Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Inflation Consequences for the Stock Market, FED Balance Sheet - 24th Oct 21
To Be or Not to Be: How the Evergrande Crisis Can Affect Gold Price - 24th Oct 21
During a Market Mania, "no prudent professional is perceived to add value" - 24th Oct 21
Stock Market S&P500 Rallies Above $4400 – May Attempt To Advance To $4750~$4800 - 24th Oct 21
Inflation and the Crazy Crypto Markets - 23rd Oct 21
Easy PC Upgrades with Motherboard Combos - Overclockers UK Unboxing - MB, Memory and Ryzen 5600x CPU - 23rd Oct 21
Gold Mining Stocks Q3 2021 - 23rd Oct 21
Gold calmly continues cobbling its Handle, Miners lay in wait - 23rd Oct 21
US Economy Has Been in an Economic Depression Since 2008 - 22nd Oct 21
Extreme Ratios Point to Gold and Silver Price Readjustments - 22nd Oct 21
Bitcoin $100K or Ethereum $10K—which happens first? - 22nd Oct 21
This Isn’t Sci-Fi: How AI Is About To Disrupt This $11 Trillion Industry - 22nd Oct 21
Ravencoin RVN About to EXPLODE to NEW HIGHS! Last Chance to Buy Before it goes to the MOON! - 21st Oct 21
Stock Market Animal Spirits Returning - 21st Oct 21
Inflation Advances, and So Does Gold — Except That It Doesn’t - 21st Oct 21
Why A.I. Is About To Trigger The Next Great Medical Breakthrough - 21st Oct 21
Gold Price Slowly Going Nowhere - 20th Oct 21
Shocking Numbers Show Government Crowding Out Real Economy - 20th Oct 21
Crude Oil Is in the Fast Lane, But Where Is It Going? - 20th Oct 21
3 Tech Stocks That Could Change The World - 20th Oct 21
Best AI Tech Stocks ETF and Investment Trusts - 19th Oct 21
Gold Mining Stocks: Will Investors Dump the Laggards? - 19th Oct 21
The Most Exciting Medical Breakthrough Of The Decade? - 19th Oct 21
Prices Rising as New Dangers Point to Hard Assets - 19th Oct 21
It’s not just Copper; GYX indicated cyclical the whole time - 19th Oct 21
Chinese Tech Stocks CCP Paranoia, VIES - Variable Interest Entities - 19th Oct 21
Inflation Peaked Again, Right? - 19th Oct 21
Gold Stocks Bouncing Hard - 19th Oct 21
Stock Market New Intermediate Bottom Forming? - 19th Oct 21
Beware, Gold Bulls — That’s the Beginning of the End - 18th Oct 21
Gold Price Flag Suggests A Big Rally May Start Soon - 18th Oct 21
Inflation Or Deflation – End Result Is Still Depression - 18th Oct 21
A.I. Breakthrough Could Disrupt the $11 Trillion Medical Sector - 18th Oct 21
US Economy and Stock Market Addicted to Deficit Spending - 17th Oct 21
The Gold Price And Inflation - 17th Oct 21
Went Long the Crude Oil? Beware of the Headwinds Ahead… - 17th Oct 21
Watch These Next-gen Cloud Computing Stocks - 17th Oct 21
Overclockers UK Custom Built PC 1 YEAR Use Review Verdict - Does it Still Work? - 16th Oct 21
Altonville Mine Tours Maze at Alton Towers Scarefest 2021 - 16th Oct 21
How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
The Only way to Crush Inflation (not stocks) - 14th Oct 21
Why "Losses Are the Norm" in the Stock Market - 14th Oct 21
Sub Species Castle Maze at Alton Towers Scarefest 2021 - 14th Oct 21
Which Wallet is Best for Storing NFTs? - 14th Oct 21
Ailing UK Pound Has Global Effects - 14th Oct 21
How to Get 6 Years Life Out of Your Overclocked PC System, Optimum GPU, CPU and MB Performance - 13th Oct 21
The Demand Shock of 2022 - 12th Oct 21
4 Reasons Why NFTs Could Be The Future - 12th Oct 21
Crimex Silver: Murder Most Foul - 12th Oct 21
Bitcoin Rockets In Preparation For Liftoff To $100,000 - 12th Oct 21
INTEL Tech Stock to the MOON! INTC 2000 vs 2021 Market Bubble WARNING - 11th Oct 21
AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
Stock Market Wall of Worry Meets NFPs - 11th Oct 21
Stock Market Intermediate Correction Continues - 11th Oct 21
China / US Stock Markets Divergence - 10th Oct 21
Can US Save Taiwan From China? Taiwan Strait Naval Battle - PLA vs 7th Fleet War Game Simulation - 10th Oct 21
Gold Price Outlook: The Inflation Chasm Between Europe and the US - 10th Oct 21
US Real Estate ETFs React To Rising Housing Market Mortgage Interest Rates - 10th Oct 21
US China War over Taiwan Simulation 2021, Invasion Forecast - Who Will Win? - 9th Oct 21
When Will the Fed Taper? - 9th Oct 21
Dancing with Ghouls and Ghosts at Alton Towers Scarefest 2021 - 9th Oct 21
Stock Market FOMO Going into Crash Season - 8th Oct 21
Scan Computers - Custom Build PC 6 Months Later, Reliability, Issues, Quality of Tech Support Review - 8th Oct 21
Gold and Silver: Your Financial Main Battle Tanks - 8th Oct 21
How to handle the “Twin Crises” Evergrande and Debt Ceiling Threatening Stocks - 8th Oct 21
Why a Peak in US Home Prices May Be Approaching - 8th Oct 21
Alton Towers Scarefest is BACK! Post Pandemic Frights Begin, What it's Like to Enter Scarefest 2021 - 8th Oct 21
AJ Bell vs II Interactive Investor - Which Platform is Best for Buying US FAANG Stocks UK Investing - 7th Oct 21
Gold: Evergrande Investors' Savior - 7th Oct 21
Here's What Really Sets Interest Rates (Not Central Banks) - 7th Oct 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Silver Rides a Runaway Expense Train

