SILVER To Enter 'New Reality' of $300 – $500, Shorts Will 'Get BURIED': Michael Oliver
Summary
Michael Oliver is calling for a new price reality in the silver market, and he thinks the metal is on the verge of breaking out and …
Transcript
Silver is going to enter a new price reality this year in the $300 to $500 an ounce range according to today's guest Michael Oliver. He brings his thesis to back up these claims and explains why he also believes silver miners will be a massive beneficiary in the aftermath of this major repricing event along with why those shorting the metal are likely to get buried if they try to stand in the way. And you're going to want to stick around to the end of the interview where Michael reveals the other sectors within commodities that he's seeing maximum value in right now. So, let's dive into it. Michael Oliver, great to have you back on Commodity Culture. Last time you were on this show, you made a call for $300 to $500 silver this year. That was a couple of months ago, and we've basically turned sideways since then. Are you still seeing signs that silver is set to break out here? And what are the key levels you're watching to know when it's game on for the next leg up? >> Well, without being so specific cuz we're specific with our subscribers, of course, of what numbers, but what we see in the ongoing bull trend in the monetary metals and their miners is a pause. And it's it's very brief so far. We're talking like three and a half approaching four months here if we get into the first week of next month. Uh but largely the break occurred on January 31st and February the 3rd, last day of January, first day of February. If you look at your charts, gold and silver, you'll see all of a sudden matter of hours literally it happened. Okay. Uh and then since then you can draw a line sideways up and down and fortunately we had and we applauded this when it happened and we kind of we expected it. There was a low in February. Oh, you know, God, we can't take out that low. We'll go we'll go down to $20 silver, whatever, you know, whoever you want to say. And and gold are back in the 3000s. Okay. Well, we went down on March the 23rd in both metals and swept the February price low, meaning everybody who had a sell stop there, and no doubt there were a lot of them, got stopped out. Great. You know how long silver stayed down there after breaking that major low? Two hours. Two hours. And it went vertical after that. Gold took a day or two. Okay. But basically, when you swept that major quote low, nothing happened except buyers came in. So if there was an opportunity to get a real top or a deep correction, deeper correction, that was it. And it and it got blown. It didn't work. Okay? And now we're where? Right about in the smack in the middle of that up down stuff. Now, if you look at a price chart of silver and gold, you say, "Well, I'll I'll be a believer if it goes back and makes a new high, okay? Like 120 plus silver and gold 5600." Okay? But if you look more closely at the price action, especially on silver, you'll notice that all the rallies since that January February collapse peaked just above 90. There's like four different rallies that probed up there and there was sellers, sellers, sellers, sellers. Now they've been selling four times. That fourth time was like a couple weeks ago. We traded 90 also. Okay. But they can't seem to get the downside going. All they can do is get a pullback. So it's four times. So So if I were just looking at a price chart and forget that nearly phantom $120 high because that only lasted for like hours or few days, okay? So it really wasn't like you lived up there for any time. But you look at 90 and you could see this repeated selling there. And therefore, if I were a simple price chartist, I would say, gee, you get back over 90 again by any sub, you know, couple bucks or so. I'm a believer. We're going up. Okay. Now, what we're doing at MSA is we're trying to identify via intermediate technicals, intermediate momentum trend technicals. Why not long-term? Because long-term still positive. It never went negative. It can't say buy me again because it it it hadn't said sell me. Okay. But the intermediate stuff did it broke down in that Jan Feb break and has been healing since then. Much like the price has been going sideways. The momentum has been building structures overhead. And they're much closer than silver getting back to 90 by the way. Okay. And gold has some key numbers and the miners each have some key numbers and we put them in our report and they can adjust weekly and sometimes daily. And so there's levels not too far above where you're trading now in both metals that say, "Oh, this rally is going to take hold. We're going up out of this congestion zone." Okay? And that's what we're focused on. And I think once that occurs, what's on the other side of this violent pause will be upside move that is far more dynamic and vertical than what preceded it. You know, silver went from uh last November was in the mid50s. It had just taken out the all-time $50 high. Within a couple months it was 120. You know, people were aed by that. I wasn't. I think it's gone a lot higher. There's so many factors that argue both fundamental monetary measurements, uh, silver versus gold measurements, net trend of silver dynamics and what's happened in a couple other major markets over the decades similar to what's going on with silver argue for a new reality and very suddenly. And we keep come I keep coming up with a range between three to 500 as a reasonable zone to reach and likely to reach it within let's say three months of having cleared this congestion zone. In other words, boom, it's over. You know, and no doubt the the the doubting public and others will suddenly gush in to want to join the game late in the game. That's fine. They provide the fuel. Okay. the verticality and you know I expect that uh anyway that's what I think is going to happen and I'd have no reason to change that assessment um that silver's headed for a new reality and likely will achieve it by late summer. >> I want to present a few bare cases that always come up in the comments when it in regards to silver going to the levels that you're talking about. One of them of course is the manipulation narrative. There's no way they'll let silver get to those levels and stay there. The bullion banks who are shorting the metal, the powers that be. They do not want people to realize that gold and silver are money. And so they'll stop it from happening. Now, interestingly, those same people were often the people saying when silver was at 30 that it could never go to 50, let alone go to 100. So, I but it's out there. That narrative is out there. And the second one is, well, if we go to $500 silver, then a loaf of bread will cost $20 because that will mean such an