What's Next For Silver?
By Jeff Nielson of Bullion Bulls Canada
NEW YORK (TheStreet) -- Back in September (with silver at $21/oz), I wrote a piece titled "Does Silver's Smooth Ride Lead Past $30?" My answer to that question at the time was "yes," with a prediction that silver would make a short-term "top" somewhere between $30 - $35/oz.
Thanks to a rude interruption when the banker-cabal launched one of their trademark ambushes of the silver market, that "smooth ride" was somewhat abbreviated early in November. Under different circumstances, I might wonder whether that man-made pause in the market was enough of a consolidation to prepare silver for yet another leg higher. Given current circumstances, however, there appears to be no doubts about silver's current status.
As I observed in that earlier commentary, this recent spike by silver duplicates a chart-pattern which had already had two previous cycles. After both of those sharp spikes, silver suffered wicked selloffs, thus those following that previous analysis may now be worried that history is about to repeat.
There are two very good reasons why silver bulls should have no fears of the previous pattern continuing to play out. To begin with, the last crash in silver -- which began at the end of the summer of 2008 -- was by no means a "natural" reaction of the market to the spike in the price of silver. Rather, as I have written often before, the "Crash of '08" was a Wall Street/U.S. government "joint effort."Wall Street was desperate to hide the fact that it, and it alone was "going down" with the crash in the U.S. housing sector, and overall economy. Meanwhile, the U.S. government had its own motive for engineering a commodities crash: postponing hyperinflation. Had that massive manipulation/intervention not taken place, there would have been no "crash" in the price of silver -- despite the sharp run-up. How can I be certain of this? This brings me to my second reason for believing there will be no crash in silver following this spike: there isn't any more silver. No, I'm not claiming that the entire crust of the earth has been scraped clean of silver. It's the "above ground" silver (i.e. global stockpiles) which has been exhausted. There hasn't been this little available silver in the world for thousands of years.
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