A Broader Perspective

525
Tue, May 14, 2013 - 11:37am

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. https://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

About the Author

Founder
tfmetalsreport [at] gmail [dot] com ()

  525 Comments

  Refresh
Dagney Taggart
May 14, 2013 - 3:06pm

Hey SRS

What happens if new or "suppressed" energy resources were released? Please explain if you have time.

I'll come back and read later. Have to run....

Dagney Taggart
May 14, 2013 - 2:56pm

Just Wanted to Pass a Mid-Day Word.......

Watch your materials indices. Large move feels imminent.

We have been working on some engineer's estimates for work this fall and 2014 and sending out requests for quotes for many basic materials for turnkey work. Lately though, we are getting a lot of highly-conditioned proposals for the materials, even conditions I have not seen in years. Some are even no-bid (too much uncertainty).

Can't say any more than that. Again watch those materials indices.

Magpie
May 14, 2013 - 2:55pm
Ned Bradenalan2102
May 14, 2013 - 2:52pm

@DPH

If your timeline is correct; then some of us who are "all in" need to get "some out" as the price for trying to outguess these criminals......

NB

alan2102John Galt
May 14, 2013 - 2:46pm

John Galt

John Galt: "[Rockefeller is] 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?"

1. Why do you think that Rockefeller is (necessarily) part of the NWO interests in America? What exactly ARE the "NWO interests"?

2. Even if Rockefeller were part of the American side of the NWO, why could he not switch sides and/or hedge bets (I guess you could call that "gaming both sides") in some ways? Capital goes where it wants to.

3. Regarding elsewhere in your post: who is the entity that controls all the central banks? Any ideas? Why do you think that the East/West competition is an "illusion"?

These are sincere questions. I'm not setting a trap. I'm thinking about these things myself. Whatever you have to say will be read with interest.

Regarding the "illusion": if this is so, it is a pretty convincing one. It has had me fooled. It seems pretty clear cut: the U.S./U.K./Israel/Japan/OECD axis has been running roughshod over the rest of the world for a real long time, and the natives are more than restless -- they're mad as hell, and who can blame them? They are, at long last, getting organized and powerful. The BRICS, or BRIICS, or BRIICSS (or various other acronyms) represents the rest of the world, and it is on the rise, and it is highly competitive with the West. I don't see it as "BRICS v. NWO", I see it as TWO WOs, if you will: the two axes, as mentioned. The U.S./U.K/etc. one has been hegemonic for near two centuries, but its time is passing. The other one is now rising. If anything should be called a NEW World Order, it should be the BRICS, or what that represents. The U.S./U.K./etc. represents the OLD world order.

SilverSurfers
May 14, 2013 - 2:40pm

Extactly

what was posted here in turdville, in that, over the last few days, we have seen two double blown downs, the first put turd on the bender having to wearing shades in shame, and today noticed at turdville. Compare

"So Hilsenrath comes out with his piece, and at a time when the manipulation (of gold and silver) is getting extremely intense"

https://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/5/13_D...

Yes, it is most difficult to predict day to day price movements with the manipulator omipresent, without eyes inside. Sure COT helps, but its not the end all, and they see the COT reports as well, and probably dont give a damn.

Unless a higher high or higher low comes in, over next 48 hours, bullish mode falls, and back to square one. +2 0 +2 -2, the negative is a bull killer, three in a row, and the bull dies.

SRSrocco
May 14, 2013 - 2:39pm

THE COLLAPSE OF THE US DOLLAR

The Collapse Of Fiat Money by a Falling Energy Supply

Each passing day, the world gets closer to a total collapse of the global fiat monetary system. After the United States unilaterally terminated the convertibility of the U.S. Dollar to gold in 1971, the world has been settling trade on borrowed time. It was full faith in the dollar and U.S. Treasury market that allowed global trade to continue for 4 decades.

However, faith in the dollar is waning as debts, derivatives and dishonesty plague the financial system. Most analysts (including many in the precious metal camp) are wasting time debating over the mere symptoms and not the disease itself.

REST OF THE POST AT THE LINK: https://srsroccoreport.com/the-collapse-of-fiat-money-by-a-falling-energy-supply/the-collapse-of-fiat-money-by-a-falling-energy-supply/

AlexCojones
May 14, 2013 - 2:38pm
May 14, 2013 - 2:36pm

@silver66

You have to click the little 'Image' icon (next to smiley) in the header bar of the message window:

EDIT: Yeah, you got it.

Aye, it's the setting free part that's hard.

BobbejaanCalifornia Lawyer
May 14, 2013 - 2:36pm

@CalLaw ...

Quote:
It's going to be a long, hot summer, for sure.
Tom Robinson Band - Long Hot Summer (1978)

.

Tom Robinson Band - Winter Of '79

.

Video unavailable

.

Billy Joel - We Didn't Start the Fire (Official Video)

.

Subscribe or login to read all comments.

Contribute

Donate Shop

Get Your Subscriber Benefits

Private iTunes feed for all TF Metals Report podcasts, and access to Vault member forum discussions!

