Silver: 50 Days and 100 Years

By: GE Christenson | Tue, Feb 18, 2014
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Maintain perspective! Skip the hope and hype, the "analysis" from vested interests, and look at facts:

So What? Look at history and facts and ignore the hype.

According to kitco.com, the average annual prices for gold and silver were:

 

Year Gold Silver
1913 $20.64 $0.58
1971 $40.80 $1.39
2013 $1,411.00 $23.79

 

Prices have dramatically increased for 100 years since 1913, the birth of the Federal Reserve - our inflation machine. Worse, since Nixon abandoned the partial gold backing for the dollar in 1971, the inflation machine has accelerated. Using Kitco's average annual price data:

In the big picture, gold and silver are increasing in price, along with the prices for crude oil, an average house, gasoline, food, and almost everything we need. Both gold and silver have accelerated their average price increases since 2001, the end of their 20 year bear market.

Official national debt was $2.92 Billion in 1913 and nearly $17,000 Billion in 2013. The compounded annual increase since 1913 has been 9.04% while the increase since 1971 has been 9.31%. National debt increases, on average, quite consistently. Given that consistent exponential increase in national debt, are you surprised that the prices for gold, silver, crude, gasoline, food, and housing have also substantially increased, on average, every year?


The Big Picture

Silver gained 7.7% in 50 days. I think December marked a double bottom in the silver market, but we'll know in a few months. Crashes and large rallies are likely to happen more often in this era of High Frequency Trading and "managed" markets.

The national debt has been increasing, remarkably consistently, for 100 years, for 42 years, and for 6 years. Until monetary systems, administrative policy, and congressional spending practices change (return to fiscal sanity) the national debt, along with most other prices, will continue to increase.

We don't know if silver will continue its rally through next week or next month, but we can legitimately expect that silver prices, along with the national debt, will be substantially higher in 2015, 2016, and 2017!

Examine this graph of silver prices since 2000. Note the following:

SI-055: Silver Comex (Pit) Cont 1st @ NYMEX (Monthly Bars)
Larger Image

So the next time you hear from an analyst that silver is likely to remain under $25 for the next decade or drop to $10, or whatever, remember 100 years of history, 100 years of price increases, and 100 years of official national debt exponentially increasing at 9% per year - compounded each and every year.

My belief is that 100 years of facts are much more relevant than opinions from various people who have a vested interest convincing people that silver and gold are dangerous investments. Examine silver cycles here: Silver: 4 Cycles in 12 Years.

And Clive Maund Analysis here: Silver Market Update

 


 

GE Christenson

Author: GE Christenson

GE Christenson aka Deviant Investor
www.deviantinvestor.com

GE Christenson

I am a retired accountant and business manager who has 30 years of experience studying markets, investing, and trading futures and stocks. I have made and lost money during my investing career, and those successes and losses have taught me about timing markets, risk management, government created inflation, and market crashes. I currently invest for the long term, and I swing trade (in a trade from one to four weeks) stocks and ETFs using both fundamental and technical analysis. I offer opinions and commentary, but not investment advice.

Years ago I did graduate work in physics (all but dissertation) so I strongly believe in analysis, objective facts, and rational decisions based on hard data. I currently live in Texas with my wife. Previously, I spent 20 years in Barrow, Alaska, the northernmost community in the United States, 330 miles north of the Arctic Circle.

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Source: The Contrarian Take http://blogs.forbes.com/michaelpollaro/
austrian-money-supply/