17 Reasons Why I Trust Silver

War and Inflation – 3 reasons:

  • From Ernest Hemingway: “The first panacea for a mismanaged nation is inflation of the currency; the second is war.  Both bring a temporary prosperity; both bring a permanent ruin.  But both are the refuge of political and economic opportunists.”  This was true before WWII and is just as true now.
  • The US is trying to provoke Russia into war, perhaps nuclear war, through the use of sanctions, pressure on the exchange rate of the Ruble, weak oil prices, and military maneuvers. R. 758 overwhelmingly passed the U.S. House of Representatives on 4 December 2014.  It brings the United States closer to a serious military confrontation with Russia.

Silver and Dollar Charts – 7 reasons:

  • The weekly silver chart shows important lows – in 2007, another in early 2010, another in mid-2012, and another about now. They are separated by approximately 128 weeks.
  • Those cycle lows are matched with important “over-sold” lows in the weekly RSI, MACD, and TDI oscillators. See graph:

 

Silver - Weekly

Silver – Weekly

  • The MONTHLY chart of silver shows deeply over-sold conditions in the RSI, MACD, and TDI.

 

Silver - Monthly

Silver – Monthly

  • The US Dollar Index is “over-bought” on the weekly and monthly charts. Note the position of the RSI, MACD, and TDI on both the weekly and monthly charts.  The dollar will, sooner or later, turn down.  A declining dollar will be good for silver prices.

 

US Dollar Index - Weekly

US Dollar Index – Weekly

 

US Dollar Index - Monthly

US Dollar Index – Monthly

  • The US dollar index hit an important high in June 1989, another important high in March 2002, and another in December 2014. Those highs are 153 months apart.  This could be significant.
  • From Jeff Clark: 7 Questions Gold Bears Must Answer
    • “Why is China accumulating record amounts of gold?
    • Why is China working to accelerate its accumulation (of gold)?
    • Why are other countries hoarding gold?
    • Why are retail investors NOT selling SLV?
    • Why are bullion sales setting new records?
    • Why are some mainstream investors buying gold?
    • Why are countries repatriating gold?”

Central Banking and Money Printing – 7 reasons:

  • From Ed Steer:No amount of money printing will do any good now — and I see nothing but very hard times ahead…I’m comforted by the fact that Alan Greenspan has gone on record that at some point in the future, the price of gold will trade ‘materially’ higher than it is now — and also by the fact that certain entities are buying massive amounts of physical silver in all forms, which will ensure that someday, silver will certainly become the new gold.
  • From James Quinn:In 1943 inflation was not in the best interests of those running the country.  Today, with $18 Trillion of debt and $200 trillion of unfunded liabilities, inflation is essential to the survival of the ruling class…  In 1943 saving benefited the ruling class, so it was encouraged.  After 9/11 and ever since the government has promised and encouraged spending and going further into debt to save the country.”

“My generation gave former tenured economics professors discretionary authority to fabricate money and to fix interest rates. 

We put the cart of asset prices before the horse of enterprise. 

We entertained the fantasy that high asset prices made for prosperity, rather than the other way around. 

We actually worked to foster inflation, which we called ‘price stability’ (this was on the eve of the hyperinflation of 2017). 

We seem to have miscalculated.”

  • From John Rubino: “We’re potentially good but infinitely corruptible, and giving an unlimited monetary printing press to a government or group of banks is guaranteed to produce a dystopia of ever-greater debt and more centralized control, until the only remaining choice is between a deflationary collapse or runaway inflation.  The people in charge at that point are in a box with no painless exit…. the dissolution of today’s myth structure will be like nothing any of us have ever seen.”
  • From Greg Hunter: “The G-20 met recently in Australia to make new banking rules for the next financial calamity.  Financial reform advocate Ellen Brown says these new rules will allow banks to take money from depositors and pensioners globally… This makes it legal for these big 30 banks to take our money when they become insolvent.” 
  • From David Stockman: “In short, what is happening now is that risk is coming out of hiding, the collateral chains are buckling, the financial time bombs are beginning to explode…  This time the carnage could be much worse because the most recent tsunami of central bank credit was orders of magnitude larger and more virulent than during the run-up to the Lehman event or the dotcom implosion.”
  • From Phoenix Capital Marketing: “Fraud is endemic in the financial system today.  We know that the currency, stock, bond, and even commodity markets have ALL been manipulated by Investment Banks or Central Banks…Until the garbage is cleared out we are set for another crisis.  The only difference is that this time around, when stuff hits the fan, the entire system will break, not just a handful of banks.”

 

Observations:

All of the above should support long-term increases in the prices for silver and gold – which have NO counter-party risk.

The central bank and government “plan” seems to be: create more inflation, levitate the stock and bond markets, encourage military action, foment another and larger war, create much more debt, extend and pretend regarding global economies and doomed fiat currencies, scare everyone regarding the threat from Russia, and generate more wealth for the political and financial elite.  Read Bill Holter:  “One Foot on a Banana Peel.

As an alternative to the above plan, I like and trust physical silver, held in a safe depository, outside the banking system. 

Gary Christenson

The Deviant Investor

GEChristenson.com