EC Can The Silver Bugs Alter The Macro?

As to the post’s title, they sure are trying. Despite doubts that the stodgy old likes of me may have.

But for two days at least dem bugz is successfully battlin’ dem boyz on da COMEX. The result is that the Silver/Gold ratio (weekly futures chart) has been rammed to a new high for the post-crash move. If we back completely away from the #silversqueeze punchbowl, this is an indicator guiding the way for forward inflation.

(Click on image to enlarge)

silver gold ratio

So again, can the silver bugs alter the macro? Are the silver bugs altering the macro or is silver just doing what it has been technically capable of doing all along? Since well before #silversqueeze (a ‘me too!’ operation to the famous Reddit plays of late) was promoted by its originator, gold had been trending down vs. silver.

A rising Gold/Silver ratio (GSR) along with a rising US dollar, AKA the 2 Riders of the Apocalypse, would liquidate the macro if they were to ride hard enough. But until two days ago all that the GSR and USD had managed were similar looking potential bounce patterns. Ref. What Thing Looks Like the Other Thing?

Using GLD/SLV for the Gold/Silver ratio we can see that the move in silver has wrecked the pattern while USD (UUP fund, lower panel) continues along in its pattern. Either the silver bugs are going to succeed and lead the charge to the next inflationary phase after this week’s expected disturbance…

From NFTRH 637 on January 10th…

“The Continuum [30yr Treasury yield monthly chart w/ 100 mo. EMA ‘limiter’] has reached a potential disturbance area as it nears 2%.”

…or the bugs will fail, USD will hold its pattern, the Gold/Silver ratio will snap back, and maybe this event, this whacky and exciting event, would be looked back upon as the final play, the trigger, to renewed market liquidity issues (a polite way of saying deflation scare).

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William K. 3 weeks ago Member's comment

An interesting post indeed. The part that I really do not like at all is that G.T. may well be correct about inflation.