The silver spot price now threatens to again pass $20 an ounce next week, now is a good time to remind ourselves about the last time we saw the spot silver prices crash and then rebound with simultaneous retail and whole silver bullion shortage.
It was during the late fall of 2008 during the Global Financial Crisis.
A quick look back to how things played out the last time the silver spot price did a 5X multiple in fiat Federal Reserve note valuation within 30 months of time (e.g. 2008 - 2011).
Back then the spot silver price bottomed with a London silver fix price of $8.88 oz on October 24, 2008.
By late November 2008, QE1 was announced. Silver ran back to the range it was trading in prior to the Global Financial Crisis only to then rocket out of its sub-20 dollar threshold in late summer 2010.
By November of 2010, QE2 was launched and silver ran past $25 oz up to $50 by late April in the following year 2011.
Now, look above at just how much tighter and faster this recent recovery has been for silver prices versus back then.
This silver spot price rebound of 2020 has occurred at more than twice the speed as the reflated QE1 version. In less than half of year's time, we have witnessed over $7 trillion in viral bailouts ongoing, the scale of this bailout dwarfs QE1&2 combined.
Silver should have plenty of upside fuel once the next breakout finally gets ripping to the upside.
Late last week, Nick Laird, the purveyor of one of the world's top precious metals price chart websites, GoldChartsRUs.com, reached out to me by email. And by chance, he confirmed exactly what I had been looking at only a day or so prior late last week.
The email he sent me was this... a yearly gold price chart covering this full fiat Federal Reserve note currency era now nearly five decades in age. We both agree it conveys tremendous power about this building gold bull.
Now please bear with me below as we foreshadow what is likely ahead for the fiat Fed Note gold price chart by looking at other major fiat currency prices for gold.
Starting with the fiat Euro.
The full fiat British pound what once was 12 troy ounces of silver is now seeing record nominal gold prices on the regular.
The once supposed safe haven full fiat Swiss franc, breakout.
Supposed resource-backed fiat currencies are not looking to resource-rich versus gold these days. Here are our Canadian neighbors to the north, and our Aussie friends down under.
Swing over the land of the rising sun, and we see a bowl breakout of epic proportions last two years of time.
Finally ending with the largest gold stackers of the world.
First, we have the Chinese fiat yuan seeing record gold price highs now on a regular basis.
Next, the Indian Rupee is off and running with record gold prices.
Now all you silver bulls out there in India, and around the world. Note the cup formation on this Indian gold rupee chart which was built from 2011 into the 2019 breakout.
Well here is how a similar cup formation is now building for silver in Indian rupee. Looks like we can expect a breakout in 2021 at this pace.
Turning back to the price of fiat Fed notes in silver 2020. When we finally get a secular bear market in the fiat Fed note's value, this silver cup should finally form too, with a likely breakout to outflow after.
In the chart below at the bottom, you can see how many 5 million ounce or more blue bar chunks have been going into SLV since QE infinity was announced on primetime TV.
Backing out to back when supposedly SLV bought their starting silver hoard from hard asset Warren Buffett's Berkshire Hathaway in 2006, we can see how unprecedented silver bullion inflows into that ETF have been of late.
Just two weeks ago we drilled into all the inflows of silver bullion going into the largest ETFs and that pace has been sustained the last 2 weeks, over 33 million ounces have inflowed since.
For a friendly reminder to our new and old viewers out there, we'll leave a link in the comments below describing some key differences between unsecured stock shares in silver derivatives like ETFs vs owning silver bullion outright.
The article published in mid-2019 illustrates the key differences between the two distinct silver plays. While the derivatives may be okay for short term swing trading, we suggest that silver bullion safety and recent premium upside arbitrage plays are why owing a core silver bullion position outright makes good recent historic sense.
Turning to the COMEX silver futures market, this chart shows us the recent and unprecedented spot versus COMEX futures market price divergences both the gold and silver markets have seen since the viral economic shutdown.
We shall see likely next week, the spot price of silver break this $20 oz barrier given where the leading edge of futures prices closed this past week. That is all for this week’s SD Bullion market update, be sure to subscribe to our free video channel for more updates ahead.
A bullion buyer years before the 2008 Global Financial Crisis, James Anderson is a grounded precious metals researcher, content creator, and physical investment grade bullion professional. He has authored several Gold & Silver Guides and has been featured on the History Channel, Zero Hedge, Gold-Eagle, Silver Seek, Value Walk and many more. You can pick up Jame's most recent, comprehensive 200+ Page book here at SD Bullion.
Given that repressed commodity values are now near 100-year low level valuations versus large US stocks, James remains convinced investors and savers should buy and maintain a prudent physical bullion position now, before more unfunded promises debase away in the coming decades.