Golden Year Validated w/Gold & Silver Surges
02/29/16 INSIIDE Track:
The Golden Year Validated
02-29-16 – 2016 began with the type of fireworks expected from a cycle convergence of this magnitude. The sharp drop in Stock Indices – with many exceeding in 1–2 months what they declined in 1–2 quarters in 2015 – was only one facet. That spurred them to spike down to their yearly support levels in late-Jan./early-Feb. – accomplishing in 3–5 weeks what typically takes 3–5 months.
Potentially more significant was the surge in Gold – fulfilling projections for the largest advance in several years, to begin 2016. After Gold & Silver triggered multi-week/multi-month buy signals in mid-Dec.(see Weekly Re-Lays), they were able to rally into mid-Feb. – with Silver matching the magnitude of its two previous advances while Gold exceeded the magnitude of 5 previous rallies – a 4–Shadow fulfillment.
The Golden Standard
Of all the expectations for this evolving period (2013–2021, 2016–2021 and more specifically 2016–2017), one of the most revealing could involve the expected ‘battle’ between Gold, currency (US Dollar & other fiat currencies) and the economic power & control corresponding to that battle.
The 40-Year Cycle governing this evolution has actually spanned over 700 years, dating back to the 1250’s – when Gold was first minted in Florence, Italy. 240 years later, in the 1490’s, the Spanish Real ’Piece of Eight’ became a trade coin and migrated to N. America, becoming its early currency. (The History of Currency, 1252–1896 W.A. Shaw)
200 & 280 years later (1690’s & 1770’s) timed some of the earliest failed experiments with fiat currency in the US Colonies. And 240 years later, we find ourselves at a debt-based tipping point – after the world divorced Gold in 1976 (Jamaica Accord).
Just as in ancient times (see Deut. 8:2 quote on page 1), this 40-Year Cycle is allowing humanity (or the God overseeing humanity) time to see how humble our hearts are. Historically, the ’humbling’ comes somewhat voluntarily during the 40-Year Cycle or very involuntarily immediately after the 40-Year Cycle. And that ’humbling’ can take many forms. 2016 is ’crunch time’.
The more I read about a Gold (or Silver or bimetallic) Standard, the more I realize it is like the peeling of an onion: once you deal with one layer, you find another… and another… and another. In theory, a Gold Standard is a far more credible, accountable and ethical structure for a currency. [But make no mistake – It would take a seismic shift of epic proportion to get from here to there.]
The ironic thing about a Gold Standard is that many of those clamoring for it are revealing a personal paradox. While touting all the benefits, restrictions & forced accountability on society – of a Gold Standard(which could consolidate power to an even smaller minority) – they simultaneously advocate a lack ofrestrictions & accountability for all other aspects of life.
In theory, a Gold Standard is FAR preferable to the opposite – a debt-backed, essentially worthless script that has only empty promises (and the deception of the masses) supporting it. Ultimately, that path is far more dangerous than Gold backing. But, as always is the case, the Law of Unintended Consequencesmuddies the waters…
For instance, had the restrictions of a Gold Standard remained in place, would the advances in technology, industry, agriculture, transportation, etc. be anywhere near where they are today? Not likely. (Of course, there is also a detrimental side to each of those ‘advances’ as well.) But there is another factor that has not yet been addressed: Perception.
The Gold Rush of the 1850’s (1849–1855 = peak years) holds intriguing parallels to the 2010’s (160 years or 4 – 40-Year Cycles later). In the 1850’s, the rapid accumulation of that coveted commodity left a fierce battle for the remaining – and harder to retrieve – gold between American & Chinese ‘capitalists’. From 1855 on, that battle turned quite nasty and resulted in serious conflict.
The 2010’s have seen a similar battle – since 2009 – for capital inflows (the coveted ‘commodity’ of the modern era). It resulted in a near-parabolic surge in equity prices – one of the last of which was China’sShanghai Composite. As the Chinese were one of the last in – to the global debt orgy of the past 40 years – they are likely to be one of the ones who get the least out… as in any Ponzi scheme.
In the 1850’s, early prospectors typically made money (at least 50% of them, according to various internet sources). By the height of that prospecting ‘bubble’ however, most of the late-comers walked away with steep losses – due to a combination of factors (including elevated prices on tools & equipment as well as scarcity of readily-available gold).
And just as that bubble peaked in 1855, the current one appears to have peaked in 2015. (Gold mining continued then, just as debt shuffling will now; the difference is the diminishing return.)
Gold Rush… to the Exits
There is another startling parallel that should not be overlooked. And this one also ties into the 1970’s, the last phase of the 40-Year Cycle. In the 1850’s., there was a rush to America for Gold (it was a global phenomenon that brought immigrants from Europe, Asia & South America to California). One 40-Year Cyclelater, a battle raged over a Gold Standard (election of 1896) – enacted in 1901.
