Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Silver Price Trend Forecast Summer 2020 - 3rd Jul 20
Silver Market Is at a Critical Juncture - 3rd Jul 20
Gold Stocks Breakout Not Confirmed Yet - 3rd Jul 20
Coronavirus Strikes Back. But Force Is Strong With Gold - 3rd Jul 20
Stock Market Russell 2000 Gaps Present Real Targets - 3rd Jul 20
Johnson & Johnson (JNJ) Big Pharma Stock for Machine Learning Life Extension Investing - 2nd Jul 20
All Eyes on Markets to Get a Refreshed Outlook - 2nd Jul 20
The Darkening Clouds on the Stock Market S&P 500 Horizon - 2nd Jul 20
US Fourth Turning Reaches Boiling Point as America Bends its Knee - 2nd Jul 20
After 2nd Quarter Economic Carnage, the Quest for Philippine Recovery - 2nd Jul 20
Gold Completes Another Washout Rotation – Here We Go - 2nd Jul 20
Roosevelt 2.0 and ‘here, hold my beer' - 2nd Jul 20
U.S. Dollar: When Almost Everyone Is Bearish... - 1st Jul 20
Politicians Prepare New Money Drops as US Dollar Weakens - 1st Jul 20
Gold Stocks Still Undervalued - 1st Jul 20
High Premiums in Physical Gold Market: Scam or Supply Crisis? - 1st Jul 20
US Stock Markets Enter Parabolic Price Move - 1st Jul 20
In The Year 2025 If Fiat Currency Can Survive - 30th Jun 20
Gold Likes the IMF Predicting a Deeper Recession - 30th Jun 20
Silver Is Still Cheap For Now - 30th Jun 20
More Stock Market Selling Ahead - 30th Jun 20
Trending Ecommerce Sites in 2020 - 30th Jun 20
Stock Market S&P 500 Approaching the Precipice - 29th Jun 20
APPLE Tech Stock for Investing to Profit from the Machine Learning Mega trend - 29th Jun 20
Student / Gamer Custom System Build June 2020 Proving Impossible - Overclockers UK - 29th Jun 20
US Dollar with Ney and Gann Angles - 29th Jun 20
Europe's Banking Sector: When (and Why) the Rout Really Began - 29th Jun 20
Will People Accept Rampant Inflation? Hell, No! - 29th Jun 20
Gold & Silver Begin The Move To New All-Time Highs - 29th Jun 20
US Stock Market Enters Parabolic Price Move – Be Prepared - 29th Jun 20
Meet BlackRock, the New Great Vampire Squid - 28th Jun 20
Stock Market S&P 500 Approaching a Defining Moment - 28th Jun 20
U.S. Long Bond: Let's Review the "Upward Point of Exhaustion" - 27th Jun 20
Gold, Copper and Silver are Must-own Metals - 27th Jun 20
Why People Have Always Held Gold - 27th Jun 20
Crude Oil Price Meets Key Resistance - 27th Jun 20
INTEL x86 Chip Giant Stock Targets Artificial Intelligence and Quantum Computing for 2020's Growth - 25th Jun 20
Gold’s Long-term Turning Point is Here - 25th Jun 20
Hainan’s ASEAN Future and Dark Clouds Over Hong Kong - 25th Jun 20
Silver Price Trend Analysis - 24th Jun 20
A Stealth Stocks Double Dip or Bear Market Has Started - 24th Jun 20
Trillion-dollar US infrastructure plan will draw in plenty of metal - 24th Jun 20
WARNING: The U.S. Banking System ISN’T as Strong as Advertised - 24th Jun 20
All That Glitters When the World Jitters is Probably Gold - 24th Jun 20
Making Sense of Crude Oil Price Narrow Trading Range - 23rd Jun 20
Elon Musk Mocks Nikola Motors as “Dumb.” Is He Right? - 23rd Jun 20
MICROSOFT Transforming from PC Software to Cloud Services AI, Deep Learning Giant - 23rd Jun 20
Stock Market Decline Resumes - 22nd Jun 20
Excellent Silver Seasonal Buying Opportunity Lies Directly Ahead - 22nd Jun 20
Where is the US Dollar trend headed ? - 22nd Jun 20
Most Shoppers have Stopped Following Supermarket Arrows, is Coughing the New Racism? - 22nd Jun 20

