Where the long term silver cycles are now

Sun, Sep 21, 2014 - 5:47pm

I described certain significant political cyclic effects in precious metals prices in previous blog essays.

(If you missed them: Gold & 2nd Term US Presidents ; War Cycles and The Price of Gold ; An In-Depth look at a Major Cycle in Spot Silver ; Silver Market Cycles )

In particular for those contributions I focused on the 2 year cycle which corresponds to congressional electoral process. I also looked at and emphasized the 4 year cycle which corresponds to US Presidential elections. A third period that I looked at carefully is the seven to eight year cycle which corresponds to the cycle of duration of reelected US presidents. This cycle, in it's eight year version may correspond to a model used by Martin Armstrong which he classifies at 8.6 years and considers to govern or to track general economic confidence.

Among large cycles which I have not covered in this series of articles is a seasonal effect in pretty much all financial markets, and that could be described alternatively as a 1 year cycle, if one wished to do so, and that would be an accurate characterization of the seasonal effect.

Another cycle which I like to keep track of is a central bankers' cycle which tends to come in at approximately five years length. Precious metals traders will be able to come up with some of the banking organizations five year deals, agreements, or plans. It is also common for sovereign states to operate economic plans and targets with this timespan, and large corporations are candidates too.

I thought I might show a picture of this 5 year cycle today, and also put several cycles together to see how they all interact with each other during Q4 2014.

So let's take the five year swing to see what it does:

Now in order to be straight up about this, the existence of a five year cycle is a debatable point, and statistically it has a weak score. So this is an alleged cycle, or a possible cycle in the price of silver. You take a look, do your own examination of the facts, make up your own mind. I merely provide an illustrated interesting direction in which you might focus your gaze for a while to see whatever you can see.

Of course there a a lot of possible cycles in silver, so a question that regularly comes up is what are the others saying?

Here is a chart showing a collection of cycles in silver. It's not the top scores, nor the best documented by researchers. This is just my subjective choice of some cycles that I consider pretty active around now, so it's my selection chosen for relevance today:

Interesting, right?

I should say that there is a middle low in the above chart which other techniques suggest will be the "main" low. Whereas this chart places the weakest spot at December. And if it slots into the notch located at end of September we are already almost there! But the general thrust might be that Q4 2014 is a time of great possibilities for buyers of silver.

So since this is a scan of the longer term swings, what about the 8.6 year cycle? Well if you take 8.6 years it looks like this:

As you can see, if it's running at that length it exerts a depressing effect on silver down until Q2 next year.

However if this cycle is running in accordance with a dual term US presidency we can look more to a gap of 8 years since the last low. Actually there are reasons to assume that a second term president gets into the saddle faster, and that cycle might be closer to 7 and a half years. My preference is 7.8. I think Tom McClellan of McClellan Oscillator has written on this and it might be mentioned on his website but I can't confirm it, but I know that he and Sherman McClellan have worked on it.

So here are the two scenarios for this swing. First I'll show it at 8 years exactly and you can judge the fit if any for yourself:

That looks quite interesting, doesn't it?

Now if it is running shorter it would match the silver price action more like this:

That doesn't look so good if you are substantially long silver. But's it's the best fit if the cycle is running that period currently.

So the interesting question is: do we have an 8 year cycle plus a 5 year cycle producing their footprint, or it it all just a 7.8 year cycle? I have given the likely fundamental underlying cause for these swings, if they are dominating other economic effects, so everyone can decide for his or herself.

Also the volatility recently seen in the precious metals prices should be compared to the same period of time at the same stage of previous waves as this can sometimes make it easier to decide which one we are in and where we are in it.

By the way, the above charts are produced using logs of price which makes the vertical axis a percentage or ratio scale, so if it looks different from your chart that is the reason why.


Argentus Maximus

The author posts daily commentary on the gold and silver markets in the TFMR forum: The Setup For The Big Trade. More information about the author & his work can be found here: RhythmNPrice.

About the Author


Sep 24, 2014 - 11:35am

@Spartacus Rex - Lawful Money/Coins

Thank you for taking the time to clarify the specifics. Very helpful. Time to start procuring old gold!

