September and October will be a time when we look back in history and say, that’s when everything cracked. There are several black swan events coming up in September that will have an impact on the economy and the markets.
The Fed is trying to maintain the illusion of stability within the US economic system, but behind the curtain, there is turmoil and fear.
Black swan events are coming in September starting with the September 4th G-20 meeting in which there will be discussion about a new reserve currency created by the IMF and tied to the SDR. Then on September 21st the FOMC meets to decide whether or NOT to raise rates. September 30th – October 1st is the official inclusion of the Chinese Yuan as a reserve currency within the SDR.
There’s also a possibility the Yuan would be devalued again by China, just like they did last August when it caused the US stock market to crash over 1,000 points in a day. If they decide to do this in September, we could see the beginnings of a huge waterfall in the stock market and a surge in gold and silver.
A rate hike has not been priced into the stock market yet and if the Fed decides to raise rates, you can expect a strong sell off in the stock market. However, I don’t think they will raise rates in September for two reasons.
First, they don’t want to risk crashing the markets prior to the November election. In fact, Barney Frank has already warned the Fed to hold off until after the election in order to make Hillary and the Democratic Party look as good as possible.
Second, they have been threatening to raise rates now for the past 8 months and they know that raising rates now will pop the multiple bubbles of the stock, bond and real estate markets. The global economy is just teetering on the brink of collapse.
‘Every time the dollar sells off, and that’s happened three times now, the cockroaches from the FOMC (the Fed) come out and talk up the dollar and say that the market is underestimating the strength of the U.S. economy.’ ~ Victor Sperandeo
The Fed is caught in a pickle; if they don’t raise rates, then any future attempts at verbal intervention will probably fail and you can only cry wolf so many times before people stop believing it.
As David Stockman recently said, ‘the Fed no longer serves Main Street. It lives to serve Wall Street.’
We are finally reaching a critical point of no return and the next 60 days should be the inflection point for the economic hurricane that is coming.
There’s really no way to predict the timing of an economic collapse with any certainty, but I think we are already in one. An economic collapse can either occur with a huge crash or occur gradually as the economic indicators erode lower with each passing month until finally something snaps. That’s the scenario we are in right now. The question is when will it snap?
The only way to survive this coming storm is to own physical gold and silver and also gold mining stocks. The US governments gold supply is considered by many to be non-existent and in the last financial depression; the US government confiscated physical gold and made it illegal to own gold privately.
Many analysts don’t believe that will happen again, but believe me, if things get bad enough, they will either confiscate your physical gold or find a way to tax any windfall profits you make on gold up to 80 – 90%.
The only way to protect yourself from that scenario is to own your gold in a Roth IRA or store it outside of the country in a safe harbor storage facility. I don’t know if profits from gold mining companies would be included in that scenario, but I wouldn’t put it past them.
The illusion is about to be revealed as the perfect storm from all of these events coming together at virtually the same time triggers a firestorm that will play out over the next couple of years as an historic hyperinflationary depression. I hope you’re prepared.
Wednesday was August 31st, which was also options expiration for the London gold exchange. As predicted, the cartel raided gold and silver hard and brought the price down below the 1311 resistance level and it bottomed close to the 1304 resistance level.
The following excerpt is from an article written on Zero Hedge on Wednesday.
‘Bank for International Settlements (BIS) intervening in the gold market to assist the battered commercial and swap dealer shorts. $5 Billion notional gold dumped on the Futures marketon Wednesday.
Commercial banks (acting as agents for the Federal Reserve) have been aggressively shorting the gold market at all-time record levels. But the Fed and the commercial banks did not anticipate that global demand for gold would skyrocket the way it has.’
The August employment numbers come out on Friday at 8:30 AM. If the job numbers are weak, gold and silver should rally big. If the ‘bogus’ job numbers show a big gain, then the Fed will likely be forced to follow through on their bluff and raise rates in September.
This could cause a sell-off in the stock market, as it does not want a rate rise, and it would also cause a rally in gold. This becomes a win-win situation for gold and silver. September is the month for precious metals as they are poised for a big surge as the coming September events play out.
There is a lot of chatter about China making waves in September. There is a chance they will announce a significant devaluation of the Yuan, especially if the Fed raises rates on the 21st. In addition, they are expected to reveal their true gold reserves to exceed that of the US reserves. That will have a devastating impact on the value of the dollar and would trigger a stock market crash.
Gold and silver are the last beacon of safety in the financial markets and you will see panic buying of the precious metals if this scenario plays out. Now is the time to get in, if you want to protect yourself.
Wesdome Gold Mines, Ltd.
I’ve added a new mining company to the list of stock investments. Wesdome Gold Mines, Ltd. is a junior minor traded on the Toronto Stock Exchange; however, you can buy this stock in the US under the symbol (WDOFF).
