Silver Will Be The King Precious Metal Performer

 

While gold is the king monetary metal, silver will turn out to be the king precious metal performer.  Currently, gold is stealing the show as the East (China) continues to consume more than total world gold production.

However, silver will surprise the markets in the future as overwhelming demand will outstrip supply in a big way.

The key factor that will drive up the price (value) of silver much higher than gold in percentage terms, will be its affordability.  As the price of gold heads back above $1,500 and silver to $30, an individual can buy a heck of a lot more silver than gold.

Mike Maloney discusses this in a recent video, Silver Has More Potential Than Gold:

Mike Maloney Silver better than Gold

In the video, Mike said the following as it pertained to President Nixon dropping the Dollar-Gold peg back in 1971:

“All the Central Banks and economists said that gold was going to fall because there was not going to be demand for it as money.  Instead of falling, gold started rise and anyone who said that if was going to $100 was considered a lunatic.  It went to $850 (by 1980).

Once gold got over $400, the public changed their preference to silver.  Silver than rose from 1/50th to 1/15th the value of gold’s value.”

Mike went on to say that during the 1970 decade, gold increased 24 times its value, whereas silver’s jump was 36 times.

A Quick Look At Silver’s 2013 Supply & Demand Balance

According to Thomson Reuters GFMS Nov. 2013 Silver update, this is their estimated silver supply and demand figures:

2013 Silver Supply

Mine Production = 815 million oz

Scrap Supply = 233 million oz

Net Govt Sales = 7 million oz

Total Supply = 1,055 million oz

 

2013 Silver Demand

Industrial Applications = 470 million oz

Jewelry & Silverware = 242 million oz

Photography = 55 million oz

Coins & Medals = 110 million oz

Total Demand = 877 million oz

Here we can see that total supply outstrips demand by 178 million oz.  In 2012, the difference between supply and demand was 201 million oz, but 41.5 million oz of that amount went into “Producer De-Hedging.” All de-hedging means, is a cut from the silver producers hedge book.

GFMS estimates 2013 total silver supply (1,055 mil oz) to rise 7 million oz more than in 2012 (1,048 mil oz).  However, total estimated fabrication demand will increase 30  million oz to 877 million oz from 847 million oz in 2012.

The 2013 surplus silver amount (178 mil oz)  falls into the “Implied Net-Investment” category.  This figure may change somewhat depending on Thomson Reuters GFMS update on the amount of silver “hedging or de-heding.”

Regardless, the 178 million oz surplus does not include any silver investment demand from standard bars and bullion coins that are not in the “Official coin” category — Eagles, Maples, Philharmonics, Pandas and etc.

These supply and demand figures are what the typical orthodox banks and brokerage houses go by in making their forecasts.  While it seems as if the 178 million oz silver surplus in 2013 was a lot, it is still peanuts when presented in a dollar amount:

178 million oz  x  $24 (2013 avg. spot) = $4.2 billion

In my previous article, Watch As Precious Metals & Energy Prices Go Crazy As Things Fall Apart, I included this chart:

U.S. Personal Sector Financial Assets & Total Global Silver ETF's

The $14 billion figure on the left side of the chart represents the current value of all the Global Silver ETFs.  If we add the $4 billion of supposed silver surplus in 2013, it would increase the total to $18 billion — a paltry insignificant figure in the whole scheme of things.

The chart above shows where the U.S. public holds its cash.  Unfortunately, Americans have been conditioned to believe that fiat money is a store of value.  Fiat money is not a store of value, but rather just a paper currency used for trade.

We are witnessing the devaluation of many fiat currencies throughout the world presently.  It is just a matter of time before the U.S. Dollar loses its role as the world’s reserve currency and experiences a 30%+ decline in value.

TECHNICAL ANALYSIS:  Increasingly Worthless in Forecasting Future Price

As I have stated over and over again… technical analysis is worthless in a rigged market.  Furthermore, I want to add another qualifier… technical analysis will become increasing worthless in a peak energy environment.

I believe ENERGY IS THE KEY to understanding where the value of precious metals are heading as well as the overall economy.  Many precious metal analysts are constantly talking about the GREAT MONETARY RESET that’s coming (I agree)… but what happens after that?

Does anyone pay any attention to that train of thought?  What happens once we see say $5,000 gold and $200 silver?  What do you do with you precious metals then?

It all gets back to energy.  Let’s look at what is taking place in the natural gas market.  The price of natural gas shot up to $6.50 briefly before getting knocked down to $4.60 currently.

NatGas Chart $3.50 forecast

Some of the large energy institutions were forecasting a very low price of natural gas for the next several years.  I am republishing this quote from EnergyWire:

Shale gas production doesn’t make a major upward move until 2016, according to EIA. Spot prices for natural gas at the major Louisiana pricing hub will drop to $3.12 per million British thermal units in 2014 and 2015, below this year’s average forecast price of $3.25, according to EIA’s Annual Energy Outlook. Prices don’t pick up until 2016 either, in the EIA assessment.

