Cash Flow is King
from Elliott Wave Technology Continuing from part 1, Why the Paper-Price of Gold and Silver Matters, as promised, we’ll start with a chart of the dollar and discuss the various heights to which this dirtiest of all shirts can elevate itself. Since basing at 78.91 back in May of 2014, the fed-injected steroids really kicked in. The dollar value has surged more than 16% in nine months – and is now trading north of the 90-handle. We have not seen these levels in the dollar since late 2005, early 2006. So how high can this illusionary fiat darling of the elite go? What would you say if I told you that the dollar could rally another 16%-18% from current levels toward the 108 handle, No way? Yes way, the 108 target is very plausible in the months and years ahead. The only way to wipe this upside price target off the map is if the dollar was to first collapse below its all time print low of 70.70, and that’s just the way it is. Ah, the reality of illusion is often a most difficult concept to envision. Grasp it we must however, for if we choose otherwise, the denial of such can prove rather costly. Before we move on to the conclusion of why dollar-based paper-prices matter, we will leave you with a couple of additional upside price levels for the dollar, one of which has already captured its target. Annotated by our customary “BAM!” tag, the market has recently captured a long standing upside price target of 90.70. The next target on path toward the 108 level is 96.88. The 96.88 target shall remain viable unless the dollar first collapses back beneath the 72.70 level. Now back to the story.
The dollar is a firmly entrenched cultural anchor that (short of Armageddon) is not going away anytime soon.
- Right or wrong, whether we like it or not, gold and silver are valued in dollars per ounce.
- For all of the reasons outlined in part 1, short of an Armageddon-like world-changing catastrophe of existential proportion, gold and silver are likely to remain valued in dollars per ounce.
- Real or contrived via manipulation, the dollar price per ounce is the only reason anyone is interested in acquiring monetary metals for hedging against inflation or monetary collapse of one sort or another.
The primary reason for investing in and maintaining possession of physical gold and silver is to insure, hedge and protect oneself from the ravages of inflation, or from a severe monetary crisis occurring within the global fiat empire. Short of Armageddon, in order to effect a suitable claim on such a policy at a future time of pressing need, one will likely need to cash-in/exchange the stable value of their metals, and put the proceeds to work in a readily acceptable currency so as to meet ones varied needs in the prevailing environment of numerous financial stresses. Think about it this way. You’re in a corrupt system that may (or may not) implode in your lifetime, and you seek to hedge and protect yourself against this, so you invest a measured portion of your worth in physical gold and silver bullion. That’s great but you can’t stop there. Just as you are so inclined to hedge against the plausible disaster, you must also set aside ample resources and the means to hedge your hedge. Meaning that if the dollar doesn’t collapse and instead – the paper-prices of gold and silver collapse further – and you still wish maintain conviction in wanting to hold this insurance without going broke, you have to protect and defend the value of your chosen insurance vehicle. Continue Reading>>>