Silver Price Projections For 2020

I recently published an article projecting possible prices for gold in the year 2020 based on the S&P 500 Index and the ever increasing population adjusted US national debt.  I assumed three scenarios and three different gold projections.  Time will tell regarding gold prices, but what is nearly certain is that national debt will exponentially increase.  Further, over 30 years, the sum of the S&P and gold have increased similarly to the population adjusted national debt.

Similar analysis can be used to project silver prices.  Based on the past 15 years, we should expect considerable and increasing volatility, as the next few years will probably see dramatically increasing debt, stock market corrections (the S&P is overvalued and probably peaking in 2015), deflationary forces and increasing debt defaults, desperate central banks “printing” even more currencies, a derivative scare or crash, central bank created consumer price inflation, another financial crisis, and the list goes on.

Given the difficulty of predicting prices in central bank managed markets, this analysis relies upon long term trends.  Consider the following:

Population adjusted national debt and the sum of the S&P plus 92 times the price of silver show clear exponential increases over the past 30 years.  Expect debt and the sum of the S&P and 92 times silver (SUM) to exponentially increase, perhaps even more rapidly.


Nat. Debt Silver S&P

Why use the sum of the S&P 500 Index and 92 times silver?  Broadly speaking, the S&P represents paper assets while silver represents real assets, and the 30 year average ratio is 92.  Both markets are heavily influenced by central bank manipulations and often one increases as the other decreases, but the sum increases along with debt.

J-SISP

BIG PICTURE SUMMARY:

  • Population adjusted national debt increases exponentially. The SUM (S&P + 92*silver) increases in an exponential channel at about 6% per year.
  • The numbers will be slightly different in Japan, the UK and Europe but the concept applies.
  • The S&P recently hit an all-time, central bank assisted high. Look out below!
  • Silver has fallen 2/3 from its near all-time high 4 years ago. The next major move is likely to be up.
  • The important question is: How will the silver market be affected by continued QE, gold price manipulations, central bank management of our casino-markets, Chinese gold purchases from western central banks, deflationary debt defaults, and consumer price inflation?  One might also ask when confidence in fiat currencies and paper assets will deteriorate or plummet and when the world will return to the sanity of gold backed money and constrained government spending.

As in my gold article, I offer 3 scenarios based on various combinations of the above macro-economic conditions.

SPECULATION REGARDING SILVER PRICES IN 2020:

MORE OF THE SAME SCENARIO: (I find this unlikely but the media likes it.)

  • US population adjusted national debt increases at 6.7%. (30 year average)
  • The S&P oscillates around 2,000 as the economy weakens.
  • No nuclear war, no financial meltdown, the usual politics, a “Demo-Publician” is elected in 2016, and no “black swans” swoop in to destabilize our financial world.
  • Silver is priced about $35 to $50, based on the exponentially increasing SUM.

CHICKENS COME HOME TO ROOST SCENARIO:

  • US population adjusted national debt increases more rapidly at about 7.5% per year until 2020. (Wars are expensive!)
  • The S&P weakens to average (guessing) 1,200 to 2,000.
  • The US dollar weakens compared to many other currencies and substantially against gold.
  • By 2020 many financial and paper assets are recognized as dangerous and gold and silver have been revalued far higher.
  • The SUM rises to the high end of its 30 year exponential range, and silver prices average about $80 to $120. Given silver’s volatility, history of manipulation, and small market, silver could spike higher toward $200.

HYPERINFLATIONARY SCENARIO for 2020:

  • Debt escalates out of control to unimaginable numbers. Governments find someone else to blame.
  • The S&P 500 Index goes parabolic.
  • Financial TV commentators are practically breathless as they discuss the huge increases in the S&P and ignore the rampant inflation, unemployed workers, human misery, and social distress.
  • Social and economic conditions are deadly and exceedingly difficult.
  • Income equality in the western world worsens and riots become more common.
  • Silver prices go parabolic and reach currently unthinkable numbers.

CONCLUSIONS REGARDING ALL SCENARIOS:

  • History and current actions justify the expectation that governments and central banks will increase debt, devalue fiat currencies, and thereby force silver and gold prices much higher. 
  • Convert digital dollars, yen, pounds, and euros into silver and gold while you can. Current “on sale” prices will not last much longer.

 

Read:          Bill Holter    Credit Crunch All Over Again

Mark Sircus          Financial Insanity Grips the World

Gary Christenson

The Deviant Investor

10 thoughts on “Silver Price Projections For 2020

  1. All i need to a couple words to get my point accross. By mid-march, Silver per oz will $12 and change. By Dec 17, looking at 5 bucks per oz. Nothing but a down hill sloop. Stay away or get out while you can at high 15’s



  2. @ Jose – Fusion is pretty well understood to me. Alicia Menendez is HOT!

    Seriously — These are some great thoughts and I have shared this with some friends. I often try to think retrospectively like this. It usually gets dismissed from our minds, but it is VERY worth the exercise from time to time. It’s certainly MUCH easier to think of only a few years away, as opposed to the ‘post SHTF major event’. To see how weird THAT is, you just have to see ALL of these movies nowadays that ALL have different post-apocalyptic weird scenarios…

    And it doesn’t look to be shaping up that way anyway…..looks to be a series of mid-size, but no less egregious events…

    The only exception to the above of course is the Trans Pacific Partnership! By 2020, this nation will look like Obama’s vision for it…the Book of Eli movie does a good job of showing that….no jobs, country is full of crime, roving bands of criminal gangs….like Baltimore or Detroit from coast to coast! Yippee! Liberal Utopia!

    It’s hard to think ‘shelter’ when you are contrasting that against total collapse. Which I admit, does indeed seem inevitable. Fed Res house of cards and all. Not even thinking about the manipulation all the way around.

    I like your note about: “By 2020 many financial and paper assets are recognized as dangerous ” — I agree with this. Hillary Clinton has floated the idea of siezing 401K funds over a decade ago on the Senate floor…..this woman should never be in any position of power based on that fascism alone…..we in metals will see them brand and stigmatize us, despite the fact that we are the sanest most sober ones and they are the drunks!

    I think in such dire straits as those, whatever it looks like, is hard to envision. People say war nickels, others say 1 oz silver (admittedly it’s at giveaway prices right now). Others say lead. How to optimally arrive at the correct combination of the above….now therein lies the rub, eh?


  3. Gary, you say that “S&P plus gold” follows national debt, then say “S&P plus 92*silver” also follows national debt. Simple logic then requires that “S&P plus gold” = “S&P plus 92*silver”. From this, we can conclude that the gold/silver ratio has been 92 for the last 30 years? I don’t think I’ve ever seen the ratio that high. It was 40 when I started buying silver in 2005, and now is only 70. What gives?


    • S&P plus gold does follow (more or less) National Debt. Also, the S&P plus 92 times silver follows national debt. But nowhere did I say either sum EQUALED the national debt. It is not an algebraic equation. If you examine the graph you can see substantial variation over 30 years – variation by a factor of 2 or 3. Hence, simple logic does NOT require that S&P plus gold = S&P plus 92 times silver. The point was not to make an exact algebraic match (does not exist) but to show that increasing debt drives increasing prices for the S&P, gold and silver, within a range.

      The ratio of gold to silver has ranged from about 17 to approaching 100 over the past 50 years. The ratio was near 100 in the early 1990’s.
      The Deviant Investor




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