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gauthier82
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Real Silver Highs 4

- Adam Hamilton - Zealllc

I read your above referenced report and agree with most of its content.

Whilst you acknowledge that the US Govt's CPI rate of inflation is an understated statistic, you make no graph of the inflation adjusted silver price using John Williams inflation calculations as outlined in his web site www.shadowstats.com where he uses the US Govt's own formulae from circa 1980, which gives a far better feel as to what the real inflation adjusted price of the 1980 silver high is, at this point in time ? As I recollect, using John Williams inflation calculations the inflation adjusted 1980 silver high is not far off USD 500 per oz.

Personally, I believe that you should show both calculations in any such future articles. To do so would help to start the process of getting precious metal investors, and potential precious metals investors, to better appreciate the true potential upside of the precious metals prices, which in my opinion, could only be beneficial. It should also be borne in mind that
- The difficulties facing the world today are far more severe and complex than those faced in 1980.
- The silver inventories today are far lower than in 1980, and are probably a great deal lower than currently estimated.
- The industrial demand for silver grows apace, with new applications being introduced almost weekly and are price inelastic.
- The silver investment demand is growing strongly, particularly with the gold price increasingly out of reach of many retail investors.
- The apetite for silver is global.
- In many cases silver is not recycled because at current prices it is just not economic.
- China has gone from exporting circa 3,000 tons in recent years to being a net importer.
- Currently silver is being mined at the rate of 8ozs for every 1oz of gold, yet the silver gold ratio is currently 53.7:1.
- Using John Williams calculations, the inflation adjusted price of silver's 1980 high is approaching USD 500 per oz.

Based upon the above, there is a pragmatic and logical case for the price of silver to have an upside potential significantly higher than USD 500 per oz, whilst there is a sound case for silver to gold ratio to be south of 10:1.

All of the above ignores the increasing mountain of anecdotal evidence that JPM and HSBC (probably partly as the Govt's agent, and partly for their own proprietory books) have been egregiously shorting silver, gold, as well as the precious metal shares, with all the attendant pricing implications that will accrue when the manipulation comes to an end, as it will in the goodness of time.

James

Commented 4264 days ago

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Beginning of the headline : Silver bearishness has naturally mushroomed following this metal’s rough December.A growing chorus is declaring silver’s secular bull finished, implying it must have peaked after silver’s dazzling April 2011 surge.But secular bulls climax in popular speculative manias, which dwarf the silver action of a couple springs ago... Read More

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