Let’s have a little fun – and with this, I’d like to explore $300 silver.
I once heard $300 silver by the end of the decade and thought it was comical. Here, I go into how it is possible – but also the threats along the way which could cost you everything.
Conservatively, it’s hard not to see $100 silver in the next few years. But I think I might have first heard $300 silver from David Hunter. I have heard others then talk about $600 silver – maybe Bix Wier. The truth is, you can get there several different ways. Am I calling for $300 silver by the end of the decade? No. I know better with all of the low-down dirty tricks the banks do and I can think if one big one I’ll get into on how this is avoided.
But is $300 silver POSSIBLE? To me, the answer is very easily – YES. I’m going to go through a few scenarios below as to HOW we COULD get there. I think it’s more rational for me to stick to $100 by 2026, with a possibility for it to run any time before now and then to $100. That gives me my upside nearer term target, but also gives me the wiggle room to predict an upside accident with 5 years of runway. Not exactly bold, I get it. But anyone who is looking for a $100 silver within 5 years and playing miners to achieve this – I think you will be happy.
This article is coming out as a supplement to my two previous articles on the supply side issues and the demand side increases coming with EVs and solar. That demand side article didn’t even begin to touch on what I think will be an avalanche of investor demand coming in too.
Let’s start with $100 silver as an appetizer, and go from there.
$100 silver by 2026 (hopefully by end of 2024)
Like I mentioned above, this might be the least controversial call of all of them, but I still have a lot of people thinking this is stupid talk. For this forecast, I’m simply going to look at a chart and use a simple tool to estimate. I use charts sort of like a weatherman may use the hurricane cone of certainty. I don’t use them to bet lots of money on, but I use charts to sort of be a guide path to the directionality and hopefully some sort of time indicator. This can get me an idea of where I THINK it will go, and perhaps using probabilities get me a nice pay out. I have lost on two bigger GDX calls I made, and one SILJ play I have going. Those three total cost me about $25k and hurt. My AG play last year before silversqueeze and my FSM play will get me total about $95k and will make me keep coming back to the table. So none of this is about being right all the time. It’s about finding things that LOOK good, then playing risk/reward with them to make money. Look for the right setups, analyze, and make bets based on those conditions/probabilities.
When the hurricane is coming onshore to Florida, you are wondering about the air currents, fronts, and systems moving from west to east that could provide headwinds and move the direction within a range. To me, this is the DXY with gold. Furthermore, the energy the system has is the fundamentals – negative real rates, inflation, supply/demand setup. The level of destruction can be measured in the move in RSI/Fib on the charts along with profitability. For now, I have to assume that over the next few years, fundamentals in my macro sense have the DXY heading down – a lot.
With this hurricane analogy, I see this storm as a Cat 5 that is in the tropics and could be barreling down on Florida in 14-18 days. The closer in time it gets, the more you can see how big the storm is and where the damage will be. In reality, the silver hurricane is a few years out but it could surprise and come onshore a lot faster than expected. It’s picking up energy with more and more supply deficits and lower mine production/grades. The directionality will be more correctly determined as the DXY falls or strengthens over time.
Using the chart below, you can see a cup and handle. NOT the current gold cup and handle – but a 30 year cup with silver, and the handle has been forming for 10 years. If you simply project out the move in the arc from top to bottom, then extend that out for the handle, you get $96.
I have seen the cup and handle measured two different ways – here is the most common I’ve seen…
Another way is to measure that same move from the bottom of the handle. What I think is significant here is a 30 year cup, which has built up tremendous levels of power during that time, with a 10 year flagging….to me, this is pretty explosive. This is the easiest way you see $100 silver. But this doesn’t have a time frame on it. Once we get over $30, to me all hell is breaking loose. And I think many are waiting for this threshold to be crossed to join the party to $50 or higher. Most aren’t playing this chop.
The above is a monthly chart, and look how steep those two $50 moves were up and down. Face ripping. My contention here that I have shown with both the supply and demand articles above, is there is a structural issue at play which can easily take the price of this to $100 by 2026. Furthermore, this could end up having $50 as the new floor for silver when this thing rips faces off and the extent of the supply/demand imbalance starts to get more widely known.
