Silver Reflection and Market Correction

In the midst of the dog days of summer, metal markets have been relatively stale. However, many analysts have continued to maintain a positive perspective on silver because of the ever-growing imbalance of its supply and demand. The supply is starting to fall behind due to many mining companies reducing production over the last year or so. While on the flip side, the demand will continue to rise as an increasing number of people realize the “silver super-sale” that is occurring. While this imbalance will surely help the profitability of silver in the long-term, it will not help the short-term market prices.

Another aspect to consider is that when mining slows down, it takes about eighteen months to affect the marketplace. This means that this kind of supply and demand battle will not be fully felt in the marketplace until the end of 2017 or the beginning of 2018. However, a draw down in above ground inventories to satisfy the needs of the industrial division could have more of an immediate effect on the silver prices than many are predicting. As always, time will tell.

In recent articles we have discussed the insolvency of Illinois and the reality that the U.S. is in a similar sinking boat, in a larger ocean of debt and consequence. Catherine Austin Fitts, a renowned financial expert, spoke to these issues and called for the dissolution of our current system in her latest interview with Greg Hunter of USAWatchdog.

“We have built an infrastructure that doesn’t make economic sense, and we are going to have to change” Fitts said. “What’s happening in state and local budgets is the same thing that is happening in health care. It’s the same thing happening in all these different areas, which is [that] we have engineered government investment to prop up the stock market.”

Fitts went on to say, “The problem is, to get that rise in the equity markets, we’ve ended up pumping out enormous amounts of government debt and government money in a way that has a negative return for taxpayers. It’s not sustainable, and the game is up. … I’ve been telling you for 15 years we were going to have a slow burn. I am telling you that’s over, and we are now into controlled demolition.”

There is no doubt that a crash is imminent, the only uncertainty is when we will see it.

“I think it’s more likely to happen in 2018,” said Fitts.  “If you look at the stock market, we are way — and I am tired of saying this — we are way, way overdue for a major correction.  If we get this major correction, that is perfectly natural, you don’t want to misinterpret that as a major crisis or event.  I think we are way overdue for a major correction, and I give that a reasonable chance between now and November. If it doesn’t happen this year, it’s definitely going to happen next year.”

In light of this assessment, I want to stress the importance of including precious metals into your and your clients’ investment portfolios. When the correction occurs, gold and silver will be the measuring stick, as they are true stores of value. Including them into portfolios provides what we refer to as “wealth insurance”. As a counter balance to a market on the verge of a correction, gold and silver will act like an insurance policy to the rest of your or your clients’ wealth, offsetting devastating loss.

Call us today to discuss how physical gold and silver can provide “wealth insurance” to you and your clients.