Tonight I’m going to start with a few long term charts for silver. It’s these long term charts we need to understand first so we know where silver has been trading and where it is likely to go based on the Chartology which has been guiding us pretty well so far since what will now be called the March 2020 low in the years ahead.
There is growing evidence that the rapid rise in the silver price is due to physical buying, not paper speculating. We can see this in the falling Commercial net short position trend as the silver price continues to rise.
Today, I would like to take a stroll down memory lane and revisit an issue that dominated the endless and often heated daily conversations I had with my dearly departed old friend, Israel Friedman. In the early days (circa the mid-1980’s), Izzy’s interest in my allegations of a short selling scam on the COMEX went to the motivations behind the price suppression and not so much the mechanics of the manipulation...
Silver has gone up a lot.
In a post-interest world, one cannot earn much return by financing productive enterprise. Instead, people are forced to speculate on whatever asset bubble is inflating at the moment.
Speculation is different from investment, in that the speculator’s profits come from the capital of the next investor. It’s a process of conversion of one investor’s capital into another’s income, to be consumed.
This is the great feat, which…
If just a mere $500 billion worth of funds attempts to acquire some of this silver, we are talking about a SEVEN TIMES increase in the price… using simple math ($500 billion / $71 billion = 7). With the current silver price at $27, seven times that would be $189. Yeah, I know that may sound like a bit of “HYPE,” but no one was saying this when Tesla surged from $200 in 2019 to $1,500 recently. That’s SEVEN TIMES higher in just a year… LOL.
It was an important level to cross on the way to the 1980 high, evidenced by the fact that it came back to that level (after it blast through in Dec 1973) before setting off to that all-time high of $118 ($50 in nominal terms).
With silver up 30% for the month, the shiny metal is now back on the Mainstream Media Radar. Yeah, it’s been seven long years since silver traded at $24, but now it looks as if it is just in the beginning stages of a new Bull Market.
Last Friday, CNBC ran an interview with Bill Baruch, president of Blue Line Capital. He said that when silver was trading at $22 on Friday, he expected more gains. And, this precisely what took place this week.
Due to measures taking by the West Point Mint to protect workers from the virus, the production of gold and silver coins will be reduced over the next 12-18 months. By enacting these worker policy changes, the U.S. Mint will not be able to produce gold and silver bullion coins at the same time. Thus, if demand continues to be strong for Gold and Silver Eagles, we could see higher premiums in the future.