Mene, Mene, Tekel, Upharsin

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From Wikipedia…“In the book of Daniel,[1] King Belshazzar of Babylon during a drunken feast takes sacred golden and silver vessels, which had been removed from Solomon's Temple in Jerusalem by his predecessor Nebuchadnezzar. Using these holy items, the King and his court praise 'the gods of gold and silver, brass, iron, wood, and stone' ” in a degrading manner.

Suddenly, words written by a mysterious hand appear on the wall of Belshazzar's palace and they were "Mene, Mene, Tekel, Upharsin". These are Aramaic names and measures of currency that only Daniel could interpret and provide their meaning which essentially was…

  • The days of your kingdom are numbered and will be brought to an end.
  • You have been weighed on the scales and found wanting.

The empire ended that very night.

Signs and Symptoms

One does not have to be Daniel to interpret the current economic signs and symptoms of distress. One does not have to be an accountant or economist to know when things do not add up.

For example, if your financial boat has only $1.5 trillion in income but $3 trillion in expenses, you are sunk. Rearranging the deck chairs, bailing and pumping, hoping and praying for a miracle rescue are not viable options. The math is simply not there and this boat will not float.

The following 7 methods postpone, but do not prevent a sinking…

  • Attempting to borrow your way to prosperity from your neighbors and competitors
  • Adding more debt to existing debt that is already unserviceable and calling it a solution
  • Changing accounting/valuation rules to avoid bankruptcy and calling it progress
  • Robbing Peter’s account to pay Paul’s bill and hoping no one will notice
  • Throwing crumbs of interest cake to the peasants and calling it stimulus
  • Camouflaging an increase in taxes on the masses
  • Printing money with wild abandon to pay for your misdeeds

These are precisely the current economic conditions we find ourselves in today. Do not be fooled. This total financial picture is not one of survival, success or solutions but a clear act of desperate drowning in the frigid waters of financial reality.

The Empire of Debt Ends

Clearly, living within our means is a tried and true concept that everyone needs to import and adopt. Simple logic, third grade math and an empty piggy bank would clarify the problem for most people. However, our representatives in charge of this task simply don’t understand basic accounting principles. This math is quite simple and knows no political affiliation.

A point will come in time where the well of wealth runs dry, accounting shenanigans end and sources of new income are exhausted. At that very moment in time, economic bankruptcy will begin, reality occurs and the debt creation will cease.

My research suggests a reality check, resolution and financial redemption will not begin until about 2015 to 2016. A convergence of unknown financial variables in the interim, the negative effects of debt acceleration and black swan events, could alter that forecast.

On a dark night, a few years hence, the empire of debt will most definitely end.

Fundamental and Technical Projections

Fundamentally, and under the current financial circumstances described above, increases in the price of gold and silver will be significant and substantial over time. A stage three gold and silver advance will probably occur during the time frame noted above. It is simply a matter of time and patience but preparation must begin now.

In the meantime, technical indicators also point to new all time highs in gold and silver prices later this year. In particular…

  • Gold prices in other major currencies reveal a generally bullish posture while the USD completes its continuing bearish weekly advance.
  • The daily XAU/Gold ratio showed a massive bullish engulfing price pattern last week. This is in the context and setting of a nearly 6 month base pattern development. In addition, the weekly XAU/Gold ratio chart also demonstrates a potential bottom formation. We are not there yet and this will take more time.
  • The weekly Market Pendulum XAU Market Health Indicator indicates base pattern development and is strongly suggestive of a breakout in due course. An XAU weekly close above 215 would begin that bullish trend.

These comments also apply to the US gold and silver market as well since their structure, trends and cycles are quite similar to the XAU.

Step by Step Analysis

On our free website, you will not find blue sky predictions, only clear, credible and convincing evidence. Improvements in gold and silver prices are always in steps and considerable patience needs to be exercised while waiting for the next surge or price Achievement to occur.

  • In our article from 12/18/11, Seen by Many, Recognized by Few, we noted that “This month’s waterfall decline and its ultimate end will be seen by many and recognized by few for the nuggets of opportunity and value it represents”.
  • A second article from 1/05/12, The Glory Hole, described strategic gold trends and indicated “That gold and silver are bedrock values of our collective financial security and the mother lode is under that waterfall”, plus a place to look for those nuggets.
  • A posting on our website on 1/26/12 noted the recent $200 advance in gold and a $7 increase in silver. It suggested that one should restrict new purchases to retracement periods.
  • An article dated 2/19/12, Breakpoint, presents interesting Cost, Debt and Wealth Transfer analogies we all can relate to plus short term XAU indicators.

If you are waiting for the evening news to announce it is time to protect your assets, you will be too late. However, common sense suggests the best time to buy gold, silver and stocks are in retracement periods for maximum benefit.

The Handwriting is on the Wall

It can be said that unless this financial ship changes course radically and immediately on debt issues, the weight of the evidence suggests severe economic problems are coming. The signs and symptoms of this distress are already clear.

Again, the primary purpose for buying gold or silver is for preservation, protection and profit as well as survival from the destruction of paper money. It’s just that simple.

The hour is now late and the financial handwriting is on the wall. Invest wisely.

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