Now to search form 1040 to find out where to enter the loss.

Sep 24, 2014 - 9:18am
Sep 24, 2014 - 8:23am

Yes, my mistake, I think this is correct

DOLLAR, money. A silver coin of the United States of the value of one hundred cents, or tenth part of an eagle.
2. It weighs four hundred and twelve and a half grains. Of one thousand parts, nine hundred are of pure silver and one hundred of alloy. Act of January 18, 1837, ss. 8 & 9, 4 Sharsw. Cont. of Story's L. U. S. 2523, 4; Wright, R. 162.

DeaconBenjaminSafety Dan
Sep 24, 2014 - 8:08am

Britain's Napoleonic wars were not over in 1812

They ended in 1815. Napoleon abdicated in 1814, returned from Elba, Waterloo was in June 1815.

Yes, the colonists paid taxes to the British. I don't believe the colonies did. I was not able to access the site you posted. Taxation without representation reflected the fact that colonists had imposed taxes on themselves pretty much from the beginning; now Parliament was imposing taxes and the colonists had no control over how the money was spent. Most problematic, Parliament was setting up a judiciary to be funded from colonists, that would adjudicate colonial crimes, but colonists would have no control over who was appointed to the bench.

Likewise, the bulk of taxes paid to the federal government before 1913 came from taxes on alcohol and import fees. These taxes were paid by individuals, not states. The reason the Civil War began over Fort Sumter was the federal government wanted to retain the power to enforce federal import taxes in Charleston.

Spartacus Rex
Sep 24, 2014 - 7:46am

@ flyinkel

The "U.S.", or rather the Law, does NOT define a dollar "as an ounce of 99.9% pure silver! That is WHY Silver Eagles are NOT actual Dollars!

Here are two examples of NOT an actual Dollar (although "legal tender") as defined in law:

Now HERE are some examples of what an actual Dollar is, as defined in Law (and why the U.S. Mint is compelled to report the "statutory" value of its working stock of precious metals regardless of the "Market" value)

These following also have the same composition and precious metal content, ergo also meet the legal definition of a Dollar:

etc., etc., ad nauseum. Hell, One can even use Silver Half Dollars or even the Silver Quarters to effect 12 USC 411, such as taking Four (4) of these https://tinyurl.com/m2tbuza which adds up to Five Dollars ($5) lawful money yet takes 127.80 Fiat FRNs at the Treasury / Mint to effect that exchange / redemption and thus actually Realize the Loss, allowing for the Write Off under Title 26 for that same year.

Find an better rate (lower price) on eBay? LCS? or wherever? Great, just keep the damn Receipts!

Cheers, S. Rex

Edit: Copy & Paste tinyurl link into browser to make it work if necessary

Sep 24, 2014 - 6:54am

This is rather veiled, I assume intentionally so

So are you saying the US defines a dollar as an ounce of 99.9% pure silver and because you earned no pure silver you earned no dollars and therefor owe no tax?

Spartacus Rex
Sep 24, 2014 - 5:35am

@ SilverRunNW

re 12 U.S.C. § 411. Is it still in effect?”

For those wise enough to still put it into effect, yes it is.

So are you saying that you are actually exchanging your green a**wipe paper for "lawful money" (gold & silver) at the Treasury Department?”

Do you otherwise imagine the the U.S. Mint is not actually a part of the U.S. Treasury Dept.?

Or any Fed Reserve Bank?”

Although it is the law, One would be hard pressed to get the Phed Reserve Banks to comply with 12 USC 411 ever since their lackey LBJ and his cohorts in Congress ( Wright Patman, etc.) sold America out to the Banksters with the Coinage Act of 1965

No problem, the redemption/conversion opportunity is still available at the U.S. Mint, as well as other sources such as an LCS, eBay, friend or neighbor( just keep the damn receipts, as they evidence the loss realized by converting/redeeming the fiat into actual lawful money Dollars, ie “$” you know the little symbol representing the lawful Unit of Account of Money in the U.S., which coincidentally appears on those IRS tax forms)

Is your main source of income...”

