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Silver Centric with Mike Maroney

Mike Maroney
November 30, 2018
Video Transcript

Mike Maroney: Good afternoon! It's Friday, November 30th. My name is Mike Maroney and I'm coming to you today from the Monex Precious Metals Studio. We're going to do our Silver Centric video today. What we're going to talk about is the fact that there are 70 different asset classes that investment banks typically track. The interesting thing as of Monday, November 26th, 90% of those 70 different asset classes were down for the year. A situation that hasn't happened in over 115 years, but the question is, which asset class currently is best positioned for a potential reversal in 2019?

Let's talk a little bit about silver. Silver had a high price this year of $17.80 and we've traded as low as $13.80. So, we've had approximately a four dollar range. Silver typically performs best in an inflationary environment or in an environment where precious metals are in a classic situation where they start to shine. Similar to what happened back in 2011, during the financial crisis, where people were very concerned with the fact that Central Banks were printing money faster than any other time in history. But in the face of that, silver hit a high of $49 and since that high in April 2011, we've been in a downtrend. Now, if you look at the facts, silver may be in a situation where it's putting in what we call a classic bottom. What we have right now is the ratio for gold to silver is at its highest level in the last 30 years. Each and every time we've seen a situation where the gold to silver ratio has hit 80 or higher, silver has typically bottomed within six months and made a major move back to the upside. If you look at the circumstances that currently exist in the market place, is the stock market which is down for the year looking like it's bottomed--No! Obviously, we had a low in the S&P of $666 in 2009 and we've tracked all the way up to almost $3,000. So, we're still very close to all-time highs. Real Estate same situation. Matter of fact, most people believe that the real estate market is prime for a major correction to the downside, but the precious metals have languished over the last seven years and look to be putting in a bottom because investors are starting to realize that all the money that governments have printed for the last seven years may finally be ready to circulate into the system and cause the one catalyst that has typically been, probably the crème de la crème of catalysts as far as precious metals is concerned, and that is inflation. Why do I think inflation is possible? Well, the U.S. debt will breach $22 trillion very soon. Really, there's only one way out from under this debt mountain and that is to monetize. We're obviously not talking about cutting back as far as expenditures are concerned, and the dollar has bounced nicely, but looks like it's putting in a high. So, we could see a major corrective move to the downside in the dollar. We could see inflation start to prop up in 2019 as investors around the world realize the debt crisis is once again upon us and maybe worse than 2008, and precious metals, especially silver, could once again start to shine.

Give us a call here at Monex. So, we can find out if precious metals are the right sector for you. Give us a call today. Thank you!

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