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Silver, The S&P and Sanity Silver prices peaked in 2011. The descent has been long and tedious. Perhaps silver prices made an important low on September 11, 2018, like they did on November 21, 2001 at $4.01. That long-term low was twenty cents below the price on September 11, 2001, the day the twin towers fell at free-fall acceleration, which marked the beginning of the silver bull market that launched prices upward by factor of 12. The S&P 500 Index has risen for over 9 years, from a low of 666 to a high of 2,940. It sits in late October at about 2,641. Massive debt increases, central bank created low interest rates, fiat currency devaluations, stock buybacks and debt based optimism fueled the rally. A correction is occurring. Sanity: I know of no metric to measure the absence of sanity in the financial world, but if such a metric existed, it would register HIGH! Consider:
The DOW and the S&P 500 Index have grown much faster than silver since 1971. National debt has exploded higher. This shows the power of printing fiat currencies to fund deficits, levitate stock markets, overstate asset prices and understate risk. The banking cartel creates debt, boosts stock markets, increases wealth for the political and financial elite and devalues fiat currencies toward their intrinsic value of zero. This is beneficial for the political and financial elite, but few others. Official national debt has increased 8.8% per year since 1971, doubling every eight to nine years. Assume debt will double every nine years. By the year 2100, debt will have doubled nine times. That places the U.S. official national debt at about $11,000 trillion. Insane! The dollar, if it still exists, will buy next to nothing. Expect a reset. Conclusion: A reset will occur. Buy silver! Debt will be defaulted or inflated to worthlessness as the banking cartel devalues the dollar. The alternative is that fiscal sanity will return, congress will balance the budget and reduce debt, the Federal Reserve will disband, pigs will fly, and three other impossible things will happen… Regarding overvalued stock markets…
Is Silver Undervalued Compared to the S&P 500? Silver prices are too low when compared to the S&P 500. Expect the ratio to rise for several years. Assume the S&P 500 corrects by 50% and silver rises to about $50. Even at those prices the ratio would remain below the level reached in 2011. The price of silver could rise far higher than $50 and remain within an expanding trend channel dating back to 2001. A financial reset could devalue dollars, implode debt, and force central bank intervention with tens of trillions of “funny money.” These events would create investor disillusionment with paper assets and might boost silver and gold prices by a factor of ten or more. Is this a forecast? No, but higher silver prices are inevitable, short of nuclear war. SUMMARY:
WHAT ABOUT THE GOLD TO SILVER RATIO?History shows that gold prices rise and fall a smaller percent than silver prices. When the ratio is too high, silver prices have fallen into the basement and will rally. The gold to silver ratio as of September 2018 has reached a 25 year high. Now (most of 2018) is a buy zone for silver. CONCLUSIONS:
Miles Franklin sells real money—gold and silver. Market prices show that now is a good time to recycle dollars from overvalued stock markets into silver. Call 1-800-822-8080.
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