What to expect? I would think you have a violent move up to near $100, with a consolidation for a few years with $50 as the new floor. This will prove to only be a fuel to base for $200-$400 by 2030. For the sake of a target in this article, let’s just stay with $300. Perhaps this is high to some, and to others it is low – so let’s just stick with that for now.
Below, I want to look at 4 different scenarios which lead to $300 silver by 2030.
Scenario 1 – Inflation
For the last 8 months or so, the inflation genie has come out of the bottle. Now, is it possible we start to see disinflation and then a 4% constant inflation for years? Yes. I’m not one of the hyper inflation scenario – YET. I think the powers that be have some sort of trick up their sleeves with currency the next few years, which is why none of these governments seem to have a problem fighting each other to debase faster. It’s like the G20 all got together and conspired to take turns printing faster. Something is going on that none of them are being honest about. Everyone feels it in their bones, but no one has evidence to tell you what it is, nor how it is going to look. But it has a feel for a handful of central bankers trying to map out ways that I would sacrifice my freedoms tomorrow for printing today. Meaning – I believe it is POSSIBLE there is a great grab of resources going on now where the printing presses are alive, credit is cheap, and those with the most power are grabbing up land (Bill Gates is buying up ALL farmland in America), real estate (Blackrock buying up houses using dirt cheap rates), media (consolidated media under a few provides fewer abilities to dissent), food (check out the food conglomerates). What is STILL left on the table, at the moment, is commodities. I think this is the last one – and in order to corner these, you need to push prices down using many of the above tools. Once those in power have what they need, the public can then participate to chase it higher.
My cousin lost her dairy farm in Indiana due to prices being pushed down by the large Walmarts of the world. These consolidations were rampant in this country for 30 years. Big companies enter the market, can borrow capital at cheap rates, produce at losses to drive competitors to sell to them – and when competition is removed, prices can run higher. I believe that’s what’s going on with commodities right now.
What I am saying is that all of this MMT is dependent on controlled ownership of everything. If you have a dairy farmer seeing higher fuel costs and he tries to pass this cost on to the consumer, prices can get out of control. It has seemed that they have tried to squeeze out the little guy. This is precisely what we have seen with silver. Why aren’t there many silver primary miners in the world? Because they can’t make ends meet. This is why you have First Majestic buying a gold mine, FSM at 27% silver, and PAAS at 26% silver. Futures prices and the banks pushing prices down can squeeze margins of producers to the point they put them out of business, then entities can buy them for pennies on the dollar. Most don’t realize that 90% of all silver is produced as a byproduct of zinc, lead, and other base metals. The primary silver miner is the independent dairy farmer here in this analogy, and is being run out of business.
The inflation of the 1970s was somewhat different than today – and the inflation then saw crazy oil/gas prices. This is a major input cost to mining and farming. And, it’s a big reason gold went up 24x and silver up 29x in that decade. This is also how we got the food pyramid – to push people to eat cheaper calories. Currently, we are seeing self-inflicted gunshot wounds with countries turning off their coal plants because they aren’t green, but they don’t have the energy in green YET to bridge the gap. This is creating high natural gas prices in Europe, as we speak.
The stage could be set here for the next few years of countries trying to be green and shutting down cheap power. We have seen in this country where our government overnight went hostile towards fracking, oil exploration, and drilling. We went from energy independent to once again being dependent on OPEC. And, when Biden told them to increase supply to lower prices, they told him to pound sand. This is the thinking of these idiots today. Let’s turn OFF dirty energy in favor of green energy we don’t have yet. Now, we have CREATED an energy crisis, and we must FUND this to build all kinds of green stuff. Meanwhile, they probably don’t realize their political opponents can run on simply offering to turn back on the cheaper energy source. This would mean fair elections – which many have cited as no longer possible under COVID measures. If the party in power can STAY in power, whilst promoting trillions in spending on green energy, they now increased the input costs for all food and commodities due to sky high energy costs. Now that there are no local dairy farmers – those big companies can pass those energy costs on to you. This squeezes the little guy while telling them in the same sentence you aren’t raising taxes. Ha!!
