Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
Has Next UK Financial Crisis Just Started? Bank Accounts Being Frozen - 21st July 19
Silver to Continue Lagging Gold, Will Struggle to Overcome $17 - 21st July 19
What’s With all the Weird Weather?  - 21st July 19
Halifax Stopping Customers Withdrawing Funds Online - UK Brexit Banking Crisis Starting? - 21st July 19
US House Prices Trend Forecast 2019 to 2021 - 20th July 19
MICROSOFT Cortana, Azure AI Platform Machine Intelligence Stock Investing Video - 20th July 19
Africa Rising – Population Explosion, Geopolitical and Economic Consquences - 20th July 19
Gold Mining Stocks Q2’19 Results Analysis - 20th July 19
This Is Your Last Chance to Dump Netflix Stock - 19th July 19
Gold and US Stock Mid Term Election and Decade Cycles - 19th July 19
Precious Metals Big Picture, as Silver Gets on its Horse - 19th July 19
This Technology Everyone Laughed Off Is Quietly Changing the World - 19th July 19
Green Tech Stocks To Watch - 19th July 19
Double Top In Transportation and Metals Breakout Are Key Stock Market Topping Signals - 18th July 19
AI Machine Learning PC Custom Build Specs for £2,500 - Scan Computers 3SX - 18th July 19
The Best “Pick-and-Shovel” Play for the Online Grocery Boom - 18th July 19
Is the Stock Market Rally Floating on Thin Air? - 18th July 19
Biotech Stocks With Near Term Catalysts - 18th July 19
SPX Consolidating, GBP and CAD Could be in Focus - 18th July 19
UK House Building and Population Growth Analysis - 17th July 19
Financial Crisis Stocks Bear Market Is Scary Close - 17th July 19
Want to See What's Next for the US Economy? Try This. - 17th July 19
What to do if You Blow the Trading Account - 17th July 19
Bitcoin Is Far Too Risky for Most Investors - 17th July 19
Core Inflation Rises but Fed Is Going to Cut Rates. Will Gold Gain? - 17th July 19
Boost your Trading Results - FREE eBook - 17th July 19
This Needs To Happen Before Silver Really Takes Off - 17th July 19
NASDAQ Should Reach 8031 Before Topping - 17th July 19
US Housing Market Real Terms BUY / SELL Indicator - 16th July 19
Could Trump Really Win the 2020 US Presidential Election? - 16th July 19
Gold Stocks Forming Bullish Consolidation - 16th July 19
Will Fed Easing Turn Out Like 1995 or 2007? - 16th July 19
Red Rock Entertainment Investments: Around the world in a day with Supreme Jets - 16th July 19
Silver Has Already Gone from Weak to Strong Hands - 15th July 19
Top Equity Mutual Funds That Offer Best Returns - 15th July 19
Gold’s Breakout And The US Dollar - 15th July 19
Financial Markets, Iran, U.S. Global Hegemony - 15th July 19
U.S Bond Yields Point to a 40% Rise in SPX - 15th July 19
Corporate Earnings may Surprise the Stock Market – Watch Out! - 15th July 19
Stock Market Interest Rate Cut Prevails - 15th July 19
Dow Stock Market Trend Forecast Current State July 2019 Video - 15th July 19
Why Summer is the Best Time to be in the Entertainment Industry - 15th July 19
Mid-August Is A Critical Turning Point For US Stocks - 14th July 19
Fed’s Recessionary Indicators and Gold - 14th July 19
The Problem with Keynesian Economics - 14th July 19

Market Oracle FREE Newsletter

Top AI Stocks Investing to Profit from the Machine Intelligence Mega-trend

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

© 2005-2019 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