The Silver K.I.S.S. Strategy

Gary Christenson
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Wednesday, August 21st

As discussed in part one, available here, KISS is an acronym for Keep It Super Simple, or Keep Investing in Stacked Silver, or Keep Insuring with Stacked Silver.

The super simple interpretation:

  • Total U.S. debt exceeds $70 trillion. Official national debt passed $22 trillion and increases exponentially, regardless of which political party mismanages government. Deficits, debt, and devaluation of fiat currencies will accelerate.

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  • “Fake” dollars, created as debt, enter the system and keep the economic Ponzi rolling. Consumer prices will increase as long as debt expands.
  • The stock market makes new highs even though the U.S. economy and corporate profits are slowing. Central bank liquidity injections and inexpensive debt support Wall Street and the stock market but do little for the bottom 90% of Americans who often live with massive credit card, student loan and mortgage debt.
  • Interest rates on $16 trillion in global sovereign debt are negative. Normal interest rates would crush the bond market and budgets for indebted governments. Central banks can’t suppress rates and increase debt forever, so a reset is inevitable. Counter-party risk will go nuclear…
  • Our President wants reelection. Can he delay the coming recession past November 2020?

Another Possibility:

Wall Street, the Federal Reserve and irresponsible governments will manage our fiscal and monetary insanity. MMT will glorify big-spending politicians, and the Easter Bunny will do lunch with the President in the rose garden while discussing increased spending plans, golden eggs and fantasies.

Keep it Super Simple – the Bill Bonner version:

  1. “The Fed will never ‘normalize’ interest rates (at least, not willingly). We were right.
  2. The Trump team will never go ‘full retard’ in its trade war with China. So far, the trade war is still at half retard. We will see what happens.
  3. MMT, or Modern Monetary Theory, as crazy as it is, will become the new humbug creed of both Democrats and Republicans. MMT is gaining ground daily. Both parties are canoodling with it, even if they don’t admit it. [Something for nothing is a successful, if silly, sales pitch. We will pay the price for believing such nonsense.]
  4. There will be no serious federal budget cuts… and no attempt to bring runaway government spending under control.”

More from Bill Bonner on the charade we call the debt ceiling:

“And didn’t every one [congressional critters] of them know, in his brain, that there was no way they could continue to spend $1.30 for every $1 of income…

“And so it was that they waited in the Washington heat… like the 300 at Thermopylae, their polished armor shining in the summer sun…

“Now was the time when good men and women would stand together… shoulder to shoulder… their sacred honor on the line… their mortal bodies in the breach… [congress in theory]

“Then, they showed their backsides and ran away.” [They raised the debt ceiling so they could spend more currency units…]

But why promote massive debts and fiscal and monetary craziness? This is the nonsense that destroyed empires in the past… the insanity that rots nations and morality from the inside… a breadline to economic oblivion. Why?

INFLATE OR DIE!

Create more debt and higher prices, and transfer wealth from the many to the few. Our President wants lower interest rates. The Fed wants more inflation so they can expand the fiat currency Ponzi scam. Congress wants to spend, spend, spend…

And they will get it. Enter MMT and Bill Bonner’s take on MMT:

“It [MMT] tells us that the fed issues the money. They control it. If there’s not enough inflation, they should issue more. If there is too much inflation, they should raise taxes to take it away.”

“It is a simpleton’s idea… which make it suitable for both Democrats and Republicans. But it totally ignores how a real economy works… and the role of honest prices in guiding investors, businesses, and consumers.” [editor: red added for emphasis on the wit and wisdom of Bonner.]

“What politician will turn off the lights at senior centers and Medicare for All? Which one of them is willing to stand up to Deep State lobbyists from General Dynamics, Raytheon, or Lockheed Martin?”

“It’s not going to happen. Neither Congress, nor the White House, nor the Fed have the backbone, the will, or the wit to challenge the Inflate or Die Era.”

“Nothing will be allowed to stand in the way of more inflation.”

In Summary:

Never count inflation out! Congress, the Deep State, the Fed, and the President support more inflation. Expect massive debts, rising consumer price inflation, devalued mini-dollars, and higher taxes. We must feed the D.C. inflation monster!

A Workaround: K.I.S.S.— Keep Investing in Stacked Silver:

Why Silver?

An empirical model for silver prices, as described here, shows that silver is undervalued (at $17) by over 30%, which is consistent with low ratios for silver to gold (shown in part one), silver to debt, silver to stock indexes, and silver to M2.

Examine these graphs:

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Debt Up, Up, Up, forever!

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The above graphs show:

  1. National debt rises exponentially. The trend began over 100 years ago. It is unlikely to reverse.
  2. Silver compared to the DOW shows that silver prices are too low, as they were in 1971, 2001, and 2019. (Before large rallies.)
  3. Silver compared to national debt shows that silver prices are low, as they were in 1991 (silver low was $3.51), 2001 (silver low was $4.01), and 2019 (silver low was $14.32). Higher prices are on the horizon.
  4. Silver compared to M2 shows that silver prices are undervalued and should rise.

CONCLUSIONS:

The Silver K.I.S.S. Strategy tells us to INSURE our purchasing power and savings by investing in stacked silver—not the paper stuff that can “evaporate.”

History, ratios and the empirical price model show that silver prices are too low. Expect higher prices for several years.

Read: Silver Manipulation Confirmed

Read: Silver Price Target During the Next Bull Market

The stock market is too high, and silver prices are too low. Would you prefer to own stocks selling at all-time highs after a ten-year run-up, or inexpensive silver at deeply discounted prices as measured by debt, stocks, M2, and monetary insanity?

“The party is over in mid-2019.” Jim Sinclair. Silver prices could double within a year or two and spike far higher before the 2024 election.

Believing politicians will spend, central bankers will devalue, consumer prices will rise, and silver prices will be multiples higher in 2025…

Gary Christenson, the Deviant Investor