Going Back to $25/oz Will Happen Quickly
In the past 40 years, the DXY index has measured the U.S. dollar by comparing it with competing fiat currencies. Only in 1984 and in 2000 was the DXY higher than it is today. Think about that, because the strength of the dollar is very distinctly the heaviest weight on the price of silver, along with money supply (M2) and FEDspeak.
All three point to higher silver prices, and I want to go over how this plays out.
For one, the FED saw CPI come in above 9.0% and didn't panic… we saw a 75bps rate hike and a confident Jerome Powell, not a frantic one who believes inflation is running away from him.
We saw the U.S. economy officially enter a recession, but we didn't get any new commentary from the Federal Reserve about changing course or doing something different.
We got to see most of the world's largest corporations report earnings and evolve to become more resilient businesses able to beat estimates, even as Russia's war on Ukraine has made a total mess of oil and food prices and the labor pool continues to be challenging.
Mortgage rates have spiked to multi-year highs, yet none of the funds I'm invested with have issued any cautionary notes or warning alerts.
Courtesy: Zerohedge.com
As the charts above clearly show, the bulls are NOWHERE to be found; what we do see is a complete lack of trust in both the underlying strength of the economy and the way forward.
When I was 13 years old, my father took me to Six Flags Magic Mountain and I really didn't want to do the scary rides… I was terrified.
I saw those rollercoasters pass above us at 100MPH and tried to hide how panicked I really was, so my father wouldn't laugh at my expense, but I was shaking inside.
Even worse than fleeting fear, I had to stand in line for 60-90 minutes to get on the ride, so I couldn't just make a rash decision and throw caution to the wind… it had to be a braver type of choice to keep standing in that line, building the suspense and the adrenaline rush, constantly convincing myself that everything would be alright.
Reluctantly, I kept marching forward… I shed a few tears from time to time, as my father (an adult) couldn't really relate to or empathize with my irrational fear.
Obviously, going on the rides is not only fun, but the second you get off, you want to do it again!
The panic level is the worst during the anticipation, when you create imaginary worries in your mind as to how terrifying it will be, but reality proves to be much more manageable than expected.
When you first get on the ride and it starts moving, you're sensitive to each vibration, to each acceleration and your body is stressed, especially as a little boy on the massive ride. Yet I did it, loved it and got scared all over again in the line of the next thrill.
This is how investors feel about the world right now… if you're bullish and LONG, you're biting your lips and closing your eyes, but you know that enduring the ride is the RIGHT CHOICE!
Silver is going to $25/oz and the DXY is peaking; the FED's less-hawkish behavior and the mild recession outlook are the contributors to this.
I'm just finalizing a multi-month due diligence surgical work on a silver company that I'm going to present to you SOON, and I can tell you that I'm personally extremely bullish on silver.
Best Regards,
Lior Gantz
President, WealthResearchGroup.com
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