SD OUTLOOK: As the paper price totally disconnects from reality, physical precious metals, aka REAL MONEY, will now go into hiding…
Well, what do you expect?
The paper price of silver is totally disconnecting from reality.
If you’re one of those chart huggers, then go hit up Peter Brandt on Twitter and I’m sure he’d be happy to point out his entry point for some SLV.
It is amazing to see such trust in an unbacked, debt-based fiat currency system that is literally entering the crack-up boom.
But I digress.
Once again, there is not much time to write today.
I will begin keeping my creative articles short, as if I were somehow creative anyway.
The big news is that silver is crashing right now:
We’re down, peak-to-trough, 22.76% overnight!
Here’s a wide-angle view of the big picture:
We’ve put in a lower-low to the 2015 low.
Here’s similar look at gold:
Gold is holding its own.
Here’s a look at the US dollar index:
The dollar’s barely budged ever since the move that began in mid-2014.
Here’s the final chart today, which is a real “blast from the past”, although it’s not even apples to oranges, but more like apples to CAT-5E cables:
With the point being that the stock market is crashing now, right along side of silver, and during the last financial crisis, silver bottomed before the stock market.
What do I think is going on right now?
Well, I think it’s TEOTWAWKI.
Forget the paper markets for a moment.
I think the paper markets have totally disconnected from reality and that we have entered the crack-up boom.
People thinking under the old paradigm are already behind.
Here’s a quick example of that: Jane Doe wants to quit her job to reduce her risk to Covid-19, and while she has savings and a pretty well stocked pantry, she doesn’t want to take the risk of losing her healthcare, so she’s afraid to do what her gut is telling her to do, so she doesn’t.
Here’s the problem with Jane: She’s not understanding the US healthcare system is going to collapse.
She’s thinking in the old paradigm.
What does the old versus the new have to do with anything?
For starters, there are some wise old dudes out there.
They’re OG’s and OS’s.
I’ll call ’em Original Gold Bugs and Original Silver Bugs, if I may.
These are the guys who’ve been stacking since at least the turn of the century, and many of them have been staking before.
They’re up on their investments, and perhaps they’d like to invest in a little food, water, personal hygiene items, and things like that.
Yes, it’s serious.
If you didn’t catch the “Coronavirus Task Force” press briefing at the White House on Sunday afternoon (yesterday, March 15th), then please understand that when the President came on television at 5:00 p.m. EST on a Sunday to say to the nation, over and over again, “please don’t buy food”, there is one very, very serious problem with the food supply in the United States:
Which brings us to the disconnect.
People say “you can’t eat gold”.
That’s funny, because if you bought gold at $750, and you sold it at $1250, $1375 or $1,550, you’re still up, big time, and if you bought a bag of rice or a can of beans with it, well, you may not be able to eat gold, but you did eat because of it.
The same general comparison can be made for silver.
There is a point here: People have been selling physical gold and physical silver for years, keeping the markets ultra liquid and premiums ultra-low in combination with a couple years of weak retail demand, but now, there is a scramble from people everywhere to get into anything and everything real when it comes to making it through this crisis.
Why are gold & silver going down then?
Aside from the active price suppression, because gold and silver are money.
It has been sold into the market to build up the other supplies needed to get through this crisis – Raw materials, food, water, land, building supplies, defensive items, or whatever.
Which brings us to the disconnect: Stackers have been persistently adding to their stack over the years, and with each incremental, meaningful drop in price, willing and able smart stackers pile on more and more metal, so we have the total disconnect from the “paper price”.
In other words, we have a similar repeat of 2008, whereby the paper price is falling, but the price for real, physical metal is rising, if real metal is even available at all.
Many dealers will simply not sell at these prices, but instead, will wait it out, or charge astronomical premiums.
Those who are selling gold & silver right now, at these prices, will run out of physical faster than the ramen noodles ran out at my local Walmart.
As I said on Friday, the lower the paper price goes, the higher the real price goes.
We’re seeing that now.
– Half Dollar
About the Author
U.S. Army Iraq War Combat Veteran Paul “Half Dollar” Eberhart has an AS in Information Systems and Security from Western Technical College and a BA in Spanish from The University of North Carolina at Chapel Hill. Paul dived into gold & silver in 2009 as a natural progression from the prepper community. He is self-studied in the field of economics, an active amateur trader, and a Silver Bug at heart.