The Historic Dow Jones-Silver Ratio Points To $300 Silver

srsroccoreport.com / May 5, 2016

That’s correct.  Going by the historic Dow Jones-Silver ratio, it points to $300 silver.  This may seem outlandish or a play on hype, but it isn’t.  While many precious metals analysts have forecasted high three-digit silver prices, I didn’t pay much attention to them.  However, after I looked over all the data, $300 silver is not a crazy figure at all.

Let me explain.  The U.S. economy suffered a fatal blow in the 1970’s as its domestic oil production peaked and inflation soared.  To protect against the ravages of inflation, investors moved into gold and silver in a big way.  Yes, it’s true that the Hunt’s bought a lot of silver during the 1970’s, but who was buying gold to push its price to $850 in 1980 versus $35 in 1970.  Furthermore, who was buying all the oil to push its price up to $36 in 1980 from $1.80 in 1970??

As U.S. oil production and the EROI- Energy Returned On Invested continued to decline in the following decades, the American economy transitioned away from its high-paying manufacturing economy to what I call a LEECH & SPEND SERVICE ECONOMY.  Thus, each new decade brought about a new bubble to keep the facade of a growing economy alive.

We had the Department of Defense Military spending Bubble in the 1980’s, the Tech Bubble of the 1990’s, the Housing Bubble of the 2000’s and now we have the Auto, Housing, College, HealthCare, Stock Market, Retirement and U.S. Treasury Bubble.  The present highly-leveraged bubble will end all bubbles.

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