While some may want to cite an “energy cliff”, that is something that has been well known for decades that I learned in grad school in the early 2000s called “peak oil” and is projected to hit in the 2030s. This is not that. This is idiots creating artificial shortages and driving up input costs to everything. Higher levels of inflation for a decade could easily take silver 10x from where we are now – given it went 29x during the 1970s. If you take the low of $11 last year (the low of the last 10 years) during the crash and multiply the low by 29, you can get $319 silver if we just did the same as the 1970s.
Scenario 2: Gold to silver ratios
IF energy costs are going to $100-$200 per barrel for oil, we can easily see a $3000 gold price. Historically, silver has been found at 15:1 to gold. More recently, it’s been found at 8:1. But you can see that last summer, it was valued at 123:1. You can also see that in 1980, it got to 12:1 I had read.
Many feel gold could hit $3,000 within this cycle. However, many forecasters are calling for $5,000 or even $8,000 gold – some at $10,000. If we take the highest number of $10,000 and use an 8:1 ratio, we have $1250 silver. If we take the lower end of $3,000 and do a 15:1, we have $200 silver.
So – inflation that could be driven by an artificial energy crisis and higher inputs of wage/energy costs can easily get you to $200 silver by the end of the decade. But just using simple ratios – at $5,000 silver and 20:1 ratio, you get $250 silver. Can $300 be hit with a 12:1 ratio to gold? Very much so.
Scenario 3: dollar collapse
As mentioned above, the DXY is a major head wind for gold, and often trades against it in a currency pair. One thing that concerns me and others is that the last 50 years, the US’s main export to the world is dollars. We give you these pieces of paper, and you give us oil. Wheat. Lumber. Electronics. In my country, we have the ability to be energy independent and drill our own oil. But those in charge seem to not want to touch any of our resources. Instead, we say we want to be “green” and shut down oil and coal. But…..we still need to get the energy from somewhere, right? So we print off more of these little green slips of paper and hand them to you to give us oil while we don’t touch our reserves. Or refrigerators. Or TVs. To me, I wonder how much longer they accept our little green slips of paper for REAL goods when we seem to have racked up the credit cards? If YOU rack up your credit cards, doesn’t your credit score go down and your rates to borrow go up because you are a credit risk? Yeah. Now do $30 trillion.
The problem is now that our debt is comical. When I was a teenager, at the end of the cold war in 1990ish – Reagan had spent about $5 trillion to boost our defenses to outspend Russia. This led to Bush Sr. losing on ‘no new taxes’ because the bill started coming in and we had to pay for that. But then something happened. Yearly deficit spending, and lower rates for 40 years.
Because of globalization, this was seen as deflationary. In my country, my dad was a steel worker. Why pay union wages to him when we can buy the steel cheaper from another country? This is what happened over decades. Where we were feared in the 1940s due to our production capabilities, over the last 40 years, our production has been outsourced to other countries while we give them slips of green paper for the finished goods. This is deflationary – in the fact that you would spend $800 for a TV, now you only have to spend $400. So over those 40 years, we constantly re-financed the house at lower and lower rates by borrowing more and more. And we printed more of these green pieces of paper, gave them to our employees, and they bought TVs and refrigerators.
We now have an issue – where we see the weakness in the supply chains. Global conflict today may reverse this course and we may need to produce more at home. This is inflationary because now we may have to pay those union wages rather than getting cheap goods from China. And with this, rates will go up – as we are seeing higher inflation – and supply chain problems – leading many to believe that rates can only go up so far before we risk defaulting on our debt.
This means, that in order to prevent default, we need to run inflation hot while our central bank buys debt – it’s essentially yield curve control to allow our government to inflate its way out of debt to perhaps get us back to 60 from 130 or so with the debt to GDP ratio.
What this means is massive currency debasement. The supply of the dollars floods our systems. And – as inflation is hot, countries that hold our dollars in reserve do not want to lose purchasing power, so they may buy our stuff. As these dollars flood our shores, and these dollars hit circulation, this does drive up GDP – but inflation is now rampant and the DXY tanks.
