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 but I do believe triple digit silver is absolutely in the cards hi this is another one in the continuing series of reports from Ronnie Stovall a of incremental AG and the in gold we trust report which is an annual report they come out with that is just amazing the amount of research in it and just to give you a concept of the scale of this report the last two videos we only got up to page twenty four and now we're going to skip all the way to page 249 Silver's Silver Lining because this is the first

year that they've done an entire chapter on silver Ronnie how are you doing very well Mike how you great so I'm going to let you lead this one you know I've been asking you about certain charts just tell me what charts are most important to you in this chapter well in general if you know silver we decided to go for silver with a with a special chapter this year because silver is unloved it is unwanted that is mocked it's nobody cares about silver like nobody cared about gold one and a half or two years

ago so for a contrarian minded investor I think it's it's a fantastic time to consider exposure in silver or in silver mining companies now with the help of our great colleague Emil kalinosky we wrote this this chapter where we analyzed first of all of course the supply-demand picture of silver which is different to the gold market but then also potential drivers coming from the macro side and then of course I think one of the major parts is of course the the gold silver ratio Mike that's that's

obviously a ratio that that you are showing for many years as well and and we saw in March that this gold silver ratio it peaked at hundred and twenty-five so this means with one ounce of silver you could buy hundred and twenty-five ounces with one ounce of gold you could buy a hundred and twenty-five ounces of silver and it ever happened in we're in 5000 years it's exactly exactly so so we said okay this is you know from a contrarian point of view that's that's just an enormous opportunity so we had a

very close look at the silver market and it seems that from the supply side actually out of eight supply sources six are basically at the stage of stagnating so so they're basically on a downward path and I think that when it comes to the demand side the the demand that will really move the needle will be investors demand now Mike you know that in gold we just you know we entered this party and we can see from institutional players that they're slowly entering the gold market but institutional players they

don't care about silver yet but I think you know from from a cycle point of view at some point they will say okay well we get gold we understand it but we want a bit more you know a bit more oomph a bit more more beta and and we know that the beta of silver versus gold is is roughly 3 to 1 so if if gold moves one silver moves three times as much on the upside but also on the downside as my saw so so I think you know if if you're bullish gold then you should definitely consider silver I think silver is also some sort

of let's say a sentiment indicator on gold and we saw really maximum pessimism a couple of months ago and and now this ratio has reversed so it basically also tells us quite a lot of inflate about inflation dynamics so I think the gold silver ratio offers you a tremendous amount of information and and discounts not only the economy but also future inflation so I think this reversal in the gold silver ratio is quite telling yeah you know I'm glad though that it's still up near a hundred

I didn't buy as much as I would have liked to have but when it was up at 120 and so on but at these ratios I will not you know I read all of the news that's put on my website and all of the stuff that's happening in the world and all of the currency creation that's going on everywhere and it just makes me want to buy gold right now except I just can't allow myself to do that when silver is one 120th of the price in these instances you know I'm accumulating silver and I plan on exchanging silver

for gold at certain gold silver ratios as that ratio is falling or the silver instead of the gold silver ratio the silver gold ratio as silver is rising against gold and starting to become overvalued against gold because back in 1980 it hit 14 actually you know but we used to say 16 but you do a lot of research on it and you can find different prices on different exchanges and and so silver hitting that 14 to 1 well let's say it only goes down to 20 to 1 if you're at a hundred to one like

it is right now roughly and you buy silver now and you're able to exchange some of that for gold at twenty to one you just got five times more gold than you paid for and I love that type of leverage and personally the reason I'm doing it is because I believe that this is something that can be counted upon it's it's it's one of those things you look at the long term gold silver ratio chart I love these long-term historic charts like I said you can take a position and count on and this reversion will happen

in my mind you know I'm not guaranteeing it for anybody else but I'm taking acts based on what I believe and what I believe is that silver you know gold is undervalued compared to all the other stuff in society and silver is tragically undervalued compared to gold and so it gives you that leverage and on the way up if it's certain ratios like it forty to one I convert a little bit 30 to 120 not yeah 2020 to 1 then I'm gaining you know at at 50 to 1 you know I know it's going to 50 so if you want

twice as much gold as your pay as you're paying for you buy a silver now and when it hits 50 you convert it to gold you could just got twice as much if it goes to 25 you've got 4 times much and so on 20 is five times as much but with the gold and silver supplies that exist the above-ground stockpiles and so on do you think there's any possibility that we can go past that 14 - what do you think the gold silver ratio could hit ten to one in a rush or even even Silver's value even being better than one-tenth

