David Morgan: Here’s Why You Must Protect Yourself Outside the Financial System
I think there's probably more so on the head. I mean, it's possible that we get a lift here to do a fake out from the longs, but I don't like the structure of the Commitment of Traders. Silver hit about a three-and-a-half year high, which hit $19.65 which I believe was the top of this spot market. And we've had several instances over the last six, seven, eight years where the last day of trading was the low pick for the year in the metals. Traditionally they start moving up the end of the year, but that's not been the seasonality for many years now. So, I think we're going to drift off lower. It's possible that the bottom is in, I called the four about a $1,450 on gold, about a 50% retracement from the $200 move that went from $1,350 to $1,550 when it finally broke that six year trading range and it's done that. But yet in looking at the CoT, I think we probably going to see lower before we see higher.
I mean we're facing something that's really never been, taken place in monetary history at least what we know of recorded history, and we're seeing the demise of the age of empire. I mean basically everything was built on this system, on money and the money system is actually designed to fail from the start. You cannot have infinite interest rates. And what it mean by that is the, the exponential function, the compounding of interest over and over and over again. They'll go to infinity eventually. So, we've had adjustments and certainly some very big problems throughout monetary history. I mean there's several that we can name. The point is, I don't think it's ever been one of this breadth and scope where basically you know that 7 billion people on the planet and very few will come out unscathed. It's certainly not the end of the world, but there will be an adjustment and how big how hard and how long that adjustment is, no one really knows.
I think the main thing to do is to one, not panic and to realize that all the wealth stays in place. I mean all the agriculture, all of the oil fields, all the buildings, they're all still there. But what takes place in a financial adjustment, a currency reset, any words that you want to use, is that the ownership changes basically. So, you have a lot of people that might be over leveraged, and the over leverage will take them out of the game so-to-speak. So, real estate investor that's on the margin, that's very leveraged, waiting for, let's say hyperinflation to bail them out may have made the wrong bet. There will be deflationary forces. It's inevitable because of the way capital markets are set up. So, when the bond market starts to fail, interest rates will start to be pushed up and that will decrease the value of the bonds.
And since they're so massive and so widely spread out among the financial capital markets, they basically touch everything… pension plans, retirement savings, savings, even money markets, everything is basically touched by the debt markets. There's nothing that really could escape it. So, this is something that had my eye on for years and I've always stated that, watch the bond market that holds the keys to the kingdom and the bond market really starts to be questioned for its ability to not just pay the interest, but what is the real value something that can never be paid off, i.e. the national debt? Then at some point you'll probably start to see some movement in the bond market. I think of what happened in my lifetime. I don't think we've got another five years, but people such as myself and others before me have made statements similar to that and then they're wrong in their timing, and it's very difficult to say when.
In fact, I was listening to a podcast this morning because I try best to stay up on all of this and his forecast was like 2047 and I forget how it came up with that number, but it never hurts to be early. And as the markets twist and turn the least valued assets right now, particularly silver and gold, somewhat relative to the S&P, the DOW, the real estate market or anything else. So, both metals are undervalued, particularly silver. So, when you buy something undervalued and add it to your portfolio or balance or rebalance your portfolio is something we really should consider.
