Silver

This article looks at the severity, duration, and recoveries of physical gold and silver in three periods that seem to most resemble what’s happening today: the Great Recession, the 1970s, and the Great Depression to see what we can learn.

If, and indeed when, the U.S economy goes into recession commodity prices will fall to levels we would have previously found unimaginable. This could be $20 oil and $7 Silver.

Those who prefer silver always seem to think the ratio of gold to silver is going to reverse “soon” - and it might; maybe significantly so, too - but there are no fundamental reasons for the ratio to move up or down at any given time and, as such, there is no reason to track it, either.

Silver prices have risen exponentially for the past 90 years as the dollar has been consistently devalued. Expect continued silver price rises.

I am convinced that silver will soon explode in price in a manner of unprecedented proportions, both in terms of previous silver rallies and relative to all other commodities. By unprecedented, I mean that the price of silver will move suddenly and shockingly higher in a manner never witnessed previously, including the great price run ups in 1980 and 2011. The highest prior price level of $50 will quickly be exceeded.

If you have not grasped the reality of what is likely to unfold over the next 6 to 12+ months in the global markets and that precious metals are the setup of the decade, then pay attention to the fact that gold and silver are poised for moves ranging from 40% to 240% over the next 12+ months depending on the scale and scope of this move...

If you are buying silver because you expect a recession will take its price higher, you are skating on thin ice. The expectation is fundamentally flawed and there is nothing historically to support the expectation for higher silver prices during recessions.

I am increasingly bullish on the prospects for silver, for the following three primary reasons:

The silver market is only 1/10th the size of the gold market so it’s prone to crisis-driven upside explosions as money floods into it during periods of high inflation and, today, the stage is set for an explosion in inflation. I expect it to kick off a crisis-driven mania into silver like what happened in 1980 and, adjusted for today’s prices, that means silver soaring above $160 a [troy] ounce.

History says the silver surge is coming. It means we should hold on and make sure we have the amount of metal we want.