Welcome to illuminati silver, we tell you the truth about silver.
Today is Monday 28th March 2016 and we are completing yesterday’s video when we asked
the question is physical silver a cheap purchase at $15 an oz, especially as it’s fallen
from a high of $50 during the past 5 years.
In part 1 we suggested that much depends upon your time frame and alluded to the fact that
if its 10+ years then current prices seem very reasonable and this is supported by the
Silver Institute’s recent reports on Supply and Demand and the likelihood that mine supply
in 2016 will be some 5% below demand and this may very well continue through 2019.
Today we are briefly addressing the issue of economic slowdown, deflation and negative
interest rates.
For investors who believe gold will keep climbing on worries about a global economic slowdown,
deflation and negative interest rates, silver could become a more profitable alternative.
Especially as it has advanced less than gold this year, and typically the metal outperforms
when the price of gold is rising and generally underperforms only when both are falling.
However Jeffrey Christian MD of CPM Group is not convinced.
He says: “There’s a lot of bullishness forming around silver,” ….. We are of
mixed minds.
Silver is in surplus, plain and simple ………….Investors will only increase their purchases if there
are more worrying economic, financial and political developments, CPM Group data on
supply and demand show annual surpluses from 34 million ounces to 177 million ounces stretching
back to 2006.”
He infers that worries over the future health of the global economy may also not augur well
for a metal known as the ‘poor man’s gold’ and which derives more than half of its demand
from industrial uses.
So what does this actually tell us?
Well for one thing it certainly suggests that the case for buying silver will indeed increase
as this decade proceeds.
Of course this could be derailed as the result of a worldwide economic slowdown, which many
of our listeners believe will happen.
However, if perhaps there is actual economic growth of even a paltry 2% in the West and
5% – 7% in India and China and somewhere in between for the rest of the developing
world, then perhaps silver demand will continue to exceed supply and over time, cause its
price to rise.
Now before you rush out and purchase millions of ounces, we suggest you bear the following
in mind.
Gold and Silver is priced in US dollars.
With countries around the world moving to negative interest rates and the FED still
talking about raising rates – even though there may only be 1 or 2 rises this year of
0.25%, in relative terms this will strengthen the dollar, and continue to have a downward
impact on prices.
Nevertheless this will to some degree be balanced by those investors wanting to take their funds
from banks and the stock markets and move a proportion into gold and silver.
It should not go unnoticed that only last Friday, it was reported that the US economy
grew at an annualised rate of 1.4% in the fourth quarter of 2015.
The US Commerce Department revised its fourth quarter GDP to upward from an initial estimate
of 0.7%.
Overall, the US economy is estimated to have grown at a rate of 2.4% for the whole of 2015.
One reason for the revised figure was greater consumer spending than officials initially
thought, boosted by an improving labour market.
This suggests, at least superficially, that the economy may at last be improving, though
we are acutely aware that many of our listeners do not believe Government statistics.
Also, Core inflation accelerated for the fourth straight month to 2.3 percent, reaching its
highest level since May of 2012 as cost of rents and medical care increased at a faster
pace.
This could indeed mean that interest rates may be raised – we doubt it will happen
in April, but that said, more economists are beginning to believe that the trend is upward
as opposed to downwards – either way, short term, the dollar is likely to strengthen further.
We are also aware that our listeners and subscribers have heard all of the Clarion calls from the
usual suspects that silver is going to $50 or $100 this year so buy now.
Well let’s not forget some of the headlines that were published in recent years.
“SILVER - $150/oz Possible In Coming Months Due To Tiny Size Of Physical Market” – Zero
Hedge – 7th December 2014 – what happened in 2015 it fell from $15.97 - $13.82
“THE FORCES THAT WILL PUSH SILVER OVER $100” – silverdoctors.com – 12th March 2014
- what happened in 2015 it fell from $15.97 - $13.82
“Silver ‘$100 Within Two Years” - moneymorning.com.au – 27th March 2013 - what happened in 2015
it fell from $15.97 - $13.82 “THE SILVER BOMB: It’s An Opportunity
That Will Never Happen Again…
$500+ Silver IS Coming” – SGT Report – 24th June 2012 - what happened in 2015 - it fell
from $15.97 - $13.82 And our favourite of all time:
“Here's Why $100,000/oz Silver is a Conservative Estimate” - roadtoroota.com – Bix Weir
- 17th June 2014- what happened in 2015 – you guessed it, it fell from $15.97 - $13.82
Our view – yes silver prices will in time rise and to appreciative levels.
Yes, taking a 10+ year view we believe $15 silver is cheap but is likely to become cheaper
later this year but nevertheless a couple of dollars make very little difference over
such a long timeframe.
However short of our proverbial black swan appearing do we see prices rising to $100
in 2016 – no – $150 in 2017 – no –$500 in 2019 – no – How about $100,000 oz silver
- Ah Yes – but long after we are all dead.
Happy Easter to you all!
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Disclaimer:
Illuminati Silver owners come from a background of Banking, International Wealth Management
and Economics.
Having now retired from these worlds we are not qualified to give investment advice.
Therefore, this and other productions must not be deemed to be giving such advice and
merely represent the personal views of its owners.