incredible debasement in fiat currency to get us there. Could you walk us through your thoughts on on those two kind of conflicting narratives? >> No, the debasement's already occurred. Uh, you don't need new debasement, although there will be because we know the government bond markets now are in trouble. >> Yes. >> In 2007 through9, we didn't have a government bond crisis. We had a mortgage crisis in 2000 to 2002. We didn't have a bond crisis. We had a dotcom bubble. Okay. This time we have the alternative asset that everybody sees is the 6040 rule. You know, 60% stocks, 40 bonds is no longer balancing your portfolio. Okay? And it's it's in fact it's it's puking. Okay? And the Fed knows this. Uh, in fact, they effectively stated such back in November when Williams, head of the New York Fed, said, "We're going to start buying bonds." Oh, not to save the market, but to provide liquidity. Okay. Nice subtle excuse. Uh, it hasn't helped. Bonds gone down anyway. Yield's gone up. Okay. And right now, the long-term bonds, talking 30-year, they're toying with yields. They haven't seen in 27 years worth of yields or so. Okay. Uh, and the same with the price charts. They're laying on the floor. Can't seem to get off of it. And we're literally, you know, one bad week away from making all-time new lows. Not all time, but the multi-deade lows in bonds, multi-deade highs and yields. And the government doesn't control this end by simply lowering rates or anything like that because they that's the 90-day stuff. Okay? So, they're not in charge. Uh, but they know they need to be and yet it's not even one of their mandates. You know, defending government bonds is not a third mandate. Yet, it is, believe me. And the Bank of Japan is has shown that. You know, they tend to be a leader in developing monetary excess. They came up with QES and, you know, head of us. And uh anyway, they're in panic mode. The prime minister there a year ago said, "We're going to print print." Wow, great. She's a free market advocate. Okay, that's cool. Uh and and now we're going to have a new Fed chair who's no doubt going to be easier than Powell. But really, that's not the issue because the Fed doesn't control things. It tries to, but it really doesn't because if it did, then there wouldn't have been stock market bare in 2020. They cut rates all the way down. Didn't help at all. 2007 to9 they cut rates even at the top that they printed the top tick in October 2007 when they cut rates in midepptember and yet the market went down and collapsed cutting rates all the way down. So they're not really in charge of JS. Okay. And so no matter who's in charge, it doesn't matter. And it doesn't matter whether quote inflation is high because really inflation is what you know what it is. It's the money growth. It's M2 chart. And that chart is an upward curving arc. So that's the reality silver's catching up to. You know, if you measure an ounce of silver in 1980 versus the quantity of M2. Woohoo. and and put it even with the money growth since then, talking 500 bucks or so. Uh, and you go back to 2011 when silver is 50 bucks. Catch up with money growth since 2011, you'd be up 300 or so. So, there's all kinds of reasons to come up with that zone. And there's others as well. The sponsor of today's episode is Arc Silver Gold Osmium. Owner Ian Everard is praised even by his competitors as one of the most honest and level-headed bullion dealers in the United States. They have some great prices. You can see some of them displayed right now on screen. Take advantage of these specials today by reaching out to Ian at 3072649441 or by email at ianarchsg.com. Make sure to tell him of course that commodity culture sent you. And now back to the interview. Now, silver obviously has been on a roller coaster ride um when it comes to price action in the runup to triple digits and now to where we are today around $78 an ounce. Looking back, I had you on the show several times and you called a lot of these moves in advance, but did anything about uh this price action surprise you at all? And and what is it telling us about how this bull cycle is different from 2011 and 1980? Well, those were confined in the 50-year box, 50-year range. You know, why why was silver confined in a 50-year range when no other metal was? Copper wasn't. Copper uh blew up out of a of a multi-deade range back in 2005 when the average price had been a buck for decades. Suddenly went to $410 within several quarters. No, not even a headline story. Lead did the same thing in 2007. It had been in a range for multiple decades. did did suddenly quadrupled in price in a matter of several quarters. No headlines. Gold, all the bull market peaks never stopped at a prior bull high. We had a $200 peak in 75. We had a 850 peak 1980. We had a 1920 peak 2011. It didn't stop at 50 bucks, 50 bucks at, you know, the same price level. But silver did, and you made the point, manipulation. Okay, fine. We know that's occurred. But there's a point at which those who try to distort reality get killed by it because ultimately reality wins. And if they're still in the way, they'll get buried. And who knows, maybe they got they were taught a lesson late last year, early this year about they can't contain this beast. And uh you know, whether they're still trying to do it, I don't know. But it didn't work before. In fact, if they if they created what we could call a market error by keeping silver too low too long in real dollar terms, whereas other assets rose like commodity, copper did, lead did, gold did, etc. Then they've distorted reality. And sometimes when a market gets distorted either too high for too long or too low for too long, what it does to compensate is is uh sheer terror. you know, just it goes very rapidly to correct the error like a rubber band breaks. Okay? And I think that's what silver's now engaged in. And I think you'll see the evidence and the result of that by late summer when we come up out of this congestion. And again, we've got trigger numbers that especially we're focused on gold. Not because gold's going to lead this. In fact, silver's beating gold over the last four, five, six months. handily beating gold and still is holding gains versus gold. Go. Silver will lead the upside, but gold has a momentum trend structure that is super hyper clear to us. And it won't take much above where we are right now, like another percent or so, and gold's going to engage through that structure. You can't see it on a price chart, but you can see it on on our intermediate trend momentum charts. It's a triple top breakout above a structure. And when we go through that, then we're going to pound the table to our subscribers and tell them, "Okay, the mama metal is saying now we're re-engaging." And I I suspect that could happen very soon. And when that happens, my bet is on the