The Silver Market will experience a significant trend change in the future
due the unraveling of the paper markets. Already we are witnessing a
lot of political turmoil and havoc as President-elect Donald Trump gets ready
to take over the White House in the next few days.
It’s also logical to assume the policy changes President-elect Trump wants
to make will cause serious ramifications to the highly leveraged debt-based
fiat monetary system… whether he realizes it or not.
Craig over at TFMetalsReport.com recently interviewed Paul
Myclhresst about the huge problem the Chinese government is
dealing with as they liquidate Dollars to prop up their banking and economic
system. I highly recommend listening to that interview if you haven’t.
Thus, the continued liquidation of U.S. Dollar Reserves by China and other
countries is probably the reason for the ongoing decline in International
Reserves covered in Hugo Salinas Price’s newest article, The Further Decline In International Reserves:
Over the past 29 months, the decline in Reserves took place at a rate of
about $42 billion dollars a month. At this rate, by the end of 2017
International Reserves will likely decline by another $504 billion dollars, to
$10.31 Trillion, which will increase the decline from the peak in 2014 to
14.31%.
As we can see from Hugo’s chart above, countries continue to liquidate
their official reserves (mostly U.S. Dollar reserves) to prop up their
financial and economic systems. This is a very BAD SIGN… likely to get
much worse in the future.
The Silver Market Will Experience A Huge Trend Change In The
Future
The Global Silver Market will experience a huge trend change in the
future, thus impacting the price in a BIG WAY. The are two critical
reasons why this will occur:
- Cracks In the Highly Leveraged Debt Based Fiat Monetary
System will force investors into purchasing silver to protect wealth
- The 17 consecutive years of annual silver deficits
totaling 1.8 billion oz, suggests the easy to acquire silver is now in
tight hands. Which means, when investors finally start to rush
into silver, there will be very little available to be purchased, only
at much higher prices
Let’s take a look at the Global Silver Market annual net balances from
1975 to 2016:
Let me explain this chart as it contains some interesting trend
changes. First, the majority of annual net surpluses occurred from
1975-1987. This was after the U.S. and British Govt’s colluded to start
the Gold & Silver Futures trading markets, which funneled investors funds
into paper precious metals rather than physical.
You can read more details on this in my article, PRECIOUS METALS INVESTORS: Are You Ready For The
Great Financial Enema.
This was also the same time when governments and big investors were
dumping old silver coins onto the market that were no longer being used as
currency. You will notice that in 1978 the net silver surplus was very
low. This was due to the huge demand by investors as the price
of silver skyrocketed. However, as the silver price was capped
by the “Financial Doctors” at the Fed and CME Group in 1980, many investors
dumped silver back into the market.
According to GFMS’s data, there was a 306 million oz (Moz) surplus
of silver that year. And, as the silver price continued to
decline in the 1980’s, more silver was dumped into the market, especially in
1983 (140 Moz) and 1984 (149 Moz).
I don’t want to get into too much detail from years 1987-1999, but annual
net surpluses continued as governments such as China, Russia and India sold
official silver stocks into the market. But, this all changed in 2000
when the Global Silver Market started to experience net deficits.
And… since 2000, the Global Silver Market has experienced 17
consecutive years of net silver deficits. According to GFMS and the
Silver Institute, the world will suffer another 185.5 Moz net deficit in 2016.
So, how can the Global Silver Market suffer 17 years worth of consecutive
silver deficits? Well, because there was over 2 billion oz of silver
surpluses (1975-1999) put away for a rainy day:
Of course these figures are best estimates and do come from an official
source that may have the motivation to under-report the real situation, but
we can clearly see that a lot of silver has moved out of the market and is
now likely be held by extremely tight hands.
While the market is nothing more than one huge “Intervention”,
these official figures reporting 17 years of consecutive net silver deficits
means the silver market is poised for something extremely big.
And, I am not saying that just because I am a silver investor. The
PROOF is right in front of us. No need to hype something that is
totally making the CASE for us.
The Gold & Silver Paper Markets Are In Serious Trouble
While many precious metals investors believe that market intervention and
manipulation can continue indefinitely, we are already witnessing the
collapse of International Reserves. Furthermore, if President-elect
Trump is allowed to run the White House for a while, we are going to see
serious financial dislocations due to trade wars and increased U.S.
inflationary pressures.
In addition, GFMS and the Silver Institute forecast continued net annual
silver deficits for the next several years (at least) as global silver
production declines while demand continues to be strong. This will be
just more FUEL for the SILVER MARKET FIRE ahead.
Again, this is not hype. What I am explaining here is the same setup
as those characters portrayed in the movie the BIG SHORT, who were betting
against the disaster called the Mortgage-Backed Securities industry.
They knew it was a huge house of cards ready to implode… it was just a matter
of time.
While the gold market will likely experience a huge run, I believe silver
will outperform gold many times over. This is due to the fact that
there is about the same amount of invest-able silver in the world as there is
gold:
According to the best sources I could come across, there is about
2.2 billion oz of investment gold and 2.5 billion oz of investment silver in
the world today. Of course, there is likely more physical gold
and silver we don’t know about, but it will not change the ratio all that
much.
That being said, just a doubling of physical gold and silver demand will
put a lot more pressure on the silver price than gold as big traders and
hedge funds jump aboard for larger percentage gains.
As we begin to see fireworks going off in the United States as
President-elect Trump stirs up the pot, 2017 will likely be the year things
really start to fall apart.
If you haven’t read my article, PRECIOUS METALS INVESTORS: Are You Prepared For
The Great Financial Enema, I provide more clues of the
situation ahead.
Check back for new articles and updates at the SRSrocco Report.
