Best of the Week
Most Popular
1. US Housing Market House Prices Bull Market Trend Current State - Nadeem_Walayat
2.Gold and Silver End of Week Technical, CoT and Fundamental Status - Gary_Tanashian
3.Stock Market Dow Trend Forecast - April Update - Nadeem_Walayat
4.When Will the Stock Market’s Rally Stop? - Troy_Bombardia
5.Russia and China Intend to Drain the West of Its Gold - MoneyMetals
6.BAIDU (BIDU) - Top 10 Artificial Intelligence Stocks Investing To Profit from AI Mega-trend - Nadeem_Walayat
7.Stop Feeding the Chinese Empire - ‘Belt and Road’ Trojan Horse - Richard_Mills
8.Stock Market US China Trade War Panic! Trend Forecast May 2019 Update - Nadeem_Walayat
9.US China Trade Impasse Threatens US Lithium, Rare Earth Imports - Richard_Mills
10.How to Invest in AI Stocks to Profit from the Machine Intelligence Mega-trend - Nadeem_Walayat
Last 7 days
The Bad News About Record-Low Unemployment - 24th June 19
Stock Market New High, but…! - 24th June 19
Formula for when the Great Stock Market Rally Ends - 24th June 19
How To Time Market Tops and Bottoms - 24th June 19
5 basic tips to help mitigate the vulnerability inherent in email communications - 24th June 19
Will Google AI Kill Us? Man vs Machine Intelligence - 24th June 19
Why are Central Banks Buying Gold and Dumping Dollars? - 23rd June 19
Financial Sector Paints A Clear Picture For Stock Market Trading Profits - 23rd June 19
What You Should Look While Choosing Online Casino - 23rd June 19
INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - 22nd June 19
Here’s Why You Should Drive a Piece of Crap Car - 22nd June 19
How Do Stock Prices React to Fed Interest Rate Cuts? - 22nd June 19
Gold Bull Market Breaking Out! - 21st June 19
Post-FOMC Commentary: Delusions of Grandeur - 21st June 19
Gold Scores Gains as Draghi and Powel Grow Concerned - 21st June 19
Potential Upside Targets for Gold Stocks - 21st June 19
Gold Price Trend Forcast to End September 2019 - 21st June 19
The Gold (and Silver) Volcano Is Ready to Erupt - 21st June 19
Fed Leaves Rates Unchanged – Gold & Stocks Rally/Dollar Falls - 21st June 19
Silver Medium-Term Trend Analysis - 20th June 19
Gold Mining Stocks Waiting on This Chart - 20th June 19
A Key Gold Bull Market Signal - 20th June 19
Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - 20th June 19
Investing in APPLE (AAPL) to Profit From AI Machine Learning Stocks - 20th June 19
Small Cap Stocks May Lead A Market Rally - 20th June 19 -
Interest Rates Square Minus Zero - 20th June 19
Advice for Financing a Luxury Vehicle - 20th June 19
Stock Market Final Blow Off Top Just Hit… Next Week Comes the FIREWORKS - 20th June 19
US Dollar Rallies Off Support But Is This A Top Or Bottom? - 19th June 19
Most Income Investors Are Picking Up Nickels in Front of a Steamroller - 19th June 19
Is the Stock Market’s Volatility About to Spike? - 19th June 19
Facebook's Libra Crypto currency vs Bitcoin: Five Key Differences - 19th June 19
Fed May Trigger Wild Swing In Stock Index and Precious Metals - 19th June 19
How Long Do Land Rover Discovery Sport Brake Pads Last? - 19th June 19
Gold Golden 'Moment of Truth' Is Upon Us: $1,400-Plus or Not? - 18th June 19
Exceptional Times for Gold Warrant Special Attention - 18th June 19
The Stock Market Has Gone Nowhere and Volume is Low. What’s Next - 18th June 19
Silver Long-Term Trend Analysis - 18th June 19
IBM - Watson Deep Learning - AI Stocks Investing - Video - 18th June 19
Investors are Confident, Bullish and Buying Stocks, but… - 18th June 19
Gold and Silver Reversals – Impossible Not to Notice - 18th June 19
S&P 500 Stuck at 2,900, Still No Clear Direction - 17th June 19
Is Boris set to be the next Conservation leader? - 17th June 19
Clock’s Ticking on Your Chance to Profit from the Yield Curve Inversion - 17th June 19
Stock Market Rally Faltering? - 17th June 19
Johnson Vs Gove Tory Leadership Contest Grudge Match Betfair Betting - 17th June 19
Nasdaq Stock Index Prediction System Is Telling Us A Very Different Story - 17th June 19
King Dollar Rides Higher Creating Pressures On Foreign Economies - 17th June 19
Land Rover Discovery Sport Tailgate Not Working Problems Fix (70) - 17th June 19
Stock Market Outlook: is the S&P today just like 2007 or 2016? - 17th June 19

