Hypocrisy in anything whatever may deceive the cleverest and most penetrating man, but the least wide-awake of children recognizes it and is revolted by it, however ingeniously it may be disguised. – Count Leo Tolstoy 1828-1910, Russian Novelist, Philosopher
SLV Stock Price & The Move Into Hard Assets
Updated Dec 2022
The Move Into Hard Assets is gaining traction. China is aggressively jumping to hard assets again, they are seeking to unwind their position in the US dollar or at the very least hedge themselves against the upcoming hyperinflationary phase that is going to hit the entire world in the not too very distant future. Their move into copper and sugar clearly illustrates that this is the beginning of a trend and that many cash-rich nations (Japan, Russia, several countries in the Middle East, etc) will soon follow China’s lead.
One of the reasons for the rise in the price of copper is all but obvious; this reason is known as the China factor. Now that prices are so low, they are busy stockpiling this red metal, in addition they know that hyperinflation is about to hit the United States and the rest of the world, for the most part, and so they are busy buying up hard assets in an attempt to at least redeploy part of their vast foreign currency reserves. In the first two months of 2009, China’s copper imports were up 71% in comparison to those of last year. Most of this buying is to add to the stockpile of the State Reserve Bureau (SRB) which is now in the process of securing 2% of the worlds copper output or 300,000 tonnes.
Copper Targets Aug 2019
Copper needs to close above 2.90 on a monthly basis if it can achieve that there is no resistance until 3.30, so future trades could make quite a bit of money if copper manages to close above this key level. Taking a longer-term view, copper could trade as high as 5.50 before it puts in a long term top. In order to achieve this, it should not close below 3.30 after it tests the 3.90 ranges.
Copper ETF Outlook
JJC needs to close above 42.o0 on a monthly basis to indicate a bottom is close at hand. A monthly close above 42.00 will indicate it is ready to challenge the 51 ranges.
China Wants SDRs to replace the Dollar as the Global Reserve Currency
Actions speak louder than words. Less than a week after he wrote an article proposing that the dollar be replaced as the world’s international reserve currency, Zhou Xiaochuan, China’s central bank governor, signed off on a $10.2 billion currency swap with Argentina. Under the terms of the deal, China will receive renminbi instead of dollars for its exports to Latin America. An Associated Press report notes that Beijing has signed “similar deals to bypass the U.S. currency with South Korea, Malaysia, Belarus and Indonesia.” Such swaps — all signed since December — add up to more than $95 billion
China’s views are starting to gain support. Russian President Dmitry Medvedev has called upon the G-20 leaders to explore alternatives to the dollar as a reserve currency. Not to be outdone by the Chinese, Venezuelan President Hugo Chavez has called for the creation of a “new oil-backed currency to challenge the U.S. dollar.” Chavez sought support for his proposal this week from among the Arab states at a conference of Arab and Latin American countries in Doha, Qatar. Full story
Conclusion
Investors would be wise to hedge themselves by deploying some of their money into hard assets such as oil, Gold, Silver, Timber, natural gas etc.
Relevant ETF’s
Gold = GLD
Silver = SLV
Natural Gas = UNG
Oil = USO
SLV Stock Price Targets, Aug 2019 Update
A monthly close above 15.50 should lead to a test of the 18.00 to 21 ranges with a strong chance of overshooting to the 24.00 ranges. Those looking for more leverage could get into leveraged ETFs such as USLV and AGQ.
Imagine believing in the control of inflation by curbing the money supply! That is like deciding to stop your dog fouling the sidewalk by plugging up its rear end. It is highly unlikely to succeed, but if it does it kills the hound. – Michael D. Stephens
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