Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
US Presidential Election Forecast Matrix, Stock Market Uncertainty - 29th Oct 20
Stock Market Turning? Look For These Support Levels - 29th Oct 20
Silver: A Conceivable Dead-Cat-Bounce on the Cards - 29th Oct 20
Stocks are Strong but be Aware of this Continuing Pattern - 29th Oct 20
The Most Profitable Way To Play The Gold Boom - 29th Oct 20
Why You Should Hire An Accountant To Complete Your Tax Return - 29th Oct 20
Global Banking: Some Sectors Look as "Precarious as Ever" - 28th Oct 20
Silver Price Minor Dip Possible Before 2nd Major Upleg Starts - 28th Oct 20
�� How to Carve a Simple and Scary Pumpkin Face for Covid Halloween 2020 �� - 28th Oct 20
Gold Price One Last Dip Likely Then Major Upleg to New Highs - 28th Oct 20
Smart Money Is Going All-In On This New Gold Frontier - 28th Oct 20
Gold Stocks Still Correcting - 27th Oct 20
Gold and Crypto: Is This How Charts Look Before A Monetary Collapse? - 27th Oct 20
Silver's Coming Double Trigger Shotgun Price Explosion - 27th Oct 20
The $126 Billion Gold Opportunity in Australia - 27th Oct 20
Tips to Breeze through Your Spanish Classes Online - 27th Oct 20
Try The “Compounding Capital Gains” Strategy Today - 26th Oct 20
UK Coronavirus Broken Test and Trace System, 5 Days for Covid-19 Results! - 26th Oct 20
How the Coronavirus is Exacerbating Global Inequality, Hunger - 26th Oct 20
The Top Gold Stock for 2021 - 26th Oct 20
Corporate Earnings Season: Here's What Stock Investors Need to Know - 25th Oct 20
�� Halloween 2020 TESCO Supermarkes Shoppers Covid Panic Buying! �� - 25th Oct 20
Three Unstoppable Forces Set to Drive Silver Prices - 25th Oct 20
Car Insurance And Insurance Claims and Options - 25th Oct 20
Best Pressure Washer Review - Karcher K7 Full Control Unboxing - 25th Oct 20
Further Gold Price Pressure as the USDX Is About to Rally - 23rd Oct 20
Nasdaq Retests 11,735 Support - 23rd Oct 20
America’s Political and Financial Institutions Are Broken - 23rd Oct 20
Sayonara U.S.A. - 23rd Oct 20
Economic Contractions Overshadow ASEAN-6 Recovery - 23rd Oct 20
Doji Clusters Show Clear Support Ranges for Stock Market S&P500 Index - 23rd Oct 20
Silver Market - 22nd Oct 20
Goldman Sachs Likes Silver; Trump Wants Even More Stimulus - 22nd Oct 20
Hacking Wall Street to Close the Wealth Gap - 22nd Oct 20
Natural Gas/UNG Stepping GAP Patterns Suggest Pending Upside Breakout - 22nd Oct 20 -
NVIDIA CANCELS RTX 3070 16b RTX 3080 20gb GPU's Due to GDDR6X Memory Supply Issues - 22nd Oct 20
Zafira B Leaking Water Under Car - 22nd Oct 20
The Copper/Gold Ratio Would Change the Macro - 21st Oct 20
Are We Entering Stagflation That Will Boost Gold Price - 21st Oct 20
Crude Oil Price Stalls In Resistance Zone - 21st Oct 20
High-Profile Billionaire Gives Urgent Message to Stock Investors - 21st Oct 20
What's it Like to be a Budgie - Unique in a Cage 4K VR 360 - 21st Oct 20
Auto Trading: A Beginner Guide to Automation in Forex - 21st Oct 20
Gold Price Trend Forecast into 2021, Is Intel Dying?, Can Trump Win 2020? - 20th Oct 20
Gold Asks Where Is The Inflation - 20th Oct 20
Last Chance for this FREE Online Trading Course Worth $129 value - 20th Oct 20
More Short-term Stock Market Weakness Ahead - 20th Oct 20
Dell S3220DGF 32 Inch Curved Gaming Monitor Unboxing and Stand Assembly and Range of Movement - 20th Oct 20
Best Retail POS Software In Australia - 20th Oct 20
From Recession to an Ever-Deeper One - 19th Oct 20
Wales Closes Border With England, Stranded Motorists on Severn Bridge? Covid-19 Police Road Blocks - 19th Oct 20
Commodity Bull Market Cycle Starts with Euro and Dollar Trend Changes - 19th Oct 20
Stock Market Melt-Up Triggered a Short Squeeze In The NASDAQ and a Utilities Breakout - 19th Oct 20
Silver is Like Gold on Steroids - 19th Oct 20
Countdown to Election Mediocrity: Why Gold and Silver Can Protect Your Wealth - 19th Oct 20
“Hypergrowth” Is Spilling Into the Stock Market Like Never Before - 19th Oct 20
Is Oculus Quest 2 Good Upgrade for Samsung Gear VR Users? - 19th Oct 20
Low US Dollar Risky for Gold - 17th Oct 20
US 2020 Election: Are American's ready for Trump 2nd Term Twilight Zone Presidency? - 17th Oct 20
Custom Ryzen 5950x, 5900x, 5800x , RTX 3080, 3070 64gb DDR4 Gaming PC System Build Specs - 17th Oct 20
Gold Jumps above $1,900 Again - 16th Oct 20
US Economic Recovery Is in Need of Some Rescue - 16th Oct 20
Why You Should Focus on Growth Stocks Today - 16th Oct 20
Why Now is BEST Time to Upgrade Your PC System for Years - Ryzen 5000 CPUs, Nvidia RTX 3000 GPU's - 16th Oct 20
Beware of Trump’s October (November?) Election Surprise - 15th Oct 20
Stock Market SPY Retesting Critical Resistance From Fibonacci Price Amplitude Arc - 15th Oct 20
Fed Chairman Begs Congress to Stimulate Beleaguered US Economy - 15th Oct 20
Is Gold Market Going Back Into the 1970s? - 15th Oct 20
Things you Should know before Trade Cryptos - 15th Oct 20
Gold and Silver Price Ready For Another Rally Attempt - 14th Oct 20
Do Low Interest Rates Mean Higher Stocks? Not so Fast… - 14th Oct 20
US Debt Is Going Up but Leaving GDP Behind - 14th Oct 20
Dell S3220DGF 31.5 Inch VA Gaming Monitor Amazon Prime Day Bargain Price! But WIll it Get Delivered? - 14th Oct 20
Karcher K7 Pressure Washer Amazon Prime Day Bargain 51% Discount! - 14th Oct 20
Top Strategies Day Traders Adopt - 14th Oct 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Silver and Warnings From Exponential Markets

