In 1863, the Rothschild brothers of London wrote to associates in New York introducing their banking method into America that:
“The few who understand the system will either be so interested in its profits or be so dependent upon its favours that there will be no opposition from that class, while on the other hand, the great body of people, mentally incapable of comprehending the tremendous advantage that capital derives from the system, will bear its burdens without complaint, and perhaps without even suspecting that the system is inimical to their interests.”
Sentiment at the Dawn of the Rally
Based on internal measures of sentiment, the financial damage to the superficial retail investor
— who is typically blind or firmly in denial about the proverbial inflationary writing on the wall
— has already been done.
Those who participated in the previous price rally largely believe that they lost "money" and can probably see no further than the fiat currency price of anything.
Furthermore, the mindset that “your money should work for you” is a dangerous and illusory entitlement left over from years of credit based monetary and economic growth.
The Next Rally
In the short-term, silver’s painted price tape is not yet indicative of a breakaway price rally. Nevertheless, the price of silver has already recently broken above its 50 day moving average and now is treading water just under the level of its 100 day MA, so bullish price signals are finally starting to arise.
The latest wave of unsuspecting, momentum seeking, and yield desperate weak hands expected to come into the market to buy the dips will be easy picking for the strong armed bullion banks like J.P. Morgan Chase.
This, combined with a very top heavy equity market and inevitable tapering because of reduced official budget deficits, may be a set up for another downside test of the $18 support area for silver. A sign that the bottom is probably in place will come when the speculative funds completely capitulate and sell out their holdings.
Of course, the next rally will ultimately arise when large players like J.P. Morgan Chase decide it is time to briefly lift their price suppressing tactics and allow more hopeful silver bulls into the market.
Silver and the Time to Sell
Someone looking to take profits on their long silver position as silver passes through $50, $100 or even $500 per ounce is probably going to be missing what has happened to cause silver’s meteoric rally there.
Those future potential “profits” are really just the preserved purchasing power of their invested dollars. Such profits would act as a hedge against their increasingly worthless fiat currency holdings.