This company is trading around the $2 mark, which makes it a small cap stock, but that also allows you to buy a larger position size than if you were buying one of the larger mining companies. This is not a stock recommendation for options trading, but a good one for direct ownership as a stock investment.
August saw a huge gain and there is still plenty of room to grow as shown in the chart below.
The red resistance line is an example of how far this stock could go and the break of the downtrend line confirms we are back into a bull market cycle.
Stock Market: (SPY) (QQQ)
The stock market looks to be in a topping pattern with the stochastic showing extreme overbought conditions. However, with the massive manipulation by the central banks, I find myself skeptical of the technical patterns.
It seems every time the market starts to correct due to natural forces, that’s when the interventions take place and the artificial surges in the market show up That makes it very difficult for investors to trade and that’s why I don’t hold any positions at this time, at least for now.
When things begin to break and I see a huge crash starting, I will then consider placing short positions in (SPY), but I would preferably trade the (VIX) instead.
The VIX Index is often called; the fear gauge and investors who have insight into the direction of the stock market can trade the (VIX) for impressive gains. When the VIX is near all-time lows, as it is now, that’s a prime opportunity to trade a long position for anticipation of a market crash.
In the chart above, I’ve circled the August stock market crash as it relates to the VIX. The smaller circles to the right shows the VIX at all-time lows with confirmation by the stochastic oscillator that it is prime for a move up and it could be a violent move, come this September.
At the first hints of the subprime crash in 2007, the VIX Index dropped all the way to 10.2. When the financial bubbles in 2008 began to implode, however, the VIX exploded. By Oct. 28, 2008 it had risen by 550%. Traders who saw it coming and got in long made a fortune.
Look at the charts below to see how they compare to the chart patterns of the 2008 crisis. Corporate earnings began to crater just before the last crash cycle and today we see a similar pattern evolving.
I believe we are on the edge of a major collapse in the markets and the events over the next couple of months could be the catalyst that sets it all in motion.
Energy Stocks: (XLE) (UNG) (USO) (LNG)
Oil has broken the down trend line again and appears to be headed lower, which I think is the natural course. The stochastic confirms the overbought conditions, so we should see continued movement down from here.
That being said, it seems all it takes is someone to post a headline about ‘bogus’ production cuts or supply draw downs and panic buying ensues. If war breaks out or missiles are fired at any of the middle-eastern oil facilities, we will see a sudden surge in the price of oil.
That’s why I prefer to stay away from any positions at this time, because the state of geopolitical balance is extremely volatile. In addition, the recent surge in the US Dollar has been at least part of the reason for the recent downtrend in oil and I think that may continue as gold and silver surge higher.
Commodities: (DBC) (JJG) (DBA) (JO)
All the recent BS about raising interest rates in September has caused the US Dollar to surge higher and the result created a bloodbath in commodities. This will not last and I expect a turnaround during the month of September. It may take a few weeks before we form a bottom, but I believe we should see another surge in commodities as the dollar begins its decent once again.
The obvious deciding factor will be whether the Fed raises rates on the 21st or not. I don’t believe they will or can, but I would wait to see what happens before entering any commodity trades.
(SLW) January 2017 CALLS
(GDX) January 2017 CALLS
(RGLD) January 2017 CALLS
(SPY) December 2016 PUTS
Stunning Chart Shows That Central Bank Liquidity Is Now Driving All Asset Prices
If there is a reason why traders walk into their office every day in a state of zombified daze, no longer able to trade various asset classes based on fundamental data or incremental news flow, there is a simple reason for that: global central bank liquidity injections have never been greater, and as of this moment, have surpassed all previous post-financial crisis central bank intervention.
It Begins: Barney Frank Tells Yellen Not To Hike Before The Election, "It Risks Destabilizing Markets"
Barney Frank - one of the architects of the 2010 Dodd-Frank "Wall Street Reform" act - and a staunch supporter of Hillary Clinton, told The Hill it would be a mistake for the Federal Reserve to raise interest rates before the election. Frank advised the Fed board not to risk destabilizing markets and perhaps the broader economy a few weeks before Election Day. “I think it would be a mistake to do it this close to the election,”
People had high confidence in Alan Greenspan for much of his tenure, but that confidence tailed off towards the end. Confidence in Ben Bernanke declined further, and confidence in Yellen is at or near record lows.
John Embry – Powers That Be Desperately Trying To Keep Confidence Alive In Failing Fiat System
…the very people who got the world into this mess have no idea what to do now other than produce bogus economic statistics, while manipulating markets and making absurd statements. This is all being done in order to retain confidence in what I believe is a doomed fiat currency system…