of Gold's value well I cannot rule it out but but you know those those levels at the moment they seem pretty pretty optimistic but I mean you know just just have a look at the price now let's say gold at 1700 silver at 17 if we apply the 2011 ratio at 30 silver would be worth 56 today no that's that's that's a pretty nice performance if we would see the 1980 ratio yes you know 85 huh so if we would go to the 1980 ratio which was 20 this would send silver monthly to 85 if you go to a

daily you're gonna find 14 okay and so you said it was what did you say it was at 32 132 one was was 56 56 so you're talking about double that so tell us about 112 and I've been saying for ages that we're going to be and that's at $1,700 gold but we're not going to sit at 17 dollar golf 5,000 bucks is in the cards I think that's a slam-dunk 5,000 you know you got these big banks projecting 3,000 sometimes you know 2,000 3,000 those big banks are talking about shorter term moves and they always are

very conservative and they're always wrong but I think 5,000 is in the cards so if if you went at twenty to one you're talking 250 dollar silver yeah I mean we we've got a big table in the report wait we've got a big table in the report on page what is it 277 where you can see okay what gold price and what gold silver ratio we will end up with which silver price so so at a gold silver ratio of 10 and the gold price of 2400 that's 240 US dollars per ounce of silver of course and and you know we can

we can run the numbers and they make me pretty confident but what what the main reason for my confidence is first of all I I think that people underestimate the supply side they think that all the silver is coming from silver mines but that's not true because silver is mostly a by-product now it's a byproduct roughly right exactly supply right and so as all goes into an economic slowdown there's less copper being mined for plumbing and wiring for houses in China there is less zinc being

mined for casting for automotive there's less lead being mined for automotive batteries so as this world goes into this economic slowdown which was triggered by the pandemic but the the popping of these bubbles that were in were destined to burst one day anyway I think what we're going into has just been moved forward by the pandemic but we were gonna go going to go into this later this year or sometime next year these bubbles would have been bursting anyway and there would be an emergency and there would be all this

currency creation the pandemic has only magnified it and moved it closer in time you agree with all that right now of course I mean we said we're in the everything bubble and it's you know last year we already said in our report we said the US will enter recession because they almost everything but other assets that's a good pun one thing that you can find well some of the other commodities you showed that long-term chart showing that commodities were historically undervalued but yeah it's it's the

almost everything bubble and this supply thing is a very key component now silver being as highly volatile as it is and what happened in 1979 you know gold had been rising it had been outperforming silver and then in late 79 Gold had hit $400 now people need to remember that just eight years earlier seven and a half years earlier it was 35 so 400 seemed really expensive for gold how could it be $400 an ounce and so some guy you know when it when it really took off and you know it bumped its head

I think in October and went sideways for a couple of months and then took off like a rocket Gold it hit 400 and then took off to 850 in just December in January the first half of genuine and but during that rush with it at $400 an ounce a guy goes into you know the average income in the United States was was about $9,000 a year so a guy goes in rushes into the bank and gets five hundred bucks out of his savings account which was a lot of money the currency back then a lot of currency back and he

goes into the coin shop and says I want to buy gold too and the guy plops one coin in his hand and he goes oh is that all I can get how much is the silver oh well you can get this many of those for the same price as one of those and that is when the ratio takes off you know years and years ago I think it was 2006 or something I interviewed Jeff Christian of CPM group because I believed that the Hunt Brothers were not responsible for driving I'd say gold hit 50 bucks in 1980 in people oh yeah that

was the Hunt Brothers just trying to corner the market on gold and they drove it up no The Hunt Brothers were actually seriously concerned about the dollars potential demise because we almost lost the US dollar in 1980 and a lot of people almost nobody realizes that and it was Paul Volcker coming in in the commodities exchange constantly changing the rules on them trying to smash silver down I believe that that the Hunt Brothers were the scapegoats the people that were used to cap the gold price by

changing the rules to liquidation orders only on silver in January of 1980 where you could not open up a brand-new commodities contract you could only close out old ones that's a rule that says until this rule is lifted the price of silver can only go down what they were trying to do was stop golds runaway because it was in a runaway and in a runaway gold can cause fiat currencies to fail and so they had to get a handle on this this is the reason they raised interest rates so high was to get debt

outperforming inflation once again because the inflation all debt was losing value compared to inflation so you weren't making gains on bonds they were called certificates of confiscation but with gold in a runaway silver is a is a miniscule market when I did my book it was one the the trading that goes on and silver in a day compared to gold silver was one three hundredth the size of the gold market back so it's much easier to manipulate the silver market than it is the gold market and by changing the rules on silver

