silver price projection based on National Debt
derryb
Posts: 36,790 ✭✭✭✭✭
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
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Too many positive BST transactions with too many members to list.
Guy before me was walking out with all of the silver bullion.
Also interesting is a bit longer year chart of the purchasing power of an ounce of silver over time as measured in dollar equivalents
Liberty: Parent of Science & Industry
Part of the irrelevance is also the fact that otc derivatives (ie debt) have grown from under $1 TRILL in 1987 to > $1,000 TRILL in 2008. Silver and gold
have been sniffing out that problem since 2001. Massive monetary and regulatory changes instituted in 1971 and 2000 just don't show up in a 600 yr chart.
Seems to me that the chart of concern would be the 40-60 yr chart....not 660 yrs that mostly covers the discovery of silver mines around the world and then
mining them into oblivion. Today there are very few pure silver mines. What gets produced today is mostly the by product of gold and base metal mining.
If we want to show people the "dead" 21 yr silver chart from 1980-2001 we should also include the "dead" DOW chart from 1966-1982. If everyone bailed on
the stock market in 1992 after a 10 yr run (ie same as silver's from 2001-2011), then they would have missed out on the majority of the gains from 1993-2000.
The 600 yr silver chart doesn't include silver's run from 2007-2011. They might as well have only taken it to 2001 for maximum effect.
<< <i>I'm not sure as to the source, but look at those National Debt Projections. Good heavens... >>
But according to some here just bury your head in the sand and everything will be fine.
<< <i>
But according to some here just bury your head in the sand and everything will be fine.
Haven't seen anyone here say that. You state it as a fact, though, so you must have a source of the quote that you can cite for us, right?
Liberty: Parent of Science & Industry
<< <i>the US national debt itself isn't tied to silver prices in a direct way... but the fact that it can only be repaid through (significant) inflation of the money supply, is why silver prices should rise.[
Why does everyone always say debt must be repaid?
Knowledge is the enemy of fear
I knew it would happen.
Knowledge is the enemy of fear
I knew it would happen.
<< <i>Why does everyone always say debt must be repaid? >>
In the aggregate, a nation's debt is unlikely to be repaid. However, each slice of US debt is held for a specific period of time (weeks, months, or years), and when it matures it must be "repaid." Usually the holder of the note will roll that money into new notes, but he/she/it is under no obligation to do so. Also, the fact is that more and more US debt is being held for short maturity periods -- not for decades -- and so a lot of it is always coming due within short periods of time. That, plus the overall amount of the debt, is what creates tremendous risk. If buyers don't materialize for new debt, the buyer of last resort (the Fed) will presumably buy the debt with newly created money. That's absolutely inflationary.
<< <i>Why does everyone always say debt must be repaid? >>
Because failure to meet the terms of the loan agreement results in default. Repayment can however, be dragged out indefinitely, as long as it is continually serviced with interest payments agreed upon by both parties, even if that agreement is re-negotiated to prolong repayment. And, interest costs can be minimized if you are in a position to manipulate interest rates. However, any interest on debt is money that could be better allocated; especially for a consumer paying high interest on a credit card. The US spent $360 billion in 2012 to service its national debt and to prolong its debt obligation. Were there better uses for that money?
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>
<< <i>the US national debt itself isn't tied to silver prices in a direct way... but the fact that it can only be repaid through (significant) inflation of the money supply, is why silver prices should rise.[
Why does everyone always say debt must be repaid? >>
Ok, max out your credit cards and pay the minimum with your children cards. How long until the reckoning with creditors?
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<< <i>
But according to some here just bury your head in the sand and everything will be fine.
Haven't seen anyone here say that. You state it as a fact, though, so you must have a source of the quote that you can cite for us, right? >>
It is a fact and I have read posts by people on this board stating that the fiscal problems aren't that bad, we don't have to pay off the debt, gold and silver are historically poor investments so why bother putting money there when you can invest it in the stock market, blah blah blah. To each his own, I believe that a well rounded portfolio should contain some PM's especially in the uncertain times we currently live in. Do I think people should take all of their money and invest in PM's, hell no but to belittle others who have some of their money invested in them is utter and complete nonsense.
