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
Stock Market Elliott Wave Analysis - 23rd Nov 20
Evolution of the Fed - 23rd Nov 20
Gold and Silver Now and Then - A Comparison - 23rd Nov 20
Nasdaq NQ Has Stalled Above a 1.382 Fibonacci Expansion Range Three Times - 23rd Nov 20
Learn How To Trade Forex Successfully - 23rd Nov 20
Market 2020 vs 2016 and 2012 - 22nd Nov 20
Gold & Silver - Adapting Dynamic Learning Shows Possible Upside Price Rally - 22nd Nov 20
Stock Market Short-term Correction - 22nd Nov 20
Stock Market SPY/SPX Island Setups Warn Of A Potential Reversal In This Uptrend - 21st Nov 20
Why Budgies Make Great Pets for Kids - 21st Nov 20
How To Find The Best Dry Dog Food For Your Furry Best Friend?  - 21st Nov 20
The Key to a Successful LGBT Relationship is Matching by Preferences - 21st Nov 20
Stock Market Dow Long-term Trend Analysis - 20th Nov 20
Margin: How Stock Market Investors Are "Reaching for the Stars" - 20th Nov 20
World’s Largest Free-Trade Pact Inspiration for Global Economic Recovery - 20th Nov 20
Dating Sites Break all the Stereotypes About Distance - 20th Nov 20
THE STOCK MARKET BIG PICTURE - Video - 19th Nov 20
Reasons why Bitcoin is Treading at it's Highest Level Since 2017 and a Warning - 19th Nov 20
Media Celebrates after Trump’s Pro-Gold Fed Nominee Gets Blocked - 19th Nov 20
DJIA Short-term Stock Market Technical Trend Analysis - 19th Nov 20
Demoncracy Ushers in the Flu World Order How to Survive and Profit From What Is Coming - 19th Nov 20
US Bond Market: "When Investors Should Worry" - 18th Nov 20
Gold Remains the Best Pandemic Insurance - 18th Nov 20
GPU Fan Not Spinning FIX - How to Easily Extend the Life of Your Gaming PC System - 18th Nov 20
Dow Jones E-Mini Futures Tag 30k Twice – Setting Up Stock Market Double Top - 18th Nov 20
Edge Computing Is Leading the Next Great Tech Revolution - 18th Nov 20
This Chart Signals When Gold Stocks Will Explode - 17th Nov 20
Gold Price Momentous ally From 2000 Compared To SPY Stock Market and Nasdaq - 17th Nov 20
Creating Marketing Campaigns Using the Freedom of Information Act - 17th Nov 20
ILLEGITIMATE PRESIDENT - 17th Nov 20
Stock Market Uptrend in Process - 17th Nov 20
How My Friend Made $128,000 Investing in Stocks Without Knowing It - 16th Nov 20
Free-spending Biden and/or continued Fed stimulus will hike Gold prices - 16th Nov 20
Top Cheap Budgie Toys - Every Budgie Owner Should Have These Safe Bird Toys! - 16th Nov 20
Line Up For Your Jab to get your Covaids Freedom Pass and a 5% Work From Home Tax - 16th Nov 20
You May Have Overlooked These “Sleeper” Precious Metals - 16th Nov 20
Demystifying interesting facts about online Casinos - 16th Nov 20
What's Ahead for the Gold Market? - 15th Nov 20
Gold’s Momentous Rally From 2000 Compared To Stock Market SPY & QQQ - 15th Nov 20
Overclockers UK Quality of Custom Gaming System Build - OEM Windows Sticker? - 15th Nov 20
UK GCSE Exams 2021 CANCELLED! Grades Based on Mock Exams and Teacher Assessments - 15th Nov 20
Global "Debt Mountain": Beware of This "New Peak" - 13th Nov 20
Overclocking Zen 3 Ryzen 5600x, 5800x, 5900x and 5950x to 4.7ghz All Cores Cinebench R20 Scores - 13th Nov 20
Is Silver Leading Bitcoin or is Bitcoin Leading Silver? - 13th Nov 20
How Elliott Waves Simplify Your Technical Analysis - 13th Nov 20
How to buy Bitcoins using debit/credit card? - 13th Nov 20
Will COVID Vaccine Kill Gold and Silver? - 12th Nov 20
Access to Critical Market Reports - 12th Nov 20
Stock Market Dow Futures Reach 30,000 on News of COVID-19 Vaccine Trials Success - 12th Nov 20
8 Terms & Conditions You Must Know Before Asking For Life Insurance Policy Quotes - 12th Nov 20
Gold Stocks Post 2020 US Election Outlook - 11th Nov 20
Champions’ League Group Stage Draw: All You Need To Know - 11th Nov 20
Stock Market Secular Trend - 11th Nov 20
Stock Market Correction Curtailed by US Election - 11th Nov 20
What Causes a Financial Bubble? - 11th Nov 20
Ryzen 9 5900X RTX 3080 - Scan.co.uk vs Overclockers.co.uk UK Custom PC System Builder Review - 10th Nov 20
Killing Driveway Weeds FAST with a Pressure Washer - Saving Block Paving from LOTS of WEEDs - 10th Nov 20
Trump Fired, Biden Hired, What Next?  - 10th Nov 20
Looking for a Personal Loan? Here Is What You Have To Know  - 10th Nov 20

