Never Bow Down To The Painted Tape

June 8, 2014

The mainstream believes that precious metals prices are all about lousy sentiment and chart patterns. 

The idea that price rigging is the underlying cause of both is a stubborn taboo. 

This is the ultimate challenge for all long-term investors and those simply accumulating over time. 

Just because the value of precious metals will never be worthless doesn't mean its (forced) legal tender will not swing wildly. 

The self deception and self importance of those who fall for the belief that there is anything close to resembling price or value reality in these markets borderlines on madness. 

The best analogy I can think of is World Wide Wrestling Federation or World Wrestling Entertainment...

Wikipedia defines the WWE this way:

As in other professional wrestling promotions, WWE shows are not legitimate sporting contests, but purely entertainment-based, featuring storyline-driven, scripted and choreographed matches, though they often include moves that can put performers at risk of injury if not performed correctly. 

The difference between this and what professional traders and those specializing in technical analysis is that the performers (those in the financial world) don't know that it is choreographed. 

WWE first acknowledged this publicly in 1981, breaking the gentlemen's agreement that previously existed among promoters.

Unfortunately, that will never happen with finance. In fact, many of the loudest proponents will likely emerge unscathed in the aftermath of the next financial crisis. 

Yet these professional traders and analysts are pervasive and highly influential. Beware. 

Horrible market sentiment creates a negative feedback loop. But is the result of pure behavioral finance. Every major market suffers from the same fate, and it trickles down to poison the grass roots. 

And it leads current investors and long term holders of precious metals down the angry rabbit hole and into that tangled web of technical analysis. 

Once there, the prudent investor finds himself up close and personal to the angry spider and his minions. They taunt and cajole. And they lie. 

Price action makes market commentary, and also drives emotions. 

All the way down the line, from the bond market to the virtual precious metals pits. The painted tape is well choreographed theatre. 

WWF reality versus fantasy.

You have these personas, actors, and mythical traders claiming clairvoyance - often in the name of sound money yet cloaked in a sinister self preservation. 

They are convincing. There is art to technical analysis. A pseudoscience. A practiced reading of tea leaves. 

Yet the tea leaves are carefully programmed to create patterns. 

And they defend those patterns as the true manifestation of nature. Reality. They just call them like they see them. Nothing more, nothing less. 

Questioning the origin of these price patterns is dramatic and scathing.

Unwavering in their belief. Their convictions. Comedic in their presentation.

They are playing on a stage that appears to be real but are far from it.

People love to watch it. And some even join in. 

An industry grows up around it and the secret is safe. There are not rigged. Never say it out loud.

The Wresting Federation finally admitted that it was an act, in that will never happen with the monetary system. 

As Chris Powell noted recently, “They can't want to believe in or even know about central bank intervention in markets because it would nullify their work, their whole careers, revealing that they have been interpreting mere holograms created precisely to deceive them.”

Holding precious metals ends up being a lonely attempt at securing reality - if just for a moment. 

Grasping at something real.  It is productive as a foundation, whether it is future capital and future accounting unit (unit of account) it is sound and in your possession. 


For more articles like this, including thoughtful precious metals analysis beyond the mainstream propaganda and basically everything you need to know about silver, short of outlandish fiat price predictions, check out

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