Tuesday, June 2, 2015

PREDICTION: A Big Move Is Coming In Silver

Yesterday leads to today and together forms tomorrow - Sebastian

In his book, Fisher has traced the history of fiat currencies with one common denominator: they all failed. The average lifespan is 40 - 50 years. The US has held as the world's reserve currency under a fiat system for 44 years. The clock is ticking...
China wants to be the Alfa dog, but opposition is still strong against their desires. However, there is a growing opposition against the greenback due to the policies of the Federal Reserve and our foreign policy of military intervention. In our present environment there are few choices. The IMF has a plan with a new currency called SDR. This is a weighted basket of currencies. China wants to be included and people say that on 20th of October of this year, there will be a major announcement on the subject. Also, we have history's choice: gold and precious metals. Since the central bankers control the game they have outlawed precious metals as money. They call people who follow the Founding Fathers choice as bugs with the euphemism "gold bugs."
One of the complaints by government about gold is a valid point. There isn't enough to back a currency. However, these are the people who make the rules. They overlook the aspect that if platinum were added to form a three tier approach, precious metals could back a currency. In any case gold has found a place in jewelry. Platinum is needed for converters and is also in jewelry. Then, the poor man's choice: silver. It is needed in so many industrial products that it could fill a page. It lost its hold in photography, but solar looms even larger. Solar producers expect to need 150 million ounces in the next two years. Silver is in demand in electronics and water sanitation which will also increase demand. We know one principal that evades even market manipulation: supply and demand. When supply is limited and demand grows, the price rises.
the present climate has all three metals in the dog pound. The miners are hurt by rules and regulations, environmental concerns and financing. In addition, they have labor problems, insurance worries and equipment costs. Low prices has caused them to cut back in production and curtailed future exploration and investment. With this outlook you would expect prices to rise under the simple guidelines of supply and demand. Did I mention a study that claims since silver is a low crust metal, the supply is dwindling due to peak discoveries? Put all of the above in my favorite stock, Silver Wheaton and I will be able to retire with heat in winter and air in summer. However, the focal point of this piece could be the catalyst or the antagonist for silver. Time will tell.
Why would JP Morgan, long whispered to be the shill for the Federal Reserve and fiat money, suddenly have an about face? They have started to stockpile silver. They are no longer just trading, and usually a short on silver, to accumulating. Is this another miracle like Paul on the road to Damascus? Morgan Chase is taking delivery of contracts. In April 2015 they purchased 8,300 ounces of silver. This big dog has caused smaller hedge funds to follow their lead. They now total 55,692,000 ounces of silver. Something is going to happen and this is the difficult part of my prediction. What do they see or know? Were they uncovered in a fraud investigation and they have to replace a truckload of silver? Do they recognize the lack of production while solar needs are increasing? Is Greece going to cause a run to safety? As you can see there are more questions than answers. Of course, with their history the danger of the dumping their load to crush the silver price and market also looms.
I offer this advice. Watch the daily action and weekly trend. If silver breaks down and falls below $15, drop it like a bad habit. However, if it rises in a staircase move with the first step being $18.50, get on board the gravy train. After that, the next step would be over $23.10. And if it continues and passes $25.12, put it all on the nose and I'm not talking American Pharaoh. When and if that day comes, I'll give an update on my triple crown of precious metals.