Silver Now - Eight Years Later
Eight years ago, silver reached $48 per ounce. COMEX changed the margin requirements, and others dumped thousands of paper contracts on the COMEX market to smash prices lower. They succeeded, as usual.
Old news! As they say, “Wash, rinse and repeat.”
Gold and silver prices fell hard since their 2011 highs, while central banks levitated the S&P 500 Index, most stocks, and bonds with massive infusions of cheap debt. Central banks also purchased stocks and bonds.
Inexpensive debt, QE, and bond monetization were good for the DOW and S&P 500 stocks. Central banks are reluctant to change policies, but the world may have arrived at another “Peak Debt” moment similar to 2008.
What are prospects for silver and gold in the next several years? What data backs up the prognosis?
Over the long term, nominal prices for stocks, commodities, crude oil, gold and silver rise. The primary driver is currency unit devaluation. That new Ford truck which cost $2,500 fifty years ago now costs $50,000.
The dollar of 1913 is now a mini-dollar in purchasing power.
Besides the exponential trend for higher prices based on devaluation of the currency, prices fluctuate based on confidence, news, and investor preferences.
Hedge funds and bank interventions also distort prices.
Central banks want continual devaluation, modest inflation, and low gold and silver prices. They do NOT want gold prices spiking higher as in 1979, 1980 and 2011 because those erratic gold prices demonstrate central bank failure to manage the slow devaluation of the currency.
In broad terms, gold and silver often move down or remain flat as stock markets rise, and vice versa.
President Nixon severed the dollar’s last link to gold in 1971. In 48 years, the S&P 500 Index, gold and silver rose exponentially. Examine their charts based on weekly data.