Market Oracle FREE Newsletter

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

Silver: May the 100 Year Force Be With You

Commodities / Gold and Silver 2015 Dec 21, 2015 - 06:03 PM GMT

By: DeviantInvestor

Commodities

What force?  Some of the “forces” in our world that are supportive of higher silver prices are:

  • Debt Increases: Global debt exceeds $200 Trillion and rising rapidly.
  • Warfare: Syria, Turkey, Russia, Ukraine, South China Sea, Chicago and others.  It is a long list.
  • Welfare: Bank bailouts, military contractors, Medicaid, food stamps, dozens of “programs” and so much more.
  • Central bank “money printing:” Bank of Japan, European Central Bank, the Federal Reserve, Bank of England and others are doing what they do best – devaluing their currencies.  The bubbles created in the bond, stock, and currency markets must be fed and supported.

There is little doubt that the world is drowning in debt.  The choices seem to be:

  • Add even more debt. Some Nobel Prize winners like this option.  The default action by nearly every politician and government is to create far more debt every day, until the system breaks.
  • Inflate the currency so the debt becomes insignificant – think Weimar Germany and Zimbabwe. Hyperinflation has never been good for the middle and poor classes.  The financial and political elite take care of themselves.
  • Raise taxes and reduce debt. NOT A CHANCE!  Have you ever met a politician that wanted to spend less money?
  • Default! Unthinkable!  Sorry bond markets, insurance companies, hedge funds, pension funds, savers, we were lying when we promised to repay you …….  Unthinkable!  (Until there are no remaining choices …)

If defaulting on the national debt and raising taxes can’t or won’t happen, governments are left with more of the same – add more debt, pretend it will be repaid, increase consumer prices, and hope the financial system does not crash.  This will lead to ugly consequences such as much higher inflation, a deflationary crash, and/or a hyperinflationary depression.

What does United States history indicate?  Examine the following graphs that cover 100 years on a log scale.

Q-ND

National debt has increased from a few $ billion to about $19 Trillion.  The 100 year history is clear.  Expect debt to increase.

Q-SICL

Over 100 years crude oil prices have averaged about three times the price of silver.  For approximately equal weights graph the price of crude oil plus 3 times the silver price.  The trend toward higher commodity prices over 100 years is clear.  However silver prices have been crushed over the past four years and crude oil has similarly fallen during the past 1.5 years.  The 100 year chart makes the recent nasty short-term price collapse look tiny and unimportant.  Expect higher long-term prices for silver and crude oil as politicians spend and central banks “print” and both silver and crude oil prices eventually return to their long-term uptrend.  If not, the system has crashed and the unpleasantness is beyond belief.

Q-ND ratio

Over 100 years the national debt has increased more rapidly than prices for silver and crude oil – hence the ratio declined.  The important point is how low the ratio is currently, and how much higher those crude oil and silver prices will go if governments and central banks choose to inflate away their debt.  The upper trend channel suggests ratios 7 to 10 times higher.  Silver prices will rise considerably more than the increase in the ratio.

Q-DJ

Over 100 years the Dow (DJIA) has risen somewhat faster than silver and crude oil prices.  The ratio of silver plus crude prices to the DOW is currently at the low end of the range and has been lower only around the year 2000 when the DOW bubbled up and silver and crude were nearly forgotten.  The ratio could easily rise by a factor of 10.

CONCLUSIONS:

Silver and crude oil prices have been crushed while the DOW has been levitated.  But national debt increases inexorably – like a runaway freight train on full throttle.

Don’t expect debt to decrease, be repaid, or even to slow its rate of growth.  Hence currency in circulation and most prices for what we need will rise.  Look again at the exponential graph of debt.

Crude oil and silver prices are historically low compared to national debt, the DOW, the S&P (not shown) and most paper investments.  Eventually people will realize that “paper” investments can return to their intrinsic value – much lower.  Or relatively speaking, silver and crude oil will be priced much higher in devaluing currencies.

When:  My crystal ball is cloudy, but silver demand is strong and prices are too low for miners to make a profit.  Eventually silver prices will rise – perhaps soon.  Crude oil prices?  Who knows all the political manipulations that influence crude oil prices?

Stack silver, stack gold, and remember that 100 year trends are not likely to change.  Expect more debt, more currency in circulation, exponential increases in prices, and more spending.  War will accelerate the process.

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