Silver Is Back!

Silver, Bars, 5000 Grams, Real Value

It’s getting harder with every passing day to find cheap assets.

Stocks, bonds, real estate, they’re all pretty pricey.  And yet, no one seems to care.

Instead, the masses, and asset managers, appear determined to keep pushing them higher.

In recent days, the S&P 500, they Dow 30 and the Nasdaq all set new records.  And yet, it’s not difficult to imagine that, at least over the next 6-12 months, these indices could easily all head higher.

It’s a classic melt up scenario.  We have all the right ingredients in place.  Even more big stimulus is likely on the way before long.  Unemployment and home prices are stubbornly high, while real interest rates remain firmly negative. 

But through all of this precious metals, and silver (SLV) in particular, look irresistibly cheap.

Silver’s Macro Environment

I have to say, I can hardly blame investors for pushing asset prices higher.

After all the two feds, the Federal Reserve and the Federal government, are a determined bunch.  It’s easy to see why.

Some important relief programs expired this past summer, including a $600 top up for unemployment benefits and a loan program for small businesses.  The $1,200 stimulus checks are feeling like a distant memory.  And other temporary aid will end this year.

Meanwhile, small businesses are struggling.  According to Opportunity Insights, there are 29% fewer open small businesses than in January, and less than at any time since the month of May.

And unemployment is persistently high, particularly for those in the lower-wage categories.  November saw just 245,000 jobs added to the U.S. economy, versus the 610,000 in October.  Since the start of the pandemic, the U.S. has lost nearly 10 million jobs.

Right now, Congress is working on a bipartisan program which could include an extension to unemployment benefits, and a possible 2nd loan to small businesses stemming from the Paycheck Protection Program.  So with the prospects for a lot more helicopter money ahead, Janet Yellen as the next Treasury Secretary must be dusting off her pilot’s license.

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Almoni33 1 month ago Member's comment

I'm waiting for the price of silver 35, so you have to buy. if the price falls below 20, I'm ignorant and will never be able to talk about silver in public. I did not see anything like that in the text of the author.