Precious metals analyst Gary Christenson examines the implications of election years on silver prices, including the alarming trend of monetary expansion that could drive big metal price gains.
It is an election year. We should anticipate 8 years of upcoming trauma, following nearly 8 years of “hope and change,” after 8 years of “no nation building,” after 8 years of “I did not have sexual relations with that woman.” Examine the official US national debt in 8 fiscal year increments (10/1/84 – 9/30/92 etc.) using linear and log scales.
You can see that official national debt has been rising exponentially. At the current rate of increase it should approach $40 trillion in 8 years. Given the likelihood of more wars, recessions, more social spending, and accelerating Medicare and Social Security expenses the total debt might be considerably higher than $40 trillion in 8 years, regardless of who is elected.
Examine the accumulated increase in national debt (the total of 8 years of deficits) over each group of 8 fiscal years. Deficits are increasing rapidly.
Examine the average annual price of silver every 8 years.
The price of silver is more erratic than the official national debt, which increases consistently, regardless of which group of borrow and spend politicians is supposedly in charge.
But it is clear that silver prices are increasing exponentially, similarly to the increase in national debt, increase in currency in circulation, and probably (not shown) the increase in Wall Street bonuses, food stamp (SNAP) payouts, Federal Reserve salaries, and the prices of cigarettes, postage, beer, food, tuition, health insurance, and prescription drugs.
It is an exponential world … until it stops. The Keynesian PhD economic policies that we have been “blessed” with assure us that exponential increases are necessary to keep the bubble in fiat currencies, debt, bonds, and stocks inflated.
Given the exponential increases in debt and prices, what exponential projections can be made for PEAKprices for silver in the next five years?
Note that this graph includes a purple line that suggests possible peak prices in silver during the next few years based upon:
Exponential increases in debt and currency in circulation, thanks to Keynesian PhD economics, central banks, and excessive spending by politicians.
If we anticipated possible price increases in silver due to declining silver ore quality, possibly huge increases in investment demand for silver, increased silver mining costs, increasing industrial demand for silver, deteriorating faith in central banks, hyperinflation of various fiat currencies, JPM forcing prices higher to overvalue their physical silver hoard, a global bond market crash, and escalating wars in the Middle-East, the price of silver could spike unbelievable higher than shown above.
The iShares Silver Trust ETF (NYSE:SLV) rose $0.10 (+0.60%) to $16.82 per share in premarket trading Wednesday. Year-to-date, the largest ETF tied to the spot price of silver bullion has gained 26.76%.
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