This Needs To Happen Before Silver Really Takes Off / Commodities / Gold & Silver 2019
Significant nominalpeaks in the price of silver tend to come after significant nominal peaks inthe Dow as well as Dow/Gold ratio peaks. This has been the case for the last 90years at least. This is mainly due to the special relationship between silver,the stock markets and debt.
These stock marketrallies are driven by the expansion of the money supply (debt), causing a bigincrease in the value of paper assets (including stocks) relative to realassets. When the increase in credit or the money supply has run its course, andis unable to drive paper prices higher; value then flees from paper assets tosafe assets such as physical gold and silver, causing massive price increase.
Although silver has acomponent that benefits from the increase in money supply or credit, it is inno way as effective as its monetary component that benefits enormously whencredit deflates.
Below is a 100-yearinflation-adjusted silver and gold chart (generated at macrotrends.net):
Dow/GoldRatio Peaks
On the chart, Ihave indicated where the Dow/Gold ratio peaked, in 1929, 1966 and 1999.Significant silver (and gold) rallies and peaks eventually followed after allof those Dow/Gold peaks.
The rally after the1929 Dow/Gold peak, ran until 1934. It is important to know that the Dow alsopeaked when the Dow/Gold ratio peaked in 1929.
The silver rally after the 1966 Dow/Gold peak,ran until 1968. After the 1999 Dow/Gold peak, we had a silver rally, whichstarted in 2001and ran until 2011.
Major Nominal Dow Peaks
On the chart, I have also indicated Major DowPeaks. This is where the real silver action comes in, since Major Dow peaks arefollowed by Major Silver Peaks.
The Dow made a major nominal peak in 1973,about 7 years after the Dow/Gold ratio peak. Note that a big rally actuallycame right after the Major Dow Peak of 1973, and ran until 1980. This wassignificantly longer than the rally after Dow/Gold ratio peak.
The 2011 silver peak was not a Major SilverPeak, simply because it basically only equaled the 1980 Major Silver Peak . AMajor Silver Peak will reach multiples of the 1980 peak, so it is still coming.
We are now still awaiting our next MajorSilver Peak, but first we need a Major Dow Peak. The bottom for silver has beenin for a couple of years already, so it has been a phase of accumulation foryears already.
The Major Dow Peak will likely come soon asthe silver price rises , until it will suddenly accelerate as the credit woescreates all kinds of panic. The credit woes are in the works. Just look at theGold/Silver ratio. It is near all-time highs (only reached trice in the last100 years).
What is significant about this peak-level inthe Gold/Silver ratio is the fact that it is so close, and follows the 2016bottom in interest rates. These confirm that some very serious credit woes arecoming. It is likely on a scale not seen over the last 100 years.
We can expect a rush for real monetary assetsas never seen before. This will put silver again at the forefront of money andmonetary solutions.
For more on this, andsimilar analysis you are welcome to subscribe to my premium service. Ihave also recently completed a Silver Fractal Analysis Report as well as a Gold Fractal Analysis Report.
Warm regards,
Hubert
“And it shall come to pass, that whosoevershall call on the name of the Lord shall be saved”
http://hubertmoolman.wordpress.com/
You can email any comments to hubert@hgmandassociates.co.za
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Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.
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