Market Overview

Market Astrology: The Risk Trade In Silver


On March 11, 1893 the American Bankers Association, led by JP Morgan, produced a leaflet entitled "The Panic Circular" which was distributed to each national bank president:

"You will at once retire one-third of your circulation and call in one-half of your loans. After this you are to advocate an extra session of congress to repeal the Sherman Law and, act with other banks of your city to push for it's unconditional repeal...The future of national banks...depends upon immediate action as there is an increasing sentiment of...silver coinage"

The bankers' plan worked as people made a run on the banks to redeem their silver for gold. This led to a depletion of the gold reserves at the U.S. Treasury and ironically - in order to keep the Treasury solvent - the United States had to borrow 3.5 million ounces of gold from JP Morgan. The "Silver Panic" created by the banks led to the repeal of the Sherman act and bi-metallic currency in America.

In my view the current hysteria on the part of the banking cartel to control the price of silver is a repeat of the "Silver Panic" in 1893 to end the price inflation of silver that was not in their control. In the 1890's the silver coinage expanded the the monetary base (inflation) impacting negatively the bonds, dominated in dollars and and held by the banks. Today we have JP Morgan (NYSE: JPM) and other banks creating a "Silver Panic" by collaborating with London traders and foreign banks to "flash short" the paper silver market with in minutes.

The volume of these paper trading episodes, in some cases, amounts to near the entire annual production of silver! Silver is a much more practical form of currency than gold as most people could easily purchase silver and begin using it for commerce, and is more likely the greater threat to paper money. Silver has always been the money of the people, and gold the money of "kings" and central banks.

From the perspective of the astrology there was an important total eclipse December 22, 1889 at the 0 degree of Capricorn (Capricorn rules restrictions and confiscations) on what is called the cardinal axis of world power, that led to the "silver Panic" and removal of silver coinage. Eclipses on the 0 degree of a cardinal sign are very rare. From 1889 there would not be another eclipse on the cardinal axis until June 21, 2001 in the sign of Cancer (the Moon rules Cancer and silver) where the bull run for silver began.

The two eclipses are opposite where the one in 1889 led to the demise of silver as coinage, and the eclipse from 2001 where there wa the beginning of a renewed push for silver as coinage again.

This could be a karmic return for JP Morgan and others who could now, in a reverse of fate, become at risk from over leveraged positions they created in order to control the price of silver. There will be another total eclipse again at 0 degree Cancer on June 21, 2020.

The Short Term Picture For Silver

The month of May could continue to bring more pressure on silver. There could be another setback to the metal on May 17th that continues into May 20th. I would advise caution on a long positions here as there looks to be more pressure May 28th - June 1st.

There is positive support for silver with the North Node in Sagittarius and there could be a substantial move up for silver June 4th. Watch for potentially bullish moves in Endeavor Silver (NYSE: EXK) and Silver Wheaton (NYSE: SLW) the first week of June. Overall the war over silver could intensify through the Summer.

slw_-_technical_analysis.pngChart courtesy of Zentrader

Editor's note: This article was contributed by Karen Starich, Astrology Traders. Learn more here

Posted-In: Long Ideas Short Ideas Commodities Psychology Topics Markets Trading Ideas General Best of Benzinga


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