In a sense, I’m not qualified to issue an “expert” opinion on the future prices of silver and gold.
I’m a managing editor of a weekly newspaper with a degree in political science. I took two economics classes in college. I don’t work in the “industry” that establishes PM prices. My knowledge of futures markets, “all-in” mining costs and technical analysis is elementary at best.
But I’m a writer (one of those who wants to “save the world” with my op-ed columns) and a silver investor. In recent years I have read just about every article or commentary I could find on precious metals. My self-education has given me the confidence to offer an opinion or two on this topic.
Some of my columns have even been published on this and other PM sites. Occasionally - almost in passing - I’ve given my opinion on the short, medium and long-term prospects of PM prices.
This opinion is that the “status quo” price might be with us for a fair amount of time longer.
Recognizing that one can end up looking foolish making price predictions in print, why do I (no “expert” me) still feel comfortable disseminating my opinion?
Because I’ve come to the conclusion that you don’t have to possess an Ivy League MBA in finance or have passed the Series 7 exam or trade gold and silver for a living, or mastered technical analysis to “see which way the wind blows” when it comes to precious metals’ pricing dynamics.
I’m a former sports writer. A staple of this genre of journalism is the pre-game story where a reporter invariably writes about the “keys to the game.” We scribes interview coaches, players, other experts and pass along our own opinions.
“Team X will likely win because they are simply better on the offensive and defensive fronts,” we might write. Forget about all the other “noise” and considerations, the outcome of the game will be determined by this factor.
The same type thinking/analysis shapes my views on precious metals. After studying the topic for at least two years, I’ve come to the conclusion that the price of precious metals is only determined by one consideration - what “the Powers that Be” want the price to be.
I don’t have to study technical analysis charts or supply and demand reports to know that the prices of gold and silver are NOT going to be allowed to rise significantly ... at least without a monumental effort to keep them suppressed.
As I see it, there are two types of people playing in (or following) this “game” - those who believe prices are manipulated/suppressed/controlled and those who do not.
As one of those people in the former category, I don’t see how (in the short and medium term) you can believe that prices will break out (rise noticeably in price) ... and then stay up.
To me, the only assumption that matters is the assumption that powerful players are 100-percent committed to doing everything they can (fair or unfair) to keep prices from rising. This is the “key to the game.”
Many people (most people I guess) think this assumption is ridiculous, the stuff of wild conspiracy theories.
Others - based on our own observations of recent price patterns and our theories of macro economics - think the “evidence” is overwhelming that PM markets are anything but “free.”
We ask ourselves a few questions. Such as:
• Why have the prices of precious metals been contained or pushed down in the past?
In our view, the answer is to protect the dollar, the treasury bond market (to fund U.S. government operations and guarantee that 100-million-plus Americans continue to receive transfer payments from the government). This policy of PM suppression also reinforces the (bogus) notion that inflation is low and contained (the better to keep COLAs affordable).
In short, the “manipulation” tactic preserves the U.S. dollar as the “reserve currency of the world.” To achieve this result “sentiment” for gold and silver must be destroyed. After all, gold and silver are the only competitors to fiat currencies that are “backed by the full faith and credit” of any government.
So, in our view, that’s why PM prices have plummeted in the last two years. As “motives” for TPTB go, the above goals are as strong, compelling and important as they come.
The next question is actually THE question:
• Why - today, next week, next month - would TPTB suddenly want to reverse course and abandon this suppression policy?
I simply don’t have an answer. I can’t picture a scenario. Can you? Can anybody?
As I see it, it took a Herculean, concerted and sustained effort to slay PM “sentiment,” the effect of which made precious metals the proverbial “red-headed step child” of the investment world (as Peter Schiff wrote recently).
But there’s a caveat to this “success story.” Once TPTB kill sentiment and knock prices down by some 40 percent, they can’t rest and congratulate themselves.
“Job well done. That’s done. Next task ...”
As we’ve seen, precious metals sentiment doesn’t want to die or surrender. Especially with the world drowning in an epic flood of debt, it wants to rise to the surface like an arc of safety.
Apparently, you can’t keep a good precious metal (“real money”) down.
The “PTB” know this and thus must take action on a weekly if not daily basis to keep prices beaten down. Give precious metals an inch, they might take a mile.
This, I believe, is the mindset of those who “paint the PM tape.” And rightfully so.
As mentioned, I don’t study those technical analysis charts, but I am aware of them. I know that it’s dangerous (in the minds of the suppressors) for certain levels to be allowed to be breached. Thus these levels are monitored closely and protected with all the firepower and strategies at the suppressors’ disposal.
I’ve previously written that I think the prices of precious metals will stay at “bargain” prices for the “short” and “medium” term. But, heck, I don’t even know what the accepted definitions of “short” and “medium” term are.
To me, short term is a few months; medium term is a year or two, maybe three.
Long-term, I’ve said, the sky is the limit for precious metals.
Now why do I (no expert me) say this?
Because common sense, and a study of historic events tells me that no scheme that monkeys with free markets can succeed indefinitely. Nefarious actions of nefarious actors are, at some point - invariably if belatedly - exposed.
And/or - to paraphrase native Alabamian Forrest Gump- world events happen.
One world event triggers another and, in the blink of an eye, everything that was so yesterday is dramatically different today.
In a nutshell, there’s too many things that can happen to defend against ALL possible scenarios that could finally set precious metals free.
My conclusion? The efforts of TPTB will be in vain.
Putting a date on when the Great Change will occur is impossible to predict. My hunch, however, is that this will occur at least sometime before the end of the Obama administration. Maybe at the very end of his term (just like we had another financial crisis at the very end of George W. Bush’s term).
I suspect that it’s getting tougher and tougher to “kick the can down the road.”
But those who fear silver and gold - and want the masses to fear them as well - will continue operating out of the same playbook - until some event(s) completely overwhelms their efforts.
Until that day, the one person out of 100 who buys precious metals to protect their future needs to continue taking advantage of today’s “sale” prices.
I also think precious metals can’t go that much lower. Remember, I did take two economics classes in college. This was enough to tell me that miners won’t continue to sell their product at prices below their cost of production. Per my readings, we’re at or near these prices now.
No expert, I’m working from the assumption that I have maybe two or three years to add to my daughter’s collection at prices I can actually afford.
Ironically enough, manipulators have given me a gift.
The next gift will be when these criminals are exposed and routed, and justice (a genuinely free market) finally plays a hand.
***
Bill Rice, Jr. is managing editor of The Montgomery (Ala.) Independent. He can be reached at bill@montgomeryindependent.com.
Bill Rice, Jr.
Managing Editor
The Montgomery Independent
334.265.7323 (office)
334.315.2583 (cell)
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