while gold was in a runaway and silver was also in a row but it was the it was the common man that actually caused this him changing his preference from gold to silver that caused the gold silver ratio to change and silver to just skyrocket by changing the rules to liquidation orders only there's all these people that trade both gold and silver when you go to the commodities exchange back then it was what they call pits or circles of guys screaming and doing hand signals at one another and and they're all the

silver pit is right next to the gold pit and so the ID don't you think that the gold traders are saying boy if they can do that - silver we're next and so it's time to sell gold because the very next day you know gold peaked and fell as soon as they capped silver gold peaked and fell the very next day and so I believe that and when I interviewed Jeff Christian from CPM group years and years ago you know more than a decade ago I I told him this and he goes yeah you know the Hunt Brothers added 50 maybe 75

cents at the most to the gold to the silver price and so it was really the public changing their preference and I believe that that will happen again somewhere around 3,000 to 5,000 dollars an ounce the public is going to say wow you know gold was only 250 dollars an ounce back in the year 2000 and it's hitting 5000 dollars an ounce it seems that seems awful expensive silver is still dirt cheap at 50 bucks so I'm gonna buy silver and I'd really think that there's I do think that there's

this potential that you could see even a ten to one ratio with gold at 5,000 so that's $500 silver yeah is it going to go there I don't know I don't have any idea and I don't want to you know stake my reputation and everything else on that but I do believe triple digits silver is absolutely in the cards and I believe that these things are a certainty it's those long-term charts playing out it's the public rushing toward other stuff that's popular and forgetting about gold

and especially for silver I mean it's just not in anybody's memory even though it is the most commonly used form of real money but even when you measure it against all of the currencies more stuff has been bought and sold throughout the centuries in silver than anything else and so there's going to come a day where people rush back to it will it become a predominant currency once again I don't know I doubt it but when you look at the mine supply statistics in an economic downturn like this all of that that 60%

that you're talking about that supply goes away because they stopped mining copper and zinc and wet and so just when everybody wants it is when there isn't any penny of new stuff available that I think is what's really exciting about silver and it's going to cause a super spike in silver and so we've we've got some exciting times coming this will be great yeah I mean you know as the old saying goes the cure for low prices is low prices and and and and and I think you know having a look at capex plans for

for for large base metal producers you can see that already before the whole crisis they were becoming much more conservative because nowadays with you know he is she and lots of regulation and so on it's it's it really takes a long time to to actually from from the point where you decide okay we'll open up a mind to the first production so so this can be 10 15 20 years yeah with with huge capex plans so we already saw last year that most of the companies had to to reduce their capex and now it even

got worse so at some point this will have a consequence on silver supply and and in silver price or silver production isn't sensitive to the to the mind supply because between 25 and 30 percent come from pure silver mines so so this will be one factor but I think on a demand side not only investors demand will be crucial it will also be technological demands being becoming more important because silver has fantastic attributes that you can use it in all sorts of different I just bought 50 solar panels yes

absolutely you know that volatility silver if it does go to these spectacular levels it's not going to stay there it's more volatile and when you're mentioning the sixty percent of the supply coming from as a by-product from other metals there's probably maybe a third of those that sixty percent maybe a third of it our minds that produce enough silver to wear at these very high prices they can become a primary silver producer instead of a copper producer lead producer or zinc producer or even gold producers once

once you get to these high levels if the gold silver ratio draw down to 20 or 10 at that point it becomes profitable to take a copper mine and slap a new name on it calling it a silver mine so there it when it gets down to 20 or 10 the gold silver ratio it's not going to last a long time but it's probably going to stabilize somewhere at 20 25 I mean you know you look at your long-term chart here and for your chart goes back 300 years I think and you know for the first couple hundred years it's down at

12 and 15 right that's the gold silver ratio yes yes and so that's probably where it's destined to go in and it may settle on 20 I believe there is 17 times more silver in the Earth's crust - supplies are about 12 to 1 and that is what sort of determined the natural gold silver ratios back in you know I'm making speculation here when I saw that chart I'm trying to figure out well what caused this why was it 12 to 1 for 4 centuries after century after century after century before you know you go

back to Alexander the Great tried to peg it at ten to one because it was at like I think in his area it was like 11 and a half or 13 to 1 or something like that and it lasted for a couple of years and then fell apart because the free market overwhelmed Russians law came into play you know one of the metals went out of circulation whichever metal is undervalued by the the the mandate the government's mandate ends up going out of circulation in people's spend the or the overvalued one gets hoarded and the undervalued one

