Silver Soars. What now?! $100 per ounce?
The price of silver is rising faster than my ability to keep up with it.
When I started this video it was roughly $20, and now it's $23. Before March if that had been the case, many would assume this video took me several years to make.
It's important to ask - will this last? What should we expect? Should I invest now? Will there be a pullback?
All of the above are important questions. In this video, using data going back decades, I show that silver usually outperforms gold during the later stages of a recession. This is roughly where we are right now. In the 1940s we saw record WWII borrowing, money printing, deflation, debt monetisation, people saving rather than spending. All of the same elements are in place now, with wartime spending having been replaced by pandemic spending.
If we look at the gold-to-silver ratio over the past three decades, it has increased during all four of the following recessions:
During the early 1990’s recession, the early 2000’s recession, and the 2008 recession, the early 2020 recession, the gold-to-silver ratio went up.
During the later stages of EACH ONE OF THESE 4 RECESSIONS, WHAT HAPPENS?
WHAT HAPENS IS THAT silver starts to outperform gold, so the ratio decreases.
Gold tends to hold up better at the START of a RECESSION due to its safe-haven status. Silver, due to its hybrid monetary/industrial status, doesn’t get the same safety trade that gold gets.
However, on the recovery side of the recession, when the economy is in rough shape but starting to improve in rate-of-change terms, and the government is deploying fiscal stimulus into the economy and the central bank has cut interest rates and is expanding the money SUPPLY, silver DOES BETTER.
Will the Price of Silver Double in the 2020’s?
Lately, Federal Reserve officials began discussing the prospect for ongoing yield curve control in the 2020’s, both in their FOMC minutes and in public discussions. So in many ways, the 2020’s are shaping up to be a lot like the 1940’s in terms of very aggressive fiscal spending that is funded by debt monetization and financial repressed via yield curve control as needed.
In the 1940’s, the price of silver more than doubled during the decade, and I wouldn’t be surprised to see similar or better performance in the 2020’s.