Bayhorse Silver Inc V.BHS

A Golden Silver Outlook from Ivan Lo of the Equedia Letter

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From its ability to rise with a growing economy to a precious metals hedge against inflation, silver is a metal with many talents.

 

But with the advent of Bitcoin and meme stocks, it's mostly been ignored. 

 

In fact, the gold-silver ratio hit a whopping 127-to-1 last year - its highest level on record.

 

To put that into context, the last time we even came close to such a wide spread was back in the 1940s and the early nineties, when it neared 100-to-1.

 

Take a look:

 

But that was last year. 

 

Right now, we're seeing history in the making for silver.

 

For the first time in modern era, the recent rise in the price of silver wasn't the result of manipulation or institutions hoarding and trading the metal – it was because of people like you and me.

 

Thanks to the same foundations that sent Gamestop and AMC to the moon, a powerful movement of retail silver investors is beginning to form. But the biggest difference is real ownership - investors are buying and holding physical silver.

 

And I couldn't be more excited about this.

 

That's because our track record of success when it comes to silver investments has been second-to-none. Almost every silver company we've ever featured has shown our readers incredible gains.

 

But over the last few years, we haven't made many moves on silver stocks – particularly silver juniors – because we felt the price of silver was too easily manipulated by the big institutions, especially since there were very few retail participants.

 

And with the stock market ripping the way it has, it just wasn't a risk we needed to take - despite having so many silver-winning stocks in the past.

 

That's all about to change.

 

Over the last year, a specific series of events have occurred that are now shifting silver's price fundamentals to the upside.

 

And in just a bit, we're going to share a brand new silver stock with you.

 

But before we do, it's important to understand how these events are now setting up for the next silver boom.

 

The Silver Conspiracy

 

Ten years ago, I revealed how financial institutions were manipulating the price of precious metals.

 

I also revealed how most of the gold traded in the markets was highly leveraged to the true physical amount that's supposed to be backing it .

 

For example, via my Letter, The Silver Conspiracy:

 

"For years, most people have assumed that the London Bullion Market Association (LBMA), the world's largest gold market, had actual gold to back up the massive "gold deposits" at the major LBMA banks. But it doesn't.

This was confirmed during the CFTC hearings when Jeffrey Christian of the CPM Group said that the LBMA banks have approximately 100 times more gold deposits than actual gold bullion. This means that for every ounce of gold traded in these markets, 99 of them appear from thin air. Has gold and silver been converted into a fiat currency in these markets?"

 

I then suggested that the price of silver would rise because those responsible for manipulating and suppressing it would slow their efforts while being investigated.

 

This investigation began in late 2008.  

Here's a look at the price chart:

 

Shortly after the investigation was revealed, the price of silver witnessed a strong and gradual climb, reaching a high of nearly $50/oz in 2011.

Then, in 2013, after silver had "squeezed" to a high of nearly $50/oz, the CFTC finally closed down the investigation, saying it had found no wrongdoing.

 

Via Reuters:

"U.S. regulators on Wednesday closed a five-year investigation into alleged manipulation of the silver market, saying 7,000 staff hours of investigation produced no evidence of wrongdoing."

 

So, what happened after?

 

The chart says it all.

 

For the next eight years, despite the rise in the price of, well, everything, the price of silver and other precious metals remained stagnant.

That is, until last year.

 

In February 2020, it was revealed that JP Morgan was under a U.S. criminal probe for the manipulation of precious metals:

 

Via Bloomberg:

 

"U.S. authorities that accused six JPMorgan Chase & Co. employees of rigging precious-metals futures are building a criminal case against the bank itself, two people familiar with the situation said."

 

And just like the time before, look what happened to the price of silver when the investigations were revealed. 

 

This time, however, "they" got caught. 

On September 29, 2020, JP Morgan Chase was fined a record $920 million for its connection in defrauding the precious metals market.

 

Via The Justice Department:

 

"…between approximately March 2008 and August 2016, numerous traders and sales personnel on JPMorgan's precious metals desk located in New York, London, and Singapore engaged in a scheme to defraud in connection with the purchase and sale of gold, silver, platinum, and palladium futures contracts…

 

…In tens of thousands of instances, traders on the precious metals desk placed orders to buy and sell precious metals futures contracts with the intent to cancel those orders before execution, including in an attempt to profit by deceiving other market participants through injecting false and misleading information concerning the existence of genuine supply and demand for precious metals futures contracts…"

 

It doesn't take a rocket scientist to see these patterns.

 

I revealed a similar case for gold in 2019 when I revealed why the price of gold finally moved higher after so many years. If you missed that issue, go here:

 

The Real Reason Why Gold is Going Higher

 

Back to Reality?

 

As I just showed you, every time there was a government body "watching" the manipulation of silver, prices climbed.

 

Has the manipulation of the silver price stopped completely? Not likely. But I do believe it has been reigned in to a degree whereby the current price level is close to a new base – especially with more scrutiny being placed on manipulative practices.

 

Via the Justice Department:

 

"For nearly a decade, a significant number of JP Morgan traders and sales personnel openly disregarded U.S. laws that serve to protect against illegal activity in the marketplace," said Assistant Director in Charge William F. Sweeney Jr. of the FBI's New York Field Office.

 

"Today's deferred prosecution agreement, in which JP Morgan Chase and Co. agreed to pay nearly one billion dollars in penalties and victim compensation, is a stark reminder to others that allegations of this nature will be aggressively investigated and pursued."

 

More importantly, from a true supply and demand perspective, silver is really starting to shine.

 

Industrial demand is projected to post a four-year high this year, as electronics, green tech, 5G tech, and electric vehicles continue to boom - all of which require silver to do so. 

 

Heck, Biden wants to install 500 million solar panels over the next five years alone. 

 

But the biggest boom of all is what's happening with silver in the investment world. 

 

In fact, the booming physical demand for investment silver has even caused the U.S. Mint to "run out" of silver.

 

Via the U.S. Mint's Facebook Page:

 

"The Mint is being impacted by silver blank shortages among its suppliers. The demand for many of our bullion and numismatic products is at record heights and increasingly outpacing the supply of silver blanks available through our suppliers."

And while investors can still find silver stock, good luck buying it at spot price.  For example, in Canada, the price of silver is around C$32/oz. But, on average, look to pay nearly $40/oz – a whopping 25% premium over spot.   Here's T.D.'s silver round to the right, as of June 19, 2021.

 

It's no wonder Citigroup analysts have been calling for silver to hit US$40 by this October - and even as high as $100!

 

Via Forbes:

 

"The bank said it's forecast of a rise to $40/oz over the next 12-months is based on a combination of sustained strength in investor demand and a recovery in industrial consumption during 2021.

…The bank said its foreign exchange (F.X.) technical team is very bullish on silver with "$50/oz a very realistic target and $100/oz possible."

 

All of this leads to the obvious: We need more silver.

 

And not just the silver that we claim is in the ground. We need people to pull it out. That's why our current investment philosophies are geared directly towards the silver miners and those with the potential for big discoveries.

 

More importantly, we need silver miners that can pull silver out of the ground at the lowest cost possible.

 

But how many silver producers are there out there? Not many.

 

Furthermore, silver production remains flat and is expected to grow by no more than a few percentage points over the next few years - during a time when both industrial and investment demand is booming. 

 

Few discoveries have been announced in the last decade, and most silver produced now is coming from the last stages of existing mines.

 

Not only that, but the quality of silver mined is the lowest it's ever been, and like most metals, silver is rarely mined in veins now. It takes many tons of earth and rock to process even a single ounce.