Transcription
The key to watch, and we've been saying this for months, when we're focused on silver and gold, the key level to watch is the bond market because we know this time around, not like 2000, 2002, which is.com bubble. Okay, fine. Simple explain overdone sector or mortgages 2007 through9, you know, this family, that family, a lot of mortgages. Okay, this time it's a government bonds.
They're the the Titanics of the world. ours the Japanese bonds UK you you name it they're all in dire straits and we know that and it's not because of just what's happening now it's been what's building up and building up and building up okay and now suddenly because of the events of the tariff versus you know the war between us and NATO and Europe and so forth uh [music] it's put our they want to dump everything you know Europeans sell all those bonds etc fine okay good they should anyway what the heck Um, but T-bonds technically we've been assessing them continually.
T-bond futures is what we look at. They're 30-year bond futures been around for decades. Okay, that does not influenced by the Fed's short-term rate cuts. In fact, they've cut rates, you know, for a period of time here. And the T-bond yields are nailed to the ceiling, high [music] prices, low. And if you slip those prices down much below where they are now, the T-bond futures price, two, three points below where they're trading now. They reached into the 113s today. Okay, I'll explain that in a minute. You could precipitate a panic where you don't just get a price drop, but you get a like a real quick couple day, oh my, you know, crash type fear. Okay, you can't have that in the bond market. It's bigger than this. It'll it stock market doesn't compare to the T-bond market. And it's not just us. It's Japan. We know that.
Uh T-bonds collapsed from 2020 to 2022. October 2022. They made a low. They dropped from 180.90 on the T-bond price down to 117. Much of that occurring in the year 2022. Okay. Since October 2022, you can draw a line sideways on the price chart or across the yields on a high level. It's gone dead, staying at those levels, either side of that 117 price level. Right now, we're actually below it. There have been three bond rally attempts in that last couple years, three years where there have been rally efforts to try to get it up off the floor, dropped the yields, and they've not taken hold. None of the rallies have worked. None of the dips and yields have sustained. They've gone right back up. Okay?
If you slip down now much below today's low by a couple points and we'll get more specific we do with our subscribers you could precipitate a what we [music] call at least a mini panic and I I know that the Fed will intervene because already in November Williams the head of the New York Fed announced or in a press conference stated that the U that the Fed was going to quote start buying bonds. Why? He said, "Oh, just because liquidity in the market needed more liquidity." Okay. Didn't say anything about the, you know, how bad they were anyway, but liquidity. Okay, fine. They've been buying bonds since November. It's evidence see. And bonds have dropped from 117, 116 and for the last couple months in the narrowest price range in T-bond futures history. Like they're dead. They can't rally, but they also don't go down. Now, suddenly today punched out that recent low in just below 115. We even got below 113 today. Now, we've got some trigger levels require a few more points, but if you do that, you could get this thing to start to puke. You cannot have that kind of event. Everything else is meaningless. If T-bonds start to go down, people go hands in the air. Okay?
And same with the central bank. Well, what's the prime beneficiary of the central banks going berserk, printing money, [music] expanding money supplies, playing games? Gold, real money. Silver, real money. And that's why today you've got this sharp down in the S&P based on the the news about the T-bonds, especially in Japan, having crashed and ours are behaving sick. Um, but gold's up sharply, silver's up even more sharply, and the miners are up. I thought the miners were supposed to go down with the stock market. Remember that, you know, sharp drop in the stock market, miners go down. Instead, they're up 3, 4%. What's going on? Okay, what's going on is reality. The question is, do we get a further sharp drop in the T-bonds like real soon? Because if that happens, you could see verticality in silver and gold like you've not seen so far in this advance. I'll pause there. and we can go on with those later on. But anyway, that that's right now we're sitting on a potential tender box that could literally unfold in days and both directions. The point is it's nailed at its ceiling. The yields haven't come down for the last several years since 2022 when they surged and yet the Fed's cut rates are on the short end. They don't control that that beast and that beast is too big to be to let go. Uh the the long end. Yeah, the the long end they can't control. Yeah.
