A Broader Perspective

Time is short but I do have something interesting for you to consider today.

Look, there's a lot going on that will make tomorrow's gold (and silver) "market" different from yesterday's. Regardless, I still believe it's useful to look at yesterday's market in order to forecast where we might be going based upon where we have been.

Today, we're going to look at the Continuous Commodity Index. http://en.wikipedia.org/wiki/Continuous_Commodity_Index. Here's a little background info from the Wiki page:

"The 17 components of the CCI are continuously rebalanced to maintain the equal weight of 5.88%. Since CCI components are equally weighted, they therefore distribute evenly into the major sectors: Energy 17.65%, Metals 23.53%, Softs 29.41% and Agriculture 29.41%. While other commodity indices may overweight in certain sectors (e.g. Energy), the CCI provides exposure to all four commodity subgroups."

So, first, let's look at a 25-year chart. Some of you may not even have been alive at the start of this chart. Personally, I was just graduating from college and chasing my then-sweetheart to San Francisco. (That's an interesting story but we'll save it for another day.) The point is: This chart covers a lot of ground and time. Therefore, it is to be respected.

Notice that for the first half of the chart, the action is sideways. From 1988 to 2002, the index fluctuated in roughly a 50-point range. Though there was some action in individual commodities from time to time, overall the sector was a real yawner. The sideways action actually goes back even further, to the early 1980s, when interest rates were raised to choke the money supply and curb inflation. So, for roughly 20 years, commodities in general sucked.

Then what happened? The debt-induced easy growth of the 90's finally popped in 2001 and it has been off to the races for commodities ever since. Sure there have been pauses and corrections along the way but there also been periods of blowoff, parabolic rallies, too. In the end, though, the trend has remained. Here, see for yourself:

So now let's look a little closer. On the five-year, weekly chart below, you can see where we currently stand. Of course, I've tried to draw the trendline as accurately as possible but it's impossible to show exactly where it currently lays. Needless to say though, we're pretty much right on top of it. So there are three things to consider:

  1. First and foremost, is this 11 year bull market in commodities over? Did commodities go sideways for 20 years only to have a bull market end after just 10 years? Look at it another way...Have the fundamental conditions which prompted this bull market changed? Are the Fed and other central banks about to embark on a Volcker-esque tightening spree?
  2. Could commodities in general (and, by extension, gold and silver) bounce and rally right here and right now, just like they did the on the last two occasions they encountered the main trendline in late 2008 and mid 2012?
  3. Are commodities about to over-shoot again, similar to the circled area on the monthly chart above? If so, could a final drop toward 500 or even 475 be in the cards? IF that were to happen, what would be the short-term impact on the price of gold? Of silver? Would you finally capitulate/panic and sell or will you rely on your answers to the questions posed in point #1 above?

OK, gotta stop there but that should give you plenty to think about and discuss for a while. Have a great day and let's hope that CIGA BoPolny/BoPelini/BoDiddley/BoJackson is proven correct.

TF

525 Comments

That_1_Guy's picture

Imagine that...im First....its a First.

Look ma...im number 1

GUY

Sorry Doc..like your site :)

The Doc's picture

First 1st?

First 1st?
Guess not..close though!
Silver looking good today off this morning's bottom.  Classic FUBM...back squarely in the last 2 week's trading range.

-Doc

Ccanuck's picture

A Thurd at Turd's

I am mostly a lurker, however I must state that the information here is incredibly diverse.

There have been statements made about echo-chambers, and like-minded people just re-enforcing the same position.

Mr.Fix makes excellent points about trolls not standing a chance, and the diversity that is offered from many different people in relation to any number of issues dealing with the end of this experiment.

I come here for that diversity, for the difference of opinion, and for Turd's insights, information, and interviews.

Most of all I like that the Trolls do not stand a chance here, they are identified quickly,

Anyway, Keep up the great work Turd and all contributors, you provide a Fantastic Site!

Thank you to everyone in this online community.

Ccanuck

Arjen's picture

4th

4th

Wallace Hartley's picture

"I plee da fif!"

Personal best...FIF!

SilverSurfers's picture

come

back kid, never count the ho out, HI HO SILVER!!!!

with a top ten turder, yeah baby!!!

