Gary Christenson: Silver and Sanity

Silver is real money, not a debt-based fiat currency that will eventually fail. Silver bullion production requires capital and effort to mine and refine. We use it for solar panels, iPhones, cruise missiles and thousands of other items. Silver is monetary sanity.

Prices for silver rise as currency units are devalued. Silver sold for $1.29 in the 1960s. Today’s price is around $18.00 because dollars buy less. The continual devaluation benefits the political and financial elite who own most paper assets – stocks and bonds. The bottom 90% pay higher prices for necessities plus interest on their debts. Savings in silver coins will offset devaluation and loss of purchasing power.

Why do dollars buy less? The banking cartel borrows and “prints” too many of them into existence. More debt means more dollars in circulation.

How much debt have our bankers created? The St. Louis Fed tracks total credit market debt. Current US debt is about $74 trillion, over half a million fiat dollars per US worker. Insanity! The debt will be extinguished via default or hyperinflation.

Total debt increases rapidly. But one might think the debt increases because population rises every year. To prove otherwise, divide total credit market debt by US population and see the rapid rise in population adjusted debt.

Population adjusted credit market debt increases, and dollars buy less every year. See the Chapwood Index.

Do you remember?

A cup of restaurant coffee cost ten cents in the 1960s. Today a coffee costs two bucks.

A pack of Marlboros cost twenty-five cents in the 1960s. Today that pack of cigs will cost $6 – $12 depending on taxes.

A new truck in the 1960s cost $2,000. Today a new truck costs $50,000 to $80,000. It may be a better truck per government statisticians, but you still pay $50,000 to $80,000 in devalued debt-based dollars.

WHAT ABOUT SILVER?

Take the above population adjusted total credit market debt and price it in silver ounces. Use the average of daily closing prices for each year to create an annual price. Debt increases faster than the price of silver, which is no surprise. The world runs on credit and debt, and currencies are debts (Federal Reserve Notes are debts of the Fed to you, the holder). The banking cartel creates billions in new debt every day. Silver prices, except in the 1970s, have not kept pace with debt creation. That will change.

Take the same data and plot it as silver price (annual average times 10,000) divided by population adjusted debt.

CONCLUSIONS FROM ABOVE:

Debt, adjusted for population, increases faster than silver prices. Fake money (debt-based currency) has prevailed since 1980 versus real money—silver.

Silver prices will “catch up” someday, perhaps soon, when fake money is recognized for what it isn’t. Investors and savers will scramble to buy a tiny supply of real silver and bid prices far higher.

Silver prices have increased since last May. Silver’s low price in May was under $14.50. Closing price on Feb. 21 was $18.53.
Palladium prices spiked higher, defying expectations. Perhaps the parabolic palladium price increases foreshadow silver prices in the next one—five years.

BUT LET’S BE CONSERVATIVE IN OUR EXPECTATIONS:

Population will slowly increase. Use the past ten years as a guide.

Debt will increase, unless you think bankers will change their behavior, governments will balance budgets, congress will become fiscally responsible, and Pentagon spending will diminish as peace descends upon the world.

The silver to population adjusted debt ratio will rise to the upper trend channel. However, the ratio could move far above the trend channel.

We need not assume a total financial reset or hyperinflation. Silver prices must rise in a debt-based fiat currency world.

Assume the ratio will rise from 0.77 to 3.0 by 2025.

Using these mild and reasonable assumptions, the average price of silver (annual average of daily closes) could rise to $85 by 2025. Since price spikes can be three times larger than the annual average price (as in January 1980) the spike price of silver could be $250 without assuming global war, hyperinflation, global pandemic, central banks fighting recession with QE4ever, electing a tax and spend socialist in 2020, Universal Basic Income, MMT, negative interest rates for most of a decade, and other insane fiscal and monetary policies.

- Source, Silver Bear Cafe