Gold and silver still waiting

Gold and silver have stopped falling and are standing still. But what are they waiting for?

Where do gold and silver stand?

Gold and silver closed at $1522.80 and $37.32 yesterday. Each metal has moved up from recent lows. But no one is betting—yet—that either metal has hit bottom and is about to rise. Franklin Sanders said earlier this month that he expects both metals to rise in price, but not before the end of June. When that happens, they will never be this cheap again.

At first glance, one might expect gold and silver to wait for a signal. Bond prices went down the day before yesterday, but went up the next day. Most commodity prices went down, too. In a sick economy, businesses use less minerals. They also take fewer risks, so they borrow less.

Where does the US dollar stand?

Incredibly, people still believe in the “full faith and credit” of the United States. Treasury bills, notes and bonds move up (and interest rates go down) because people still think that American sovereign debt is a safe haven. They already know that European sovereign debt is not a safe haven. Greece is now a by-word for sovereign default (or the threat of it). That is the only reason that the US dollar has not crashed. The euro will crash first. If it’s not crashing already, that’s because Europe’s central banks are keeping it from crashing. They can’t do that forever. And because most people compare the dollar to other currencies, the dollar looks good.

But the dollar will soon crash for the same reason that the euro is crashing. Like the European Union, America has racked up so much “sovereign debt” that it can never hope to repay it in anyone’s lifetime, if ever. The Federal Reserve has been doing its own manipulation, too. That can’t last forever, either.

What else is going on?

Other things are happening in the world that will crash the dollar. None of the financial experts are talking about them. And they had better start.

1. China is buying gold—lots of it, and faster than airplanes can carry it there. That should have caused a rally in gold already. Whoever is selling gold as fast as the Chinese are buying it, won’t be able to keep that up forever, either.
2. The USA talked about “sanctions” against Venezuela, for its support of Iran, as Iran works on building nuclear weapons. Venezuela’s oil minister told the Americans to go to—the other place. He then said that Venezuela might just stop selling oil to America altogether. Scratch ten percent of America’s supply.
3. Hamas now has an open border with Egypt. Why? Hamas and Egypt’s Freedom and Justice Party are the same party (The Muslim Brotherhood), that’s why. Hamas has always looked forward to fighting another war with Israel. The Egyptians are making the same noises, with Mubarak gone.
4. Israel now has its back up. That was probably a long time coming. But relations between the American and Israeli governments couldn’t be colder. Two of Bill O’Reilly’s guests last night, self-styled experts on “body language,” said it best. You had only to look at Obama and Netanyahu last week at the White House. Obama gave Netanyahu a look that dripped icicles. You almost expected him to sneer at him…but your editor will not repeat that. Netanyahu was sweating as he dressed Obama down on why those “1967 Israel borders” were a non-starter.

The last time Israel felt so alone and abandoned was June 5, 1967. And we all know what happened then.

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What does this mean for gold and silver?

The world is at the end of its rope. One more stress will snap it. War in the Middle East, an IAF airstrike against Iran—either of these will mean the Great OPEC Oil Embargo all over again. The petrodollar system that Nixon and Kissinger put together, almost fell apart with the Yom Kippur War. The next war might smash it for good.

And then the dollar will not be worth the paper it’s printed on—and everybody will know it. The Arabs will dump all their Treasury paper and stop selling to America. They’ll probably bail out Europe and might accept euros as payment for oil. If they don’t demand gold.

A loaf of bread for a day’s pay, and three loaves of barley bread for a day’s pay, and be careful not to damage the oil and the wine. {Revelation 6:6]

If Egypt starts moving troops across the Sinai, watch out. If they close the Straits of Tiran, make your buys.

For now, the signals still read: Hold. But as Revelation also says, “be on the lookout.” [Revelation 3:2]