Silver currently looks inexpensive compared to crude oil, the S&P 500 and the size and rate of increase of the national debt suggest silver is ready to rally.
Christenson goes on to say in further edited excerpts:
Silver vs. Crude Oil
The price of a barrel of crude oil has increased from about $1.50 to about $90 over the past 50 years. Examine the following graph of silver divided by crude oil. They increase together on average, but silver currently looks inexpensive compared to crude oil. Expect silver to rise in price more rapidly than crude oil.
Silver vs. S&P 500
Examine the graph of (100 times) silver divided by the S&P 500 Index. The attractiveness of financial assets (S&P) varies widely compared to the need for hard assets such as silver and gold. Note that the ratio has dropped from over 3 to less than 1 in the past 3 years. Expect silver to rally substantially compared to the S&P.
- Do you expect the emphasis upon warfare and welfare to change?
- Do you expect fewer dollars to be created?
- Do you expect central banks will self-destruct by allowing interest rates to rise and/or deflationary forces to overwhelm the economy?
The above is highly unlikely and hence, unless (until) something unlikely and world changing occurs, we should expect, as with the past 50 years:
- More warfare
- More welfare
- Increasing consumer prices
- More debt
- More government statistics proving everything is wonderful in election years
- More volatility, anxiety, worry, and concern over markets, ebola, war, the NSA, which insider will purchase the presidency etc.
- More gold and silver coins sold to Americans and Europeans who increasingly distrust paper assets.
- More gold and silver purchases by Asian individuals and governments who increasingly distrust paper assets.
- More talk-talk on financial TV about the great stock buying opportunities available in 2014, 2015, 2016, and through 2030.
Silver is currently inexpensive compared to the S&P 500 Index, crude oil, the size and rate of increase of the national debt, and especially the future price for silver after markets have reset, paper assets have devalued, and hard assets have jumped much higher in price.
Inevitable? Certainly not, but the best overall predictor of future prices, future policies, and future wars seems to be the long term trends shown by past prices, policies, and wars.
Weekly Silver Prices
Examine the following graph of weekly silver prices since 1994.
The black vertical lines are spaced 5.75 years apart and they show significant lows in silver prices in 1997, 2003, 2008, and about now.
Based on the stochastic index and the disparity index (and many more such indicators that are not shown) silver prices are ready to rally.
Editor’s Note: The author’s views and conclusions in the above article are unaltered and no personal comments have been included to maintain the integrity of the original post. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.
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