Nobody can actually do this with 100% accuracy. It's more just to keep my mind on the big picture.
I'd say the rally up to $35 is a 95% chance of success though, once we bottom between $18.25 and $14.50.
From $35, I'm not really sure. I'll have to see how the momentum plays out, but my guess is that it will GRIND higher through the major resistance levels up in the mid 40s. See a false break on $50 again and fall back to $30 zone.
Then have another huge bubble like rally from $30 to $100 zone.
There will be a great shakeout as we get a 1929 like debt deflation, the world's largest run on the banks.
Markets will go dark and will come back online with CHN backed by backed by gold, and USD still backed by nothing (or possibly partially backed by gold). Which will naturally bring silver up.
Even more so than the monetary use is the physical supply issues. What you saw from $50 was not real supply. It couldn't have been. It was future supply (years of it) dumped onto the market at a great price. Now these same players are scooping it up cheap.
As of November 15th 2013, YTD mining numbers look like this:
gold mined worldwide 66 million ounces. Silver mined worldwide at 620 million ounces.
Do you realize what this means? A market that is trading at 7x lower than its mining ratio.
But then you have to take into account industrial use for silver vs gold. Gold has less than 1000 industrial uses, while silver has over 10,000.
The long term true value has always been 15:1 or less for silver. We are headed back there in due time.
Strategy for me is simple.
Physical Metals.
$21 is 10% of holdings.
$18.75 I increase to 20% of holdings
$15.50 I increase to 40% of holdings.
If ever we see $9 or $10 silver, I will increase to 75% of holdings (speculative total assets, not including real estate)
Good luck out there long term investors. It will pay off if you stay patient.
Comments
SBCM
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made a few edits, stay sharp traders
JesseSewell
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SBCM I am interested to know what you base your long term market collapse forecasts on? Is that a natural life cycle based on global governmental debt, stimulus , etc? Is there a blog that you are particularly fond of for getting atypical global market data from which to gain insight? I am long in silver by the way and will remain so. Thanks.
charron1
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Hi SBCM, what is your view on silver now in Dec 2015? Today Silver is 13.28 or so, I am seriously thinking of making significant investment in Physical silver.
Global Solar Demand requires 130 million ounces (15% of yearly mining supplies)
We have a mining production deficit folks. The void will never be filled. Do you think we are just going to go back to the stone ages?
SBCM
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Since 1980, world population has increased by 176%.
Global GDP has increased by 500+%
Above Ground Available Gold increased by 600%
Above Ground Available Silver decreased by 80%
Spot Price of Silver is Down by 60% from its 1980 high.
The 1980 high, only $1.50 of price increase was due to the Hunts Brothers.
SBCM
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The vast majority of gold mined each year is hoarded and added to global Inventory.
The vast majority of silver mined each year is consumed into technology, never to be retrieved (unless price is high enough to make it worth retrieving grams of silver).
BEI
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Nice chart, i completely agree with your view on silver prices and enjoy your charts, you seem to really know what you're talking about.
But i was thinking that actual rally will be a correction wave #4, making another potential low highly possible before the big 400-600% rally. This would be around 15$. I was waiting for a lot more action on previous bounce for it to be real serious, although i think it's still has some room to go 26-27$, i think it will come back again to complete the cycle, as it did in late 2008. This would leave some room for dollar to rally before we send prices to the moon!