Key Economic Events Week of 9/21

9/21 8:00 ET Goon Kaplan
9/21 10:00 ET Goon Evans
9/21 Noon ET Goon Brainard
9/21 6:00 pm ET Goon Williams & Goon Bostic
9/22 10:30 ET Chief Goon Powell on Capitol Hill
9/22 Noon ET Goon Barkin
9/22 3:00 pm ET Goon Bostic again
9/23 9:00 ET Goon Mester
9/23 9:45 ET Markit flash PMIs for September
9/23 10:00 ET Chief Goon Powell on Capitol Hill
9/23 11:00 ET Goon Evans again
9/23 Noon ET Goon Rosengren
9/24 1:00 pm ET Goon Bostic #3
9/24 2:00 pm ET Goon Quarles
9/24 10:00 ET Chief Goon Powell on Capitol Hill
9/24 Noon ET Goon Bullard
9/24 1:00 pm ET Goon Barkin again & Goon Evans #3
9/24 2:00 pm ET Goon Bostic #4
9/25 8:30 ET Durable Goods
9/25 11:00 ET Goon Evans #4
9/25 3:00 pm ET Goon Williams again

Key Economic Events Week of 9/14

9/15 8:30 ET Empire State and Import Price Idx
9/15 9:15 ET Cap Ute and Ind Prod
9/16 8:30 ET Retail Sales
9/16 10:00 ET Business Inventories
9/16 2:00 ET FOMC Fedlines
9/16 2:30 ET Powell Presser
9/17 8:30 ET Philly Fed
9/18 8:30 ET Current Acct Deficit

Key Economic Events Week of 9/7

9/9 10:00 ET JOLTS job openings
9/10 8:30 ET Initial jobless claims
9/10 8:30 ET PPI
9/10 10:00 ET Wholesale Inventories
9/11 8:30 ET CPI
9/11 9:45 ET Core CPI

Key Economic Events Week of 8/31

9/1 9:45 ET Markit Manu Index
9/1 10:00 ET ISM Manu Index
9/1 10:00 ET Construction Spending
9/2 8:15 ET ADP employment
9/2 10:00 ET Goon Williams
9/2 10:00 ET Factory Orders
9/3 8:30 ET Initial jobless claims
9/3 8:30 ET Trade Deficit
9/3 12:30 ET Goon Evans
9/4 8:30 ET BLSBS

Key Economic Events Week of 8/24

8/24 8:30 ET Chicago Fed Idx
8/25 10:00 ET Consumer Confidence
8/26 8:30 ET Durable Goods
8/27 8:30 ET Q2 GDP 2nd guess
8/27 9:10 ET Chief Goon Powell Jackson Hole
8/28 8:30 ET Pers Inc and Consumer Spend
8/28 8:30 ET Core Inflation
8/28 9:45 ET Chicago PMI

Key Economic Events Week of 8/17

8/17 8:30 ET Empire State Manu Idx
8/17 Noon ET Goon Bostic
8/18 8:30 ET Housing Starts
8/19 2:00 pm ET July FOMC minutes
8/20 8:30 ET Jobless claims
8/20 8:30 ET Philly Fed
8/20 10:00 ET LEIII
8/21 9:45 ET Markit flash PMIs July

Key Economic Events Week of 8/10

8/10 10:00 ET Job openings
8/11 8:30 ET Producer Price Idx
8/12 8:30 ET Consumer Price Idx
8/13 8:30 ET Initial jobless claims
8/13 8:30 ET Import Price Idx
8/14 8:30 ET Retail Sales
8/14 8:30 ET Productivity & Unit Labor Costs
8/14 8:30 ET Cap Ute and Ind Prod
8/14 10:00 ET Business Inventories

Key Economic Events Week of 8/3

8/3 9:45 ET Markit Manu PMI July
8/3 10:00 ET ISM Manu PMI July
8/3 10:00 ET Construction Spending
8/4 10:00 ET Factory Orders
8/5 8:15 ET ADP employment July
8/5 9:45 ET Markit Service PMI
8/5 10:00 ET ISM Service PMI
8/6 8:30 ET Initial jobless claims
8/7 8:30 ET BLSBS for July
8/7 10:00 ET Wholesale Inventories

Key Economic Events Week of 7/27

7/27 8:30 ET Durable Goods
7/28 9:00 ET Case-Shiller home prices
7/29 8:30 ET Advance trade in goods
7/29 2:00 ET FOMC Fedlines
7/29 2:30 ET CGP presser
7/30 8:30 ET Q2 GDP first guess
7/31 8:30 ET Personal Income and Spending
7/31 8:30 ET Core inflation
7/31 9:45 ET Chicago PMI

Key Economic Events Week of 7/20

7/21 8:30 ET Chicago Fed
7/21 2:00 ET Senate vote on Judy Shelton
7/22 10:00 ET Existing home sales
7/23 8:30 ET Jobless claims
7/23 10:00 ET Leading Economic Indicators
7/24 9:45 ET Markit flash PMIs for July

Recent Comments

by Boswell, 3 min 30 sec ago
by boomer sooner, 19 min 50 sec ago
by Wizdum, 28 min 38 sec ago
by cyclemadman, 1 hour 3 sec ago

Forum Discussion

randomness