All else being equal, I project silver through 2015 to be: * Flat in USD with regular ups and downs of around 10% and maybe the occasional spike that will revert * Up in AUD as the Australian economy weakens and the AUD falls against the USD In 2015, without any Blackswan event, we will see: * Flat industrial demand * Flattish overall production output * No significant inflation * The US economy will continue to show slight growth * Western governments will continue to tighten their fist around the liberties of citizens * Incumbent corporate/government interests will obstruct competition and innovation to protect entrenched business models * Free trade partnership agreements will crush the potential of less powerful nations * No significant growth overall But! None of this will hold if there is a major economic or other crisis: * Can global markets continue without incident for another year? * What will happen with Russia? * Will China's massive stock market boom end in tears? * Will a major natural disaster throw the markets into chaos? * Will the complex interconnections and feedback amongst the global economic system turn a small hiccup into a runaway disaster? Of course, this is all just a guess and I could change my mind in light of new information. It will be interesting to revisit this projection at the end of 2015.
The buts are big with serious consequences and I think we're all prepared to various degrees just by owning silver and gold. The risk is that some people aren't prepared to hold for another year if nothing much changes. Patience is a virtue in stacking.
So we can look back, I am going to agree with a JP projection that silver will average $18.25 in 2015. As a percentage, that would be a pretty good year.
I'm looking at the USD vs AUD exchange rate. Further falls in commodity prices such as iron ore and copper will affect the AUD and of course if, just if.... Yellen does raise interest rates by a 1/4% in the second half of 2015 the AUD may drop under 80. BHP have already said they are in takeover mode and will also continue to produce more copper so if BHP is getting prepared for price improvements in a few years, other miners may follow suit. I see major take-overs in the gold and copper sectors with BHP, Rio, and Newmont leading the charge. Some of our miners are going to do ok if the AUD stays low and of course some of the smaller miners like Unity have hedged some of their production. So what does it all mean to me? I don't see a lack of silver by-product. I see consolidation in the mining sector. I see tighter lending criteria for commodity spec stocks and juniors. I see cheaper energy for miners. I see a labour market where mining companies can pick and choose the best staff. And, I see a very bright future for gold, silver and platinum in the coming years. My gut feeling says...only the cartel knows where they will drive the paper-market. If they drive spot lower and I think they will, there's going to be a lot of tension in the mining industry and the flow on effect for many countries could spark more currencies to crash just as we have seen the rouble. Like it not, the cartel has the power to inflate a BS DOW, break, mining companies, smash countries currency and totally screw their GDP's. Owning a bit of gold, silver or platinum might just help your portfolio but...as we have seen in Russia and Greece, there's no point owning precious metal after the crash of a currency, you need to have it before. Its tricky to balance the trend of precious metal (PM) up or down plus the exchange rate and your own personal goals and experience. For me...I'll buy when I think the spot price has bottomed and the FOREX is suitable. I see lower spot and a higher USD.
I expect the prices to drop, as the interest rates in the US rise and other investments become more attractive. My bottom price is $10 by Christmas 2015. Anything below $12 is a good buy. I expect the prices to rise in the years to come. Anything below $15 makes sense, if you have a longer time frame.
And if there is a financial crash soon silver will skyrocket and many people would have missed the boat.
Or they may not have enough silver to really benefit from any financial crash. Sure, they will get a good return no matter how much they have, but 100oz is probably not going to make you rich enough to live a Russian Tzar.
"if" Its about your risk appetite. I've been ramping up my purchases in recent months because I think the risk level has increased significantly. But as I explained in the original post, all else being equal, expect flat silver through 2015. Of course, if you look at what is happening in the world at the moment, there could be a major event sooner rather than later that blows everything out of the water. Maybe even over Christmas. None of us can know for sure, but I think its worthwhile being prepared in whatever way you think is best - holding cash, moving cash to physical, etc. If nothing happens you can always get back into fiat without too much of a loss (I hope) if you really want. But there's no guarantee anything will happen at all, and as I said, everything else being equal, silver should remain relatively flat. I'm still stacking though.
Depends on your objective. Many stack not to get rich but to lose less than if they held fiat. 100oz is better than nothing and not everyone can afford a big stack.