As the dollar decreases in value, this means you need more and more currency units to buy things. Over the next 5 years, you could see the dollar index below 50. Easily. This could set the stage for $5,000 gold by then. Since so many dollars are coming in, demand for our goods is higher, and this means industrial metals are also in high demand – which pushes silver very high up in value. With gold at $5,000 and a 15:1 ratio, you can see $333 silver.
Furthermore – if this imported inflation takes us to 10%, who is buying our treasury notes at 2%? No one. It is also possible we start to see treasuries getting dumped in the markets to push up rates – but no buyers other than the Fed. This has the potential to taking our fed to a balance sheet of $20T and making us look like a banana republic. 10 years ago, Venezuela was one of the richest nations on earth, but stupid socialist policies now have them in hyper inflation and people paying for food and hair cuts in flakes of gold. Where are we in 5 years with the stupid policies they are creating today?
Scenario 4: Supply/Demand problems
Many want to say there’s no way that there’s 60b oz of silver above ground. Well, there’s only a few billion ounces in investment grade silver, but 25b is supposedly in silverware/jewelry and 30b has been consumed in electronics/band aids/stretchy pants, etc. I get pushback on this, but it’s pretty simple. The assumption is 97% of all gold ever mined is still in existence. They estimate how much is in jewelry, how much in bullion/coins, and how much is perhaps in teeth and circuit boards. If silver has been found at 15:1 of gold, you take all of the gold and times it by 15 – and this is where you get your approximations of 60b.
In the two articles I discussed above, there are two hurricanes meeting. One is a demand of industrial requirements increasing due to green policies, specifically with EVs and solar. I didn’t add investment demand to that, but suffice it to say I believe you now have millions of people around the world beginning to hoard all silver they can get their hands on. This will continue for years. At the same time, you have supply that isn’t increasing, and cannot increase by much.
I had someone write to me yesterday on Twitter that at $300 silver they would just mine more and people would turn in silverware. This is the thinking that is logical, but also doesn’t work. Most people think there’s a dial where you could just mine more. I know First Majestic had some mines they have shut down because the cost to mine them was too much. There are such mines in the world, that aren’t feasible to run at $20 silver, but at $50 silver, you can get millions of ounces. But these mines just don’t have a flip switched on. You need sustained higher prices before anyone spends the millions to flip that switch on. There’s a lag here.
Many also don’t realize total mine production is usually 800-850m oz, and every ounce of silver taken from these mines depletes their mine lives. These are not 100 year mines, many of them may only have a few years left, like San Jose with FSM. Maybe they can extend the life of mine on many – but the reason they may not is perhaps it is lower grade and costs more to extract. Those who want green things are morons in the fact they don’t understand that everything “green” has dirty mining behind it – and these prices need to rise, substantially, to achieve that green future.
What I have showed is perhaps by 2026 we are seeing 200-400m more ounces of a supply deficit, and that’s not taking into account how many more stackers may be pulling silver out of the supply by then. Remember, in 1980 and 2011 – retail was the chokepoint. If price of silver went up, you just choke off supply to retail, which forces premiums higher, which forces people to stop buying – and that’s how you curb demand.
We are in a different universe today, son. I am now looking at 4 vehicles which will bypass your retail chokepoints:
- PSLV. If you are a millionaire or billionaire, you can simply buy shares into PSLV or even SLV. IF you want to take possession of your large amounts of bullion, you can cash in your shares and take possession. When you buy into these ETFs, they are putting pressure on the 1,000 oz bar market.
- Kinesis. If I’m wanting to buy silver and seeing 50-100% premiums on silver rounds, I simply can buy silver in Kinesis or mint it there. This has them going out and buying 1,000 oz bars. Where this is BETTER than PSLV is that people like myself can take possession of silver with as little as 200 oz.
- 100oz slices – I think there are now several companies started to take 1,000 oz bar off of COMEX to then slice them up into 10 or so slices, stamp them, and sell them. I believe Apmex and SDBullion and the like should form partnerships with these companies as they can help produce available overflow of supply at times.