Actually, the EIA (U.S. Energy Information Agency) was forecasting an even lower price than $3.50 for 2014 and 2015.  Furthermore, Charles Nenner who worked at Goldman Sachs and now has his own forecasting service, made an even worse prediction.

You may have heard Charles Nenner or his associate, David Gurwitz being interviewed on GoldSeek and Financial Sense recently.  David Gurwitz spoke with Jim Puplava on Financial Sense on Oct, 13th, 2013 about Nenner’s forecasts for gold, silver and various commodities.

In Gurwitz’s interview, he stated the following about natural gas:

“Charles Nenner called a top in natural gas in the high $3’s.  He sees it going down to $2.50, and then lower after that.  It doesn’t show great economic demand.”

I paraphrased what he said just a bit, but that was the basic forecast for natural gas coming from Nenner Research.  If we look at the natural gas chart above, the price did not continue to fall towards $2.50, but instead spiked higher to $6.50.

Nenner and Gurwitz do not follow supply and demand fundamentals, rather they look at math and cycles.  While I have a great deal of respect for analysts who are able to see price trends through cycles, I believe this sort of analysis becomes increasingly worthless in a peak energy environment.

The reason the price of natural gas spiked over the past several months had EVERYTHING to do with supply and demand forces The table below details U.S. natural gas withdrawals and underground storage levels.

Natural Gas Storage table 22714

(Bcf = billion cubic feet)

Total natural gas withdrawals for the most recent report were 95 Bcf, which pushed the underground gas storage level down to 1,348 Bcf.. 40% lower than the same period last year.  There are still five weeks (on average) of net gas withdrawals remaining.

The next chart shows how low the gas storage levels are, compared to the 5-year average:

Natural Gas Storage 22714

The extreme cold winter in the Midwest and Northeast had a lot to do with the huge draw-down of underground gas supplies as well as the recent price spikes.  However, this isn’t something Nenner and technical traders go by when they make their future price forecasts.

What happens if the U.S. does peak in natural gas production in 2014 or 2015?  I am not saying it will (chances are becoming more likely), but this is not taken into consideration by the technical Chartists.

Keep an eye on the price of natural gas in March.  If we continue to see large weekly withdrawals of underground gas supplies, the price will head back over $5.  So much for technical analysis and prices below $2.50.

Silver Will Be The King Precious Metal Performer

As the public and market are lulled back to sleep (presently) on the value of silver, there will come a time in the future when it will be impossible to acquire a single ounce… only at much higher prices.

I presented the 2013 silver supply and demand balance figures to show just how little there was in a “Dollar Surplus.”  When the Fed purchased over $1 trillion in U.S. Treasuries and MBS – Mortgaged Backed Securities in 2013, the hidden value of silver increased substantially… even though the paper price did not reflect it.

The price or value of silver will move up much higher in percentage terms compared to gold in the future due to its affordability to the masses.  Technical analysis will be worthless in forecasting this meteoric rise —just as Charles Nenner’s technical analysis failed to see the rise in the price of natural gas in 2014.

Precious metal investor need to stop paying attention to these orthodox silver supply and demand forecasts as they will become irrelevant in the future as global peak oil production destroys the biggest Fiat Monetary Ponzi Scheme in history.

Please check back for updates at the SRSrocco Report and my new REPORTS PAGE in March.  You can also follow us at twitter below:

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54 Comments on "Silver Will Be The King Precious Metal Performer"

  1. Silver Curious | February 28, 2014 at 2:50 pm |

    Just exactly where is this overwhelming demand for Silver going to come from?… are the South&Central American countries going to re-monetize Silver again soon?.

    BTW – if energy prices moon shot, economy gets destroyed, disposable income falls for EVERYTHING.

    • Silver Curious,

      You are basing DISPOSABLE INCOME as a fiat currency. This is the ERROR that most make. What happens when one’s INCOME based on a fiat currency, goes the way of the Zimbabwe Dollar?

      steve

  2. Energy seems to have dropped all the way back to 4.62 from 6.2 high even though the supply keeps declining.

    Do you see any reasons for this?

    • Max Meister | March 1, 2014 at 1:02 am |

      If the price movement of a comodity doesn’t perform as it should according to the the rules of suppy and demand, then it usually has to do with speculation and/or manipulation in the derivative market. As long as you can neked short comodities without having the real stuff at hand, we will see such illogical price moves all around.

    • In the short term energy supplies are in fact increasing, not declining. Blame fracking more than anything else. With demand depressed and the additional supplies brought online after the price shock a few years ago, i fully expect gas and energy costs to remain consistent or even fall vs inflation through the end of the decade. It’s after that we have a really serious problem with energy.

      • Morbius,

        Unfortunately… the price of natgas will have to rise or production will start to decline in a big way. Devon Energy just announced (according to Bill Powers) a 40% cut in spending in the Barnett shale in 2014. Why did they decide to do that?

        Because there is no money to be made drilling new wells further from the sweet spots that do not produce a decent return. This is precisely what the shale energy companies are starting to realize. Once the sweet spots have been exploited… production and profits fall off a cliff.

