Silver, Debt, and Deficits – From an Election Year Perspective

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.




  • 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.


Gary Christenson

The Deviant Investor


8 thoughts on “Silver, Debt, and Deficits – From an Election Year Perspective

  1. Regardless of details, how can Gary Christenson not have his inferences correct?

    If anyone has major uncertainty about the logic of his evidence and inferences, here is a strategy:
    1. Take whatever capital you are thinking of using to make a long term investment commitment to silver.
    2. Divide those funds into as many tranches as correspond to your uncertainty about whether silver prices will rise.
    3. Commit some tranche or fraction (one-half, one-third, one-fourth, etc.) at current prices, bearing in mind that at $17 or so, prices are less than half of what they were just a few years ago.
    4. Wait to see what happens. If the price of silver rises, congratulate yourself on owning an asset that has appreciated. If the price drops, congratulate yourself on having committed only part of your funds, and rejoice on being able to get an even better bargain than on your first purchase as you build assets.
    5. After making the second purchase, wait a bit to see what happens, and iterate as seems warranted.

    Is there anyone out there who thinks that the odds are greater that, with silver at $17 or so per ounce, it is more likely that it will go to zero rather than double?

    Given the overall state of affairs in the global monetary system, the real problem is whether one should be buying silver rather than gold, or metals rather than miners. Fortunately, these alternatives are not mutually exclusive. And all of them are better than buying Dow or S&P type stocks at current prices.

  2. One of the big news items in precious metals along with the Deutsche Bank news implicating HSBC and Bank of Nova Scotia in silver price rigging, is the Texas Bullion Depository. The Texas gold is allegedly at HSBC NYC and the gold is actually owned by University of Texas Investment Management Company, whose management wants the gold to remain linked to COMEX. There are other deep issues with the Texas Bullion Depository. Interested parties are advised to look for release of research at Silver Market News Online and other sites immediately after the Presidential election results are posted, regarding the Bullion Depository and how Texas leaders can improve its operations.

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