other side of that, three monthly bars later after escaping this zone, we're going to be in that zone on silver. >> Are you watching at all the the spread in the silver price between the West and China? I had Francis Hunt on the show recently. He he pointed this out and believed that it was a pretty significant development in terms of China potentially setting the real price of physical silver. Is is this all noise to you as you're you're more focused on the technicals or or are you paying attention to that? >> It's noise but it's an attribute that is part of the overall picture. In other words, it's telling you something. Now whether you can use it as a timing instrument, that's the different thing. I mean, after all, fundamentally, if you're a supply demand guy looking at silver, you say, "Well, gee, we've had a supply shortage for five years now. We're producing less than we consume." Uh, and there's no end in sight in that regard. But how come silver didn't launch until just recently, you know, late last year? Five years of this deficit ongoing, and yet it was ignored or manipulated. But either way, you know, these fundamentals are there. Yes, they are evidence. They're not necessarily invalid. It's just the problem. How do you use them as a timing mechanism? And that's that's very hard to do. >> Let's switch over to gold uh and dispel some myths because you wrote recently in momentum structural analysis, so many myths out there about how gold must drop with sharp stock market drops and also drop when rates go up. Can you walk us through why these beliefs are myths and lay out what you expect gold to do in the case of a sharp correction in the broad market and a higher interest rate environment? >> I think fear drives more than greed almost in this case where you look at a couple of examples going back 50 years or so with gold where you see a period of time where rates went up a bit and gold went down you know etc. But when you look at I don't know what these people are looking at really. They they go back to the late 70s when we had global recession. They call it global stagflation because prices went up. The Fed drove rates off the page. Short-term rates and long-term bond rates like 30-year bonds went from a yield of 7 12% to 12%. Okay, right now we're around five. Okay, so 7 and 12 to 12% vertical. Not just the Fed on the short end, but the long bond rise in rates. Gold exploded all during that time. It replicated the rise in yields. It didn't wasn't hurt by Okay. And this has happened before. There's other times when gold's had a big move and yields have gone up and it hasn't mattered. That was a particularly strong evidence. But there's too many times that's not the case. meaning I bet I could do a moonphase analysis and come up with a better correlation for gold than whether the rates are going higher or not. Okay. Uh and then with the stock markets the same story. Yes, there are times where during a ongoing bull market like 2001 to 2011 in gold, gold went up eightfold. Okay. In the middle of that move in 2008, the stock market had been going down for an entire year from 2007 to 8. Gold wasn't going down. Then in October, August, no, September, October particularly of 2008, the stock market, a year off its high, way off its price high, had what you could call a collapse month, more than 30% in one month, in weeks. In other words, gold participated. In other words, it took a break in its major uptrend. It had a huge down month in sync with the stock market. At that point, Bernani came in with a page out of the Japanese book and instituted QES in November of 2008, a year and a month off the bull high. He'd been cutting rates all the way down. It didn't work. Okay, he did QE. And if you look at what happened to stocks starting in November 2008, they collapsed through March 2009. QE didn't stop the decline. Almost two more quarters of decline. Gold during that time shot back to its highs and made new highs. Gold immediately turned on the institution uh when they instituted QE in October, but November when they instituted headed back up. So, it had an interruption and yet people think, "Oh, that was with the trend." No, it was a one-mon in sync situation in what was a longer term uptrend and a longer term bare trend because the stock market took until 2013 for the S&P to ever even get back to its 2007 high. God, gold did like, you know, eightfold move. Okay, so and yet the stock market was a wasteland. So all these correlations that people like to talk about, I think they're driven by fear. Other words, what could hurt me? Rather than the correlations that indicate, boy, if they raise rates and go berserk, if they do, uh then uh gold will go up because if I do the correlation the other way, then I'd say, oh boy, I cheer that. Okay. So the public is uh too narrow in their view and I think they're motivated more by fear than than greed. >> Now gold has been in a pretty similar position to silver recently chopping sideways since the Iran war began. I would love to get your forecast there. Do you expect a major move up this year in line with silver's path to 300? Do you think the markets will perhaps bifrocate and and operate more independently as as opposed to being correlated? No, they will be the same. And uh a lot of people like to think of silver as an industrial metal. And if you go back and study, for example, the Bloomberg commodity index going back decades and look at copper for example or oil or any of these things, they tend to move in large waves with not necessarily monthtomonth, but big move to big move with the Bloomberg. In other words, they move like a commodity. Okay? Silver doesn't. Silver moves with gold. And there are plenty plenty of times. So for example, gold made a bare low in 2015. It went down to it went up and doubled by 2020. Went from a,50 to over 2,000. Okay? And then went sideways a couple years, but it doubled in price during that same late 2015 to mid 2020. The Bloomberg went down the whole time. Commodities went down, gold was going up, silver went up with gold. Okay? So, I expect them to trend together, but I do expect gold to create something dramatic, but it won't be percentwise anything like what I expect out of silver in terms of relative performance. So, yeah, watch gold. Uh, it's a good place to be, but silver during this move to a new reality is a better place to be by far. And so are silver miners versus the gold miners. And when you plot charts, spread charts, relative performance between silver and gold, you could see that back last November, we took out a 10-year range high at very low relative levels, silver to gold, like a percent and a half area, closer to 1%. Okay. Uh heck, in two in 1980, it was 6 and a half% the price of gold. In 2011, it was 3.1. And right now, we're still under 2%. So if silver even just gained