        The U.S. domestic energy supply will peak a great deal sooner than most realize. This will not take a decade, but more likely… a few years.

        steve

        • Agreed. All shale deposits except Marcellus are in long-term decline. Barnett is precipitous, I think. As the first shale play, it presages the timeline for most plays – 80% decline within 5-7 years.

  3. I HAPPEN TO AGREE WITH EVERYTHING YOU SAY. However,if and when things unfold as we believe they will,then the average joe,who has seen the change coming,and has been stacking,he will become wealthy,and the smug suit and tie guy will be broken. It’s just hard for me to believe the powers that be will allow this,no matter how many must be killed.

  4. Demand will determine (price) valuation. This physical silver demand will be from the east. China.

    The Chinese have used silver for over a thousand years as “money”. Even the word they use for their currency unit “Yuan” is silver based. For the past number of years they have focused on the accumulation of gold bullion, since this is what the western economies used to be based on and still is in an unofficial capacity.

    Now that the Chinese have their foot in the western bank vault door, they will turn their attention to increasing their silver bullion hoard. Extreme caution is their modus operandi, while concealing the fact of their true intention. Consider the recent fall in the Yuan’s value versus the US dollar, brought about by the Chinese themselves. Why?
    Their mountain of US dollar based reserves are now “worth” more in purchasing power, while pulling the rug out from under the derivative speculators. Mainly some TBTF western banks. These positions must now be covered in a financial environment of quality collateral drought. Silver will be that missing “quality” collateral. Bought up by the Chinese with their now more “valuable” USD reserves.

    The western mind thinks in a relatively short timeline, while the Chinese think in generational terms. We think about our childrens education, they think about their grandchildrens education. Their ultimate game plan is a global leadership role, not only economically but militarilly, financially, etc.

    They are well on their way. Do not under estimate them. To do that would spell your doom.

    • I rarely hear anyone on these sites make any mention of the mass psychology of people. I have been researching the Chinese mindset and I totally agree with you. In the book, The Art of War, the Chinese General who wrote it reveals the Chinese mind in both war and business. I am applying an old saying in a diferent way to illustrate, ” Know your friends, but know your enemy better.” The word enemy here is defined by myself as anyone whom one regards without understanding or empathy. The Chinese mentality has developed over a millenium into a people who grew up in a country where there are just too many mouths to feed. Anyone growing up in a large family will attest to the in house competition that exists between siblings for what is perceived as scarce resources. Many mouths to feed creates economic strain on both parents. One mother cannot attend adequately to many babies and young children’s needs for her attention. When we take it right down to its barest elements, a nation of people is simply a nation of family units and family units are a group of people, whose individual perceptions, values, tastes, beliefs etc. are formed by the parents and culture in which they live. To escape this mental indoctrination requires many years of psycho therapy and even then one is never rid of those earlier formative years and experiences, it takes incredible committment on the part of the individual to stay consciously aware and self reflective. This is hardly something one can expect from the masses. Here in Canada, the Chinese stick together and don’t integrate within Canadian culture, whatever that means, en mass. A friend of mine, non Chinese, speaks fluent Mandarin. She applied to countless Chinese import/export firms for a job and finally one owner had the guts to tell her the truth as to why after a year of searching what the problem was. He told her she would never be hired by Chinese, they only hire their own. People get up in the air here when they hear this stuff but I read an article where that same sentiment was revealed. A family owned business in Markham Ontario was a huge garden centre and had been there for over 60 years. It was the largest garden centre in the Toronto area. Over the years Markham went from being a lovely small town white enclave to being over run with Chinese. The downtown merchants saw their businesses floundering and talking to them they said Chinese don’t shop here. The garden centre closed down and the head of the family that owned it said the same thing. So I take that as a word to the wise, coming from Lao Tszu himself…know who doesn’t support you. We are addicted to Made in China but they are not addicted to us at all. I am not prejudice by the way, my husband has a lovely young Chinese man working for us and he’s smart, polite, extremely helpful and socialable…everyone likes him. I am thinking learn Mandarin and actively seek connection with Chinese people and even make a friend or two. Our futures all depends upon mutual understanding and acknowledgement that we are all made from the same fabric of this universe and our differences, have all been an invention of the few who seek to dominate us all.

      PS I have one thought about the Chinese and I’d like to run it by you. We look at them and see them as these disciplined people who know how to save money and are good in business, have technical skills and good in math and sciences. But I keep thinking about what Einstein said, ” Imagination is more important than knowledge.” The Chinese are technically good, they’re good at copying but how imaginative, creative, free thinking are they really? I mean its good to have math and science skills but if the right side of the brain isn’t equally nurtured then one is not well rounded. Ideas and the ability to generate ideas is where I’m thinking we, in the west, excel. We are new nations, Canada and U.S., we have been exposed to a multitude of cultures within our countries and although we have some divisions, we still manage to live relatively peacefully with one another…is this not one of our greatest strengths?

      • OutLookingIn | March 2, 2014 at 11:46 am |

        Disciplined? Imaginative? Creative? Inquisitive? Deep thinking? Stoical?

        Yes to all the above and many more adjectives.

