Crude Oil, US National Debt, and Silver

Conclusion:

Crude oil and silver prices have crashed before, and they will again.  But the one constant in our financial universe that seems inevitable, for the foreseeable future, is increasing debt.  Crude oil and silver prices will follow increasing debt.

*****

Examine the following chart of monthly crude oil prices.  In the past 26 years crude oil prices have crashed 65%, 59%, 54%, and 76%.  The current crash is about 51% so far.

Crude Oil - Monthly Prices

 

Examine the following chart of monthly silver prices.  You can see similar crashes of 64%, 46%, 51%, and 68% since 1986.  Prices rallied after these crashes and went considerably higher.  Sometimes it took years, but like the national debt, silver prices have substantially increased since 1913.

Silver - Monthly Prices

Examine the US national debt, which is currently over $18 Trillion = $18,000,000,000,000.  Unfunded liabilities, which might be ten times larger, are not even considered in the following graphs.  Adjust the national debt for population increases so we see only the per capita national debt.  As expected, it is climbing exponentially higher, and accelerating since 9-11.

Following the increase in national debt is an increase in the currency in circulation and the prices for most commodities and consumer goods.  Examine the graphs for population adjusted national debt, crude oil, silver, and the S&P 500 Index, all of which show annual averages of weekly prices.  Note that all prices have been indexed to 1971 = 1.0 for comparison purposes.

Population Adjusted Nat. Debt and Crude Oil

Note that the recent crash in crude oil prices is not yet reflected in the annual average of weekly prices.

Population Adjusted Nat. Debt and Silver

Population Adjusted Nat. Debt and the S&P

Conclusion:

Crude oil and silver prices have crashed before, and they will again.  But the one constant in our financial universe that seems inevitable, for the foreseeable future, is increasing debt.  Crude oil and silver prices will follow increasing debt.

Expect the S&P to correct downwards (eventually), expect silver and crude to resume their upward trajectory (eventually, probably soon), and, like the inevitability of death and taxes, expect debt to inevitably accelerate higher.

WHEN the corrections will occur seems more and more under the control of the High Frequency Traders, the politicians, and the banking cartel.  Sadly our global economic problems, which have been exacerbated by the crude oil crash, will not cured with more debt, which seems to be the preferred “solution.”

Gold and silver are real money, and they are insurance against the craziness and volatility of debt based fiat currency that is increasingly vulnerable to currency crashes like we have seen in Argentina, Venezuela, Ukraine, Russia and elsewhere.

A currency crash can also occur in Japan, Europe, and the United States.  Those dollars, euros, and yen have counter-party risk while gold and silver do not.

Read:          Ron Paul:  Janet Yellen’s Christmas Gift to Wall Street

Gary Christenson

The Deviant Investor

GEChristenson.com

 

 

14 thoughts on “Crude Oil, US National Debt, and Silver

  1. I love the feel of gold and silver eagles in the hand. It’s totally different from the feel of the base metal coins in circulation. It just feels so valuable.


  2. When I get my paper check I immediately try to convert some of it into metal somehow. I will ask for a few rolls of nickels at the bank then I might go to the pawn shop and buy a Morgan or something then I will look online for more. I can’t stand this worthless fiat money. You need a ton of it just to pay utilities. Its junk.I am saving metals for 30 years hopefully by then I will be rich finally.


  3. GOLD is the money of the KINGS, SILVER is the money of the GENTLEMEN, BARTER is the money of the PEASANTS, but DEBT is the money of the SLAVES


  4. Folks–here’s just some advice from a VERY old-timer.

    Prices-smiches. Bid/Ask, tisky-task!

    Put something REAL into your hands. Feel the stuff; look at it; hold it; and, for sure–keep it! As Ann Barnhardt, http://www.barnhardt.biz, says:

    “The first, older Barnhardt Axiom is:
    If you can’t stand in front of something and physically defend it with a firearm, then you don’t own it, and probably never did.”

    Get the “physical” precious metal–all else is fraud and hoax. As a retired lawyer, I have seen the death of the ‘rule of law.’ There is no “law” anymore; it’s all corruption, greed, theft, and deceit. All you need to hear is the verb: “Corazined.” Need I say more? Over $1B USD of clients’ funds gone, poof, up in smoke–with no consequences!

    “A prudent person foresees the danger ahead and takes precautions. The simpleton goes blindly on and suffers the consequences.” Proverbs 27:12


  5. Silver is currently down 68% from $48.60 to $15.70! Could it go to $12.70? Possible, however I think that gold could fade more dramatically to $890 even if it is not in the interests of the American’s gold stores! Our central banks keep selling it at incredibly low prices to keep dollar sentiment strong. Several customers remind me, “Gold is like farmland, they only make so much of it!” The window will close at some point! Keeping the westerner in the dark about the value of the dollar and sentiment strong for the dollar amuses the Chinese and qualifies what they already know about American’s. http://www.whynotgold.com


    • With all the HFT and other central bank manipulation, yes, I suppose $890 gold is possible. But I still think the probabilities are strong that the next big move will be up instead of down.
      The Deviant Investor


      • If gold does fall below 900 per oz. China and Russia will be salivating.
        It is my belief that the attack on the ruble was orchestrated to prevent
        Russia from purchasing gold at a deep discount. If the ruble is weak
        Russia cannot purchase as much gold, thus a stalemate in preventing
        Russian enrichment. Ultimately it will backfire.


Leave a Reply

Your email address will not be published. Required fields are marked *