regained some of those old highs on the relative performance, it's already taken out those price highs. So why doesn't the maybe the relative performance is going to catch up as well? Then silver will double, triple, or whatever versus silver versus gold. And the same with the silver miners versus gold miners. If you plot them as a spread chart, you can see they broke out several months ago. And sure enough, since then, silver miners have actually month to month been beating the gold miners. Uh, nobody notices that, but it's it's measurable event. And I think that's where you want to be in the monetary metals. Where could gold go? I don't know. All I can say is twice before since legalizing, it had two eight-fold moves, different time spans, but both were eight-fold dimension gains from bare low to bull high. I've said this before to you on your show. And if we have another eight-fold move, we'll be $8,500 because our last low was $1,50. Now, even JP Morgan came out with a report several months ago, fundamentally based, no doubt, that argued for $9,200 gold as a as a working target. I don't think it's a target. I think it's merely, oh, I did it again. I've had another eight-fold move. Well, what's so that's nothing extraordinary. It's done it twice before. Eight-fold gain. Uh, this time we have fundamentals that are far more far more dynamic and and nuclear than any ones we've ever had before. We have a government bond crisis. Like Jamie Diamond told us two weeks ago, you got to have a government bond crisis now and you're going to have to deal. We're going to have to deal with it. And he didn't mean 10 years from now. He meant it's coming. It's now. We can't keep pushing it off. So, that's an event that the public and and financial TV really hasn't put up front as a major issue. I don't know why. That's fine. They'll figure it out later. >> Yeah. Well, I think those controlling the media probably do not want people to be aware of that for starters. But I do want to dive a little deeper into gold and silver mining stocks because if we use the SIL ETF as a proxy for silver miners, um this is something you report on regularly and look at a one-year time frame, it clocks in at around 110%, but silver is at around 128% over the same time frame. Do you think we'll eventually see uh the miners break out more versus the silver price particularly if we enter this new reality for silver the 300 to 500 range? What would that do for the silver miners? >> Probably more than silver. Yes, I agree with that. Uh and if you measure them historically like even the gold the gold and silver miners via the XAU index which has both silver and gold miners it goes back decades to the 1980s and if you look at it it's like you know 8% XAU divided into an ounce of gold. Heck, it used to live in a range for decades that oscillated with a median about 25%. It's 8%. There's a base we're breaking we're trying to break out of. In fact, XAU marginally nipped out of it a couple months ago in the recent surge and it pulled back a little bit. The relative performance readings I'm talking about divide XAU into an ounce of gold. Okay. 11-year wide range with a fairly clear ceiling. You punched up through it marginally. But when we do GDX versus gold, it didn't quite break out. It's pressing at it. It's like third time at the same level trying to get through. when we see both XAU and GDX break out on a spread basis above that 11-year wide range of relative performance at very cheap levels. At that point, we think the miners will gush not just in relative performance but in net price in a way that will shock people. Now, what might motivate the miners more than the metals when the public gets nervous about the stock market? And we think the stock market is in a topping process. We thought we would get a rally to new highs back when we were under pressure because of the quote war news. People selling that were stupid. You don't sell headline news. That doesn't top a market. Headlines come later. The real headlines like federal government debt crisis, uh, a debt collapse, private credit, and so forth. Right now, they're focused on, oh, tariffs. Well, that worked for about 2, three months if you shorted it and you got killed. Okay, tariffs didn't go away. And now the Iran thing, it hasn't gone away really. And yet the market made a low and then shot up to a new high which we expected. I suspect we're going to top out in this quarter in price S&P. And when we start to roll over in a way that tends to upset the investor and analyst, other words, get their attention because right now they're all measuring new new targets up there, you know, u and there's nothing but good news. You know, that's the environment you want when you top. You want all to be happy news. Iran war somehow melts away, civil disorder there, the revolution on the ground level, you know, etc. uh or Ukraine Russia war goes away. There's a lot of evidence that's about to happen uh because Putin is in political trouble in terms of maintaining power. there's elements within his government that you know are poed at him big time and there's a lot of foreign uh policy analyst in Europe especially and intelligence analysts who say there been you know he's been under extreme protection from parts of his the state structure that might want to overthrow him uh and he's losing the war and that's now pretty much admitted I think even she recognizes it that the Russians are not winning this for and uh once that sentiment hits Russia, the populace and the hierarchy and the government, they're going to say, "What the hell are you still doing this for? You either quit or you're gone." Okay, so that could end, too. But wouldn't it be neat to have no more world uncertainty and the market tops with all smiles and then the reality takes over? We have a government bond crisis that we've been pushing off for decades. and it's going to, you know, have massive wave effects. Uh, that's the kind of atmosphere I'm looking for. And I think it's going to occur this quarter where you make this happy high. By the way, we did a study in the weekend report, the market is not making new highs. NASDAQ 100 and the S&P are, but it's really the S&P 5 that's making new highs because when you look at the subsectors within the S&P like XLF, financial sector, industrials, healthc care, you know, you're going down the line, consumer discretionary, which is a high-risisk sector supposedly, consumer staples, all these sectors are collapsing relative to the S&P on spreadsh ignored And finally, the market got the word the S&P did and collapsed as well. But right now, we're having it really inside the market. You're not doing what you think the S&P is doing. So, but anyway, once that occurs, the average investor is going to want to do what? Well, they're not going to want to buy bonds. Uh, and