FED, Gold, Silver, Interest rates and Markets 2016

FED, Gold, Silver, Interest rates and Markets 2016

Welcome to illuminati silver, we tell you
the truth about silver. Today is Sunday 11th December 2016 and we
are expressing our view on the forthcoming FED interest rate decision due on 14th December
and its likely impact on gold and silver prices. The overwhelming consensus in financial markets
is that on 14th of December, interest rates will rise in the US by 0.25% to a target range
of 0.5%-0.75%. If we think back to the last time the FED
raised rates, which was in December 2015, it forecast that 4 rate rises were likely
to occur during 2016. Stock markets fell and the price of gold then began to rise from
$1049 to $1274 within 3 months and peaked in July at $1370 while silver rose from approximately
$13.58 to $17.85 by April, then peaking at $20.71 in early August; for it became clear
that the 4, and then amended 2 interest rate rises, were not going to occur. Despite gold
and silver prices now having fallen back somewhat, they are still some 11% and 25% higher than
they were 12 months ago. There are in our view 4 main reasons why the
FED is likely to raise rates again this week: 1. The economy has created on average 188,000
new jobs per month since last year with the unemployment rate falling from 5% – 4.6% the
lowest rate recorded since August 2007. Hawks argue that participation has reached its limit,
so little slack remains in the labour market. Firms, large and small, list hiring difficulties
among their top concerns and fewer workers were laid off or fired in September than in
any month since data started being collected. 2. Wage and price inflation. Although hourly
wages are only about 2.5% higher than a year ago, Researchers at the San Francisco Fed
have suggested that a slew of retirements by baby-boomers on large salaries are dragging
this average down. Without this anomaly, the median hourly pay rise is running at 3.9%
– almost as generous as in 2007. Although price inflation, is not as yet at
the Fed’s 2% target level it is getting closer. Excluding food and energy, prices
are 1.7% higher than a year ago, up from 1.4% at the end of 2015 3. Congress will probably cut taxes next year
under a Trump Presidency. Higher rates may be needed to stop any fiscal stimulus becoming
too inflationary. 4. To save face. For the FED to maintain at
least some degree of integrity, it has to raise rates – to forecast 4 rises and actually
produce none bodes ill of its economic forecasting, and too much emphasis has been made by Janet
Yellen in recent weeks about this possibility for it now not to occur.
To support our view further, The CME FedWatch tool has interest rate markets pricing in
a 97.2% chance of the FED funds target rate band increasing to 0.5 to 0.75%.
With a rate hike all but priced in, investors will be looking at the Fed’s forward guidance,
and if hawkish; because of uncertainty concerning the new Administrations policies, the European
banking concerns and current record stock market levels, the risk for these markets
is tilted to the downside. We suspect however that if the FED raises rates but offers a
dovish tone, then markets may continue their upward trajectory, though to be frank, a small
correction would in fact be healthy. We should not forget that there are a number
of key economic data releases in the U.S. this week, of which the FED is likely to have
prior knowledge. On Wednesday the PPI report and retail sales figures for November are
released. Retail sales are expected to continue their upwards trend with analysts expecting
a rise of 0.5% month-on-month. On Thursday the inflation report is expected to show a
modest uptick to 1.7% year-on-year, heading towards that 2% target the Federal Reserve
has in its sights, and on Friday housing starts and building permits are reported.
Any surprise in these figures, could potentially cause the FED to delay a rise, however it
is our strong view, and has been for 8 months, that rates will rise in December by 0.25%
So the question we know our listeners wish to have the answer to, is what does this all
mean for markets, and in particular, for gold and silver prices?
Well according to an article published last Friday by Adrian Ash who runs the research
desk at BullionVault, Gold prices rose more often on Fed interest-rate hikes than on cuts
during the last 30 years. In summary he argues 2 keys reasons:
1. Markets anticipate a rise in rates well in advance, and the price of gold, and often
silver, falls prior to the rise because of the strengthening dollar and because the two
metals offer zero dividend. This is often overdone, and so when the rise does occur,
it’s all but priced in and prices begin to recover.
2. Gold prices rise after an interest rate hike because the reason the FED raises rates
is usually in anticipation of rising inflation and gold traditionally performs better in
a higher inflation rate environment. Both of these reasons make sense, and collective
wisdom should suggest that gold and silver will get a bump once the rate rise has been
announced. We however are a little more sceptical for
the following reasons. Most of the Western world is actively embarked on a Quantitative
Easing Programme, reducing the value of their currencies against the dollar. China too,
with a mass exodus of the Yen or Renminbi out of China plus its economic policies are
causing the Yen value to fall are witnessing funds being invested in the US Dollar instead.
We have seen the dollar index rise almost consistently from 85 in June 2014 to the 101
that it is today. In fact it has surpassed its last peak of 97 previously seen in March
2009, and seems to be heading in the direction of its previous peak seen in 2002 which stood
at 113. Now whilst we do not see 113 being reached
again, certainly not easily, as it could prove harmful to the US economy, we would not be
surprised to see a dollar index reach 105 and possibly 107. This does not bode well
for gold and silver prices in US dollar terms. In other currency terms a different matter,
but not in US dollars. Our caveat however, as mentioned earlier is
that much depends upon the FED’s forward guidance and tone and of course whether it
raises rates in the first place which is, practically, a certainty.
So our view is somewhat contrary, in that there may indeed be a small bounce in gold
and silver prices towards the end of next week and possibly a slight dip in stock market
levels. However, caveat withstanding, we still see precious metal prices continuing to decline
and the stock markets resume their rise– even though historic odds are against this
from occurring. Could we be wrong, absolutely, but our political antennae twitches that the
current Administration wishes to see no collapse on its watch and that nothing but good economic
news being forecast before the current President leaves Office. Just call us cynical!
We hope you have found this video interesting and informative and if so, please give it
a thumb up and share it on twitter. Also kindly visit our website at illuminatisilver.com
and if you haven’t already done so please subscribe as a free member for regular email
updates and offers. Our Facebook page which is updated daily can be found at facebook.com/illuminatisilver Disclaimer: Illuminati Silver owners come from a background
of Banking, International Wealth Management and Economics. Having now retired from these
worlds we are not qualified to give investment advice. Therefore, this and other productions
must not be deemed to be giving such advice and merely represent the personal views of
its owners.


