Best of the Week
Most Popular
1.Bitcoin War Begins – Bitcoin Cash Rises 50% While Bitcoin Drops $1,000 In 24 Hours - Jeff_Berwick
2.Fragile Stock Market Bull in a China Shop -James_Quinn
3.Sheffield Leafy Suburbs Tree Felling's Triggering House Prices CRASH! - Nadeem_Walayat
4.Bank of England Hikes UK Interest Rates 100%, Reversing BREXIT PANIC Cut! - Nadeem_Walayat
5.Government Finances and Gold - Cautionary Tale told in Four Charts - Michael_J_Kosares
6.Gold Stocks Winter Rally - Zeal_LLC
7.The Stock Market- From Here to Infinity? - Plunger
8.Ethereum (ETH/USD) – bullish breakout of large symmetrical triangle looks to be getting closer - MarketsToday
9.Electronic Gold: The Deep State’s Corrupt Threat to Human Prosperity and Freedom - Stewart_Dougherty
10.Finally, The Fall Of The House Of Saud - Jim_Willie_CB
Last 7 days
Best Time / Month to Buy a Used Car From a UK Dealer - 16th Dec 17
Relief Rally in Gold Mining Stocks - 16th Dec 17
Amid Bad Fundamentals, Gold Sector Rally May Have Begun - 16th Dec 17
Gold Bullish on US Fed Interest Rate Hike - 16th Dec 17
The LORAX Explains What Happened to Sheffield's Street Trees 2017 - 16th Dec 17
Bitcoin Trading Alert: Bitcoin Pauses – Will Appreciation Follow? - 16th Dec 17
SanDisk Ultra 128gb 100mbs Micro SD Card for Smartphone's Speed Test - 15th Dec 17
Inflation is Spiking Globally… Bond Bubble Bursts in 3… 2… - 15th Dec 17
Sheffield's 'Real' LORAX Defending the Trees From the Labour City Council Patrol Units - 15th Dec 17
Stock Market Decline Signals are Near - 15th Dec 17
Santa Is Putting Christmas On The Blockchain And Saving Billions - 14th Dec 17
The Unprotected, the Protected, the Vulnerably Protected Classes—Which Are You? - 14th Dec 17
Gold’s Upside Target - 14th Dec 17
Year-end US Interest Rate Hike Again Proves To Be Launchpad For Gold Price - 14th Dec 17
2 Charts That Might Define the Fed’s Jerome Powell Era - 13th Dec 17
UK Stagflation Risk As Inflation Hits 3.1% and House Prices Fall - 13th Dec 17
Stock Market Elliott Wave Forecasts - Is the World coming to the end? - 13th Dec 17
A Method Traders Can Use to Confirm an Elliott Wave Count - 13th Dec 17
Best Time / Month of Year to BUY a USED Car is DECEMBER, UK Analysis - 13th Dec 17
A Former Wall Street Veteran: Good Traders Are Born, Not Trained - 12th Dec 17
Buy Gold, Silver Time After Speculators Reduce Longs and Banks Reduce Shorts to Continue? - 12th Dec 17
Masters of Economic and Political Illusion – in Taxes, Debt, Government, and Markets - 12th Dec 17
Approved Used Land Rover Main Dealer Real Customer Buying Guide - Hunters, Chester - 12th Dec 17
Gold Price 100% Bullish Signal - 12th Dec 17
Epic Stock Market & Fixed Income Bubble Will Not End Well - 12th Dec 17
Bitcoin can be stolen. Although Can’t be hacked - 11th Dec 17
Have Stocks Reached A Permanently Rigged Plateau? - 11th Dec 17
Trying To Beat The System Is A Fatally Flawed Investment Strategy - 11th Dec 17
Is This The Beginning Of The Next Silver Rush? - 11th Dec 17
The Dow Gold Ratio - 11th Dec 17
Evidence of a Stock Market Top Mounting - 10th Dec 17
Bitcoin Doesn’t Exist – Forks and Mad Max - 10th Dec 17

Market Oracle FREE Newsletter

Traders Workshop

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.


© 2005-2018 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

Catching a Falling Financial Knife