        The “Chinese General” to whom you refer, I gather to be Sun Tzu and his “Military Rules” commonly referred to in the west as “The Art of War”. These rules were inscribed on bamboo slips dated back to the 2nd century B.C. and contain one passage in particular that encapsulates the Chinese mindset for me: Sun Tzu said “War must be avoided whenever possible, however war should be fought swiftly, as no long war ever profited any country.”

        To me, the above quoted Sun Tzu passage speaks volumes about the present Chinese leadership and their global overall collective game plan. By all means, learn to speak Mandarin, but understand Cantonese also. As you would upper and lower case English.

      • lastmanstanding | March 3, 2014 at 9:54 am |

        I recently saw in a Jim Willie article or interview that according to one of his HTL subscriber who was privy to some “inside info” that the Chins had pretty much purchased anything/everything of value in Canada…fracking, oil sands, transport of it, pm and energy mining, tech, RE, etc.

        Any opinion on that? It is happening here in the US so I fully expect that it has happened in Canada.

        It amazes me to see the incredible inflation, especially in RE/housing market. Homes in Canada that are worn out spaced about 5′ apart going for $500k avg…if this is so out of wack, everything else is as well.

        Care to share an opinion?

        • OutLookingIn | March 3, 2014 at 10:48 am |

          Yes. The Chinese have been on a global ‘tear’ in recent years, with their acquisitions of resources and attending infrastructure. Canada, as is the US, are no exceptions to this move. The US less so, since trade protectionism is more prevalent than in Canada.

          The Chinese gather just enough company equity to give them overall control, however keeping in place that companies operating methodology. Operating in this fashion, they show great business acumen and forge long term loyal, inter-company relationships, that proves not only profitable for them, but also to western stockholders. The Chinese fully realize that they are in for the ‘long haul’ and wish to forge long term partnerships, that are benificial to both parties.

          The Canadian residential housing sector is due for a correction, however it won’t be as severe as what occurred in the US with their massive volume of subprime mortgages, with attendant large scale financial malfeasance.

          As to inflation levels, yes. In some sectors. Other sectors? Not so much, and still others, the opposite being true with deflation. This strange situation will be ongoing until some globally sensible prime direction emerges, both financially and politically.

    • I agree with everything you are saying, however, the amount of money needed to completely wipe out the Silver market is minuscule compared to Gold. A few billion dollars will completely absorb whatever Silver is available, which to China is barely a drop in the bucket. No doubt the Chinese will get their hands on as much Silver as they can as it is not only a monetary metal but also a strategic industrial metal and we know that China will accumulate anything of strategic importance.

      • OutLookingIn | March 2, 2014 at 11:54 am |

        I agree with your premis that the “silver market is minuscule compared to Gold.”

        Once the Chinese have all the gold that can possibly be collected, at a price that meets their approval, they will then turn their attention to the physical silver market. Soon.

  5. Hi Steve. Why doesn’t the GFMS factor in bullion demand and ETF demand? Both reduce the number of available ounces on the market.

    • Mike,

      I gather it is too difficult to get all the data, but they do provide silver bar investment figures. GFMS estimated 110 million oz of Coins & Medals for 2013 may be too low. Coins & Medals are the official coins.

      If we figure that the U.S. Mint sold 42 million Silver Eagles and the Royal Canadian Mint sold upwards of 24 million.. that is 66 million just from those two sources in 2013.

      Furthermore, the U.S. Mint and the Royal Canadian Mint also sell other types of silver bullion coins. I would imagine total silver bullion sales from these two official mints were probably 70-72 million.

      Then we have to add in all the Austrian Philharmonics, Australian Silver Bullion of all types, Chinese Pandas, Mexican Libertads… it has to be well over 120 million.

      GFMS actually does provide a figure for Silver Bar investment. According to the 2013 World Silver Survey… total Silver Bar investment was 53 million oz in 2012, down from 105 million oz in 2011.

      This silver bar investment figure does not include ETFs.

      So, as you can see.. the market can absorb a great deal of silver bar investment if it feels motivated. 105 million oz of silver bar investment in 2011 was a great deal. I believe silver bar investment was higher in 2013 than 2012.

      We will see when the 2014 World Silver Survey comes out.

      Mike… if we were to assume that real Official Coin demand was 120 million oz (not 110 million) and Silver Bar investment was 70 million oz and let’s throw in say 20 million oz in standard bullion coins… that would add up to 10 + 70 + 20 = 100 million oz of total Silver investment other than official coin. That really does knock off quite a bit from that 178 million oz so-called surplus.

      steve

  6. If the super government eventually imposes a credit only economy, where cash is not used, only digits of work hours, sales, etc, then what would the value of gold and silver be

  7. Steve,

    Last week [Tuesday I think] I turned on my car radio. It was tuned to the Atlanta station that features frequent weather, traffic, MSM news updates, and conservative talk radio. Sean Hannity was on with two energy “experts”. Not catching the discussion from the beginning I missed some. But the focus seemed to be “let’s” create more American jobs”, and we can create 2 million in the energy sector.