<< <i>
<< <i>
But according to some here just bury your head in the sand and everything will be fine.
Haven't seen anyone here say that. You state it as a fact, though, so you must have a source of the quote that you can cite for us, right? >>
Guilty as charged. I have posted this on occasion:
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>
<< <i>
<< <i>
But according to some here just bury your head in the sand and everything will be fine.
Haven't seen anyone here say that. You state it as a fact, though, so you must have a source of the quote that you can cite for us, right? >>
Guilty as charged. I have posted this on occasion:
At least you amit it.
Is he hiding his head from the fact that the selling pressure above $45 will be ... shall we say... substantial?
Liberty: Parent of Science & Industry
I knew it would happen.
<< <i>Is that a picture of the silver investor who thinks the metal can ever go (and stay) above $50/oz?
Is he hiding his head from the fact that the selling pressure above $45 will be ... shall we say... substantial? >>
get back with me on this in about two years.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>Is that a picture of the silver investor who thinks the metal can ever go (and stay) above $50/oz?
Is he hiding his head from the fact that the selling pressure above $45 will be ... shall we say... substantial? >>
Congratulations you just answered your own question!!!!
<< <i>No, that's a stock investor looking at the alternative universe that he tries to live in. >>
What is funny is the anti PM crowd keeps going back to the stock markets bull market run from the early 80's till now yet conveniently ignores the prolonged bear markets stocks have suffered when economic times are uncertain. Economically this is about as unstable a time for the US and the rest of the world as there has ever been yet they insist it is the only game in town.
I wonder why they haven't considered all the baby boomers retiring in the upcoming years and how they will be withdrawing money from the stock market to pay for their living expenses along with all of the unemployed people having to raid their retirement accounts to have money to live on?
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>The anti PM crowd keeps us honest and on our toes. I am thankful for them and welcome their challenges. Neither is always right.
For sure a healthy dose of scepticism is a good thing when backed with facts. I don't think for a minute that most people here believe that PM's are the only thing in the world worth investing in, rather they serve a purpose in times of great uncertainty which is to provide insurance against fiat currency.
longer term). The thing is, this sovereign debt rebalancing only occurs during the 15-20 yr bust cycles (ie 2000 to 2015/2020). So the correlation between debt and gold falls apart
for almost 20 yrs when the "what me worry, be happy" crowd runs a FED-induced boom cycle to exhaustion. No need to worry about debt when revenues coming in are adequate.
The debt doesn't have to repaid. As others have mentioned, it can just be rolled forward, probably forever as long as the nation hold's the official world's reserve currency.
Even so, gold and other hard assets have tended to rise to that price which balances off the sovereign debt. That takes 15-20 yrs during the bust cycle. Debt doesn't have to be
repaid. But the dollar will lose value and harder assets tend to rise in price. It took 18 yrs to balance off that debt during the last PM's bull market (1962-1980). Then it took
another 20 yrs to totally unbalance it.
Inflation was present in the 1970's and it is present today. If just so happens that there are deflationary forces in play as well. The FED learned their lesson in the early 1930's
that they need to keep the inflationary forces going during major recessions/depressions. Therefore they ensured that happened in the 1970's and post 2000 as well. There will
always be inflation during this current cycle. The prices of numerous things have been rising over the past 10 yrs (food, professional services and fee, taxes, health care, energy,
etc.). Just in the past several month I paid a higher price per unit that ever in my life for: bakery desserts/sweets, health insurance, car insurance, property taxes, tree removal,
well/plumbing services, oil burner and chimney service, heating oil, granola, pumpkin seeds, fresh salmon, etc. But sure, one can find cheap milk and canned chunk light tuna on the
cheap if you shop around. But that 7-1/4 oz can of tuna we knew as kids is now 5 oz. And the Chips Ahoy from 1968 is about 2/3 the size with 1/2 the chips. Cookie Man would be
ashamed.
I think this may be the major difference between now and the 1970's.
I don't think we'll ever know how much shadow banking debt we are paying off in addition to what's on the books as sovereign debt.
Both are deflationary, and both require monetary inflation simply to keep the system from crashing while the debt is being "paid off". Keep a few of those greenbacks - if Bernanke ever changes his mind, they might be worth something someday.
I knew it would happen.