Silver To Hit New Highs Despite Bearish Forecasts

silver pricesThe big “V” correction in the precious metals back in 2008-2009 did not persuade investors from buying gold and silver at severe lows.  Matter-a-fact, it actually motivated huge retail buying of physical bullion.
This time around the monetary authorities got smarter.  They engaged a new “SLASH & BURN” tactic by bleeding the gold and silver investors dry by slowly crushing the price of gold and silver over a two-year period.  To complete their masterpiece, they initiated two huge take-downs in April & June to make sure even the most hardcore precious metal investors would question their holdings.
The price of silver will hit new highs as an explosion of investment demand will overwhelm supply in the future.  This once in a lifetime event will occur not because of bullish rhetoric, technical analysis or brokerage recommendations, but because the fundamentals will finally kick in a major way.

2oz Freedom Girl new proof
From the SRSRocco Report:

Of course, this realization today may seem like selling ice water to an Eskimo by the silver investor as precious metal sentiment is at a decade low — or even lower.  Furthermore, I have heard through the grapevine that even some of the precious metal analysts have thrown in the towel and sold their gold and silver miners for the typical large cap stocks on the S&P and Dow Jones.

This was the very plan by the Fed & member banks from the start.  The big “V” correction in the precious metals back in 2008-2009 did not persuade investors from buying gold and silver at severe lows.  Matter-a-fact, it actually motivated huge retail buying of physical bullion.

This time around the monetary authorities got smarter.  They engaged a new “SLASH & BURN” tactic by bleeding the gold and silver investors dry by slowly crushing the price of gold and silver over a two-year period.  To complete their masterpiece, they initiated two huge take-downs in April & June to make sure even the most hardcore precious metal investors would question their holdings.

Today, the precious metal investors are still holding onto the fundamentals knowing at some point in time things will turn around.  To give comfort to the silver investors, Jeff Christian of CPM Group plans on speaking at the Silver Summit next week to make sure that investors realize silver is going to consolidate for the next few decades at $17-18 and move up to a new high before the end of the century.

Yes, I am exaggerating here, but that is basically their stance even though they are talking about the end of a decade, not this century.  According to CPM Group’s new release:

Silver May Hit New Highs in the Next Ten Years:  CPM Group

Silver prices may rise to record highs within the next 10 years, according to CPM Group’s Silver Long-Term Outlook report released Thursday.

This year through September, silver prices have averaged 20% less than in the same period in 2012, CPM Group said, forecasting the declining trend to persist in the medium term.

Longer term, however, prices could begin to rise again within the next 10 years, it said, “continuing a secular bull trend that began at the turn of the century.” Silver rose at a compounded annual average rate of 23.2% between 2002 and 2011.

In the latter half of the next 10 years, investors are expected to approach the silver market “more positively as economic conditions improve relative to the first half of the projected period,” CPM Group said. “Investors are expected to step up their purchases, backed by expectations for strong capital appreciation amid rising industrial demand for the metal.”

And “in this scenario, silver prices could rise rapidly, possibly touching fresh record highs within the next ten years,” it said.

So, silver investors do not worry… according to Jeff Christian’s CPM Group, new silver highs are coming.  Unfortunately, you are just going to have to wait a decade before this takes place.  CPM Group is using the well-known market timing strategy of “Sell in May and go away.”  However, they are saying instead, “Sell today & come back in a decade.”

Now, I am not going to get into personal attacks or name calling here as I may have done in the past, because it does not bode well for an ongoing professional debate.  I have gone to the CPM Group website and looked at the analysts there and I have to say, they are a smart group of people with a great deal of experience doing what they believe is right.

As for the “Manipulation theme” on gold and silver, I am not going to get into it.  I realize Jeff Christian does not believe in manipulation even though central banks did conspire to rig the LIBOR, and GATA has proven that the U.S. is legally allowed to intervene in the precious metals, commodities or whatever markets they see fit according to a law past in 1934.

So, I am going to let GATA and Bill Murphy fight and debate Christian on that issue as they are more qualified.  That being said, I believe there is another angle that will almost guarantee much higher valuations for silver in the future.

We have to come to the conclusion that if manipulation is going on… then why would it stop?  Or how do you stop the Elite from controlling the markets if they have been successful in doing so for hundreds of years?  Proving that manipulation is taking place only makes those pulling the strings laugh and snicker because they realize nothing will become of it.

That being said, the common sense approach is to look at the variables and things that the Elite cannot control.  Those of you who have read my articles are aware, my take is that a peaking energy supply is the fundamental the Elite can’t control.  Peak oil will force the end of the fiat monetary system and bring a new life to the precious metals.

Even though there are some who agree with my premise, many don’t believe in peak oil and others eyes glaze over as they read about the details of energy and the EROI.  This is quite a shame as I believe energy is the most important factor going forward for not only the precious metal investor but also for the public and world at large.