Market Oracle FREE Newsletter

AI Stocks 2020-2035 15 Year Trend Forecast

Silver, Warfare and Welfare

Commodities / Gold and Silver 2014 Oct 14, 2014 - 03:15 PM GMT

By: DeviantInvestor

Commodities

US policies that promote warfare and welfare have produced massively increased debt, much higher consumer prices, larger government, and more central bank intrusion into the markets. And yes, higher silver and gold prices also resulted from these policies.

Fifty years ago we were bombing North Vietnam "back into the stone age" while also declaring a "war on poverty." The consequences of both "wars" have not been encouraging. Since then we have created considerable indebtedness by promoting such questionable ideas as a war on Iraq, a war on drugs and a war on terrorism. Future uses of national income and more debt could include a war on ebola, war on ISIS, and many other "wars."


Official national debt has increased from roughly one-third of a $ Trillion in 1964 to nearly $18 Trillion today. The price of a barrel of crude oil has increased from about $1.50 to about $90 over the past 50 years. A pack of cigarettes has increased from a quarter to nearly $6. There are 1,001 more examples of increasing prices, often not matched by increases in personal incomes.

Consumer prices have broadly increased with some price rises far exceeding others - college tuition and healthcare come to mind. Also bonuses on Wall Street have been outstanding.

Examine the following graph of silver divided by crude oil. They increase together on average, but silver currently looks inexpensive compared to crude oil. Expect silver to rise in price more rapidly than crude oil.

Silver/Crude Oil 29-Year Chart

Examine the graph of (100 times) silver divided by the S&P 500 Index. The attractiveness of financial assets (S&P) varies widely compared to the need for hard assets such as silver and gold. Note that the ratio has dropped from over 3 to less than 1 in the past 3 years. Expect silver to rally substantially compared to the S&P.

100*Silver /S&P500 29-Year Chart

Do you expect the emphasis upon warfare and welfare to change? Do you expect fewer dollars to be created? Do you expect central banks will self-destruct by allowing interest rates to rise and/or deflationary forces to overwhelm the economy?

An accident where the financial elite are hurt more than the masses could happen but it seems like an unlikely scenario. Hence, as with the past 50 years, expect more currency in circulation, much more debt, higher consumer prices, more warfare, and more welfare.

Further, expect the prices for silver and gold to increase relative to the S&P, and expect silver prices to increase more rapidly than the price of crude oil.

Inevitable? Certainly not, but the best overall predictor of future prices, future policies, and future wars seems to be the long term trends shown by past prices, policies, and wars.

Unless (until) something unlikely and world changing occurs, we should expect:

  • More warfare
  • More welfare
  • Increasing consumer prices
  • More debt
  • More government statistics proving everything is wonderful in election years
  • More volatility, anxiety, worry, and concern over markets, ebola, war, the NSA, which insider will purchase the presidency etc.
  • More gold and silver coins sold to Americans and Europeans who increasingly distrust paper assets.
  • More gold and silver purchases by Asian individuals and governments who increasingly distrust paper assets.
  • More talk-talk on financial TV about the great stock buying opportunities available in 2014, 2015, 2016, and through 2030.

Silver is currently inexpensive compared to the S&P 500 Index, crude oil, the size and rate of increase of the national debt, and especially the future price for silver after markets have reset, paper assets have devalued, and hard assets have jumped much higher in price.

Examine the following graph of weekly silver prices since 1994. Based on the stochastic index and the disparity index (and many more such indicators that are not shown) silver prices are ready to rally. The black vertical lines are spaced 5.75 years apart and they show significant lows in silver prices in 1997, 2003, 2008, and about now. Guarantee? No! Probability? Yes!

Silver Weekly Chart

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

© 2014 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.


© 2005-2019 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

6 Critical Money Making Rules