One 40-Year Cycle after that, there was another ’Gold Rush’ – a ’rush’ to abandon Gold – first with Britain in 1931 and then America in 1933. One 40-Year Cycle later, there was a rush to cash in US Dollars for Gold, leading Richard Nixon to shut the gold convertibility window in August 1971. The ensuing years saw a ’rush’ for nations to back their currencies with debt and abandon Gold’s stabilizing role.
However, a funny thing happened on the rush to Fiat-phoria… one by one, nations began to see the handwriting on the wall – or the lack of clothing on the emperor – and began to quietly ‘rush’ for the exits. That ’rush’ began exactly 40 years after the US gold window was slammed shut in August 1971, with numerous countries prying that gold window back open – beginning in August 2011… lining up to retrieve (repatriate) their Gold from the U.S.
Actually, it is not yet a ‘rush’. It began as a trickle (Venezuela)… morphing into a stream (Germany, Netherlands, et al)… and is gaining momentum as it heads down the mountainside and new streams join in at every turn. These modern-day prospectors – some of them key trading partners – are merely exercising their ’claims’ after losing faith in New York’s (& London’s) oversight of their Gold.
When historians look back, my guess is they will see the 2007–2009 collapse as the trigger to so many unintended consequences that nobody would have ever imagined… many still yet to emerge.
One of those was a wave of uncertainty – pulsing around the globe – prompting many nations to start considering the repatriation of their Gold. Several have already acted on those fears. After seeing the collapse or near collapse of major brokerage, banking & insurance entities in America – the rest of the world woke up and rubbed their eyes…
Is this the ramifications of a 40-Year Cycle of wonton spending & debt?
Is the entire fiat edifice a house of cards??
Was a complete divorce from Gold – sanctioned exactly 40 years ago – really a wise idea???
Or was it the firing of a starting pistol – ushering in a monumental 40-Year Period of Testing and leading to a seismic shift, beginning in 2016–2021?!
Ultimately, it could be a rush to see who can (partially) re-incorporate Gold into their currency and win the race for perception of stability. An East-ward glance reveals some intriguing developments…
Gold & Silver are steadily validating the potential for a bottom after Gold reached its secondary 3–5 year downside target – and its primary downside target for the year of 2015 – at 1033–1045.0/GC. That is where a Major bottom has been considered most likely.
Gold & Silver triggered multiple (WR) buy signals in mid-Dec. and re-affirmed those signals in late-January – projecting an overall (initial) surge into February. From a cyclic basis, that was expected to subsequently lead to a pullback into March… perpetuating a ~4-month cycle between the lows…
In doing so, Gold also fulfilled a decisive & convincing objective discussed back in Sept. & Oct. 2015 – fulfilling the 4–Shadow signal** triggered at that time. When Gold rallied into late-October and exceeded the duration & magnitude of its previous rebound, it provided an important signal that the ensuing decline would/should be the last one in that overall bear market. (**See top of page 9.)
And once that ensuing decline had unfolded, it would pinpoint the most important upside target for the initial surge of the subsequent advance.
Gold peaked in late-October and then did see a final decline… bottoming precisely at its second 3–5 year downside target. From there, it needed to – and was expected to – rally more than it had rallied in the preceding 2+ years. In order to do that, Gold needed to exceed 1257.6/GC and surpass the magnitude of its Jan.–March 2014 rally (1181.4–1392.6/GC – a total gain of 211.2/GC). Gold made it up to 1263.9/GCJ onFeb. 11th – fulfilling that critical objective as well as related buy signals…
There were some other important clues revealed at that time… [See March 2016 INSIIDE Track for additional clues pertaining to Gold & Silver projections for a 3–6 month surge to begin 2016.]…
This could lead to an intermediate low in mid-March – ~90 degrees from the mid-Dec. spike lows. (The Weekly Re-Lay will hone this analysis – and provide related trading strategies – as weekly & daily action reveals more specifics.) There is another more intriguing cycle that comes into play immediately before the Date of Aggression (April 19th)…
From all appearances, that (~19-week) cycle should also time an important low… as it has been a governing force in Gold for the past couple years (see accompanying chart). The question will be whether it pinpoints a low that is higher or lower than the preceding (anticipated) low in March.
6–12 month & 1–2 year traders & investors could have begun to accumulate long positions in Gold & Silver in late-July/early-August and then again in early-Jan… [FUTURES TRADING INVOLVES SUBSTANTIAL RISK!]
The XAU has surged since intermediate cycles bottomed on Jan. 19th. It turned its weekly trend up (a lagging & confirming indicator) – signaling a multi-month bottom.”
Gold & Silver fulfill initial surges since mid-Dec. 2015 buy signals. Mid-March & mid-April cycle lows (ascending lows?) should spur additional advances. Weekly Re-Lay will clarify, update & hone this analysis.