Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
How to Capitalise on the Robots - 20th June 24
Bitcoin, Gold, and Copper Paint a Coherent Picture - 20th June 24
Why a Dow Stock Market Peak Will Boost Silver - 20th June 24
QI Group: Leading With Integrity and Impactful Initiatives - 20th June 24
Tesla Robo Taxis are Coming THIS YEAR! - 16th June 24
Will NVDA Crash the Market? - 16th June 24
Inflation Is Dead! Or Is It? - 16th June 24
Investors Are Forever Blowing Bubbles - 16th June 24
Stock Market Investor Sentiment - 8th June 24
S&P 494 Stocks Then & Now - 8th June 24
As Stocks Bears Begin To Hibernate, It's Now Time To Worry About A Bear Market - 8th June 24
Gold, Silver and Crypto | How Charts Look Before US Dollar Meltdown - 8th June 24
Gold & Silver Get Slammed on Positive Economic Reports - 8th June 24
Gold Summer Doldrums - 8th June 24
S&P USD Correction - 7th June 24
Israel's Smoke and Mirrors Fake War on Gaza - 7th June 24
US Banking Crisis 2024 That No One Is Paying Attention To - 7th June 24
The Fed Leads and the Market Follows? It's a Big Fat MYTH - 7th June 24
How Much Gold Is There In the World? - 7th June 24
Is There a Financial Crisis Bubbling Under the Surface? - 7th June 24
Bitcoin Trend Forecast, Crypto's Exit Strategy - 31st May 24
Zimbabwe Officials Already Looking to Inflate New Gold-Backed Currency - 31st May 24
India Silver Imports Have Already Topped 2023 Total - 31st May 24
Gold Has Done Its Job – Isn’t That Enough? - 31st May 24
Gold Stocks Catching Up - 31st May 24
Time to take the RED Pill - 28th May 24
US Economy Slowing Slipping into Recession, But Not There Yet - 28th May 24
Gold vs. Silver – Very Important Medium-term Signal - 28th May 24
Is Gold Price Heading to $2,275 - 2,280? - 28th May 24
Stocks Bull Market Smoking Gun - 25th May 24
Congress Moves against Totalitarian Central Bank Digital Currency Schemes - 25th May 24
Government Tinkering With Prices Is Like Hiding All of the Street Signs - 25th May 24
Gold Mid Tier Mining Stocks Fundamentals - 25th May 24
Why US Interest Rates are a Nothing Burger - 24th May 24
Big Banks Are Pressuring The Fed To Losen Protection For Depositors - 24th May 24
Another Bank Failure: How to Tell if Your Bank is At Risk - 24th May 24
AI Stocks Portfolio and Tesla - 23rd May 24
All That Glitters Isn't Gold: Silver Has Outperformed Gold During This Gold Bull Run - 23rd May 24
Gold and Silver Expose Stock Market’s Phony Gains - 23rd May 24
S&P 500 Cyclical Relative Performance: Stocks Nearing Fully Valued - 23rd May 24
Nvidia NVDA Stock Earnings Rumble After Hours - 22nd May 24
Stock Market Trend Forecasts for 2024 and 2025 - 21st May 24
Silver Price Forecast: Trumpeting the Jubilee | Sovereign Debt Defaults - 21st May 24
Bitcoin Bull Market Bubble MANIA Rug Pulls 2024! - 19th May 24
Important Economic And Geopolitical Questions And Their Answers! - 19th May 24
Pakistan UN Ambassador Grows Some Balls Accuses Israel of Being Like Nazi Germany - 19th May 24
Could We See $27,000 Gold? - 19th May 24
Gold Mining Stocks Fundamentals - 19th May 24
The Gold and Silver Ship Will Set Sail! - 19th May 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Desolation Row: The Silver Market

Commodities / Gold and Silver 2015 Aug 14, 2015 - 11:27 AM GMT

By: DeviantInvestor

Commodities

Silver peaked in 1980 and then crashed into “Silver Desolation Row” in 1999 – 2001, like now.