gets the opposite I'm sorry but anyway this is another one of those things that you can sort of count on but you have to have patience absolutely you know that's sorry for interrupting this you know the great financial analyst X Rose he said all we need is just a little patience yeah so I I think this is exactly right yeah we need patience and it's we saw dramatic moves in the silver market but coming back to your point regarding Paul Volcker we should not forget that Paul focused job was to kill inflation he was

the man who stood up and and and I read inin in an article that there were death threats and everybody hated Paul Volcker because he raised interest rates yeah and in the u.s. and to the recession we saw high unemployment but now we have seeing exactly the opposite because the biggest concern of central bankers is that they're below there for some reason 2% inflation target so I think that that that that mr. Powell he even makes you know channel dl9 Bernanke look like look like a hawk so he's really over Davis

recently and I think at some point they will reach the 2% inflation target and they will be super happy when they reach it and when it goes slightly above it will be even more happy and they won't say okay now let's reverse monetary policy let's raise interest rates let's reduce the balance sheet and so on they won't do them and they wouldn't be able to do that i I think it's going to be a situation where they achieve that by creating massive amounts of currency while velocity is still slowing and so a

lot of that currency won't be circulating it'll be saved up it'll be hoarded and yeah when they finally see it go above 2% yeah they'll be celebrating for a very short period of time but then when velocity picks up I mean even if they don't even if they reverse course and they start liquidating or they you know when they when the Fed liquidates assets off of their balance sheet they they buy stuff they sell stuff back to the banks and the currency they get from the banks gets destroyed

and so the currency supply is reduced but there will be so much currency saved up they it won't matter they will have created so much by that point in time that we could see a hyperinflation even with a complete reversal of central bank policy around the world and because they to the central bankers these Keynesian economists they've got their theories and their databases and graphs and charts and stuff that and they're trying to follow these theories and implement these formulas and stuff and try and get

the bend the free market to their will but they forget that it is people's emotion their emotions that guide the economy the call it psychological it's it's the economy runs in waves in cycles there's also a certain logic to it and that the the logic is determined it you know emotion and logic are usually two like opposing things but in this case you can look at emotion and the swings in emotion of the public and there is a logical thing that you can derive from that and apply those thoughts to what's

happening in the market we quote a study in our report when we discuss inflation and and it's interesting that this is actually a study coming out of I think the Federal Reserve San Francisco where they analyzed how people anchored their inflation expectations and it's really interesting because it says that supermarket prices so so grocery shopping is really really important for people for their inflation expectations now what we saw over the last couple of weeks I think the grocery bills of

everybody they they were way up and and and and and I can tell you you know we're talking about inflation and deflation and this interplay that we call monetary tectonics for many years now and over the last couple of weeks we had so many requests really from from from family offices institutional investors retail investors about inflation hedges so it seems that you know inflation is really becoming a concern for people now I think when it comes to central bankers you know they're I think that the main problem

that they have is they completely underestimate the time lags so so so I think you know that their models are complex and they're they're sophisticated they don't work and I think the main reason is because of those time lags and I recently as I said at the keynote it's it's my tequila shot theory which means that you know you drink one or two tequila shots and you feel kind of good and in a good mood and and and cheered up and you have more and more and you know the party goes well

and then you wake up the next day with a complete hangover and you know the I don't know the sister of your best friend lying next to you and you don't know what happens so my wife hates this cup here is probably but you know this time lag of when you inject and and and and basically the moment when it really kicks in this is something that that central bankers just don't get and now I think at some point when when been caught when confidence comes back yeah when velocity rebounds this would be the

moment when central bankers are at this fork in the road and then they would have to decide okay you know we have to reverse monetary policy again and I'm sure that they won't do it and then of course we will get the inflation surprises on the upside and and and then I think the big question is will there be a central banker like Paul Volcker who will be able to turn it around again if we compare the sheer size of of debt levels only for government debt but also for household debt for corporations for the

financial system and so on compared to 1980 this is just a whole different ball game it will actually collapse the world economy so exactly exactly they've only got one direction they can go and that's basically to print the currency into a deathtrap themselves into what I call it a Keynesian trap they've painted themselves into a corner and you know it's like you know I also and I think maybe in my book or somewhere I talked about a Keynesian tiptoeing through a Keynesian minefield

and the minds get more and more dense as you go and now you're in a spot where no matter what direction you turn you're going to step on a mine yeah no way out of this this trap that they've created for the world economy so I want to thank you so much these this series of interviews has been absolutely wonderful it's great you know sometime this conversation was great we weren't just going over charts we were just talking and I want to do another one of these sometime where we just have a good

conversation because this to me was very exciting thank you very much thank you and for the audience we'll see you all next time thanks a lot thank you very much bye-bye