The Coming Perfect Storm In Silver

There’s a coming Perfect Storm in silver as surging demand will overwhelm falling supply.  The beginning stages of this storm are already forming, getting ready to converge when the conditions are right.  The timing of this storm will occur as the Fed and Central Banks lose control over the massive debt propping up the entire system.

I sat down with Mike Gleason at Money Metals Exchange and discussed how 2016 could turn out to be a horrible year for the broader stock markets and a final bottoming and turnaround of the precious metals.  However, this will depend upon what the Fed and Central Bank will do in response to the upcoming U.S. and Global recession.

Here is part of the interview below:

Mike Gleason: Well Steve, we do have a lot to cover so I’ll dive right in. And I want to start out by asking you about the divergence we’re seeing between the global stock markets and the precious metals so far this year. Now, the metals haven’t necessarily taken off, but they are up a little bit, which is a positive sign given the major sell-off that’s unfolding in the equities market. So before we go any further, what do you make of the market action so far in the early part of 2016, specifically the way gold and silver have reacted to all the other market headwinds?

Steve St. Angelo:  Yeah, Mike. I think the last time we spoke I said, and this was I believe in the fall, August or so, if the markets were going to really crash during the end of 2015 I thought we would see a dislocation in the market, or we would see a bifurcated market. The metals would start taking off and heading north, and then the stock market would crash. Well we saw a little bit of that. It started to happen, and then of course I think the U.S. government and the Fed came in there and propped it up, because 95% to 98% of Americans are invested in that market, so it’s in their benefit to keep that market propped up. Well we started to see that this year, and I think the reason why we haven’t seen even higher prices for the metals, and if you looked yesterday (Wednesday, January 20th), the only thing that was really up, let’s say besides Treasuries and a few stocks, gold and silver were up yesterday, where the Dow I think was off 550 points at one time. But the only 2 (things that were in the) green (were) metals.

Cooper and zinc were down, but I think because the price of oil has been plummeting, it’s kept gold and silver from going higher. But I think going forward, when we start to see more red in the broader markets, the Dow Jones, the S&P, I think we will start seeing higher prices in the metals and we’re seeing that now. When the Dow goes down and the broader stock markets go down, the metals have been going up, not significantly, but they’re not going down, and I think the reason for that is the deflation of the metals has already taken place. Silver, Mike, is down 71% from its high in May of 2011. The stock markets, even though everyone’s worried, there’s blood in the streets, they’re only down like 10% or 11% from their highs. The metals have actually seen most, I think, of their down side, (although) I’m not saying they can’t go lower. So I think going forward it will depend on what the Fed and central banks do, but once we start seeing more declines in the broader stock markets, I do think the metals will decouple and you’ll see their prices move much higher.

You can checkout the entire interview by watching the YouTube video above or click on the link at the Money Metals Exchange SRSrocco Report Interview.

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14 Comments on "The Coming Perfect Storm In Silver"

  1. Hi Steve, love your work!

    I was wondering: When SHTF and we get a “new world” where all this temporary wealth is destroyed, and it becomes apparent that all this oil and mining production we see today was because of unsustainable detb, do you see gold and silver miners as a good investment? Currently I have some physical silver and a good deal of mostly silver miners.

    TLDR; Do you see gold and silver mining companies as a good investment given what is to come or should one be mostly in physical metal?

  2. Upcoming recession Steve? Dare we say DEPRESSION?

    What is a depression?
    Assets are sold, at much lower valuations. Often for pennies on the dollar. The result being that asset prices collapse. Equity values and levels drastically decline. This triggers more selling of assets. Credit levels shrink as the value of underlying collateral vanishes. Cash flow dries up and debt servicing stops, generating more distressed asset sales and bankruptcies become common. This now becomes a self-reinforcing cycle of economic negativity.
    Welcome to the “vicious circle” of depressionary systemic deleveraging.

    This is exactly what has been unfolding. Gold and silver will “shine” through.

    • OutLookingin,

      Correct… the so-called DEFLATION has already occurred in the precious metals. Folks invested in the broader markets are just beginning to get the ENEMA OF THEIR LIFE… Unfortunately.

      steve

      • Yes and my elderly mother who thinks her “wealth manager” has done such a good job, will pay those “management” fees all the way down now. At 87 she told me she would not give me power of attorney if she couldn’t handle her affairs [instead she gave it to her bank where her “wealth manager” is] becasue I would probably sell her stock and buy something dumb like gold. Really.

        • Sounds like a wise woman to me.

          • She is continuing to do what has worked well up to this point.

          • Jerry Kowalski | January 26, 2016 at 10:54 pm |

            I’m in the same boat. These “managers” make a percentage off assets under management. Of course the last thing they want is their clients pulling out. While those who weathered the storm in 2010 saw great returns in the market, this time it’s a different animal. This bubble is based on credit. This one will sting. At minimum I would try and diversify say a 40% hedge in gold and silver. Minimum. These will reach new highs undoubtedly. And hey. Markets swing. What’s the worst that can happen? She can jump back in the market cheap in the future if things don’t totally collapse. Like doomsday style. Gold and silver isn’t just shit talking. It’s where smart people are going to. That and cash. If your into foreign currencies. Gets a little complicated there.

      • Steve.
        Just wondered what you make of this article.
        http://www.reuters.com/article/us-metals-gold-poll-idUSKCN0S91G220151015
        Thanks.

  3. Steve,

    Physical silver or senior silver miners … I currently have 50/50 but am leaning
    Toward 80/20 heavy phys

    • James,

      I believe owning most of one’s assets in physical and a small percentage in Juniors. Now, if an individual has more money than God, then they could allocate more funds to the mining stocks.

      steve

  4. Hi Steve,

    I’m starting to hear that more solar panel companies are moving away from silver as an electrical conductor to cooper and aluminum to save on manufacturing costs. Do you have any concerns about this trend?

    Rick

  5. Actually…When this “CRASH” unfolds…Recession/Depression…..Owning physical Gold/Silver will be our only way to survive…The reset is going to be painful and prolonged. There is a lot of talk about Silver production having already peaked…Reserves of UN-mined Silver they say is just not there….That gives rise to great suspicion in my mind as to the validity of this assertion. I am leaning overboard in believing that some of these conclusions are manufactured to manipulate the Physical Gold and Silver markets (DUH)…..Others believe this too. The DEBT is real (for the U.S.A.), no doubt about that that….That is really a no win situation….But Gold to Silver ratio’s are screwed…Prices are artificially extremely low….Mining is close to a stand still except where a Government subsidizes production at a loss….Stocks and reserves are below historical records…YET:….Mints are still selling Gold and Silver rounds….? COMEX stores are lower Historically than they have ever been before… China it is said now has 20,000 tons to 15,000 tons of Gold in its reserve? No one knows what the U.S. Reserves are….But it is said to be well below that of China’s…You can not get a straight answer from the FED on this issue anyway. CONCLUSION: There IS “NO CONCLUSION”…..Fiat currency is just that…PAPER. My strategy being a poor man, is to buy Silver in small quantities while the prices are depressed….and wait.
    The problem with all those tons of gold is RADIATION…..It will be useless metal for hundreds of thousands of years if hit by a “DIRTY ATOMIC BOMB.” That could be why FORT KNOX is EMPTY…..LOL….LOL….and if there is Reserves…Why the location (S) are kept secret….INSIDIOUS…YES?

  6. “The death of yield” indeed. Paperpushers desparately trying to keep things afloat while the real world crumbles. No yield, a big steaming pile of debt, peak affordable oil and boatloads of brainless freeshitters.

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