Boss of Drilling-Services Giant Believes Peak Oil is Here

Dave Demshur EnerCom 2013

Dave Demshur was a speaker at the August 2013 Enercom Oil & Gas Conference in Denver.  Core Labs is headquartered in the Netherlands and has 70 offices in 50 countries.  They specialize in analyzing drill results from the major and 100′s of miner oil & gas companies in the world.  They take this drilling data and assist these companies with increasing their efficiency in removing more oil and gas from their fields and reservoirs.

If anyone has a good idea of where global oil production is headed in the future, Core Labs is most certainly one of the best qualified.  According to Dave Kamm on News-Press.com:

Never very bashful in the breakout session, CEO Dave Demshur readily offered his thoughts about the big energy picture. When queried about predictions of increased oil production he took the under in most cases.

Demshur is a “peak oil” proponent — translated it means that at some point the oil production of the planet will maximize, flatten, and then diminish. For the first time I can recall, he said we have reached the peak area.

He estimates planetary oil production in 2014, 2015, and maybe 2016 to be at the peak level we shall ever be able to generate. When asked about future oil independence here in the US, he just smiled — and added “no chance”.

Let me repeat what Demshur stated so it can really sink in.  He estimates planetary oil production will peak in 2014, 2015 or possibly 2016 and the U.S. will have “no chance” in becoming energy independent.

It is very hard to give an exact date for peak as there are many variables, but here we can see that a CEO from one of the major drilling-services companies believes peak is coming in the next few years.  Folks, if this is true… that’s not much time at all.

Silver Supply & Demand Forecasts vs Peak Oil

How will Energy Impact Silver Investment2

As I have mentioned in several articles in the past, peak oil-energy will destroy the ability to properly forecast supply and demand forces in the future.  We are entering into uncharted waters.  This is where I can offer a different opinion than the one suggested by Jeff Christian and the analysts at the CPM Group.

I have not purchased CPM Group’s 2013 Long Term Silver Outlook and actually do not plan to.  I would imagine a great deal of research and effort was put into creating this report, but I have to say, if Peak Oil arrives in the next few years, the data from these high-priced reports will become increasingly worthless.

You see, Christian may be able to debate and confuse investors on whether or not manipulation is taking place, but he cannot deny the ramifications of peak oil and its impact on the precious metals.  Folks, peak oil changes everything.

Who cares if a junior mining company has resources of say 3-5 million of ounces of gold in the ground if there isn’t an inexpensive enough or readily available source of liquid energy to extract the metal in the future.  Sure, the mine may go commercial, but what happens in say 3-5 years into its 20 year mine lifespan if energy supply becomes short??

In a nutshell… don’t count on a growing supply of gold and silver once the PEAK OIL PHAT LADY SINGS.

Most analysts including Christian have no clue how to forecast in a peak energy environment….ZIP.  Hell, even I don’t know the details on how things are going to unfold.  However, I will assume that those companies who are now commercial and have proven reserves will more than likely continue for a quite while whereas most of the juniors will never become mines.

The irony of it all is… I actually had a speaking slot at the Silver Summit but had to cancel last month because of certain commitments.  Now I wish I could have attended to present my views on how energy will greatly impact the values of the precious metals in a positive way.

Furthermore, I would have provided data that would have suggested that manipulation does not have to be proven for the precious metals to regain their roles as monetary metals.  Basically, Jeff Christians negative views on manipulation… in the end won’t matter.

The world is heading straight for an ENERGY WALL shortly and most (99%) of the analysis are forecasting business as usual for the next several decades.  Peak Energy will destroy the valuations of most of the stocks on the Dow and S & P 500 going forward as growth will not be possible for the majority of companies.

As the value of stocks, bonds, retirement accounts and etc continue to disintegrate under the gravity of a falling energy supply, there will be a radial change in silver investment demand.  Gone will be the pathetic supply and demand calculations that will seem quite silly in the whole scheme of things.

At this point in time, investing will switch from owning paper assets providing yield to physical assets like silver and gold that will protect wealth — very much like squirrels hoarding acorns for the winter.  The majority of investors are not prepared for this change.

At the SRSrocco Report we will continue to provide updates on energy data and explore how peak oil will impact the precious metals, mining and overall economy.

Comments

  1. Dollar down to $79.23 on DXY  http://www.marketwatch.com/investing/index/dxy

    • Yeah, been a fun day.
      And as always Steve—you do good work; Hope someone records you at the Silver Summit and The Doc puts it up for us!

    • @4 oz I don’t believe Steve is going but if there is anyone here going, can you do me a favor and slip Jeff Christian a Right Uppercut for me? Keep Stacking

    • @Marchas45
       
      “…but if there is anyone here going, can you do me a favor and slip Jeff Christian a Right Uppercut for me? ”
       
      Sounds good, Charlie.  A lot of us would stand in line for hours to bash that little twerp.  ;-)

  2. Like I been sayin’
     

  3. Sprott’s Open letter to The Gold Council.
    http://sprottglobal.com/markets-at-a-glance/maag-article/?id=8424
     

  4. Silver prices may rise to record highs…
    ———————————————-
    The only record Silver high I am seeing, is the height of my stack as I continue to um…accumulate at these prices.