    Two guests were on; one used to work for Shell oil [can’t be a geologist unless he is a shill] ; the other I didn’t catch his pedigree. One of them said “there is enough fossil fuel to power the earth for a THOUSAND years. I knew two hundred years was BS as a Geology major at age 19 in 1975. That was explained in great detail by my PhD professor who knew what the hell he was talking about. He was talking about peak oil in 1975 or before, based on FACTS like increasing average drill depths and costs of production.

    Unfortunately when people come on a nationally syndicated show and says that crap, the sheeple are likely to believe that. I’m including financial analyst sheeple.

    • David,

      I know exactly what you mean. Unfortunately, these TALK SHOW HOSTS do not bring on their network anyone who has the REAL SMARTS. If the audience spent say… an hour with a guest who spoke about the subject of the falling EROI, they would realize the supposed 1,000 years of oil is complete garbage.

      Who cares if there are TRILLIONS of barrels of oil shale in the west if the EROI is 1.5-2/1… when the U.S. Economy needs something north of 10/1 to survive? We just can’t afford that ultra-low quality crap. Hell, it’s not really oil…LOL.

      Unfortunately… this is exactly what happens when the Power structure is in control of the Media. Whether it be the LEFT or RIGHT. I really could care less… both are terrible distractions to this society.

      I will be getting into this subject in my THE U.S. & GLOBAL COLLAPSE REPORT.

      Everything takes more time and I have many coals in the fire… but I will be getting the REPORTS PAGE up and running shortly.

      steve

    • lastmanstanding | March 1, 2014 at 2:23 pm |

      They are just trying to buy more time in this deceptive game of the right vs. the left.

  8. Here’s what I want to understand. If this silver goes to some astronomical price level, like $200/oz, who is going to buy or exchange it for you? What are they going to exchange it for, FRN’s? Would you or anyone pay $200/oz for 1 silver coin? If so why when you could just take the cash and get what you need? Ok so hyper-inflation sets in, still won’t the rise in silvers price absorb that? As I understand it, people buy silver at prices that they can reasonably assume will go up from that price, thus hoping to make a profit, or hedge against inflation. How would they be buying it at $200/oz. in hopes that it would go up from there? My point is that you have to have a buyer for it @$200/oz., and a buyer has to see it as advantageous in a “road warrior”, economic holocaust.

    • Platinum is at $1,440 and palladium is at $740 and no one is freaking out about that. So why can’t silver go up into the hundreds??

      • I didn’t say it couldn’t go up to that number ($200/oz.). I asked how it would be salable at that price. Silver is far different asset class than platinum and palladium just because of it’s inherent price difference. But, I’ll use your example as an example of what I’m talking about.

        For silver to go up to $200/oz. it would be a 841% increase.
        For platinum to go up the same rate would mean $12,110.4
        For palladium to go up the same rate would put it at $6223.40

        The same point made about silver, who is going to be a buyer for these precious metals? Why would someone in a economic apocalypse want to buy this pretty shiny metal at those prices instead of raw materials like food or something? Obviously in this scenario, the dollar has collapsed and is worthless as Weimer money, but still assumes precious metals will still be exchangeable. They are only worth what a buyer will pay, and why would anyone buy it ?

        • Platinum and palladium may well reach those prices, after all Pt was $2400 7 years ago and Pd was once $1100 a decade and a half ago. Hell Rhodium was over $10,000.

          200M ozs a year is NOT VERY MUCH AT ALL for the investment side. Hell I know many people who can afford to buy 10000, 100000, or even 1 million ozs of silver at $20… My bosses and the owner for example lol.

          I think at some point people who own RE may wise up and create liquidity unloading some RE and stacking shiny. With which to buy a lot more RE later.

        • If Silver is @ $200 that means everything else is far more expensive in dollar denominated terms. My guess is that you will not be able to buy Silver at $200 because those of us who own it know that Silver has gone to $200 because the dollar is being systematically destroyed and will continue to fall in value. So it’s only a matter of time until Silver will be at $500 and then $1,000. Why would I ever sell my Silver for something that continues to decline in value? I will only convert silver into dollars because I need dollars as medium of exchange but my savings will remain in precious metals as long as we remain on a fiat currency system that is backed by nothing.

          • If the gold/silver ratio were 9/1 (as it is coming out of the ground) silver could be $144 now without anything else changing

          • But who knows what the price in $$ would be in a free market since there hasn’t been a free gold & silver market for a loooong time.

        • That’s when silver actually becomes a medium of exchange in itself. You will be glad you bought it at these ridiculously undervalued prices.

        • Whiplash, what is the exchange ratio between gold and silver in say Vietnam, India, Ukraine, etc. Why do people still exchange the currencies for the metals?

          Because the currencies are worthless!!!

    • I have been stacking silver eagles since they were $7 a piece. I bought at $10, $20, $30 prices and back down to $23. I have a nice hoard to say the least.
      Most of Yall are thinking short term & low profit/deflation hedge. If you look at the silver to gold ratio, it is over 60 to 1. Through out history the ratio was around 15 to 1. They also say the in ground ratio is 16 to 1. But, here it comes: all the gold that has ever been mined is still around, yet tons of silver has been destroyed by commercial use. So once we get past the manipulation that ratio may be 1 to 1 or better for silver owners.
      And yes I pay more than $200 for Carson City Morgans.