- 1,000 oz bars directly from COMEX – We are now seeing the COMEX getting drained. Just yesterday, 4m more oz left the COMEX, taking it to 89m oz or so. If you are a really rich guy and seeing problems ahead, you can simply pull the bars from here and vault on your own. We have guys today like a Musk who might actually do this, and he’s at a billionaire level ($250b) where 1-5% of his assets into precious metals could actually move both of those markets substantially. Silver is very important to anyone who is in industry.
The point is that where before they might just try and short the futures markets down, all you might end up doing with that is providing those who are buying in bulk from the futures cheaper bars. It’s not going to have the same net effect as 1980 or 2011. Right now, you are seeing stackers clean out places and retail silver is hard to come by. This will be forcing people away from the retail chokepoints into the 4 items above.
Where the COMEX smashing is VERY effective is with the daily psyops of punishing investors and running the monthly metals options heists – but where it is NOT effective is the long term price moves. The underlying supply and demand fundamentals eventually catch up. What will happen is one day all of this shorting will then turn into many going long. I have shown evidence that December 2021 looked to be the time where it broke the pattern of the last 16 months. To me, it signaled THE bottom was in, and they tried to washout any long they could before they let it run.
In 10 months, we are now down about 70m oz in the COMEX. There are less than 89m oz now on registered, and I fail to see how lower prices can entice silver from the eligible to the registered. I fail to see how lower prices can entice silver exploration, or turning on mines that cost $35 an ounce to run.
How we get to $300 here is the significant gap in available supply to demand would require much, much higher prices to get stackers to turn in silver, entice jewelry and silverware to be turned in – but more importantly – entice more mine supply. I have shown that we have a bottleneck of about 200m oz in scrap supply, which cannot simply be dialed up to 400m. These refineries run at near capacity now, and maybe they can boost by 5%, but double? You would need more refineries. These things may cost many millions to make, and who is doing that for a $50 silver price for a weekend? No one. There would need to be sustained supply coming in, and a LOT of it for these guys to consider building more capacity. Currently, if they buy silverware at $23 per ounce, they have to hedge that buy on the COMEX – creating more shorts. These shorts are suppressing the price, not enticing more supply.
What will NEED to happen is the PSLV/SLVs of the world will have to get raided for 1,000 oz bars. If I buy SLV at $22 and it goes to $44, I might sell my shares. Perhaps here you are seeing the big boys buying shares and then destroying them to take the silver out. If these ETFs have about a billion ounces, and you are running at a few hundred million ounces of deficit per year – it would be interesting to watch outflows of these ETFs are large companies buy up shares and then take silver out of them. In this scenario, you can potentially see the ETFs drained by 2030 with a deficit of 500m oz per year and mine supply hopelessly behind with refineries maybe going from 200m now to 300m then. This has a potential for a hockey stick move up – with no hope of filling that gap.
Threats to $300 silver?
There’s a few things that bother me about the silver industry. Many don’t realize how bad this supply/demand fundamental is. You have someone point to a chart and show you that there’s 25b in jewelry and candlesticks available, but these guys also fail to mention we can only process 200m of those oz a year, and the funny thing is we are creating more NEW jewelry and silverware per year than we recycle (scrap).
So as we are expecting significant increases in EVs and solar over the next 9 years, our recycling, which mostly comes from old jewelry, silverware, and photography, cannot even keep up with the new silverware, jewelry, and photography needs. Let that sink in. As mining grades of ore are far lower and life of mines deteriorate with lack of exploration and development projects in the pipeline to replace it.
Now, if we are to see $300 silver, wouldn’t miners be the best thing ever to invest in? Yes – for a time. My biggest concerns are below:
- Mine nationalization. I don’t think is as big of a threat as others, but no doubt in some countries as you see silver hit $100 per ounce, you may see nationalization of resources. Especially with global conditions and supply chains today. If I own a miner in one of these countries, I’m screwed. I might be out of miners at $75 not because I don’t like them, but because there’s a risk I’m very concerned about.
