Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Silver Price Green Light

Commodities / Gold and Silver 2015 Oct 16, 2015 - 04:03 PM GMT

By: DeviantInvestor

Commodities

Silver looks like it has bottomed and will move substantially higher.  Why?

Long Term – 25+ years:  Examine the silver to gold ratio since 1990.  The ratio is currently low and appears to have bottomed.  Silver bottoms when the ratio bottoms.  Expect a multi-year rally.


Medium Term – 15+ years.  The US national debt is huge, moving higher, and has effectively zero chance of stabilizing or decreasing in the next decade.  A poorly built mobile home is more likely to survive a Category 5 Hurricane than the US national debt will decrease.  Examine the chart of national debt and silver prices for the past 15 years.  Silver prices will “catch up” with the drastic increase in national debt.

Silver prices erratically follow national debt higher.  Long term charts of debt versus silver since 1913 and 1971 (not shown) clearly demonstrate the same relationship.  Questions:

  1. Do you expect US national debt, global debt, and other sovereign debt will decrease without a massive debt default? I don’t – debt will increase.
  1. If the world continues on its current “borrow and spend” path, do you expect silver prices will reverse their 100 year correlation with debt, spending, and currency in circulation? I don’t – silver prices will increase substantially.
  1. But if the world economy collapses into a deflationary depression and $100 Trillion in global debt defaults, would you rather own physical silver, dodgy fiat currency, or paper debt?
  1. Or if the world economy collapses into a hyperinflationary disaster, would you rather own physical silver, increasingly worthless paper currency, or paper debt?

Multi-year Term:  Examine the graph of weekly silver prices.  Silver prices are low and have broken the long term descending resistance line.  The next targets are the upper horizontal band at about $19.15 and then about $35.

Short Term:  The High Frequency Traders are overly influential in the short term gyrations of COMEX paper silver prices.  They will push paper silver prices wherever is best for them, but real silver prices are moving upward.

Note that the premium above spot prices (COMEX paper silver prices) is currently larger than normal.  I recently checked an on-line site and they quoted about 44% premium (somewhat less now – Oct. 11) for silver eagles in quantities of 100 or more.  I remember a similar high premium at the bottom of the silver market in late 2008, while a premium of 10% to 15% is more typical.  When real physical silver falls much less or actually increases in price as the COMEX paper price declines, we are (most likely) at or have passed a bottom in silver prices.

From John Rubino:

“At the risk of sounding like a broken record, the negative interest rate/high debt/rapid money growth world envisioned by the Guardian looks like a precious metals paradise.”

I see a green light for substantial silver price increases in the next several years.

Gary Christenson

GE Christenson aka Deviant Investor If you would like to be updated on new blog posts, please subscribe to my RSS Feed or e-mail

© 2015 Copyright Deviant Investor - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Deviant Investor Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in