The 1970s decade was the time for commodity price increases and inflation.  The 1980s and 1990s saw a preference for paper assets and stocks, while commodities, gold, and silver prices collapsed.


Cycles and preferences change.  Silver was “bombed out” in “Silver Desolation Row” by 1999 – 2001.  Stocks were all the rage from 1982 – 2000.  But the NASDAQ could only be pushed so far and then reality intervened.

About like now….

Examine the chart of the silver to S&P 500 Index ratio.  Note the low in 2001 when silver was “bombed out” and scratching for a bottom in “Desolation Row.”

The ratio looks about the same in 2015 – bombed out.  I haven’t heard people comment about silver that “you can’t give the stuff away,” but we must have been close in July.

Compare the ratio of silver to the San Francisco Housing Index (Case-Shiller data).  Again, silver looks “bombed out.”

Compare the price of silver to the Population Adjusted National Debt of the U.S.  Again, silver looks “bombed out.”

From Bob Moriarty:

“What we can know is prices in relative terms. In absolute terms, the lowest price for silver since 1975 was $3.53 in 1993. In relative terms, silver hit $4.01 in November of 2001 and that was the lowest relative price in 5000 years. So in late 2001, silver was cheap. And I said so. In April of 2011 I saw silver getting nutso again as it did in January of 1980 and I said so.”

“I was reading Steve Saville this weekend and he put in a really important chart. Steve is the publisher of The Speculative Investor and is brilliant. He is a must read. The chart was an inflation-adjusted graph of the Continuous Commodity Index. It used to be called the CRB. Going back to 1956, on an inflation basis, the CCI is the lowest it has ever been measured.”

Note his two statements:

“…silver hit $4.01 in November of 2001 and that was the lowest relative price in 5000 years.”

“Going back to 1956, on an inflation basis, the CCI is the lowest it has ever been measured.”

Silver was “bombed out” in 2001.  The same is true today.  The inflation adjusted CCI (all commodities index) is the lowest it has ever been measured.  It too is “bombed out.”

Will crude oil, silver and gold go even lower?  Ask the central banks and the High-Frequency-Traders!  But at some point, probably soon, even in our delusional financial world, it will occur to a significant number of people that:

  • Stock markets can be levitated for only so long. I think their “expiration date” has been passed or is close.
  • Silver prices are “bombed out” much like they were in 2001. Once the COMEX sellers are exhausted (or out of bullion) the buyers will dominate and silver prices will exit from “Desolation Row” and rally much higher.
  • Real money (gold and silver) will eventually dominate, as they should, over fiat currencies, digital equivalents, and “extend and pretend” central bank manipulations.
  • US money was formerly gold and silver coins. They were replaced by paper certificates.  Those were replaced by Federal Reserve Notes (debt) borrowed into existence.  Now the Fed “prints” the “money” by monetizing debt.  Could this process reset with a return to honest money – gold and silver – replacing the failing paper stuff?

Confidence is what holds the unbacked fiat currency system together.  Confidence can evaporate rapidly, though unpredictably.  When confidence fades real money, hard assets, and commodities, such as gold and silver, real estate, diamonds, and base metals, will shine.

There are numerous reasons to expect that the US stock markets might follow the Chinese markets downward, particularly by the end of the year.  A FEW possibilities are:  7 – 8 year cycles, extended valuations, excessive confidence, new wars, Chinese market crash, bond market reversal, interest rate increases, weak internals, Armstrong’s economic confidence cycles, and Shemitah cycles.

Silver has been crushed and the S&P has been levitated.  Both seem likely to turn soon.

Read Bill Holter:  “They Will Say “You Were Warned!

Gary Christenson

GE Christenson aka Deviant Investor If you would like to be updated on new blog posts, please subscribe to my RSS Feed or e-mail

© 2015 Copyright Deviant Investor - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Deviant Investor Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in