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Next Recession Is Here; Buy Gold, Silver And Crypto's!

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Fed vs Gold, Silver and Cryptocurrencies

For several years the central banks have been demonizing gold and silver, and cryptocurrencies. They are afraid of gold, silver and cryptocurrencies, because they are another form of money, which is beyond the control of the central banks. That is why central banks have been saying cryptocurrencies are being used for money laundering, smuggling and illegal activities. They want to try to forestall the use of cryptocurrencies. Now their message is changing because their story is falling apart.

An April 30 Hong Kong Financial Services and Treasury report on money laundering, terrorism financing and the crypto-market concluded that cryptocurrencies are not particularly involved in either type of crime. There are vulnerabilities related to both crimes in cryptocurrencies, but they are not being used much in either area. In fact, the report found, cash is the most common asset used for money laundering and terrorism financing. Bitcoin has been used for e-ransom attacks, where hackers lock down your computer and demand that you pay a ransom. However, many such attacks may have been engineered by intelligence agencies so they could accuse North Korea and Russia of being behind such attacks.

In fact, it is ridiculous to use cryptocurrencies to finance terrorism or for money laundering because you can trace the flow of the money throughout the process. The best asset to use is cash, because you cannot trace cash without tremendous difficulty.

Weak Economy

ADP reported the weakest job gains in a long time; the biggest miss in 7 years. The job situation is not doing well. The numbers have been manipulated for years to try to make everyone believe that the economy is doing well, but nothing has really changed. What has changed is what the real economy is doing; we are in a recession or headed toward a recession or even a depression.

Auto Market Crumbling

Retail, GDP, and many economic indicators show that everything is starting to fall apart. Retailers, restaurants, and auto dealers are not showing expected profits. Auto dealers have been selling cars to subprime people, and now they cant afford cars. Ford is planning to cut $25.5 billion in cost cuts by 2022. Ford will attempt to restructure its business, while cutting a lot of jobs. The smaller subprime auto lenders are starting to implode. Larger lenders will be next, and then the whole system is going to collapse, which is why car companies are trying to cut costs. They are trying to learn from 2008, when many car companies, such as GM, kept spending, taking out more credit. Then the auto market collapsed and they were forced to cut. Saturn and Pontiac disappeared.

Housing Market on the Verge

In the housing market, mortgage rates have jumped to 2011 levels. A 30-year mortgage rate with 20% down jumped to 4.8% for the week ending April 27, up from 4.66% just two weeks ago, according to the Mortgage Bankers Association. At 4.8% a 30-year fixed rate will be equal to the highest rate in 2013. At 5.2%, it will be the highest level since 2010 and if it hits 5.5%, it will be the highest since 2008. Before 2008, interest rates were going up and then in 2008 they began to fall, just before everything fell apart. We are now approaching the 2008 rate. In a couple of weeks, we are probably going to hit it, which will push a lot of people out of the housing market. The big difference between 2008 and now is that home prices have skyrocketed by more than 50% in some markets, such as Dallas and San Francisco. The Case-Shiller home price index is up between 25% to 40% depending on the city . People who have lost jobs or lost full time jobs and gone to part time or lower-paying job, as well as others no wage increases, cant afford these homes. Fannie Mae now allows 3% down who had not seen a raise in years, are no longer in the housing market. Soon we are going to see 0% down mortgages, which is a sign of the end. For the week of April 27, mortgage applications were down 2.5%, and they are going to continue to decline because people are being thrown out of the market, which will then fall apart.

Fed CryptocurrencyNot!

The Fed made some headlines saying they were going to be looking at a cryptocurrency, and then announced they were going to try something completely different: Central Bank Electronic Money for All . The Fed claims it will be easily implemented. It will allow households to open accounts and the Central Bank will then make payments based on those accounts. Central Bank e-money will be a close substitute for cash and make it easier to say goodbye to cash. Tied into the idea is a revival of an old idea: making post offices act like banks, as they do in some foreign countries. There is a bill in the House to have 36,000 post offices offer basic banking services, which, backers say, will reach unbanked and underbanked Americans, and help wipe out payday lenders. In fact, the real goal is to help usher in the Feds electronic money system. If the Fed e-money system moves forward, the Fed could then set interest rates on savings accounts, and thereby have more control over the economy.

Dont Follow Feds Advice: Cryptocurrencies, Gold and Silver

The Fed has been looking at cryptocurrencies and have consistently warned investors to stay away from all three markets. Wherever they say not to be in, such as gold, silver and cryptocurrencies, is usually where you want to be. Wherever they say to be, such as the stock market, is where you dont want to be.

The reason the Fed and government are so against gold, silver and cryptocurrencies is because they do not control those assets. The Fed wants control and centralization, not decentralization, which is why the Fed hates physical gold and silver because they have no control over it. The same holds true for their new e-money. It is not just like a cryptocurrency. It is a means for the Fed to control interest rates and more of your assets.

We are headed for a transition. The system is being moved from the West to the East, and fiat currencies, like the dollar, are heading for a massive decline.

Disclaimer: The information in the Market Commentaries was obtained from sources believed to be reliable, but we do not guarantee its accuracy. Neither the information nor any opinion expressed herein constitutes a solicitation of the purchase or sale of any futures or options contracts. It is for educational purposes only.

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About the author

After more than 30 years in the financial market business, Patrick MontesDeOca has developed a unique and automated trading tool based on a combination of Elliott Wave, Fibonacci, WD Gann and Vedic Mathematics. This proprietary trading tool, the VC Price Momentum Indicator, is a revolutionary trading tool that identifies major cyclical changes and trading opportunities in the commodities and financial markets with unprecedented accuracy.

Learn how the fully automated VC PMI works, see its trading record, and begin to delve into the way professional traders trade. MontesDeOca, has spent more than three decades trading all types of markets, beginning in 1974 as a legal, banking and trading advisor for several major Latin American coffee exporters. During the 1980s he became a member of the New York Coffee and Sugar Exchange, and the New York Mercantile. He also served as a consultant and technical analyst for the Mexican government. He created the MCTS Markets Commentary, an advanced automated and technically oriented market letter for the financial and commodity markets published daily in Consensus Magazine since 2003. He is a widely published author, technical analyst and commentator in,  INVESTING.COM, and complex multifaceted system is now completely automated and is available from TradeStation Technologies app store.

contributing author since 12/18/2017 

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