Calls for $60, $75, $100 and $140 per ounce of silver by the close of 2012 may be very reasonable ones. Several well-known analysts have placed their bets already on each of these numbers. Sign-up for my 100% FREE Alerts
Sure, $140, a quadruple from today’s $33 price seems way out there.
However, after considering the ramifications of a global financial system moving more rapidly away from the U.S. dollar (witness Iran), coupled with the no. 2 reserve currency, the euro, looking vulnerable, too, half the world’s purchasing power may be forced into gold and, by proxy, silver, whether they like it, or not.
U.S. and European financial institutions have not participated in the silver bull market. But they will—though, at much higher prices than their Asia brethren.
2012 could be the year of some shocking revelations to the mom-and-pop retail investor. The soundness (or the lack thereof) of the U.S. dollar will redirect their attention away from NDAA and other Washington nonsense as they receive a hard study on why politicians have gone mad lately. It’s about the U.S. dollar, not Iran’s nuclear capabilities or terrorism or anything other lie that may fit.
At any time, the lines outside the coin/bullion dealer could form, as a carefully orchestrated attack of the dollar by significant entities of the East could result as a weapon against U.S. military aggression in the Middle East or elsewhere. That scenario, a dollar Armageddon, comes from Jim Willie.
Sounds outlandish? Welcome to the freshman class of the Jim Willie School of analysis. When you reach your senior year of Willie’s tutelage, however, you won’t be calling him “Crazy Jim” anymore, as past graduates will gladly attest to his previously unwarranted monicker. He’s been correct on so many issues, dismissing his analysis is most likely a bad idea.
And all it would take for a Jim Willie scenario is for the U.S.DX to break below 72, with vigor. Then, all hell would break loose. The short squeeze on silver could be epic, according to James Turk, Jim Sinclair, Bill Murphy and Eric Sprott.
And anyone who’s not familiar with the huge overhang of JP Morgan paper shorts won’t understand why silver could be so explosive to the upside. To them, analysts like Willie come off as hucksters when talking about possible 4-bagger moves in a commodity (money) in a 12-month period. Willie isn’t calling for $140 silver; he’s calling for dollar destruction. Who knows how high silver will go in a coordinated attack on the dollar.
If, however, Jim Rogers of Rogers Holding is right, the mega wake up call that the U.S. “preppers” are expecting won’t come until after the election, but in 2013, instead. In which case, maybe the $60 and $75 price targets for 2012 may be more reasonable ones, as politicians furiously work overtime to push out a crisis past the election season. One of the top silver analysts of the world, David Morgan, a conservative and thoughtful analyst, falls into this camp.
Consider the U.S.DX chart, below, and glean into why all the calls for much higher prices for silver have come out since Bernanke’s FOMC statement on Wednesday, and earlier, in anticipation of the January meeting.
If the dollar retreats from its 40-month moving average, as it has since Wednesday’s FOMC meeting, the next leg down in the dollar is expected to test the 72 level as soon as this year—maybe even before the summer.
If 72 is not held, a run on the dollar to much lower levels (62?) could soar silver much higher than that 400 percent in the 30-month move we had from the third quarter of 2008 to the second quarter of 2011. Panic could ensue. From the $28 low support of December X 400 percent = $140.
A move of 400 percent in less then half the time of its previous move of that stature would imply a very significant event taking place that affects the U.S. dollar. If silver is to repeat a 400 percent return, or $140 by the end of the year, a COMEX scandal, a whopper geo-political event, a Jim Willie scenario of an attack on the U.S. dollar by a cabal of Eastern raiders, or some black swan event as a result of tensions, will be the trigger.
With the U.S. playing recklessly overseas in both geo-politics and monetary matters, anything could happen to break the U.S. dollar stranglehold. That’s when silver turns to gold. Whether David Morgan’s $60 call for silver turns out to be more accurate, or an Armageddon run on the dollar takes silver to who knows where, 2012 should be an interesting year for silver. Sign-up for my 100% FREE Alerts