he ne won't necessarily want to go buy silver futures or calls on silver. he might want to buy miners, you know, stocks, uh, especially the bigger ones. But anyway, I think that's when you may get the money flow that boosts the miners and catch up to silver and and in valuation. I want to touch on the energy space as well because I had Colonel Douglas McGregor on recently and he said that if the war in Iran continues and the straight of Hormuse remains closed, we'll likely see oil at $200 a barrel before the end of the year. From a momentum perspective, do you think that's a realistic forecast or do you see energy markets playing out differently? >> No. Um, we turned bullish on the commodity complex last October, Bloomberg. I'll get to the oil in a second. That's October. Okay. Bloomberg was 10650. It's now 140. No headlines. Oil was a late contributor to that late. It didn't break out via our long-term momentum metrics until January. Price of WTI then was $65. Okay. War didn't happen. It was late February, early March the war began. And that's when the crowd came in, the headline chasing idiots and bought oil and paid probably paid 100 bucks, 105, etc. for it, thinking it's going to go to 200. Well, it's probably going to 200, maybe three or 400 over the next year or two. But it isn't because of a stupid headline that's temporary in passing. Okay, that's not the way it works. Um, and those guys are likely to be reamed and I suspect somewhere in the next few weeks or whenever we get some obviation of this Iran thing. Uh, already it's down to 91 today. Well, almost 90 at one point today. So, I think it could go deep into the 80s. Our buy signal was 65. And any sharp pullback now you have to view as an opportunity. But what you want is a sharp pullback that flushes those headline chasers. that makes them wish they hadn't been headline chasers. You know, $20 loss in their oil position, that kind of thing. And I think therefore oil is sort of vulnerable to that kind of pullback. The commodity complex, by the way, by the time that war began, Bloomberg was already up to 120. It had already gone up big, not because of oil, but because of other components within it. So, it's a broader thing. And a lot of people are thinking, oh, the quote inflation, they don't know what inflation is. They think it's CPI or something. It's really money supply growth. But anyway, they think inflation is solely effect of oil. No, it's not. The broad commodity complex turned up. Uh oil joined in late this time. Last time around between 2020 and 2022 when the Bloomberg came off of a effectively free low in the 50s on the Bloomberg index, uh it went up to 140. And then when the war began, by the way, it peaked three weeks after it peaked. Uh three weeks after the war began in late February, Bloomberg and oil peaked and went down. Okay. Uh so war isn't always positive, but in this case, they bought oil because of that war, because of the nature of where it is and effect on oil. But no, that's a transient thing. The real reason oil will go up is simply that it's a cheap commodity. And by that I say do the following. Take a take WTI price monthtomonth. Go back 10, 20 years, plot it in a percent of what the price of the S&P is, and you'll see this collapse. It's like it's free almost compared to the S&P. Compare it to gold or silver. It's off the page cheap. Uh, in terms of the Bloomberg, it's only in the middle of the range of the last decade or so. So, it's not even at the upper end of the performance range that it's seen before relative to the Bloomberg commodity index. So oil by all kinds of metrics is simply a cheap commodity. It's even cheap compared to its own history. We had two prior peaks at 140 and 130. 2022 it was 130 and now we're you know 90. That's still cheap compared to that. Uh I think once the Iran thing goes away then the real driving forces of oil will take over. But they're not so dramatic that they create sucker buying. It'll be an ongoing process. I'm not sure how high go oil will go. But I think what will shock people is if the Iran situation sort of goes by the way and later after that, six months later, three, whatever, oil takes out those 140 $130 highs and people say, why is this doing this? Well, the main reason is the commodity complex overall, oil included, is vastly cheap to reality to any other asset. meaning the money the Fed has printed went primarily into the stock market, especially since 2009. Once that money starts to flow elsewhere and they print more to save the bonds, it goes somewhere. And if you're a smart investor, you like to buy cheap and sell high. And right now, you can see the commodity category is quite steady firm. And in fact, we ran some spread charts in the weekend to report relative performance of oil uh XLE for example, the oil sector versus the S&P uh XME, the metals and mining sector versus the S&P and uh XAU index, gold, and silver miners versus the S&P. And you compare those spread charts, which are explosive. They came out of the hole like rocket ships. They beat the pants off the S&P over the last year. and compare it to any other sector within the stock market, you can't find a better asset category to be in. And I think that's what's going to happen is the money is going to move into that which is cheap. And we're going to have a readjustment in asset class valuations. >> And where else are you seeing this sort of massive upside potential outside of precious metals and energy? um whether that's commodities or elsewhere that this this capability of for investors at the moment to buy cheap and and see these potent these prices rise dramatically. >> The grain sector looks good to make grains look good. They're not explosive. They've broken out by our metrics to indicate the start of something and they're very cheap just like oil is. Cheap compared to their own history, cheap compared to the commodity category, cheap compared to the S&P, you know, cheap versus everything. Uh cotton recently broke out, isolated, but it's still part of the complex. Copper is continuing up. Not explosive yet, but you know, it used to it went from 50 cents to a buck 50 for multiple decades. Then in 2005 shot up to 410 and by three quarters, okay? Then lived in a new reality with an average price of about three and then recently broke up above five, taking out the old highs. Now we're six and a half area we're pushing. So, you know, it's probably going to seven, eight bucks, if not a lot higher. But all these things are going up. So, there's it's a good place to be. And I don't think you're chasing late because this only just began. And this this move is likely to last several years. And so, from an investment grade point of view, I don't think you have to come in with call options or lever positions. I think you could simply establish a broad commodity