Market Oracle FREE Newsletter

Gold Price Trend Forecast Summer 2019

Silver Prices in an Exponential Financial System

Commodities / Gold and Silver 2016 Oct 26, 2016 - 03:35 PM GMT

By: DeviantInvestor

Commodities

Our financial systems create exponential increases in:

  1. Debt
  2. Prices for stocks
  3. Prices for commodities
  4. Currency in circulation
  5. Prices for gold and silver

Why? Fractional reserve banking, central banks creating more currency, and politicians who spend governments deeper into debt each year… but this article isn’t about why.

Student loan debt in the U.S. is about $1.4 trillion, auto debt is about $1 trillion, official national debt is nearly $20 trillion, corporate debt is huge and the list goes on. Much of it will never be paid in current dollars. Default will occur via repudiation or hyperinflation. Look at the official national debt below:

Official national debt has increased exponentially since 1913 and somewhat more rapidly since 2001. Project out another ten years and we see the following:

Increasing debt at about the same rate as the past 30 years projects north of $40 trillion in 10 years, BEFORE the massive increase in debt that will accompany new wars, more social programs, out of control Medicare spending, and 100 other items on the “out of control” list.

Read Karl Denninger: The Certain Destruction of Our Nation

Exponential increases in total debt are also seen in the increases in the net deficits. The following shows the net increase in debt every eight years.

But along with exponential increases in debt and deficits we also see similar increases in the S&P and Silver.

The S&P has increased from about 200 to over 2,000 in 30 years, with a number of significant crashes during that time. Silver has increased from an annual average of about $4 to a peak over $48 since 1990.

Our financial systems exponentially increase the quantity of currency in circulation and consequently the prices for practically everything increase. Think college tuition, medical care, beer, cigarettes, food, gold, silver, postage and more. A few prices have come down or increased more slowly, such as televisions and computers, thanks to technological innovations.

But on average prices for almost everything, including stocks, have increased since 1913 and will continue to increase until our economy is crushed with a major financial and economic reset. Until then, expect erratically higher prices, UNLESS:

  • Congress balances the budget
  • Central banks stop creating currencies
  • Governments reduce total employees, expenses and taxes
  • Militaries are reduced in size and expense
  • Medicare expenses are capped or reduced

Clearly none of the above will happen in our current world.

What can we expect for silver prices?

In the long term silver prices increase exponentially, along with other prices. Examine the following chart of the ratio of silver prices (times 100) to the S&P 500 Index using the annual average of monthly prices.

Conclusion: Silver prices are currently low compared to the S&P 500 Index based on 30+ years of prices. Central banks have levitated stock prices and “discouraged” silver prices since 2011 so this low ratio makes sense. What if the S&P continues its exponential increases and the ratio reverts back toward the high end of its range?

In ten years, given the exponential increases shown above, and assuming, more or less, current economic craziness continues without a massive “reset” then the S&P could be approximately 4,000, the silver to S&P ratio could be around 3.0, and the annual average price for silver could be roughly $100 – $150, with potential price spikes several times higher.

Can we expect the exponential increases from the past 100 years to continue?

  • Of course not! All exponentially growing systems eventually crash. When is difficult to estimate.
  • Nuclear war would change circumstances for most people, countries, and commodity prices. Nuclear war could happen accidentally or intentionally to cover and distract attention from criminal behavior, massive fraud, crashing economies, and policy failures. I trust other options will be used and we will be spared the devastation of nuclear war… but it is possible.
  • The next U.S. president is likely to increase borrowing and spending. Much “free stuff” has been promised and “fiscal stimulus” will prevail. Perhaps he or she will push systems into hyper-inflationary mode, either accidentally or intentionally. In that case prices will be much higher. Reminder: Argentina has devalued its peso, compared to the US dollar, by 10 trillion to one since the 1950s. It can happen anywhere.

CONCLUSIONS:

  • Silver and other prices increase exponentially.
  • Silver prices are currently, relative to the S&P, quite low.
  • A “reset” is coming sometime … It seems likely that silver will be reset much higher in both price and purchasing power.
  • Hyperinflation is an insane response but may be used by the financial and political elite for their purposes. The same is true for nuclear war.

Silver flies, paper dies!

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

© 2016 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