Redneck Review!
No. 190 - 12/10/2018
Well, you tell me what is going to happen soon!  Research tells us that the Dow Jones Industrial high for the past 52 weeks was 26,951, while the low during the same period was 23,344, with a closing price last Friday of 24,388. In  numbers easy to remember, the Dow has dropped from about 27,000 to 24,000, a significant drop to most people! So the interesting thing is, what has happened early this week and what happens next? Also, what has happened in the last year to high flying Amazon, who we are told just recently is planning more huge new dispensing complexes to provide for increased delivery of groceries and other household items?  Again, the record tells us that their 52 week high price of 2,050 has dropped to a low of 1,157, though it did close Friday at 1,626. Anyone brave enough to predict its future price over the next few months?
This column boldly claims that it had to happen!  No claim here when, but happen it must!  Several factors mentioned publicly and here the past several months virtually guaranteed the results we are seeing!  1)Huge debt!  Government and business and consumer as well!  Record setting, we are told!  Even college students are in hock over a $trillion!  And why this huge debt everywhere?  2)Near zero interest rates the last ten years have made increased debt very attractive, from high priced consumer items to increased deficit spending at the federal level!  And what has been happening this last year? The FED is  3)Slowly raising interest rates, putting more pressure on all holders of debt!  That includes Amazon who uses debt to increase company size, our government with its near trillion dollar deficits, we consumers who use debt to increase our living standards, and investors who often use debt to invest in a rising market!
And why has the FED found it necessary to inch up interest rates?  Well, 4) The looming specter of increased inflation has forced its hand!  Higher prices coming should be no surprise! More money-->Increased demand-->Higher prices! As simple as A-->B-->C! 
And what about the claim made last week, repeating claims made several times here, that precious metals is due for dramatic price increases!  True more for silver than for gold or other metals!  Why?  Again, as simple as A-->B-->C! 1) Ever since J.P. Morgan bought out Bear Stearns in 2008, some experts have claimed the silver market has been manipulated for nearly ten years, allowing Morgan Chase to make huge profits trading in silver!  Recognized silver expert Ted Butler claims the bank has never suffered a loss in its silver trade, allowing it to accumulate 800 million ounces of physical silver, suppressing price on the futures market, then buying actual silver for storage at the lower price. And evidence of this manipulation became public recently when a Morgan Chase official pled guilty of price manipulation of silver with permission of higher bank officials. 2)The ratio of gold to silver today (roughly $1250 to $14.50) is about 85 to 1, whereas the historical ratio of gold to silver is around 16 to 1.  So silver is drastically underpriced when compared to gold! 3)Whereas the amount of physical silver in the world in the late 1900's was about five times the amount of gold, the size of the reserves has flipped today, so that there is now more ounces of gold on the world market than there is of silver!  So silver is in short supply compared to gold today!  Why? 4)New uses of silver in medicine, photography, phones, and countless other electrical devices means increased use of silver in industry today! Finally 5)The current stagnant price of silver has cut production, as the cost of mining the metal has cut sharply into any potential profit made!  So silver prices are due to explode! When?  No date given here, but... sometime soon! (Hey!  For the best newsletter I have read in 50 years, call Bill Collins at 1-800-328-1860 and ask for info on this subject!)
Jake Wren

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