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Silver Shines but It is Not the Star (Yet)

For those who have not followed these pages or my radio show since silver’s last run during the Great Financial Crisis, a word of warning:

Silver looks nice, but isn’t the superstar it should be; yet.

The old curmudgeons like myself always tout the monetary value, the gold/silver ratio should be 20:1 and its industrial applications to try to justify the rise in price and why it should be trading one hell of a lot higher.

Gang, I’m not saying I have any silver, but I do store it in a safe in a van down by the river.

I hate it when the brakes fail and it rolls into the river only to be lost forever.

So what does the recent rally in silver really mean?

It’s a commodity, no different from coffee, cocoa, iron ore, nickel, etc. except that it has a romantic monetary value because it was used in coinage by many nations before the 1970s. In reality, it still has a huge barter value as a one ounce coin in today’s inflated dollars still equals a decent haircut or a case of beer, but the truth is that 95% of the American public would know a silver dollar from a sliver of shiny metallic garbage.

Sad, but true.

Thus as the rally continues, which it will this year, I’m not going to get as excited about silver as I have about gold due to the performance variations. The chart below should explain why.

Thus why I say it is all noise until the old highs from 1980 and the GFC are broken with volume.

Is yours truly predicting this?

Not yet. I need to see more evidence not just from the metal itself, which physically is in short supply, but from the miners. If silver breaks above $35 per ounce this summer which is a realistic possibility, then the new all time highs are attainable.

Buckle up, because $75 silver means the world is on fire and the US is the nation in the air fryer.

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