Grublux's picture

Top Ten

A rarity nowadays!

cpnscarlet's picture

Top ten

Because time is shorter.

treefrog's picture

thanx turd

nunth!

thanks for the macro view.  i got into silver just after y2k.  i have plenty of time to wait.  weekly charts?  monthly charts?  bring them on.  they look pretty good from here.  imo, this pm bull has AT LEAST another ten years to run. if you price it in dollars?  that night get problematic.   not for the pm's, for the dollar.  might need to adjust/recalibrate the metrics of the charts if uncle buck crashes and burns.

Mickey's picture

"You can't build catalytic converters with paper palladium"

Nick Barisheff in an interview with Gregg Hunter USA watchdog.

tyberious's picture

Russia's Plan For The BRICS

Russia's Plan For The BRICS To Dismantle The Dollar System

http://www.testosteronepit.com/home/2013/5/12/russias-plan-for-the-brics-to-dismantle-the-dollar-system.html

n Russia, politics are Byzantine; the fact that the Kremlin decided not to hide the document or leak it to a chosen few journalists, but publish it outright is a very strong signal, a very vocal angry signal directed at the US. A signal that the Western media chose to ignore.

In the recitals section of the document, the authors point out that “there is a common desire of the BRICS partners to reform the outdated global financial and economic framework that doesn’t take into account the growing economic weight of the emerging markets.” Moreover, the Russian strategists view the BRICS as a tool to reform the way the world is being governed. Then the document hammers home its message:

Russia assumes that, given enough political will of the leadership of the BRICS countries to advance their cooperation, this alliance can become one of the key elements of a new system for global governance, primarily in the economic and financial domains.

Move aside New World Order! The BRICS are coming to change the world.

The goals are clear. In the section titled “Strategic goals,” the first point on the BRICS’ agenda is the reform of the world financial system in order to make it “fairer, more stable, and more efficient.” In the later chapters, it is spelled clearly that this “reform” is actually a dismantling of the dollar system.

It is worth noting that the place of this issue in the list of the BRICS’ priorities speaks volumes about its importance. Judging by the order of priorities, depriving the dollar of its status as the world reserve currency is more important than “preventing breaches of sovereignty” (a.k.a. the “Syrian problem”) or “expanding economic cooperation.”

The language used in this document indicates that it has been written or strongly influenced by Sergei Glaziev, the president’s economy advisor, who is known for masterminding the economic aspects of the Eurasian Union between Russia, Belarus, and Kazakhstan. Glaziev has repeatedly accused Fed Chairman Ben Bernanke of starting “a currency war” against the emerging markets. He also believes that Bernanke’s policy will ultimately lead to a military confrontation: “the conservation logic of the current financial and political system leads to a further escalation of military and political tensions, including the start of a major war” (read more).

A whole chapter of the strategy document is dedicated to step-by-step instructions on dismantling the existing global financial system. The list of measures includes: 

  • Reformation of the world currency system in order to create a representative, stable and predictable system of world reserve currencies;
  • Reduction of the risks of destabilization of currency and equity markets linked to massive cross-border flows of capital;
  • Increasing the use of national currencies in the trade between BRICS countries;
  • Increasing the level of cooperation between BRICS countries in order to promote their interest in the domain of world trade;
  • Strengthening the BRICS Exchange Alliance;
  • Creating independent rating agencies.

Since the Durban Summit, at least one of those measures has been implemented: RT reported that “China’s Dagong Global Credit Rating agency is to set up the joint venture with US-based Egan-Jones Ratings Co (EJR) and Russia's RusRating JSC to challenge the three major US ratings agencies.” As BRICS countries try to achieve the rest of their stated goals, it remains to be seen if the dollar system survives the joint onslaught of the biggest emerging economies. By Valentin Mândrăşescu, author of the pungent article on the inner machinations of Russia.... Cyprus: A Triumph For Russian Isolationists

Keep Stacking!!!

AlexCojones's picture

Paging Katie Rose - London Calling: Bring George PRONTO

Commodities come in many shapes, sizes and forms.

George the Goat, the Fence-Climbing, Prodigious Breeder of Nipple Nuzzling Offspring for Overworked Katie Rose, might be an ENORMOUS boost to the City of London and all of England.  Just get his fence-climbing little butt onto a plane and start breeding.

