Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Trump Stocks and Crypto Mania 2025 Incoming as Bitcoin Breaks Above $100k - 8th Dec 24
Gold Price Multiple Confirmations - Are You Ready? - 8th Dec 24
Gold Price Monster Upleg Lives - 8th Dec 24
Stock & Crypto Markets Going into December 2024 - 2nd Dec 24
US Presidential Election Year Stock Market Seasonal Trend - 29th Nov 24
Who controls the past controls the future: who controls the present controls the past - 29th Nov 24
Gold After Trump Wins - 29th Nov 24
The AI Stocks, Housing, Inflation and Bitcoin Crypto Mega-trends - 27th Nov 24
Gold Price Ahead of the Thanksgiving Weekend - 27th Nov 24
Bitcoin Gravy Train Trend Forecast to June 2025 - 24th Nov 24
Stocks, Bitcoin and Crypto Markets Breaking Bad on Donald Trump Pump - 21st Nov 24
Gold Price To Re-Test $2,700 - 21st Nov 24
Stock Market Sentiment Speaks: This Is My Strong Warning To You - 21st Nov 24
Financial Crisis 2025 - This is Going to Shock People! - 21st Nov 24
Dubai Deluge - AI Tech Stocks Earnings Correction Opportunities - 18th Nov 24
Why President Trump Has NO Real Power - Deep State Military Industrial Complex - 8th Nov 24
Social Grant Increases and Serge Belamant Amid South Africa's New Political Landscape - 8th Nov 24
Is Forex Worth It? - 8th Nov 24
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Two Top Reasons Why Silver Is A Must-Have

Commodities / Gold and Silver 2016 Feb 18, 2016 - 10:42 AM GMT

By: Hubert_Moolman

Commodities

The timing of this silver rally relative to the gold silver ratio (GSR).

In the last 100 years, there were three significant silver rallies, with the current one still in progress. Below is a long-term Gold/Silver Ratio chart showing those silver rallies:


I have highlighted the periods during which the silver rallies occurred - from bottom to peak.

Gold/Silver Ratio

  • The silver rally of the 30s started (measured from bottom) before the 1940s major peak of the GSR.
  • The silver rally of the 70s started (measured from bottom) before the 1980 major bottom of the GSR.
  • The current silver rally started (measured from bottom) after the 1991 major peak the GSR.

Although the three rallies have similarities, they are actually radically different, when you look at them relative to the GSR.

The 30s silver rally was not that strong because silver had not bottomed yet (from a long-term point of view), in relation to gold.

Although the rally of the 70s started during a down-trend in the GSR, it was right at the end of the downtrend, as well as closer to the lows than to the highs.

The current rally seems to have started at a "sweet spot". It started just after the beginning of the GSR downtrend, as well as close enough to the highs. This bull market, therefore, has much more energy available for a silver price rise as compared to the previous bull markets. It is much like how cycling downhill is easier than cycling uphill (just visualize it on the chart).

With the ratio even higher than when the silver bull market started; it is a really good time to exchange gold for silver. So, if you understand gold currently to be the ideal investment, then how much more silver?

Silver is probably the best insurance against consequences of the coming debt market collapse

Today's debt levels are massive compared to any previous era. These debt-levels are unsustainable, and we are headed for an inevitable debt collapse.

The US, for example, owes holders of US dollars (world-wide) about 114 771 tonnes of gold as at August 2015 (US monetary base/price of gold per ounce - read more ). That is about 67% to 74% of world gold reserves, depending on which estimate one goes by.

There is no way that the US is able to obtain 67% of all world gold reserves. Even during its best years it was only able to claim a maximum of 22 000 tonnes of gold. Fortunately (for the US), the decree by Nixon in 1971 prevents US dollar holders to claim their gold from the US. Unfortunatley (for the US), the decree will not stop the inevitable bankruptcy. That is the collapse of the US dollar and US bond (debt) market.

Fortunately, silver provides a perfect insurance against this coming debt collapse. This is because silver and debt (such as bonds) have historically moved in opposite directions. If silver is going up, then debt is going down and vice versa.

Below, is a chart of interest on 10 - year treasury bonds, since 1900 to prove this:

10-Year Treasury rates 1900-Present

The blue is the actual interest rate movement, whereas, I have indicated (in grey) how the price of silver has moved almost in union with the interest rates over the long-term.

Alternatively (because the interest rate on a bond moves opposite to the price of the bond), when bonds are going up, then silver is going down, and vice versa.

The fallout from this debt collapse will be devastating - unlike anything seen before. Insurance like silver, against such a terrible and real threat, is a must have.

For more of this kind of analysis on silver and gold, you are welcome to subscribe to my premium service. I have also recently completed a Long-term Silver Fractal Analysis Report .

Warm regards
Hubert

“And it shall come to pass, that whosoever shall call on the name of the Lord shall be saved”

http://hubertmoolman.wordpress.com/

You can email any comments to hubert@hgmandassociates.co.za

© 2016 Copyright Hubert Moolman - 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.


© 2005-2022 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