by Gary Christenson, Money Metals:
How low and how high will the price of silver range on the PAPER markets during 2017?
Knowing the influence central bankers, politicians, HFT algos, bullion banks and JPMorgan exercise over increasingly managed markets… it is impossible to answer the question, and it is probably the wrong question to ask.
Instead, What Do We Know With A High Degree Of Certainty?
The US national debt will substantially increase as it has almost every year since 1913. We can trust politicians and central bankers to act in their best interests to spend in excess of their revenues and increase total debt. See chart below.
Politicians and central bankers are unlikely to change a century of their spending, borrowing, tax and inflation behaviors.
The price of silver on the paper markets will be volatile but, over the long-term, will exponentially increase as it has since 1913.
Silver prices relative to their own history and to the S&P500 Index are low and far more likely to rise than to fall further. See charts below.
Silver prices will, like the national debt, consumer prices and currency in circulation, increase. The inevitable long-term direction of silver prices is upward.
Silver prices are currently low by many measures so the probable move higher should be substantial. Risk of lower prices is small.
What Analysis Supports These Conclusions?
Plot the official national debt on a log scale every four years – presidential election years. The exponential increase (about 9% per year – every year) is unmistakable. Doubling debt approximately every eight years is not a winning strategy for the US economy. Take cover!
Population Adjusted National Debt
Yes, the official national debt, even adjusted for population growth, has increased exponentially for 100 years. Expect it to rise further and probably more rapidly as baby-boomers retire, uncontrolled Medicare costs skyrocket, and politicians aggressively spend with borrowed currency.
Silver Prices – The Long-Term
Silver prices have risen exponentially for 100 years, along with debt, consumer prices and currency in circulation. Note the log scale.
Silver To S&P500 Ratio
Plot monthly prices for the ratio of silver to the S&P500 Index. In the long term both increase exponentially however the current price of silver is low compared to the price of the S&P500. Note that silver prices are off two-thirds from their 2011 high while the S&P is at an all-time high. Expect silver prices to move much higher regardless of a potential correction in the S&P.