Sometimes a commodity just needs a "Jump start"

UK Lamb Births At 30 Yr Low After Drought, Rain, Snow

goat%20on%20bobs%20back.jpg

zman's picture

I thought copper and oil

I thought copper and oil inventories were very high at the moment, and with global economies struggling, this would suggest lower prices in the future.

Road_Scholar's picture

If one costs more, then substitute

for the other- and they probably taste about the same too when it's not "real".  Mmmmmm, random meat chunks...images?q=tbn:ANd9GcRnE50cew8RjVB1Mip9Wt5

mystery-meat.jpg

(That's how the government does it with CPI)

hai's picture

Video: Zephyr Management’s Managing Director Awad Explains Why

Video: Zephyr Management’s Managing Director Awad Explains Why Gold Hasn’t Done As Well As History Suggested

http://www.hardassetsinvestor.com/videos/4792-video-zephyr-managements-managing-director-awad-explains-why-gold-hasnt-done-as-well-as-history-suggested.html

Rui's picture

@Indenture - Theory VS reality

Quote: "I see the Euro mandated to keep inflation at 2%. Yes, every other currency can print away their nations debts because they are single currencies representing a single nation. But the Euro is different."

So you think people would trust the mandates from these EU governors who just recently stole Cyprus savers' money (in addition to the other nonsense they have done since PIIGS crisis no less)? If they have told you in your face they are "willing to lie when it becomes serious" then why do you have undying faith in their mandates?

And especially for this "2% inflation" thing. Who in their right mind would give up the depreciation-proof gold for Euro that inflates 2%? If I run a bank that charges a negative interest rate, would you rush to open an account in my bank? Well, you would not be any more willing to stop by my bank than the rest of world willing to depart their gold for your beloved Euro. Look at the real world, not theories on paper.

Quote: "So why is the Euro different? Because when the system crashes a currency will be needed to bid for gold.  A currency gold trusts."

After Dollar loses its GRC status, gold will take its place as it neither carries any counter-party risk nor inflates. A currency gold owners trusts is gold itself. If you wanna buy foreign nations' export, you pay them gold(not Euro or any currency). Gold will simply flow from debtor nations (e.g. PIIGS) to saver nations (e.g. BRIC). Euro is just another local currency that gets ignored in the future global trade.

Well there's a way to make Euro as attractive as gold, which is setting up a hard link w/ gold: this xxxx fixed amount of Euro can buy an ounce of gold. Now your Euro would look good as it ain't depreciate every year. But NO! You FGers insist it must inflate 2% b/c of some banker propaganda. Alright, you wanna shoot your own foot then fine. That kinda Euro would simply be ignored in future international trade.

vonburpenstein's picture

i aint no menza mimber.....

.....butt i dew no dis....DON"T NOBODY KNOW NUTHIN!

ah, ahh, ahhh, ahhhh, ahhhhh, ohhhhhhhhhhhhhh

ah, ahh, ahhh, ahhhh, ahhhhh, ohhhhhhhhhhhhhh.....what it's like watching things each week in the metals world.

You know what, I bet a bunch of folks are like me...they heard about silver a few years back, did some research, seemed to make sense, made a purchase (or two, or ten) and now you're like - FUCK! Anyway, I'm still glad I got some but going forward I'm just gonna pretend like I lost a bunch of money and start fresh - and only invest in what I know that I know that I know.  Coming here daily has its benefits as I'm much smarter (esp now knowing I was hanging with a bunch of genius').

And here's my one and only prediction...whatever's gonna happen aint gonna happen the way we think and for sure not as fast....I'm gonna go sell some more houses because that's what I know.  Takes a while to re-inflate a bubble...

PS....Can't one of us do some research and find someone who's a friend of the guy who decides how the .40-.75 swings are gonna go each day and then let us know ahead of time...this would seem to be a better tactic than pontificating daily...

AlexCojones's picture

Logical Mensan Conclusion to Commodity Spurt?

Regards commodities.

I think Turd has lured us into drawing our own conclusions - to think for ourselves - like an inspirational professor rather than a droll troll.