based or commodity stockbased investment portfolio in that category and it's not going to be hot and frenzied at this point at least. It's just going to be glacial and later on it may get hot and frenzied. Okay. But uh right now I think it's a great place to be and I I hesitate to try to pick which is the better place. Oil sector, grain related. I I would throw a dart basically say you can pretty much throw darts at commodities and you're probably going to have winners at each each hit. Okay. uh other sectors. Uh by the way, I'd include uranium in that in that mix as well. Uranium stocks, it's had a nice pullback since its wake up bull move that occurred, you know, peaked a couple years ago, uh year or so ago. Uh I don't think it's that dynamic, but I think they're all going to go up. Some of them may be more dynamic than other components during that process, but that could rotate as well. Um trying to think of any other category. Most stock markets of the world look similar in the sense that when they if the S&P tops as we expect and shows evidence of the top in the third quarter, not this quarter. It may top this quarter but not show the evidence that people see as a top. Um other markets in the world in especially including bubble markets like the nick is a bubble market. We're a bubble market in terms of too much gain too long. Um, Europe less. So, China will likely top with us as well, but it is certainly not a bubble market. Its price is only double and a half where it was in 2009. S&P is 12fold. NASDAQ 100 like 24fold above its 2009 low. Uh, so their market is not bloated like ours. So, it may trend down with us because after all, China's part of the world economy. If the world economy goes into negative zone, then it's likely to hurt. But it isn't going to hurt like ours. Uh simply because of what we did and they didn't in terms of the stock markets. Uh but I can't find a a stock market really to be in those that are more commodity related such as you can call it a basket. The EM emerging markets should might even go up but certainly not down like the S&P. So, if I were going to play a sophisticated trade called global market neutral, million bucks in this and a million bucks, million bucks long, million bucks short, I'd short the S&P and I'd buy EM and make money on the difference. So, even if EM did go down, it's going to go down if it if it went down, it's going to go down a lot less than the S&P. So, you make a lot of money on the spread. Okay? So that would be my stock market strategy, global neutral. >> Well, momentum structural analysis is available at oliversa.com. That's going to be in the description below. Uh why don't you tell us about uh what what people can expect from that service? >> Well, we look at all four major asset categories because especially this day and age, you can't just have these blinders on and say, "I'm long, gold, and silver, and I'm gonna watch their dayto day." And that's usually a mistake, too. Don't watch dayto day. Doesn't mean jacks. Okay. uh you can get even the last three months you may look back or you will look back and say hey what a bunch of noise that was you know so too many people are impressed by what happened today not the bigger picture and so we look at the usually we focus on the the larger trend pictures the ones that matter uh and relative status of categories versus categories because that's what an investor wants to do wants to be in the the better performing asset arena uh and that is no longer the stock market. Gold and silver made that statement last year. They're the leaders now in terms of gain miners as well. Uh so anyway, it's Oliver MSA is the site and um study our we explain in pretty detail our unorthodox methodology and uh ask for some samples. >> Great. Well, I'm going to as I said put the link in the description below so people can check that out. I receive uh your letter and tons of incredible information. You put out a lot of great work. So definitely recommend people check that out. Thank you once again, Michael, for coming on the show. >> Thank you, Jesse. Thank you. >> Thank you for joining us today. Our sponsor is Arc, Silver, Gold, Osmium. They have some great prices on precious metals bullion products. They are on your screen right now. These are subject to change and while supplies last. So reach out to owner Ian Everard today at 3072649441 or by email at ianarchsg.com and make sure to tell him that commodity culture sent you. And I'll see you guys in the next episode. Commodity culture is a series on commodities and natural resources. If you would like to see more, be sure to subscribe and hit the bell notification so you're always up tod date with the latest episodes.
SILVER To Enter 'New Reality' of $300 – $500, Shorts Will 'Get BURIED': Michael Oliver
Summary
Michael Oliver is calling for a new price reality in the silver market, and he thinks the metal is on the verge of breaking out and …Transcript
Silver is going to enter a new price reality this year in the $300 to $500 an ounce range according to today's guest Michael Oliver. He brings his thesis to back up these claims and explains why he also believes silver miners will be a massive beneficiary in the aftermath of this major repricing event along with why those shorting the metal are likely to get buried if they try to stand in the way. And you're going to want to stick around to the end of the interview where Michael reveals the other sectors within commodities that he's seeing maximum value in right now. So, let's dive into it. Michael Oliver, great to have you back on Commodity Culture. Last time you were on this show, you made a call for $300 to $500 silver this year. That was a couple of months ago, and we've basically turned sideways since then. Are you still seeing signs that silver is set to break out here? And what are the key levels you're watching to know when it's game on for the next leg up? >> Well, without being so specific cuz we're specific with our subscribers, of course, of what numbers, but what we see in the ongoing bull trend in the monetary metals and their miners is a pause. And it's it's very brief so far. We're talking like three and a half approaching four months here if we get into the first week of next month. Uh but largely the break occurred on January 31st and February the 3rd, last day of January, first day of February. If you look at your charts, gold and silver, you'll see all of a sudden matter of hours literally it happened. Okay. Uh and then since then you can draw a line sideways up and down and fortunately we had and we applauded this when it happened and we kind of we expected it. There was a low in February. Oh, you know, God, we can't take out that low. We'll go we'll go down to $20 silver, whatever, you know, whoever you want to say. And and gold are back in the 3000s. Okay. Well, we