  1. You actually believe the Gov's numbers on employment? Inflation? You might want to check shadow stats dot org for the real picture.

  2. At last price inflation will follow money inflation, and it will gain its own dynamic.
    The FED will not be able to control a la long. But rigging the real gold price by paper gold trading will go on as long as it's possible. So my guess is,that the PMs will go sidewards for the rest of the year, may be upwards, but not much downwards.

  3. Shared via Minds.com https://www.minds.com/newsfeed/654695256440184842

    Gotta get as many eyes on it as we can! d=O)

  4. I hope silver and gold  drops bigtime because I want to buy a lot more and I think when Trumps take office jan 20th silver and gold will shoot up because the world has no idea what will happen for a few.

  5. Is 2017 a bad year to buy a house? Just worried rates will rise and it might be good to buy but I believe housing market is going down at some point in next few years.

  6. Sorry. Have to disagree with you regarding lies, damn lies, and statistics. 188,000 new jobs? Like real jobs with a living wage or part time jobs of which you need three or four to just get by. Next unemployment. You do realize the Feds use armed forces personnel in their calculations and ignore the tens of millions who have given up. As for inflation, you ignore food and fuel. Well, sure, they're not that important. More like luxuries, really. And while I agree with you that the powers that be will use the bogus numbers, the numbers are still bogus. The emperor has no clothes. Lastly, as always, thank you for your excellent analysis and much appreciated food for thought.

  7. I dont understand…Inflation inflation inflation is all i hear everywhere……….Like why is it good thing we get 2% poorer each year??

    Everybody here in the west can tell u things are not as 20 30 years back where in terms of buying power of the currency…

    Living becomes harder and harder and wages nearly rise…Everybody or very many that switch jobs start with the legal minimum thats the same for years and still the banks want the population to get 2% poorer each year and they print and print and print but is has very very very little little effect……

    Where is all this freshly created money,could it be the stockmarket is a bigg fat bubble that not in any form reflecting the real econemy??????

    Wenn are the stockmarkets going to be on a real level vs what the econemy is performing….
    Put intrest rates on 5% and see what happens and stop this crap with 0,5% in 8 years and keep telling the people each month data here date here its so great housing prices rises,meaning people need to be in debt more to have a roof over there head and thats suppose to be a good thing??????
    (its only good for the GDP cause more new money comes in the econemy so the econemy grows on paper….But the negative side is its not from real production and labour and trade its like shoot ureself in the foot and think its a good thing)

    If things are really that good as being told on the news daily then pensionfunds (atleast here in holland) would increase the pensions by 2% to make up the inflation but they dont do that they pay the same as the years before but demand higher inputs from working people???