I simply intend to follow his merry lead - and that of BRAZIL, RUSSIA, INDIA and oh yeah, CHINA. 

In conclusion, are the BRICs buying the effing dip (by the tonne) but not Bloomberg or Goldman? Bwahahahaha. All I need to know.

So logical even a Mensan can understand it.

Just A Regular Guy's picture

I love this chart

SilverSurfers's picture

So

according to William Kaye over at KWN, his audio is great, there are no abundant gold supplies, not piles left, that its all paper, then what is the big deal about GLD? Maybe someone shooting from the hip, just got a toe. Maybe its a head fake. Holder would be impressed. Where did that doubting tom go, away? Just Wondering Just Saying Just asking

See how that RICO crime hoodies fits in nicely with Kaye's perspective. :O

And the US Army and CIA aint giving up what is left at the Fort, and aint telling jack about it, as the last ditch defense to total anarchy, so sssshhhhh about that, for crying out loud.

http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2013/5/14_William_Kaye.html

Hagarth's picture

@Zman Oil

One of the problems with that is OPEC is having structural problems.  Seven out of the 10 member states have conflicts occurring within their borders.  This makes for a dicey proposition for Oil companies to continue resource extraction and drilling operations.  It not safe to send men out, if hostilities continue and governments cannot quell the violence government stability becomes questionable.  Changes like we saw in Egypt can happen quicker than  anyone expects. 

Antrobus's picture

Natural History of bankers

Dr Jerome's picture

Troll species

There do seem to be various species of trolls. The most dangerous are those paid trolls who spread misinformation for a living. They are versed in the art of sophistry, mercenaries who will write or say anything for money--intellectual prostitutes that probably really don't have any firm positions of their own and can't care less, as long as they get paid for trolling. IN fact I am not sure we can even call this type a troll. They are far more devious and dangerous.

But another species seems to be unpaid trolls who have something against the metals community. Did their heart turn dark after a poorly timed trade?  Intellectually, do they hold a commitment to fiat and the system that is just to painful to release? They appear to have short half-lives on the site, especially after getting called out, but reappearing often and regularly.

Some trolls are an enigma. with the preponderance of mental disorders, who knows what motivates them. This guy here even has gold earrings, which I understand are favored by trolls.

Other trolls seem to just be hateful, negative people. I do not understand their motives for posting here. I don't want to  waste my time trying to understand. Run the SOBs out.

But I don't want to mistake a bear for a troll. Some genuine PM investors see us in a long bear market and appear to be advising us to wait on our purchases. They have reasoning and experience to support their outlook.  I am the eternal optimist, but I must discipline my response and consider their warnings. lately they have been correct. and with the availability of silver increasing lately, their advice has been solid.

I don't consider the FOFOA group to be trolls, though some do their fair share of troublemaking. Others seem reasonable and simply want us to persuade us buy gold instead of silver. Not bad advice for those who are risk-adverse.

Personally, I am moving toward that bear camp as we watch the CFTC do-nothings, the corruption, the manipulation and the powerful people with unlimited money who are keeping this system afloat. They are bailing the ship furiously, but keeping it on top thus far.

I think the sinking will happen suddenly and over a weekend. We will awaken in a new world on a Monday morning.

I argue that the BRIIICS countries also do NOT want to accelerate the buying so that they can continue to load up at cheap prices for the gold standard that approaches. Nobody with money who is expecting the gold standard wants higher prices right now--just us small time metals investors who still think this is a way to get rich quick. I do not expect a sustained rally in price up through $40 for AG or $1800 for AU until the cupboards are bare.

Now is the time to load up. Premiums say metals are in shorter supply than the spot price says. Get it while you can and hold on for the long haul.

Beware the sophist!

On th' other side up rose
BELIAL, in act more graceful and humane;
A fairer person lost not Heav'n; he seemd
For dignity compos'd and high exploit:
But all was false and hollow; though his Tongue
Dropt Manna, and could make the worse appear
The better reason, to perplex and dash
Maturest Counsels: for his thoughts were low;
To vice industrious, but to Nobler deeds
Timorous and slothful: yet he pleas'd the eare,
And with perswasive accent thus began.