  9. How long have people been predicting the collapse of the dollar and precious metals acceleration? Many who are firm in this belief are either writing a book about the coming collapse, selling precious metals, or both. They win either way.

    Everyone says they can’t predict “the exact time or even time frame” that a collapse will happen, but that it certainly will. I will bet that most of these same people have been investing their cash in the stock market and making a fortune. Will there be a correction – – sure, but when who knows.

    I made the mistake of listening for years now and remembering that I thought the collapse was imminent. My inexperience and stupidity, and now years later a lot lighter in the wallet investing in precious metals and mining stocks – – oh yes remember that line about how undervalued and wonderful they are for nearly what 4 or 5 years now!

    I am much more cautious now about the so called “experts” advice. The central bankers have so many tools at their disposal plus real “insider information.” If you are not in that “inner circle” you don’t have a clue about what is really going on.

    Yes, silver is much more affordable than gold and I am sure because of the lower price much more easily manipulated. Andrew Maguire showed the CFTC when fraud was being committed in “real time” and we all know the results of that exposure – – NOTHING.

    • @William;

      Yes, people try to point to fundamentals when it comes to the justification of predictions. Like historical gold/silver ratios to present ratios, and thus saying “there has to come a correction”. But as you point out, fundamentals does not stop anything from being manipulated. Who say’s they can’t manipulate something forever? The Federal Reserve has been manipulating us since it’s creation (1913). So, whens righteousness going to prevail? In our lifetime? I doubt it. The most one could hope for is small gains to be made in precious metals. Though I could be wrong. However there is money to be made selling fear.

      P.S. The USDX is below 80 now. Did anyone catch that?

    • William,

      I understand what you are saying as well as the frustration of investing in precious metals during a manipulated fiat monetary system.

      However, all Ponzi Schemes collapse. Peter Schiff was on CNBC & FOX Business for years warning of the collapse of the Housing Market. He was the laughing stock on the set. In 2007-2008.. the Housing Market and total U.S. Investment Banking System collapsed.

      William… I agree with you about the BUY THE DIP mentality. Many readers emailed me about Casey Research telling their subscribers to continue to buy the mining stocks on the dip. Unfortunately, the dip was 3 years long as it pertained to the silver miners. Many of these investors got seriously hurt.

      I have never recommended the mining stocks over the past 3 years. Physical metal is the best investment.

      Lastly, I see the upcoming collapse due to the peaking of energy production. If the world could continue to increase its oil production for the next 1-2 decades… then the Banker Elite would be also be able to continue manipulating the markets.
      .
      However.. the Plateau of Global Oil production has put a huge wrench in their operation. As I have mentioned before, a Ponzi Scheme needs a new source of investors funds to keep it going. This is the same with the U.S. Fiat Monetary System. The only difference is the Fiat Monetary System needs a growing energy supply to continue.

      steve

      • lastmanstanding | March 1, 2014 at 2:48 pm |

        As energy production declines, the energy available will transferred to sectors that can afford it. As energy continues to diminish, fewer sectors or individuals will be able to purchase it…then, one will notice/expect massive changes.

    • William, a world reserve currency can not collapse overnight. The reason the dollar has not yet collapsed is because ALL fiat currencies are being debased at the same time which makes the collapse of fiat currencies less apparent. All the experts who are predicting a collapse are not wrong, but remember a collapse only happens once and until then I guess you can say that they have been wrong.
      In the end you have to look at what is happening around the world and when study geo-political and macro-economic events you will see that the Petro-Dollar is hanging by a threat. Once the petro-dollar goes, the days of the dollar as a world reserve currency are numbered. It is all happening right now, you just won’t over hear about it on the main stream media until after the fact. Keep your eyes open and so your own research and when you do that, there is no way that you can conclude anything other a collapse of fiat currencies in the not too distant future.

  10. i think you failed to leave off about a hundred over an over agains in your article mr rocco sir. ever wonder how much total wealth has been lost from listeners over the last three years from kwn podcasts an others that have said silver will be 50 dollars by year end, 200 dollars, or like dr leeb has been saying 500 dollars? think last time i checked craig was at a zillion dollars an ounce 🙂 or was that a mcmansion?. most of us in the usa have been read the little boy that cried wolf. we dont need the updated silver version every other day, day after week after month after year. one out of a hundred of us will have something bad happen to us in the next year. pass it on.

    • palika,

      While I understand your frustration… I would like to make a few points if you don’t mind.

      1) There are other individuals in the U.S. and world who are new to the subject of the Global Fiat Monetary Regime. My site receives upwards of 70-80,000 unique hits a month. So, my message may seem to be the SAME ‘OL THING to the old timers, but it is new to the individuals who are finally waking up.

