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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 729 days old. It may contain broken links, out-dated or misleading content. Please read on with caution.
1 POST
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...
..“It cost me millions to learn that another dangerous enemy to a trader is his susceptibility to the urgings of a magnetic personality when plausibly expressed by a brilliant mind.”...
Jesse Livermore
.."We are fast approaching the stage of the ultimate inversion: the stage where the government is free to do anything it pleases, while the citizens may act only by permission"..
Ayn Rand
.."So you think money is the root of all evil? Have you ever asked what is the root of money? Money is a tool of exchange, which can't exist unless there are goods produced and men are able to produce them. Money is the material shape of the principle that men who wish to deal with one another must deal by trade and give value for value(...) Money is made possible only by the men who produce. Is this what you consider evil?"..
Ayn Rand
.."I was educated once - it took me years to get over it"..
Mark Twain
.."man exists for the achievement of his desires"..
Ayn Rand
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