Is Silver Price (finally!) Set to "Cross the Rubicon"? / Commodities / Gold & Silver 2020
Historyis full of intriguing sayings coming down to us from other cultures that informour thinking and behavior.
"Managinga large state is like cooking a small fish." – Lao Tzu.
"Astitch in time saves nine." – A 1700's sewing reference.
"Healingis a matter of time; sometimes a matter of opportunity." – Hippocrates.
OneI especially like tracks back to Julius Caesar after ending his governance ofthe Roman province of Gaul and being ordered to disband his army. Under nocircumstances was he to come closer with it than a small stream outside ofRome.
YetCeasar decided to cross the Rubicon and march on the capital, knowing there wasno turning back and his likely fate if the venture failed. He supposedly toldhis men "The die has been cast!"
Ihave followed the ups and downs of a certain white metal since reading HarryBrowne's books in the 1970's on life, living... and silver.
Somehowsurviving the 1980 Hunt Brothers' debacle after the run to $50 and subsequentcollapse below $5 over the next 22 years, I happened into a local coin shop in2000 and spied a printed copy of Jim Puplava's "The Perfect Storm: RogueWave" about a financial tempest that would generate a massivelydestructively wave coming seemingly out of nowhere, carrying gold and silver tohuge gains.
Itmotivated me to get back in the game.
Foralmost as long, I've been reading Ted Butler's missives about how "someday"silver would break the chains of suppression, market indifference, andcompelling supply/demand metrics and make a massive historic move to the upsidenever to be undone or repeated.
I'veworked for a long time with "The Silver Guru" David Morgan,learning a lot from him about markets in general and silver in particular as Itoured mines, wrote reports for The Morgan Reportand presented at NorthAmerican conferences.
Andwe have both been exponents of LODE, a project constructinga digital (silver and gold-backed) money of the future,enabled by the blockchain.
Forseveral decades, both David and Mexico's Hugo Salinas Price (via the latter'sproposed silver Libertad coin) have sought some way of returning silver to theworld for wealth preservation and "honest money" for everyone – rolesthat for millennia it has faithfully served.
Recently,I've come to the conclusion that we're getting awfully close to the day – after all theseyears – when the price of silver is about to Cross its Rubicon.
Whyam I so optimistic about silver right now?
Ted'smost recent interview about the change in J.P. Morgan's status from the biggestshort on the COMEX to perhaps its largest long…
…seeingsilver being mined at just a 9:1 ratio to gold as mill head grades dropped 60%in the last decade…
…understandingthat the entire gold and silver sector is less than 1/3 the market cap of Applestock…
…watchingthe effects of unprecedented financial mismanagement worldwide exacerbated byCOVID; and seeing a flood of money from investors large and small pour intoboth metals, whether prices rise OR fall... the list is almost endless.
Something(other than a price rise) happened recently to Bitcoin. It's been estimatedthat the electronic "mining" of new Bitcoin results in the additionof about 900 coins per day.
Asyou've heard, "the program" dictates that there can never be morethan 21 million bitcoins – several million of which have already been lost.
Alongwith the explosive popularity of blockchain applications in general, it'sestimated that Square and PayPal alone have acquired the equivalent of all BTCmined this year.
Oncethe Rubicon is crossed, there is no turning back.
WhenI bought some Bitcoin a few years ago at $235 apiece and watched it drop to$180 soon thereafter, I didn't think it would rise 90x.
Yes,Bitcoin could have and might yet "drop to zero" like some naysayersstill claim. Even if it had, I would not have lost too much because of theincredibly skewed risk-reward nature of the bet... something that wager has incommon with silver.
UnlikeBitcoin, silver has been the trusted money of last resort across cultures forthousands of years. And it has not, nor will it ever likely go to zero!
Inmy studied opinion, the case for a price explosion to the upside has never beenmore compelling, nor dare I say, felt more imminent. Whether it launches verysoon, or sometime in 2021, its day of reckoning is relentlessly bearing down.
"TheDie is Cast" for Silver...
Thepressure building under silver is like the tremors that shook Mt. St. Helensbefore the pyroclastic explosion which tore out the side of the mountain andburied several states under white ash. Even today the surrounding landscape hasnot "returned to normal."
Ican remember palladium trading at $180. Once it "impossibly" roseabove $1,100, it from there tripled and never looked back. Rhodium went from$600 to $14,000. Amazon traded in 1997 at $20 and hit $3,500 this year. AndBitcoin is not likely going back to $200 anytime soon.
SilverBullets:
Following David Morgan's dictum of investing "small money to attempt big returns," silver today is still a wildly asymmetric trade.Holding some physical (and maybe a few well-selected mining stocks) serves as insurance, inflation-protection, a liquidity vehicle, and a savings habit.Like the "lost Bitcoin" mentioned above, and unlike the gold supply, most industrial-bound silver is never recycled, thereby permanently dropping out of the supply equation each year.Some 75% of available silver is now lodged in ETFs. What happens to the price if a company or hedge fund launches a drive to stockpile the rest, analogous to what took place regarding Bitcoin with Square and PayPal?Ted Butler concludes that "when silver goes off, it will be like an atom bomb on a hydrogen bomb on a neutron bomb... I don’t think there will be anything like it again in my lifetime."Areyou willing to take the other side of this bet by passing on the opportunity to acquiresome "hold in your hand silver"?
Whenit "crosses the Rubicon" there will be no turning back. It will be aone-time historic event. The price and supply terrain will fundamentallytransform for a long time to come. Because when that day arrives, the die willhave been cast. There will be no Second Chance.
Onwhich side of the stream will you be standing?
David Smith isSenior Analyst for TheMorganReport.com and a regular contributor to MoneyMetals.com aswell as the LODE Cryptographic Silver Monetary System Project. He hasinvestigated precious metals’ mines and exploration sites in Argentina, Chile,Peru, Mexico, Bolivia, China, Canada and the U.S. He shares resource sectorobservations withr eaders, the media and North American investment conferenceattendees.
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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