      2) While it is true that many precious metals investors are suffering losses over the past 3 years, I did not hear anyone complaining when silver went from $5 to $21 and $17 to $49. We as humans tend to look at things in the lifespan of a GNAT, whereas we should be looking at the longer term.

      3) I never recommended anyone to purchase mining shares. I have always believed in buying physical metal and holding on to it. Americans have been investing in 401k’s for decades… why should precious metal investors be any different?

      4) The global collapse is coming… and it will be mostly due to the PEAKING OF OIL & ENERGY. This is where I differ from many of my precious metal counterparts.

      5) Nothing is easy in life. It takes more energy and conviction to stick it out during the HARD TIMES than it does RIDING IT UP DURING THE EASY-GOOD TIMES.

      6) An author, researcher, writer or analyst can’t make everyone happy. Not only that… the public can be a fickle and unforgiving bunch at times. However, all one can do is present the best data and information and let the reader-investor make up their own mind.

      steve

      • lastmanstanding | March 1, 2014 at 2:56 pm |

        Conviction is something that only a few of us understand…It goes along with honesty, loyalty, integrity and faith in all that is good.

        Give’m hell Steve.

        “don’t go down without one helluva fight”

      • And just to add. In the story of the boy who cried wolf………the wolf finally came!

  11. Silver Curious | March 1, 2014 at 3:00 pm |

    There’s only 1 way that Silver comes back down to a “sustained” 15-to-1 Silver-to-Gold Ratio, and that is if enough Central&South American countries re-monitize Silver again …. if/when they grab a brain and re-monitize Silver, demand for the metal goes thru the roof on a “sustained” basis, and the current supply of Silver that’s currently being shipped to New York & London for covering naked shorts will shrink rapidly.

    Way too many “risks” to reliably base high Silver prices on high US energy prices …. as I mentioned above, a moon shot in energy prices will have severe economic consequences…. re-montization of Silver on the other hand does not require a risky moon shot on energy prices to drive Silver demand thru the roof.

    • Silver Curios,

      Let me clarify the subject on the Future Silver Price. I don’t believe energy (oil) prices will skyrocket. They can’t… the masses will not be able to afford very high energy prices. The price or value of silver will not increase substantially due to the price of energy going higher, but rather due to the collapse of paper assets as global oil production peaks and declines.

      Paper assets derive their value from a growing energy supply. When the energy supply peaks and declines… so will the value of the paper assets. The rush out of increasingly worthless paper assets and into physical assets such as gold and silver…. WILL BE THE FACTOR THAT PUSHES THEIR VALUES UP TO MUCH HIGHER LEVELS.

      Again.. it has nothing to do with the cost or price of energy at that point in time.

      steve

  12. Johny Comelately | March 1, 2014 at 5:20 pm |

    Hi Steve,

    Silver has been manipulated since the crime of 1873. For 140 years it has been manipulated. Some will argue why can’t it be manipulated for another 100 years? Like you said, all Ponzi schemes eventually come to an end. At some point physical supply will not satisfy physical demand. There are over 10,000 industrial applications, ever growing investment demand and possible new monetary demand when currencies fail.

    There is not enough new silver coming onto the market at todays spot price and we’ve blown through most of the old silver spoons lying around to make up for the mining shortfall. It is frustrating waiting for the day silver will shine again and return to a natural price ratio of 1/9 with gold as 9 ounces of silver for every 1 ounce of gold comes out of the ground.

    I’ve been crying wolf since 2011 and my friend and family think I’m nuts. Now I only whisper wolf because only those who want to listen will prepare. I admire what you do and that you still have the energy to argue with people who think we are wrong.

    • Silver Curious | March 2, 2014 at 11:24 am |

      At some point, the South&Central American countries that were duped into switching from a Silver based currency to a fiat based currency will finally wake up & realize how they were robbed & continue to be robbed …… once they figure it out, and get back to re-monitizing Silver, demand for Silver will go thru the roof, and it quickly returns to aprox 15-to-1 Silver-to-Gold ratio…….. the economic spin-off’s of re-monitizing Silver for the Silver rich countries like Mexico, Peru, Boliva, etc are so enormous, that it’s quite shocking they didn’t start re-monitizing Silver decades ago.

  13. pietronovich | March 1, 2014 at 8:21 pm |

    All precious metals are being “managed” by the Bullion Banks and the Central Banks and
    have not been permitted to float at “true value”.

    We are living in a world of “Paper Debts”…”Hedge Funds”…”Derivatives”… that not only defies logic but
    are absolutely ASTRONOMICAL!

    Why is India and China constantly buying tons of gold and TONS OF SILVER every month of the year
    while North Americans sleep?

    We are all forgetting that fiat currencies ALWAYS fail while gold and silver will simply explode in
    value once returning to their “rightful place” of backing REAL MONEY.

    A thousand dollars is fast becoming “chump change”…about what a Silver Eagle will be worth once
    all of the paper currencies “bite the dust”. That’s the absolute minimum…if “cyber money” continues
    and escalates way beyond the present 10 TRILLION dollars circulating on planet Earth, then you had better start adding zeroes!