The sophist is graceful, beautiful, dignified, and persuasive, but false, hollow, fearful and slothful. John Milton called BS on this type in the 17th century, yet still he slips past the guards and spreads lies. Often even getting elected.

realitybiter's picture

mulligan mint

I've been watching the back and forth between Chris Duane and Rob Gray regarding what were obviosuly Chris' designs (Freedom Girl, Slave Queen, Debt and Death) and the Mulligan Mint taking them.....

I don't know the truth here - but I can share my experience:

I do know that I placed an order in January, was delayed and delay and delayed.  In April I was told twice "hold on, I will go back to shipping and sort this out......(5 min later).....yes, your order was just packaged, and you will receive confirmation"    Then nothing.  No confirmation.  Finally, weeks later, I had had enough and gave them the choice to produce a wire transfer refund, ship, or get sued.  They shipped that day.

I have bought from a dozen different dealers over the last 12 years.  This was the worst customer service ever.  I bought from NW Territorial Mint in Jan 2011.  They had delays then, too, BUT they never lied.  They were consistent with their delays and kept their word.  The same cannot be said of the Mulligan Mint.  Lie, after lie, after lie.

Jut the truth folks.  That was my experience.

What do I think happened?  I think they are very shady - but that is my opinion.  I think they used money received for orders to purchase equipment and then  didn't have enough money to buy the metal to produce the orders....somehow the money was misused.  The "I'm in shipping right now" reminds me of the scene out of "Boiler Room":  go to 1:20....great movie:

Will I order anything from them again?  No way.  You simply don't lie like that without repercussions.

SIlverbee's picture

@philipat

I did not buy the dip. I am in far enough. Having followed the meme's  BTFD and keep stacking I am now waiting for affirmation.

The annoying thing is I know it is the right thing to do both fundamentally and righteously but the PTB are done with the natural laws of economics. It seems every time they appear to be in a corner just like Batman they find a way out. The only way to win is to bet with the house.

SIlverbee's picture

Miners

Why is it that the stock markets are at new highs but the G/S mining sector is at multi year lows?

Can anyone explain the fundamental reasoning that CNBC might use to explain this.

Surely it is an obvious indicator of manipulation?

John Galt's picture

@tyberious re: BRICS vs NWO

I am more than a little sceptical about the East vs. West and BRICS vs. NWO theory.

On a very macro level I believe that the various large central banks are all controlled by the same entity, and the "competition" or rivalry we perceive is nothing more than illusion.

Several years ago there was a video floating around around that was an interview of a movie producer by the name of Aaron Russo. In the late 1990s Russo became friends with one Nicholas Rockefeller who told him that an "event" would happen in the Fall of 2001 which would result in a futile war on terror where soldiers would be looking for non existent terrorists in caves. Russo at the time thought it was all BS until things unfolded the way Rockefeller said they would.

Here is a segment of that interview:

http://m.youtube.com/#/watch?v=wD7wOUM4IEQ&desktop_uri=%2Fwatch%3Fv%3DwD7wOUM4IEQ

On a whim I decided to look up Rockefeller's name to see what he is up to now.

http://www.nicholasrockefeller.org/wikipedia/

Based on his website he's heavily involved with banking and business interests in China.

So my point is that if the Rockefeller family is part of the NWO interests in America why are they integrating themselves so deeply with one of the biggest BRICS players at the same time unless, of course, they're gaming both sides?

Also given that Rockefeller apparently told Russo that the new currency to come would be a fully digital one, I have to wonder how stackers will "sell" some or all of their stack after the reset when banksters will have full control and knowledge of all transactions and be able to tax and seize at will.

The Watchman's picture

True-From Jesse

bernankebondfraud.JPG

Hunt brother's picture

Gold price rises into the London fix...

Then the COMEX paper shorts take it down.

London fix involves delivery of physical gold.

Naked shorting on the COMEX is counterfeit gold.

Upseting to see the rampant circulation of counterfeit gold.

Hunt brother's picture

Re:silver bee. Miners

Mining stocks are call options on the value of gold in the ground.

with current metal "prices" below production costs, the miners are "out of the money" call options.

The HUI went from 150 to 600 off the 2008 low.

Syndicate contentComments for "A Broader Perspective"