    Really i wonder how long this mass laying off workers and companys that buy each other and the 1% getting richer and the 99% getting poorer and banks that are in trouble and nations debts that are growing in such huge numbers can go on…

    I am impressed we made it so far…..

  8. Just a thought. It seems like a risk to raise rates politicaly. Raise them now during this period of profit making greed would have everyone criticizing Yellen if it causes more than a minor correction.?

  9. Raising rates has historically been good for gold. Igoldadviser did a video on this a week or two ago. Look what happened last year. PMs went way up after the hike.

  10. Rates were raised last year at this time and the stock market had its worse start to a new year in 2016 than it had in years. i think they will raise rates and because the stock market has been on a rally for the past few weeks expect it to have a crash.

  11. Great video, I find myself in complete agreement. If political conspiracy theories are permitted, I suspect the Federal Reserve now has their preferred fall guy(Trump) to do some dirty work that has been needed for years; rate normalization at what will surely be Trump's expense.  I predict continued optimism for the business climate during the initial phase of the Trump presidency and will view it as a possible entry point for the purchase of precious metals that I missed this year due to the runaway in prices. As stated in previous comments, I didn't chase.

  12. How interesting! I agree with the temporary rise in PM's; they will continue to fall further. I charted a high for USD at 106, and YOU ARE THE ONLY ONES not laughing at that possibility. It got so bad, I just stopped talking about it. Regarding interest rates, a 0.25 hike is baked in; not so much 0.50, and a 0.75, even in increments, might not be tolerated by stocks, and bonds already seeing big outflows. Bonds will be a mess, no matter how small the increment of rise in rates.

    A word about Housing here in Texas. Not even in 2005-07 have I seen such a strong Sellers Market; no doubt due to rising rates. Homes, many that were flooded in the heavy rains of 2015 and earlier this year are being snapped up at ridiculous prices. Don't believe for one moment that big banks aren't involved in issuing mortgages to those who are unqualified. My credit is sparkling and I'm a middle class wage earner, at best; yet BAC came out with a pre-qual for what I think is an outrageous amount. I have to wonder who else is being pre-qual on the same terms? Thus, I've determined, this is not the time for me to purchase a home. I'd rather snap up some out-of-favor PM's at lower prices. The home can wait.

  13. If you have ever tried to guess on how a scary movie ends,only to find it ended even scary-Er….go to your bullion dealer and back up your truck……,,tomorrow

  14. According to wikipedia: "Cynicism is one of the most striking of all the Hellenistic philosophies, offering people the possibility of freedom from suffering & happiness in an age of uncertainty."

    "Their goal in life was self-sufficiency, equanimity, to speak truth, love humanity, flourish according to the nature order, maintain indifference to the opinions of others & the vicissitudes of human affairs."

    Keep it up S.I.

  15. Hi guys, I am intrigued by this image, another good article….buy the rumour sell the fact.
    I have a question that has nothing to do with metals, I was wondering seems you are masons and use the banner Illuminati, could you confirm the existance of the Mazzini Pike letter, Its a long shot I know but no harm in trying.

  16. Gold and silver prices 2 steps forward and 4 steps back. Every week they're about to go through the roof but I think they'll fall through the floor first.

  17. Obama had the Fed keep interest rates low for 8 years so he could make people think that the economy was better than it was–of course by doing this Obama destroyed retired peoples' income that was from CDs and bonds–Obama also kept the Fed rates and interest rates low while Hillary was running for office so she would look good! Whatever happens to the stock market if it is a big drop, Obama owns it!

  18. Well, the feds just raised rates as of today. Next year is gonna be REAL shaky, especially when the real estate market begins to crumble, we may not make it….

  19. I think it also depends where you live, I live in the Netherlands, buying silver now is good, because interest, inflation and oil price can only go up this year, and an economic crisis will surely come, and if the dollar remains strong and the FED keeps pumping money, the Eurozone will deflate (question also), but I find the market very odd lately, it seems they found a way to make it look bad, but huge profits can still be made on the stock market. Silver may very well go down a bit more this year, but it must come up. I am amazed that the oil price remains low, the oil market seems to have changed in favour of individuals and companies, they seem to have lost their control and power. This will be a very interesting year, more so than the last three years.

  20. Normally when there is an interest rate increase, how does that effect spot price? (normally)
    I forget the normal flow of rate increase/decrease/ or even NO change…how that effects spot price

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