Published 6/15/2024
In this post, I want to discuss silver price and the slight pull back we have seen.
Now as of this writing silver has dropped to around $29 an ounce, and fell under that $30 level, which is really important from a psychological level. Still, even though silver has dropped slightly, we have to point out that silver is up 24% year to date.
This raises the question what will happen next?
In my opinion, we’re going to see silver price stay in that $28-32 an ounce range for the rest of the summer. Even though there’s many reasons the economy could enter a recession or even a depression in the US, there reason to believe that the can will continue to be kicked down the road.
This is because the Keynesians are currently in charge. Keynesian economics is a school of thought that supports in the event of an adverse economic event like a recession, government intervention should occur. They advocate for things like additional spending when economic activity declines. They also support direct payments to people and of course actions from the Central Bank like cutting interest rates.
The problem with this school of thought though it supports inflation and even worse doesn’t allow the economy to experience recessions. It’s healthy for an economy to experience recessions and for business cycles to occur naturally. When the government jumps in and artificially stimulates the economy, it’s going to lead to bigger problems down the road.
This makes no sense to do, and we don’t do this with so many things in life.
For example, if you have a child, the first few years of a child’s life it’s good if they catch colds and experience other types of illness. Obviously, you don’t want anything too serious like pneumonia. If you keep your child completely isolated, they won’t be able to build their immune system. Then, when you finally let them out, they run a risk of getting extremely sick.
This is what’s been happening to the US economy for quite some time, but the last ten to twenty years it has gotten progressively worse. We continue to see excessive government spending.
Even worse many continue to preach that government deficits and debt don’t matter. This is extremely dangerous and as Milton Friedman once famously said “there’s no such thing as a free lunch”.
These attitudes and what we’re seeing in the economy is why it’s so important to own assets like gold and silver.
We all know the asset acts as real money and insurance too, but it provides many benefits such as owning real wealth outside the system.
Not even owning land or real estate can say that. Those assets are subject to taxes, insurance and government regulation. Even more so, most homes people don’t own, but the bank owns. The majority of Americans have mortgages and in an economic downturn we could expect that massive defaults on properties could sink the real estate market. This is especially true if foreign investors come in and start buying up dozens of homes, which is surely possible. We’ve seen this happen before.
While silver price hovers in the $30 range, how much room does it have to go up this year?
I believe this year in 2024 the price will remain high but not breakout. This is due primarily to the US elections happening in November. Even with Donald Trump being convicted, it’s been a relatively quiet in politics so far. In terms of The Federal Reserve, I don’t think it will cut interest rates unless something disastrous happens and the government will due pretty much whatever it has to keep the economy looking rosy.
In the coming years we will see silver price breakout though. There are all sorts of estimates around the true value, and it’s extremely obvious at this point that silver is being manipulated on the exchanges, like the COMEX. There’s more solver traded in a day than mined in an entire year. This disparity is absolutely disgusting and ridiculous when you think about it, yet the regulators refuse to step up and regulate the future exchanges.
I still believe we have time though…
In other words, I believe there’s still time to buy gold and silver at affordable prices.
It said by many when it breaks it will be fast and happen very quickly. I tend to agree with this although I would also argue its already started right now. it’s anyone’s guess too what the reaction will be from the federal government. Many Believe that we might be forced into a central bank digital currency or CBDC. I tend to believe but that’s going to happen regardless of whether we have an economic crisis or not. I am of the mindset inflation will keep rising and eventually spiral out of control. This is why having real wealth is so important.
