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Created on: 9/25/2021 3:20:38 PM Last Update: 9/25/2021 4:18:55 PM Posted by: RTT
WARNING: This entry is 551 days old. It may contain broken links, out-dated or misleading content. Please read on with caution.
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Silver during periods of Industrial Inflation
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 When industrial inflation is hotter than consumer inflation silver does well.
Previous Post: Silver, after the FED said taper talk is a long way off
In the chart below we see the relationship between silver and the yield curve and the Producer Price Inflation.
The yield curve is the US 30 yr interest rate less the Fed Funds interest rate (blue line). When the blue line is high a steep yield curve is present, and when it is low a flat yield curve is present. A steep yield curve is when longer term rates are higher than short term rates vica versa for a flat yield curve.
A steep yield curve is when the long term rates are higher than the short term rates, suggesting investors are not selling risk on assets and buying safe bonds, this is a healthy risk on environment. A flat yield curve is a period of economic concern as investors are selling risk on assets and buying safe bonds, this is when the blue line is falling and if below zero it may lead to a recession. Silver price tends to suffers during recessions.
Economic recovery is when the blue line moves from up from zero, this recovery leads to increased industrial and investor demand for silver.
POINT: Yield curve recovery leads silver price recover.
The next indicator (red line) is the industrial producer price inflation ratio to the consumer price inflation, or PPI divided by CPI, or business versus the consumer. If during a period of yield curve recovery we also have hot producer price inflation the silver price recovery is likely to be more aggressive.
Higher inflation arrives during periods of abundant money supply while suffering market constraints (or shortages). There is abundant money around (after FED printing) and COVID19 has disrupted supply chains resulting in shortages. High demand for items in short supply creates inflation.
Currently 2021 PPI is red hot versus CPI and if this persist like the periods of 1973 to 1982 and 2006 to 2014 (ex 2008 shock) silver will likely see higher prices.
POINT: Hot industrial price inflation will support higher silver prices.
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The chart below shows Gann Angles drawn from zero (see more via our previous post), these are good for price pull back analysis. They currently show an ideal place for the bulls to buy back in at a great price.
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NOTE: Posts here are the lite version, more depth on each subject can be found via our RTT Plus membership.
Changes in the world is the source of all market moves, to catch and ride the change we believe a combination
of Gann Angles,
Cycles,
Wyckoff and
Ney logic
is the best way to ride the change, after all these methods have been used successfully for 70+ years.
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NOTE: readtheticker.com does allow users to load objects and text on charts, however some annotations are by a free third party image tool named Paint.net
Investing Quote...
.."TIME is the most important factor in determining market movements and by studying the past records of the averages or individual stocks you will be able to prove for yourself that history does repeat and that by knowing the past you can tell the future.
There is a definite relation between TIME and PRICE.
Now, by a study of the TIME PERIODS and TIME CYCLES you will learn why tops and bottoms are found at certain times and why Resistance Levels are so strong at certain times and bottoms and tops hold around them.
The most money is made when fast moves and extreme fluctuations occur at the end of major cycles." ..
William D Gann
.."There is only one way to kill capitalism - by taxes, taxes, and more taxes"..
Karl Marx
.."If you have trouble imagining a 20% loss in the stock market, you shouldn't be in stocks"..
John (Jack) Bogle
..."If you don't read the newspaper, you're uninformed. If you read the newspaper, you're mis-informed."...
Mark Twain
.."Just because you’re taught that something’s right and everyone believes it’s right, it don’t make it right."..
Mark Twain
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We at readtheticker.com hold the view that a mix of stock chart technical analysis, Richard Wyckoff, William Gann and Jim Hurst methods plus market fundamentals allows the investor to formulate a very sound market opinion. These attributes are mutually inclusive and must be weighted equally before investing or trading in any Stock, ETF, Currency, Bond, Commodity, CFD or Mutual Fund
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