Commodities / Gold and Silver 2015 Aug 31, 2015 - 04:48 PM GMT

By: DeviantInvestor

Commodities

For the past 15 – 40 years, debt and prices in most markets have moved upward, broadly speaking, in exponential trends.  See the following log-scale graphs.

US T-Bonds:  T-Bonds have been rallying in their bull market since the early 1980’s.  Will they continue, correct, or crash?  Doug Noland says it is “The Beginning of the Great Global Unwind.”  See chart.


Doug Noland:

“I really fear for the unwind of the ‘global government finance Bubble’ – the grand finale of a multi-decade period of serial bubbles.  It’s history’s first systemic global Bubble, encompassing the world’s Credit systems, securities markets and monetary systems more generally.”

Corn: Since the late 1990s corn prices have increased in an erratic exponential pattern.  Corn prices are currently way below trend.  Deflationary forces push it downward but devaluation of currencies will push it upward.

Dr. Copper:  It has the same basic pattern as corn and sugar (not shown).

Silver:  Silver prices increased exponentially since 2001, peaked in April 2011 at more than double the exponential trend price (as drawn), and crashed to about half the exponential trend price.

 

The Message from the Markets:

Paper markets such as T-Bonds and the S&P 500 have been levitated by central bank “money printing,” government support, and the inevitable devaluation of fiat currencies built into the structure of the financial system.  Paper markets move higher – exponentially – as currencies devalue and reset or crash to lower levels, and then repeat.

“Buy for the long term” works if you buy the lows and lighten up at the highs.  Few people succeed.  NOW is NOT the time to buy most stocks, while NOW is the time to buy silver and gold.  However, few people will transfer their digital currencies into physical metal, and most will regret not doing so.

Commodity markets increase in price due to the same devaluation of currencies that propels paper markets higher.  They also fall when global economies weaken, or when countries manipulate commodity prices lower (e.g. crude oil) to damage the economies of enemies.  These tactics have been used for decades – and will continue to be used by global governments.

But people and economies need commodities such as silver, copper, crude oil, and sugar.  Devaluations, manipulations, supply, demand, taxes, HFTers, and government legislation can push prices far higher and lower for years.  Perhaps some commodity prices will stay low for a while longer, but remember:

  • Central banks heavily influence the supply of money and will inflate their currencies. The exponential increases in prices will continue unless we devolve into a deflationary depression that overwhelms the considerable efforts of central banks to inflate.
  • Central banks fear deflationary forces and will inflate and devalue their currencies to avoid deflation.
  • Politicians will spend and borrow, and create exponentially increasing debt which increases the money supply and devalues their currencies.
  • Silver and gold act like commodities but also as monetary metals. When economies, stock markets, and bond markets become unstable due to excess leverage and overly optimistic valuations (like now), when people, hedge funds, and institutions become fearful, they want real assets, like gold and silver, not debt based paper that can devalue rapidly.  A trickle of demand for silver and gold can quickly become a flood based on fear and worry.

GENERAL CONCLUSIONS:

Economic policies that devalue currencies and create inflation … will create inflation.  Yes, it is stupid but central banks and governments everywhere use the same flawed thinking.  How are those policies working for people in Venezuela, Argentina, and Ukraine today?  Is it conceptually different in Greece, Russia, the UK, Japan, or the US?

Silver prices are currently low compared to global debt, CEO bonuses, government spending, official US national debt, the S&P 500 Index, silver prices in 2011, money in circulation, gold prices, military spending, pension underfunding, and the prices of college tuition and health care.  Silver prices will increase substantially in the next five years.

If a government subsidizes butter, it will get more butter.  The US government, and many others, currently subsidize social welfare spending, food stamps (SNAP), poverty, disability income, corporate welfare, military adventures, dependence upon government, media propaganda, financial corruption, medical expenses, Medicare, congressional corruption, and so much more.  Expect more of the same.  The consequences of most of the above will directly or indirectly increase silver prices over the next five years.

Thought Experiment:  Place a few assets in a virtual time capsule that you will open in the year 2020.  Do you want gold coins, silver bars, paper dollar bills, a stock index ETF certificate, a junk bond issued by an insolvent “fracking” company, Apple stock certificates, Venezuela Bolivars, Russian Rubles, junk silver coins, or Hillary 2016 campaign buttons?  In 2020 we will recognize that the value of silver coins, silver bars, and gold coins has increased substantially compared to the other options.

Invest and purchase financial insurance, such as silver and gold, accordingly.

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

© 2005-2019 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