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 PEAK prices 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.
CONCLUSIONS:
- Politicians will borrow and spend until they no longer
can borrow. Hence national debt will exponentially increase until the
system resets.
- Exponential increases in debt parallel increases in the
prices of many goods, services, and commodities, including silver.
- Silver is likely to peak in excess of $100 during the
next multi-year rally, based on nothing more than Keynesian PhD economics,
spending by politicians, central banks “printing” and more of the usual
nonsense.
- But if other factors, such as hyperinflation, massive
investor demand and others listed above manifest, the price of silver
could jump far higher.
- Alternatively, it is possibly true that “I did not have
sexual relations with that woman,” there will be “no nation building,”
we will all benefit from “hope and change,” we are “stronger together,”
the Easter Bunny is coming, world peace is imminent, Obamacare costs
will come down, the NSA will stop spying on everyone, TSA is the most
loved federal agency, politicians will balance the budget, and central
bankers truly exist to help ordinary citizens in their everyday lives.
- If those ideas ring false, then you may wish to
hedge against the collapse of some of your paper assets with physical
silver and gold.
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GE Christenson is the owner and writer for the
popular and contrarian investment site Deviant Investor and the author of the book, “Gold
Value and Gold Prices 1971 - 2021.” He is a retired accountant and business
manager with 30 years of experience studying markets, investing, and
trading. He writes about investing, gold, silver, the economy, and central
banking. His articles are published on Deviant Investor as well as other
popular sites.
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The author is not affiliated with, endorsed or sponsored by Sprott Money
Ltd. The views and opinions expressed in this material are those of the
author or guest speaker, are subject to change and may not necessarily
reflect the opinions of Sprott Money Ltd. Sprott Money does not guarantee the
accuracy, completeness, timeliness and reliability of the information or any
results from its use.