went down on March the 23rd in both metals and swept the February price low, meaning everybody who had a sell stop there, and no doubt there were a lot of them, got stopped out. Great. You know how long silver stayed down there after breaking that major low? Two hours. Two hours. And it went vertical after that. Gold took a day or two. Okay. But basically, when you swept that major quote low, nothing happened except buyers came in. So if there was an opportunity to get a real top or a deep correction, deeper correction, that was it. And it and it got blown. It didn't work. Okay? And now we're where? Right about in the smack in the middle of that up down stuff. Now, if you look at a price chart of silver and gold, you say, "Well, I'll I'll be a believer if it goes back and makes a new high, okay? Like 120 plus silver and gold 5600." Okay? But if you look more closely at the price action, especially on silver, you'll notice that all the rallies since that January February collapse peaked just above 90. There's like four different rallies that probed up there and there was sellers, sellers, sellers, sellers. Now they've been selling four times. That fourth time was like a couple weeks ago. We traded 90 also. Okay. But they can't seem to get the downside going. All they can do is get a pullback. So it's four times. So So if I were just looking at a price chart and forget that nearly phantom $120 high because that only lasted for like hours or few days, okay? So it really wasn't like you lived up there for any time. But you look at 90 and you could see this repeated selling there. And therefore, if I were a simple price chartist, I would say, gee, you get back over 90 again by any sub, you know, couple bucks or so. I'm a believer. We're going up. Okay. Now, what we're doing at MSA is we're trying to identify via intermediate technicals, intermediate momentum trend technicals. Why not long-term? Because long-term still positive. It never went negative. It can't say buy me again because it it it hadn't said sell me. Okay. But the intermediate stuff did it broke down in that Jan Feb break and has been healing since then. Much like the price has been going sideways. The momentum has been building structures overhead. And they're much closer than silver getting back to 90 by the way. Okay. And gold has some key numbers and the miners each have some key numbers and we put them in our report and they can adjust weekly and sometimes daily. And so there's levels not too far above where you're trading now in both metals that say, "Oh, this rally is going to take hold. We're going up out of this congestion zone." Okay? And that's what we're focused on. And I think once that occurs, what's on the other side of this violent pause will be upside move that is far more dynamic and vertical than what preceded it. You know, silver went from uh last November was in the mid50s. It had just taken out the all-time $50 high. Within a couple months it was 120. You know, people were aed by that. I wasn't. I think it's gone a lot higher. There's so many factors that argue both fundamental monetary measurements, uh, silver versus gold measurements, net trend of silver dynamics and what's happened in a couple other major markets over the decades similar to what's going on with silver argue for a new reality and very suddenly. And we keep come I keep coming up with a range between three to 500 as a reasonable zone to reach and likely to reach it within let's say three months of having cleared this congestion zone. In other words, boom, it's over. You know, and no doubt the the the doubting public and others will suddenly gush in to want to join the game late in the game. That's fine. They provide the fuel. Okay. the verticality and you know I expect that uh anyway that's what I think is going to happen and I'd have no reason to change that assessment um that silver's headed for a new reality and likely will achieve it by late summer. >> I want to present a few bare cases that always come up in the comments when it in regards to silver going to the levels that you're talking about. One of them of course is the manipulation narrative. There's no way they'll let silver get to those levels and stay there. The bullion banks who are shorting the metal, the powers that be. They do not want people to realize that gold and silver are money. And so they'll stop it from happening. Now, interestingly, those same people were often the people saying when silver was at 30 that it could never go to 50, let alone go to 100. So, I but it's out there. That narrative is out there. And the second one is, well, if we go to $500 silver, then a loaf of bread will cost $20 because that will mean such an incredible debasement in fiat currency to get us there. Could you walk us through your thoughts on on those two kind of conflicting narratives? >> No, the debasement's already occurred. Uh, you don't need new debasement, although there will be because we know the government bond markets now are in trouble. >> Yes. >> In 2007 through9, we didn't have a government bond crisis. We had a mortgage crisis in 2000 to 2002. We didn't have a bond crisis. We had a dotcom bubble. Okay. This time we have the alternative asset that everybody sees is the 6040 rule. You know, 60% stocks, 40 bonds is no longer balancing your portfolio. Okay? And it's it's in fact it's it's puking. Okay? And the Fed knows this. Uh, in fact, they effectively stated such back in November when Williams, head of the New York Fed, said, "We're going to start buying bonds." Oh, not to save the market, but to provide liquidity. Okay. Nice subtle excuse. Uh, it hasn't helped. Bonds gone down anyway. Yield's gone up. Okay. And right now, the long-term bonds, talking 30-year, they're toying with yields. They haven't seen in 27 years worth of yields or so. Okay. Uh, and the same with the price charts. They're laying on the floor. Can't seem to get off of it. And we're literally, you know, one bad week away from making all-time new lows. Not all time, but the multi-deade lows in bonds, multi-deade highs and yields. And the government doesn't control this end by simply lowering rates or anything like that because they that's the 90-day stuff. Okay? So, they're not in charge. Uh, but they know they need to be and yet it's not even one of their mandates. You know, defending government bonds is not a third mandate. Yet, it is, believe me. And the Bank of Japan is has shown that. You know, they tend to be a leader in developing monetary excess. They came up with QES and, you know, head of us. And uh anyway, they're in panic mode. The prime minister there a year ago said, "We're going to print print." Wow, great. She's a free market advocate. Okay, that's cool. Uh and and now we're going to have a new Fed chair who's no doubt going to be easier than Powell. But