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The Silver/Monetary Base Clearly Says Now Is the Time To Buy Silver

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There are way more U.S. dollars in existence today than at any point in history, but yet the silver price is not reflecting that reality. Currently, it is really one of the easiest decisions to make silver part of one’s investment portfolio.

Silver is still near all-time lows in many ways. One of the most significant measures wherein silver is at an all-time low, is its price relative to the amount of U.S. dollars (U.S. monetary base) in existence.

Below, is a long-term chart of the silver price relative to the US monetary base:

As you can see it is at all-time lows (0.004), but actually even lower, since this chart was done before the massive amounts of US dollars that were created this year. It is currently at 0.0035.

The point is that silver is still really cheap. It can only be expensive if it comes into its own as a monetary asset. No industrial demand or other demand as a commodity (especially given the outlook of the world economy) will cause silver to be expensive or in a bubble.

Only when:

  • debt-levels are at significant lows, can silver be near highs…
  • the Dow has had a real crash could silver perhaps be overvalued at some point after…
  • silver is considered an actual monetary asset (like the U.S. dollar or gold), and actually part of monetary reserves world-wide

could it possibly be considered fairly valued. Currently, it is really one of the easiest decisions to make silver part of one’s investment portfolio.

Below, is a long term chart of silver:

This is another illustration of how the silver price is currently relatively low.

On the chart above, the first phase of the silver bull market (marked 1 to 3, in black) was from 1993 to the end of 2001, and the second phase (marked 1 to 3, in blue) is from 2001 to the 2020 and beyond…Both of the phases appear to occur within in a broadening channel, from which they both broke down, after point 2.

As long as silver is below the blue broadening channel it is extremely cheap. Just like it was from about September 2000 to November 2003 when it was below the black broadening channel.

After breaking down from the channel there was a consolidation that ended at a new point 1. The first phase managed to get back inside the broadening channel again.

If the current pattern follows and does the same (by getting inside the channel), then we will see some high silver prices, but still not expensive. Only near the top of the broadening channel would I consider silver to be relatively expensive.

Conclusion

If you missed out on buying silver in 1999 to 2003, then now is your chance.

Editor’s Note:  The original article by Hubert Moolman has been edited ([ ]) and abridged (…) above for the sake of clarity and brevity to ensure a fast and easy read.  The author’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article.  Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor. Also note that this complete paragraph must be included in any re-posting to avoid copyright infringement.

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