1) No offense SilverRunNW, but more than likely you do not even know the actual legal definition and meaning of the word “income”, nor where it is to be found, since conveniently, it does not appear anywhere within the Internal Revenue Code (Title 26) although One can easily find the grossly misleading term of “gross income” therein. Therefore you and others as well would be wise to use and think in terms of Receipt/s or Gross Receipts.

...being paid to you in a**wipe paper (or digital equiv) or lawful money?”

2) That's the beauty of it SilverRun, as I am at Liberty to accept either, or even a combination of both. If fiat a**wipe, I have no trouble redeeming same back into lawful money Dollars $. Or on the hand, lawful money, who doesn't like the honest form of Money?

How exactly is making this exchange reducing your tax obligation under 12 U.S.C. § 411?”

I think you are confusing yourself SilverRunNW, as there is not any “tax obligation” under 12 USC 411, as it simply mandates the redemption of FRN obligations, which coincidentally routinely appeared on the face all such FRNs prior to the assassination of JFK.

The tax obligation elimination/reduction provided for under Title 26 simply, and only becomes available to those who actually avail of themselves the mandate provided at 12 USC 411.

Are you claiming a loss because of the FACE VALUE engraved on the gold American eagle (1 OZ. FINE GOLD ~ 50 DOLLARS). So if you give the Treasury or Fed Reserve Bank $1,250 a**wipe frn's and they give you an American Eagle 1 oz gold coin, lawful 50 dollars, that you can claim a $1,200 loss on federal tax returns?”

That is not correct SilverRunNW as you cannot use the Bullion Coins for 12 USC 411 purposes.

Perhaps you have missed my earlier posts pointing this erroneous assumption out, most recent examples of such appearing in Dr. Jerome's Exigence article:



You cannot use the Bullion Coins for the 12 USC 411 process, as they merely have a “legal tender” value impressed upon same, and if you read the posts linked above, you will see that I clearly warn about this, unless you desire to wind up just like Robert Kahre.

The Dollar ($) is defined in law, with a specific weight and composition of precious metal that is Coined, as are other denomination defined in law Coins.

Ergo, The “Silver Eagle” Bullion Coin, although having a “legal tender” value of 1 Dollar impressed upon same (big deal, so does the 1 dollar FRN) it is still not an actual U.S. Dollar of “lawful money” as 12 USC 411 explicitly expresses, (versus merely redeeming into another or any other form of “legal tender”)

The 5 oz ATB Coins are impressed with “legal tender” value of “QUARTER DOLLAR”

The ¾ oz Gold Kennedy Half Dollar is impressed impressed with “legal tender” value of “HALF DOLLAR”

Although they are all Beautiful Coins, Do NOT imagine for even a second that such will work for the purposes of redeeming FRNs to avail the Tax Write Off provided under Title 26, anymore than any other U.S. Bullion Eagle Coins of gold-and-silver, (or the "Buffalo") as they do not actually meet the parameters of the weight and composition of precious metal contained in how the U.S. Dollar $ is defined in Law, applicable for use w/ 12 USC 411 (same applies w/ high "Collector" value Coins, so don't even think about trying that either, Duh!)

BTW: Maxims you may have heard:

For every wrong there is a remedy”

The law helps the vigilant, before those who sleep on their rights.”

ie Now wake the hell up and stop getting ripped off every single year!

Cheers, S. Rex

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Spartacus Rex
Sep 24, 2014 - 4:44am

@ Safety Dan

We're good, and I appreciate your contributions herein. For the record I was not accusing you of Plagiarism, or would otherwise presume that you would stoop so low as to engage in such, hence the ? in the header, nor do I have any reason to believe that you are too thin skinned to receive a call out by me for any checks or corrections warranted.

Do hope you are able to cut back on those meds (explains a lot) and are back to 100% in short order.

Cheers, S. Rex

Sep 24, 2014 - 1:18am

duckie and chicken recipe,

duckie and chicken recipe, here's a start, economical, more people coming to dinner, cut them into smaller pieces...

Wok with Yan Cashew Nut Chicken

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