Clean AB=CD call on the June low. Agree $69 to $70 is the wall, and Friday showed why it needs a daily close, not a wick: silver tagged $71 and closed back at $66. On Warsh, balanced or not, the yields moved. The 10-year real yield rose 2.34 to 2.42 on the day. That's the real headwind. The tell now is the miners, holding their line while both metals gave back their first level.
The headwind from rising real interest rates may be limited, comparing the 10 year real interest rate with Silver futures (price corr: -0.06 / %corr:0.16, over the past 4 years). Any effect from yields may be limited; supply and demand may be more important to watch here.
Fair point, and the data backs you: over a full 4-year sample the silver/real-yield correlation is weak, and supply and demand dominate the multi-year story. I'd only refine it this way: that low full-sample number averages the many days yields don't matter with the few shock days when they do, so it hides a conditional relationship. Friday was one of those shock days, the real-yield jump was the proximate trigger for the intraday reversal. But you're right on the bigger point, yields are an episodic catalyst, not the cause. The cause is the debasement and deficit story, and that's what decides where silver ends up. We're saying the same thing from two ends.
I don't think we're on the same page. Let's get the facts straight. The cause is not the debasement, as the correlation between M2 (Money supply) and silver over the last four years is only a meaningless 0.04. If a currency is devalued, all hard assets should rise uniformly, which they don't. Last Friday's reversal is probably due to paper-driven trading panic in silver, typically driven by algorithmic trading and margin calls. When real yields increase structurally, you may find that institutional investors will likely flee into government debt, since holding silver pays no interest. The simple fact remains that demand is high due to a lack of supply (since the vaults have been emptied); demand for industrial tech remains high (an 8-9% annual increase), and mining cannot keep up. Scarcity, not the printing press, is setting the price floor.
Friday does look paper-driven, algos and margin calls into a thin tape. And the scarcity floor is real: emptied vaults plus 8-9% industrial growth against supply that can't scale is the strongest part of the case. Where I'd push back gently: M2 is a narrow proxy, and it shrank in 2022-23 while gold rose, so a four-year 0.04 is almost baked in. Debasement is fiscal deficits and real-rate suppression, not money supply alone, and it never implied hard assets rise uniformly.
But we don't need to settle the cause to agree on the trade: scarcity sets the floor, monetary demand the ceiling, both can be true. My job is the levels either way.
Let's agree to disagree. Next time, please, as per my rule, do not use AI-generated content. If you cannot rely on your own knowledge and expertise, please refrain from further comments. We can all do without the AI slob.
Fair enough on agreeing to disagree. One clarification, since it matters to me: English isn't my first or even second language, so I use a tool to translate and tighten my writing. But the analysis, the framework, the levels and the reasoning are entirely my own, built over +20 years and published under my own name. The words get help. The thinking doesn't. I'll leave the debate there, no hard feelings, I've enjoyed the exchange.
Clean AB=CD call on the June low. Agree $69 to $70 is the wall, and Friday showed why it needs a daily close, not a wick: silver tagged $71 and closed back at $66. On Warsh, balanced or not, the yields moved. The 10-year real yield rose 2.34 to 2.42 on the day. That's the real headwind. The tell now is the miners, holding their line while both metals gave back their first level.
The headwind from rising real interest rates may be limited, comparing the 10 year real interest rate with Silver futures (price corr: -0.06 / %corr:0.16, over the past 4 years). Any effect from yields may be limited; supply and demand may be more important to watch here.
Fair point, and the data backs you: over a full 4-year sample the silver/real-yield correlation is weak, and supply and demand dominate the multi-year story. I'd only refine it this way: that low full-sample number averages the many days yields don't matter with the few shock days when they do, so it hides a conditional relationship. Friday was one of those shock days, the real-yield jump was the proximate trigger for the intraday reversal. But you're right on the bigger point, yields are an episodic catalyst, not the cause. The cause is the debasement and deficit story, and that's what decides where silver ends up. We're saying the same thing from two ends.
I don't think we're on the same page. Let's get the facts straight. The cause is not the debasement, as the correlation between M2 (Money supply) and silver over the last four years is only a meaningless 0.04. If a currency is devalued, all hard assets should rise uniformly, which they don't. Last Friday's reversal is probably due to paper-driven trading panic in silver, typically driven by algorithmic trading and margin calls. When real yields increase structurally, you may find that institutional investors will likely flee into government debt, since holding silver pays no interest. The simple fact remains that demand is high due to a lack of supply (since the vaults have been emptied); demand for industrial tech remains high (an 8-9% annual increase), and mining cannot keep up. Scarcity, not the printing press, is setting the price floor.
Friday does look paper-driven, algos and margin calls into a thin tape. And the scarcity floor is real: emptied vaults plus 8-9% industrial growth against supply that can't scale is the strongest part of the case. Where I'd push back gently: M2 is a narrow proxy, and it shrank in 2022-23 while gold rose, so a four-year 0.04 is almost baked in. Debasement is fiscal deficits and real-rate suppression, not money supply alone, and it never implied hard assets rise uniformly.
But we don't need to settle the cause to agree on the trade: scarcity sets the floor, monetary demand the ceiling, both can be true. My job is the levels either way.
Let's agree to disagree. Next time, please, as per my rule, do not use AI-generated content. If you cannot rely on your own knowledge and expertise, please refrain from further comments. We can all do without the AI slob.
Fair enough on agreeing to disagree. One clarification, since it matters to me: English isn't my first or even second language, so I use a tool to translate and tighten my writing. But the analysis, the framework, the levels and the reasoning are entirely my own, built over +20 years and published under my own name. The words get help. The thinking doesn't. I'll leave the debate there, no hard feelings, I've enjoyed the exchange.