Commodities / Gold and Silver 2016 Jan 05, 2016 - 05:36 PM GMT

By: DeviantInvestor


The US government will spend nearly $4 Trillion this fiscal year – starting last October 1.  Of course it projects a massive deficit, increasing national debt, uses “funny” accounting, and does not address unfunded liabilities.

Business as usual…

Examine the last 100 years of US government expenditures and national debt – on a log scale in $ millions.  Note that official government expenses have increased from about $750 million to about $4 Trillion, an increase by a factor of over 5,000.

National Debt (official – not including unfunded liabilities) has increased from about $3 billion to nearly $19 Trillion in 100 years, an increase by a factor of about 6,000.

Expenses increase, national debt increases more rapidly and … based on 100+ years of history, both will continue their exponential increases for a long time.  The 100 year exponential increase in government expenses has averaged about 8.9% per year.

The Excel calculated statistical correlation between US government expenses and official national debt for 100 years from 1915 – 2015 is 0.97.  No surprise here.

What about silver prices?

Silver in 1915 averaged about $0.56 cents per ounce, per  Since then national debt increased, the dollar was continuously devalued, and silver prices increased.  Business as usual … the train runs down the track.

The Excel calculated statistical correlation between US government expenses and silver prices for 100 years is 0.82.  The government spends more, goes deeper into debt, the dollar devalues, and silver prices rise.  Business as usual … train running down those tracks …

But if we look at the ratio of silver prices to the official expenses of the US government over the past 30 years, we see a reversal in the years around 2000 – 2003.  Call the turning point September 11, 2001.

From 1985 to 2001 the (1 trillion times) silver/expenses ratio declined as the paper (stocks, bonds and debt) economy boomed, commodity prices, including silver and gold, languished, and the ratio dropped from about six to two.  But after 2001 the ratio climbed to a high of nearly 10 in 2011, and has since dropped to about four.


  1. Expenses and national debt are exponentially increasing with no end in sight.
  2. Both expenses and national debt resemble a runaway train without the oversight of adult management.
  3. Silver is used and needed in more industrial applications every day.
  4. Investor demand for silver is much larger than in previous years and increasing.
  5. Supply appears to have peaked. Read Steve St. Angelo’s
  6. Silver prices, even as erratic as they are, correlate with US government expenses over 100 years at better than 0.80. Expenses will increase and so will silver prices.  Silver prices are riding that accelerating expense train.
  7. Silver prices have corrected about 70% from their 2011 high and, based on history, will “regress to the mean,” which means their next big move should be much higher.
  8. War, further dollar devaluation, an increase in monetary or fiscal stupidity, a financial crash, or a weakening of US international prestige will accelerate the decline of the dollar and the rise of silver prices. All of the above seem likely.  Read Bill Holter.

I think it is clear that silver prices will rise considerably.  The expense train is accelerating and the consequences will push silver prices higher.

Assume US government expenses increase by a typical 40% – 50% in five to seven years and the silver to government expenses ratio increases from the current 4 to about 12 or considerably higher.  That puts silver prices in the range of $50 to $100 around 2020 – 2022.

Is $100 silver improbable?  Consider for comparison:

  • Silver prices rose from under $2 in 1973 to about $50 in January of 1980.
  • Apple computer stock rose from under $0.50 (split adjusted) in 1997 to over $125 in 2015.
  • Argentina has devalued the peso in the last 40 years by a factor of about 1,000,000,000. Inflation (excessive central bank “printing”) is aggressively destroying currencies in many countries throughout the world.
  • The Federal Reserve was “printing” about $85 Billion per month to buy dodgy paper to bail out banks. Approximately two months of such QE was enough to purchase all the gold that supposedly is stored in Fort Knox.  It is easy to “print” currency but it is difficult to create wealth.  Yes, gold is wealth!  If not, why does Fort Knox exist and why are China and Russia aggressively selling paper and importing gold?

I think $50 – $100 silver is not only possible but quite probable within a few years.  It certainly seems likely by comparison to the above four actual events.  Yes, silver prices are riding the runaway expense train.

Silver thrives, paper dies!

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

© 2016 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

© 2005-2019 - 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