Uh the the issue is though the speed of this event if we're entering like what Japan just experienced last night and their T-bonds, their bond market, uh which has been going up in yields and yields ongoing but now it's spiking. Uh we're starting to do if we start to do the same thing, uh-oh, that's like a nuclear event, especially for markets. And we know the central bank will go as berserk as they possibly can. They know what all kinds of tools they've had in the past. They'll use them all. They'll invent new ones. I don't know what they're going to do. [music] But they will have to panic because it's too big not to intervene. Uh the question then is our assessment of silver in particular. We think gold is and silver are going up a lot more this year. A lot more. Okay. Multiples more. Uh but silver is going to beat the pants off of gold. Silver is very depressed to gold. We all know that. It's been depressed for a long time. So, that hasn't worked. But the technicals that say it shifted into an outperform versus gold occurred in November at the close. By our metrics, we said, "Okay, game is on. Silver's going to launch versus gold. It's since it's now up to 2% of the price of gold." Early this year, last year, it was at 1% of the price of an [music] ounce of gold. So, it's doubled in relative value over a year. And if you go back in history and look at where was an ounce of silver versus an ounce of gold as a percent and let's say the 1980 bull market peak when we hit $50, that old range, okay, was at 6.5%. 6 and a half, we're at two. Okay? And in 2011 peak when we hit $50 the second time it was over 3%. We're at two. Our technicals show us that that spread relationship has broken out and we're likely. Think about this. Silver's been in a 50-year half a century dull range suppressed whatever. Gold hasn't been. Gold blows the heck out of every prior bull high. Copper is not where it was back in the 1970s, '80s, '90s, 2000. It's four times that price. Silver, for some reason, has been contained. Whether that's manipulation or a combination of events, it made a mistake. [music] And whenever markets make a mistake, they tend to compensate for it and quite often overcompensate in a tantrum. This has happened many times in markets. It's it's not usual, but it happens. Copper did it in 2005-6. Lead did it in 2007. We quadrupled in a couple quarters [music] to a new reality. If silver does that, our projection is you could see silver this year $300 to $500 an ounce. Okay.
Now, much of that should occur within the first couple quarters of that spread breakout. and much of it should occur by middle of this year in a thunderbolt [music] tantrum move. Um, this event that's going on now with T-bonds could help speed that up because it panics the central bank. And if you're an investor and you look at the horizon, what do you got? Do you want to buy the stock market? The world's selling it now. You want to buy the T-bonds? Uh-uh. What's left? What's doing well? Well, what your buddy down the street told you 6 months ago that he did and you didn't do it. You know, you buy silver instead. All we're hearing in the internet is let's short it. Let's short it. It's over. It's over. you know, uh I think this surge that we get in the immediate horizon if those T-bonds slip a bit more could take silver well past 100, which might be sort of a normal guy's expectation of where the a doubling of the old $50 high, you know, and you get a midpoint stumble in this six-month explosion, which we do expect to get a midpoint fake-out stumble. Where's it going to be? Is it going to be at a logical level or at some level it just turns people's heads like $130 bucks or something? These events that are now going on with T-bonds could precipitate that. And if they do, watch out for the Supreme Court because if those guys come in and say, "Hey, we're going to step into history here. We're not going to let you do that." Or at least try not to. Uh and create doubt about whether he can do it. In which case, oh, panic's over, right? >> [laughter] >> uh you could get a lot of volatility at that point anyway. Long silver over gold. >> So you're suggesting >> Yeah. You're you're suggesting Congress isn't going to do the right thing. So the Supreme Court >> they'd be too slow anyway. The Supreme Court could do it like they put their foot down and say, "Okay, we've already decided, you know, we got enough majority or whatever. Uh we don't want you to do that. Can't let you do that." And even if he goes to some alternate policy, which he says he's got, you know, and all this stuff, fine, good, okay, whatever. But the point is that would at least temporarily help put out the fire that we perceive to be of Europeans dumping our bonds, Europeans dumping our stocks, etc. It won't sustain a turn, but it could create that kind of, oh, fever's over. In which case, if that fever has been driving silver and gold o over the last few days, for example, uh then yeah, it might create a correction. [music] But the question is where where do you go before you get that? And I'm of the view that probably you're going to be well past 100 before you even see a correction. You could say, "Oh, there's the midpoint of the time six-month span uh where you get a wobble." [music] Uh anyway, it's an important level because people that got calls got to be concerned about that, you