But not bitcoin!
For a long time now, along with many others, I’ve concluded that the spot price of gold (and silver) is heavily suppressed, especially at strategic times. Evidently this is to prevent a ‘run’ to precious metals. Precious metals are finite in the earth and historically used as money, there is no alchemy capable of manufacturing gold from other elements. Through history gold as money was safe from inflation. Limited supply, limited by nature. A run would mean rising prices.
On the converse side stock markets are propped up in the exact same but opposite way. Through this means, investors are diverted in the direction ‘they’ want which at this time is towards the stock market. I could go into endless detail but you get the picture I’m sure. Gold and Silver bad, stock market good, (because stock market up means the economy is good). Backed up by the media most people believe this mantra. They seem not to notice the inevitable corruptible nature of fiat money. Maybe this will change with the advent of negative interest rates and the banning of cash. Or not?
Who cares? Not many people care which is why it works. But I care.
On the side of people who do care, just about everyone has been wrongfooted by the Trump victory. Gold was supposed to go up. Trump is anti establishment. Trump the populist. Trump is going to drain the swamp. But lets step back a moment. The fact is that gold and silver are down, below critical technical levels and looking horrible. What does this tell us? It tells us the people in charge are still in charge in a very clear and unambiguous way. Forget Brexit and Trump. So how do you un-elect central bankers? Where is the referendum to get rid of those fuckers? Where is the conversation?
There is another form of money which like gold also has a limited supply. Bitcoin! Bitcoin has not read the central banker script. I find the price action during the US election very interesting. Initially gold, silver and bitcoin spiked when it was apparent Trump had won the election. In my view this was the free market reaction which managed to briefly show its face with all these assets doing what they should. What followed was gold, silver and bitcoin being stomped on by a massive controlling big boot.
In the case of gold and silver this has been amazingly effective (so far), in the case of bitcoin not so much. Bitcoin did go down but now is pushing up again, technical levels so far intact. I’m sure Satoshi would approve very much. Why would this be? Why is bitcoin resilient to the price suppression? My long held suspicions are that bitcoin is still far too new for them to know how to suppress it. The tools are not in place, the derivatives and ETFs and the futures markets are not there or not mature enough. Maybe the inherent nature of bitcoin is also a factor, the blockchain is visible, precious metals holdings are obscure. Does fort knox hold the gold thats claimed?
So anyway, looks like I might be tempted to resurrect this blog. I’ll see how it goes.
Heres some charts.
Gold looks horrible on 1week chart because it fell under my rising channel and failed to break up from long term resistance.
Similar with silver, its now under the rising fork I have been watching for some time.
Bitcoin, so far holding up quite well.
Appendix – US Election Day
In what was initially a post of its own, I’ve decided to move it here where I think it belongs.
In the post above I wrote:
“I find the price action during the US election very interesting. Initially gold, silver and bitcoin spiked when it was apparent Trump had won the election. In my view this was the free market reaction which managed to briefly show its face with all these assets doing what they should. What followed was gold, silver and bitcoin being stomped on by a massive controlling big boot.
In the case of gold and silver this has been amazingly effective (so far), in the case of bitcoin not so much. Bitcoin did go down but now is pushing up again …”
I thought it might be nice to expand on that and have a look at what I described on the following 1hour charts.
Starting with gold;
You clearly see the initial market reaction, which was a very sudden large spike upwards which actually threatened to break through an important bearish trendline. But then gold fell because… Reasons.
In silver the spike up was not so pronounced and there was a delay but then silver too fell because… Reasons.
Bitcoin also spiked up on the news which is interesting in itself that bitcoin does indeed function similar to gold. Then bitcoin fell too because… Rea
In this same post asons. But bitcoin hasn’t continued down instead reversing and resuming its bullish trend which I doubt is what was wanted.
Out of the three charts the best example is seen in the gold chart in which the moves were much larger than the scale of the surrounding noise (or volatility). But even so it is interesting that the same pattern can be seen in all three within the noise.
As I elaborated in my other post I suspect that bitcoin is a little bit harder to suppress than gold and silver. If they want bitcoin to fall they actually have to sell huge volumes of actual bitcoin across many exchanges, unlike in gold where they can sell huge volumes of paper representations of gold on the comex for example.