  14. I understand if some people are pissed about their mining stocks and precious metals……..This is not a sector for the faint hearted…..If you stress out about every up and down movement then you are way overweight in this sector…..precious metals are a lifetime investment…..

  15. GermanReader | March 1, 2014 at 11:21 pm |

    To all folks here being frustrated, that is price to pay if you bet against government fiat paper. I am frustrated with this price action also but i as i investigate all the facts on the net i come always to the same conclusion. A collapse of the fiat money system is unavoidable. Yes the paper bubble is still growing and if you look from outside to this growing bubble is painful not to participate. When this bubble burst how can you get out of it fast enough ? The Silver market is so small is like the game of musical chars but not 9 chars for 10 people its like 1 char for a hundred people. Stand the pain and investigate the facts on the net to be sure to do the right thing.
    And i want to thank you Steve for bring some light mainly on the energy, supply and demand part of the equation. I am sure the run up from 8.5 USD to 50 USD what happened 2008 to 2011 will look like a child’s game when tshtf finaly.

  16. Congratulations Steve! You know your information is spreading when you have trolls posting in the comments section.

    • andrew,

      While I am leery of individuals who come into blogs trying to misinform the members with a constant barrage of negative comments.. many of those who come in here playing the role as a DEVIL’s ADVOCATE, are either extremely frustrated (I really can’t blame them) with the precious metals price action or do not really understand the ENERGY DYNAMIC.

      I can honesty say…. I have only seen maybe one TROLL (as you label them) in here since I started the site. And the individual has been long gone…. months ago.

      steve

  17. I understand the frustration of some of the posters here, as I share it myself.

    When one starts investigating a host of issues (fiat money, the Fed, Peak Oil, EROEI, etc.) and starts connecting the dots, there inevitably comes a “whoa” moment (probably peppered with some typical expletives.) The general tendency (at least in my case, and I know in quite a number of others) is to buy a couple of thousand rounds, cash out all traditional investments for a hoard of Krugerrands, and “head for the hills.”

    There seems to be a cottage industry that preys on this. I won’t name names, but when one taps into these “PM permabulls” one can start to think that one has tapped into a wellspring of great esoteric wisdom that is unknown to the masses. This in turn gives rise to a feeling of great personal power, since, well, it’s only human nature (pace Nietzsche) to embrace things that make us feel powerful. A lot more of us than we’d like to admit do fantasize about the day that our PM’s stash makes us all filthy rich while being able to say “I told you so” to all of the irritating naysayers we have to put up with on a constant basis (like the idiot co-worker I had back in 2005 when I was first getting in to PM’s whose idea of “investing” was to do whatever Jim Cramer told him to that night — I bought gold around $400, and was told by this suburban middle-management “financial sage” that it was just going to drop to $300 and never move from there ever again. I told him I had zero doubts it would go to $1000 and he looked at me like I was out of my mind.)

    Anyway, fast forward a few years and all of the calls for dollar/societal/etc. collapse have yet to transpire, and a lot of us definitely feel “apocalypse fatigue” after a while. I’ve been hearing these calls for well over a decade now and what irritates me, intellectually, is that the “doom and gloomers” seem to be right factually, but can’t even time any of these events within a decade or so.

    Still, with all that being said, I do now think that we are on a tipping point of sorts. I don’t think we’ll be wearing old football pads and fighting off motorcycle gangs with crossbows any time soon, but I do think 2014 is almost definitely going to be an inflection point. In addition, Peak Oil is definitely going to prove itself to be a long, drawn-out process. To use the hackneyed slowly-boiling-frog analogy, I think we’ll all collectively wake up in another decade and realize just how drastically the world has changed. After all, remember when people were complaining how “expensive” gas was when it hit (oh, the horror) $2/gallon? Now it’s hovering just under $4 where I live in Colorado and no one bats an eye.

    Steve, I no longer listen to timing prognostications from you or anyone else but the trends you describe are inexorable and you are correct in your assertion that precious metals represent the best “Store of Economic Energy” in the years ahead. It’s just that the trend will, I think, take MUCH much longer to play out than anyone thinks it will.

    Jonathan

  18. Whiplash just go to coinflation and look at the silver values. Gas is still less than 20 cents a gallon just depends on the 20 cents used. Your scenario is already happening.

    On another note every once in a while it needs to be restated your base needs to be established before you make investments. I find that the newcomers (ones like me) tend to be the ones who are frustrated because they got in at the high side. All that needs to change in these peoples live is to settle down and reallocate. Buy metals but buy steady needs first. Mike said it best “it is a lifetime investment.”

    I am sort of glad that the price hasn’t moon shot yet because it gives me more time to better position myself.

    Thanks Everybody

  19. iaffcherry | March 4, 2014 at 7:54 pm |

    I am loading the boat . They say 10% of your cash that’s stupid. Buy all you can and be happy you are not the poor chump buying at 100.00 it is sad to think China is going to be the super power ! I will say this Kramer the stock guru just say last week to his sheep it’s time to lock in your profits now and sell into strength in the market.

  20. “Buy silver, buy gold, have faith”.

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