  5. That right there my friend is what I am talking about.  Most sensible article I have read in awhile!

  6. Are we there yet?

  7. Is it possible the financial elites are suppressing the prices so they can also buy physical on the cheap?  Are we to assume its only foreigners like China and relatively small investors like us who are taking advantage of the low prices? 

    • Bullion banks are dumping massive paper while loading up the phyz that gets sold into the market when the price tanks. Like it will by Thursday or Friday. Back to $21 or lower

  8. Ranger how does this factor into your intel
      Fitch, the French credit reporting agency, has had its chain yanked and told that it basically cannot downgrade or put the US on a negative credit watch.  As the top world reserve currency, rating agencies cannot judge and evaluate us.  Only Dagong Global has a free hand in rating the US.

    • AG… the credit rating agencies should immediately cease to rate the US at all.  Just put a big old N/A in any column of their data regarding the US.  In small print at the bottom of the page or in a footnote, they can say that it is not possible to rate the USA without all manner of BS falling upon them, so they are giving up.  Buy US debt at your own risk, people.  The ratings are a complete sham.
       

  9. “To give comfort to the silver investors, Jeff Christian of CPM Group plans on speaking at the Silver Summit next week to make sure that investors realize silver is going to consolidate for the next few decades at $17-18 and move up to a new high before the end of the century.  Yes, I am exaggerating here, but that is basically their stance even though they are talking about the end of a decade, not this century.”
     
    Yes, we all recognized the sarcasm in this comment.  Jeff Christian and the CPM Group would be the vest last people on Earth to whom any of us would turn for “comfort” in the PM arena.  These elitist tools will say and do whatever they are told and much of it will be in the realm of PM bashing / pushing people away from PMs, so why pay ANY attention to them whatsoever.  We KNOW the story here and we will NOT give up our PMs.  Period.
     
    “Now, I am not going to get into personal attacks or name calling here as I may have done in the past, because it does not bode well for an ongoing professional debate.  I have gone to the CPM Group website and looked at the analysts there and I have to say, they are a smart group of people with a great deal of experience doing what they believe is right.”
     
    When one tells the truth about another person or organization, it is NOT bashing!  It is what it is and these people have earned every scrap of enmity that comes their way… and then some.  Yes, they are all very smart but they are still elite tools whose mission is to denigrate PMs in every way possible so that as many people as possible move away from PMs and not into them.  This is their real function and not informing anyone of what is the proper way to invest or save their money.  They are not about helping ANY of us and are ONLY interested in serving their elite masters.  If anyone else has a better description of these people, I am ALL ears.
     
     

  10. $666 silver.   With $10,000 gold, that would be back to the natural 15:1 ratio.   Just saying…   $333 silver and $5000 gold works ok for me too.

  11. So everywhere i’m reading is saying that we’re now in for a very long wait for Silver prices to rise again. It seems that from what i’m reading come back in 2020 and you might be lucky to have made a few bob on your investment, thats ok, but if your 66 years old another 7 years is a life time to wait! I might have to sell and take a 75% loss on my investment because i cant wait 7-10 years for “possibly higher prices”, looks like i’ve done my ass and my kids inheritance on this Silver stuff! Dam!Ofcourse i’ll leave it until my kids can get the benefit of the investment, it just means i miss out on all the big dreams i had. Hopefully they will get to enjoy my hard earned money instead while i’m feeding worms 6 feet below.Work your guts out for 40 years and give it all to your family at the end and dont get to enjoy it yourself, i guess thats the way it works. I hope they enjoy it! My folks left me with a funeral bill…

  12. Maybe SRSROCCO is the only one talking about EROI and peak energy because it’s irrelevant. Think about this: energy is common to all human activities on earth. So whether the future of energy is bright, bleak or indifferent, what can anyone do about it?
     
    It’s like saying “There’s an asteroid the size of Texas on a trajectory to hit earth 6 months from now”. What can the common man do to prepare for that? What preparations would make a damn bit of difference?
     
    The stackers of silver & gold are stacking as hard as they can for the proverbial rainy day – not much more we can do than that. If the cost of energy becomes prohibitive to mining gold, or building cars or coffee machines or gas chromatagraph mass spectrometers, then they will cease to be built. End of story.
     
    SRSROCCO is flogging his hobby horse to death, and I’m sick of hearing about it. I know you all love his work, so I guess this’ll draw some flack, but so be it.

  13. ‘It’s gonna rise!!’, ‘No, it’s gonna fall!!’  Meh.  US debt was increased over $328B in one day to pay back some internal borrowing.  We’re now easily over $17T in debt with a nice and easy $2T to grow deeper into debt with now.  Jobs suck, jobs suck and did I mention, jobs suck.  All that and Ag rose over a dollar in one day.  What happens when all these roosters finally come home to roost?  Rise or fall it will ALWAYS be worth something to someone (actually many).

    Keep stacking it folks.  Got me some easy, peasy, inexpensive 90% last night – quite nice.  Only a few but a few here and there add up to a lot!

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