Biden The Silver Bull

It may seem like an unlikely match.

But there are some big reasons why Biden could become silver’s best friend.

The main force behind this thesis is that we can expect stimulus. A lot of stimulus.

More specifically, Biden is likely to do his utmost to bring on more general support for the economy through increased borrowing, further expanding the deficit and national debt.

He has also made it clear that he’s a big proponent of a Green New Deal, which is a mega effort to migrate the economy towards renewable energy and net-zero carbon emissions.

And both of these are likely to help boost silver prices in a big way in the next few years.

Let’s dig in…

Stimulus, And More Stimulus

The timing for any new surge of easy money is difficult to predict. 

Even if the Senate remains Republican, there will be lots of pressure from all sides to pass some kind of new stimulus bill.

Yes, there are now three promising vaccines nearing approval, and those will be game-changers. But by the same token, that’s not going to happen overnight.  “Back to normal” will be a gradual process.

Healthcare workers will be first to be inoculated, followed by higher-risk individuals. But it’s likely to be spring, or later, before the “average citizen” has access to a vaccine. That means we’re unlikely to see anything like business as usual until maybe next fall.

Even Fed Chair Jerome Powell has recently repeated, “there hasn’t been a bigger need for it in a long time”, appealing to Congress for more coronavirus relief for challenged businesses and Americans looking for employment.

So, given the extent of economic damage and the drawn-out nature of this pandemic, I think it’s reasonable to expect multiple stimulus packages to come forth. The virtual printing press will not get much rest.

This chart shows what’s been happening to the M1 Money Supply since 1980. 

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