SILVER’S NEXT BIG MOVE…
Eight years ago this month, silver started its “next big move”. And that move continues today. It is awesome to behold. See the chart (ten-year history of silver prices) below…
Silver
Silver Fails Miserably To Meet Expectations
No matter how harsh it sounds, it is true. Unfortunately, too many people don’t want to hear it and refuse to listen.
Acknowledgement of the facts doesn’t seem to deter its supporters. We are told that silver’s ongoing underperformance relative to gold makes it “a better buy” with “more profit potential”.
Let’s see what the charts say.
Gold Nuggets And Silver Bullets
It is very difficult to let go of someone – or something – when we have invested so much time and energy in it. It is even harder when we have invested so much of ourselves in it; when the outcome is not what we expected; when our reputation is at stake.
In this particular case, that something is gold and silver.
The emotional proclamations just a few weeks ago seemed quite strong, almost being religious in their fervor. But after two thrusts of the dagger to the heart, the explanations afterwards seem a bit hollow.
No Silver Lining Here
NO SILVER LINING
As bad as the prognosticators can be with their predictions for the price of gold, the situation for silver is even worse.
Some very recent headlines trumpeted the following proclamations:
“Silver prices to surge…”
“Silver…Why Prices Will Soar”
“Why You Must Own Silver…”
But my favorite headline expresses all of the emotion and confusion regarding silver quite aptly: “What Is Wrong With Silver?”
Implosive Silver Vulnerable To Big Price Drop
IMPLOSIVE SILVER
Admittedly, it must sound encouraging, and even exciting, to hear proclamations that a “silver” lining is now apparent in the metals complex. Or that a silver “blast-off (is) about to happen”.
Expectations abound for the long-expected, vertical leap in silver prices that never seems to come. And we are told it is supported by solid fundamentals that include supply deficits, a return to the 16 to 1 gold/silver ratio, increasing monetary demand for silver, etc.
Gold-Silver Ratio: Debunking The Myth
A 16-to-1 gold to silver ratio has been the Holy Grail of some silver investors since the mid-sixties.
Unfortunately, fifty years later, it is a quest that continues unabated without success.
In fact, there is evidence that contradicts and widens the chasm that separates wishful thinking from reality.
Hi Yo Silver! sort of…
HI YO SILVER!
In January, 1980 silver peaked at close to $50.00 per ounce and gold hit its high point of approximately $850.00 per ounce. Thirty-one years later, in 2011, both metals again reached lofty levels.
For gold, the new high point was $1900.00 per ounce. For silver, the number was $50.00 per ounce; again.
Six years later, as of this writing, gold is priced at $1260.00 per ounce. Silver is at $17.00 per ounce and change.
Over the entire thirty-seven year period, gold is forty-eight percent higher than its January, 1980 peak price; whereas, silver is sixty-six percent lower.
Silver Is Not Real Money
Is silver real money? I don’t think so. But I know that my proclamation will likely draw vociferous contradictions from others who consider themselves “hard-money advocates”.
That’s okay. Let’s look at the facts.