- Mine taxation/royalties. At $50 silver or higher, you may start to see countries add taxes to these mining companies. New projects may require royalties to the governments, further impeding profits and harming miners’ ability to profit. I think most countries will not nationalize, as they don’t know shit about mining, but I can see them taxing the hell out of them. This is a threat to profitability to miners
But I’m also concerned with the path to $300 silver. What we saw during silversqueeze is they change the rules in the middle of the game. Something that concerns me is ETFs scooping up all of the 1,000 oz bars. To me, this makes sense if I want to invest. Buy something like this, knowing you are directly affecting supply. But this is also a strategic mineral, which is in thousands of products. Each solar panel as 20g of silver. So if silver went up 10x in costs, what would that do to the costs of solar panels?
To me, it makes sense for a price to rise, substantially, during times of supply issues. However, big bankers don’t think like you and me. I think they first thing they do is paint ETFs as some sort of monopoly on silver, and because of these things, silver is artificially high at $75. Nevermind they have to invest there because paper silver scams are worthless and you do not allow mints to get the proper amount of silver. To me – I see them at some point dissolving the ETFs. De-listing from NYSE or the like. If you bought silver at $25 and your silver ETF at $75 has you making a pretty penny – think again. If they have to take 1b oz and flood the market in a week with liquidation, that could be $4 silver overnight.
This would punish those investing while giving industry and banks access to all of those bars at 90% discount. I love PSLV, but do not underestimate how bankers want to steal from you. This is also why I have Kinesis, because I feel in a scenario like this, I may be able to then “mint” silver at $4 an ounce into Kinesis. Meaning, my PSLV holdings may go to shit overnight, but this could allow my dollars to buy silver cheap in Kinesis. This may also send my miners to virtually nothing overnight if they flood the market with 1b oz of silver.
At issue here is this – many like myself will buy up all we can, and that $4 will be back to $20 in no time as this is gobbled up by banks, industry, and savvy private investors. The underlying problem of the supply/and demand was only kicked down the road a few years, it wasn’t solved. And when that billion ounces is chewed through in 3-5 years, there’s zero buffer. This is when the metal goes hockey stick on its own.
Lastly, I worry a lot about taxes/VATs on PMs here in this country, along with “wealth” taxes and the concepts of FedCoin which might not really permit the buying and selling of PMs by individuals. If you spend the next 9 years stacking, and a FedCoin comes into existence, they can simply say you cannot exchange gold or silver for FedCoin, period. End of sentence, and anyone doing so faces prison time. Cash will be banned. To me, this will lead to a lot of internal problems in countries where leaders may be replaced either with elections or other ways I cannot discuss here. If you one day try and strip the wealth of millions of people, bad things can happen. They may require you to have a license for manufacturing to buy silver for the making of jewelry or industrial uses, meaning investment demand goes to zero.
Don’t put anything past those in power. It might sound tinfoil hat, but remember, owning gold bullion in this country for 40 years was illegal. What makes you think they would not use emergency powers to do the same thing now?
So, I see a road to $100 happening in the next 1-3 years based on the above. Maybe out to 2026. I feel pretty solid to get there. But things start to get sketchy after that going to 2030 and there’s a lot of dangers I discussed above which may prevent you or I from ever benefitting from a $300 silver price. A move back to $50 from COMEX shorting to back test, high taxes on miners, and articles start coming out about PSLV hoarding silver may threaten your investments. Confiscation threats. No one can nail this prediction 100%. However, what people CAN point out are conditions that COULD lead to $300 silver and then point out conditions that could be speed bumps on the way there. You make the play for the $300 silver – and navigate the risks along the way. There is no doubt to me that conditions ARE there for $300 silver by 2030. However, there are a lot of threats as well that could cost you dearly.
I think for most reading this, buying a few ounces a week and tucking away and not worrying about $300 silver is the best thing to focus on. Diversify how you hold silver. Put some at home, some in a vault, some in PSLV, some in Kinesis. These people are trying to take your wealth. Don’t put it all in one place.
Don’t make it easy for them.