Commodity Trade Mantra

Posts Tagged ‘S&P 500 Index’

Silver Prices to Increase Exponentially in the Long Term

Silver prices, relative to the S&P 500 Index, are currently quite low. Central banks have levitated stock prices and “discouraged” silver prices since 2011. What if the S&P continues its exponential increases and the ratio reverts back toward the high end of its range? The silver to S&P ratio could be around 3.0, and the annual average price for silver could be roughly $100 – $150.

Explosions in Debt, Stock Markets, Crude Oil, Silver & Consumer Prices

Exponentially increasing systems cannot last forever. Our problem is that the global financial system is based on exponentially increasing debt, energy usage, population & exploitation of natural resources. However, we are approaching the inevitable end of the exponential increases. Rallies & crashes have become more extreme.

Fed Admits There Is Persistent Over-Optimism About The US Economy

Real GDP growth forecasts have typically started high, but are revised down over time as incoming data continue to disappoint. Possible explanations for this pattern include missed warning signals about buildup of imbalances in the economy before the crisis. Persistent bias applies to growth forecasts & also of inflation & unemployment.

Silver Price At Historical Extremes

Silver is currently inexpensive compared to the S&P 500 Index, crude oil, the size and rate of increase of the national debt, and especially the future price for silver after markets have reset, paper assets have devalued, and hard assets have jumped much higher in price.

QE: Quantitative Easing or Questionably Effective

If you were a member of the top 5 – 10% & had a large investment in the stock market, you have increased your nominal net worth, thanks to the levitating wonder of “printing money” via QE – Quantitative Easing. However, if you were in the bottom 90%, then the wonders of QE did not “trickle down” to you, except as higher prices.

When Fundamentals No Longer Matter

Individuals will scour the internet to find the best deal on everything from a pair of shoes to a television. However, when it comes to investing, most people disregard “value” and tend to spend less time researching the underlying investment fundamentals and more time fantasizing about their future wealth.

Gold, S&P or the Dollar - Mr. Bernanke?

Sacrifices, such as higher gold prices, must be made to maintain the “full steam ahead” status of our national train wreck in progress – deficit spending, ever-increasing debt, QE-forever, more wars and currency debasement.

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