really, that's not the issue because the Fed doesn't control things. It tries to, but it really doesn't because if it did, then there wouldn't have been stock market bare in 2020. They cut rates all the way down. Didn't help at all. 2007 to9 they cut rates even at the top that they printed the top tick in October 2007 when they cut rates in midepptember and yet the market went down and collapsed cutting rates all the way down. So they're not really in charge of JS. Okay. And so no matter who's in charge, it doesn't matter. And it doesn't matter whether quote inflation is high because really inflation is what you know what it is. It's the money growth. It's M2 chart. And that chart is an upward curving arc. So that's the reality silver's catching up to. You know, if you measure an ounce of silver in 1980 versus the quantity of M2. Woohoo. and and put it even with the money growth since then, talking 500 bucks or so. Uh, and you go back to 2011 when silver is 50 bucks. Catch up with money growth since 2011, you'd be up 300 or so. So, there's all kinds of reasons to come up with that zone. And there's others as well. The sponsor of today's episode is Arc Silver Gold Osmium. Owner Ian Everard is praised even by his competitors as one of the most honest and level-headed bullion dealers in the United States. They have some great prices. You can see some of them displayed right now on screen. Take advantage of these specials today by reaching out to Ian at 3072649441 or by email at ianarchsg.com. Make sure to tell him of course that commodity culture sent you. And now back to the interview. Now, silver obviously has been on a roller coaster ride um when it comes to price action in the runup to triple digits and now to where we are today around $78 an ounce. Looking back, I had you on the show several times and you called a lot of these moves in advance, but did anything about uh this price action surprise you at all? And and what is it telling us about how this bull cycle is different from 2011 and 1980? Well, those were confined in the 50-year box, 50-year range. You know, why why was silver confined in a 50-year range when no other metal was? Copper wasn't. Copper uh blew up out of a of a multi-deade range back in 2005 when the average price had been a buck for decades. Suddenly went to $410 within several quarters. No, not even a headline story. Lead did the same thing in 2007. It had been in a range for multiple decades. did did suddenly quadrupled in price in a matter of several quarters. No headlines. Gold, all the bull market peaks never stopped at a prior bull high. We had a $200 peak in 75. We had a 850 peak 1980. We had a 1920 peak 2011. It didn't stop at 50 bucks, 50 bucks at, you know, the same price level. But silver did, and you made the point, manipulation. Okay, fine. We know that's occurred. But there's a point at which those who try to distort reality get killed by it because ultimately reality wins. And if they're still in the way, they'll get buried. And who knows, maybe they got they were taught a lesson late last year, early this year about they can't contain this beast. And uh you know, whether they're still trying to do it, I don't know. But it didn't work before. In fact, if they if they created what we could call a market error by keeping silver too low too long in real dollar terms, whereas other assets rose like commodity, copper did, lead did, gold did, etc. Then they've distorted reality. And sometimes when a market gets distorted either too high for too long or too low for too long, what it does to compensate is is uh sheer terror. you know, just it goes very rapidly to correct the error like a rubber band breaks. Okay? And I think that's what silver's now engaged in. And I think you'll see the evidence and the result of that by late summer when we come up out of this congestion. And again, we've got trigger numbers that especially we're focused on gold. Not because gold's going to lead this. In fact, silver's beating gold over the last four, five, six months. handily beating gold and still is holding gains versus gold. Go. Silver will lead the upside, but gold has a momentum trend structure that is super hyper clear to us. And it won't take much above where we are right now, like another percent or so, and gold's going to engage through that structure. You can't see it on a price chart, but you can see it on on our intermediate trend momentum charts. It's a triple top breakout above a structure. And when we go through that, then we're going to pound the table to our subscribers and tell them, "Okay, the mama metal is saying now we're re-engaging." And I I suspect that could happen very soon. And when that happens, my bet is on the other side of that, three monthly bars later after escaping this zone, we're going to be in that zone on silver. >> Are you watching at all the the spread in the silver price between the West and China? I had Francis Hunt on the show recently. He he pointed this out and believed that it was a pretty significant development in terms of China potentially setting the real price of physical silver. Is is this all noise to you as you're you're more focused on the technicals or or are you paying attention to that? >> It's noise but it's an attribute that is part of the overall picture. In other words, it's telling you something. Now whether you can use it as a timing instrument, that's the different thing. I mean, after all, fundamentally, if you're a supply demand guy looking at silver, you say, "Well, gee, we've had a supply shortage for five years now. We're producing less than we consume." Uh, and there's no end in sight in that regard. But how come silver didn't launch until just recently, you know, late last year? Five years of this deficit ongoing, and yet it was ignored or manipulated. But either way, you know, these fundamentals are there. Yes, they are evidence. They're not necessarily invalid. It's just the problem. How do you use them as a timing mechanism? And that's that's very hard to do. >> Let's switch over to gold uh and dispel some myths because you wrote recently in momentum structural analysis, so many myths out there about how gold must drop with sharp stock market drops and also drop when rates go up. Can you walk us through why these beliefs are myths and lay out what you expect gold to do in the case of a sharp correction in the broad market and a higher interest rate environment? >> I think fear drives more than greed almost in this case where you look at a couple of examples going back 50 years or so with gold where you see a period of time where rates went up a bit and gold went down you know etc. But when you look at I don't know what these people are looking at really. They they go back to the late 70s when we had global recession. They call it global stagflation because prices went up. The Fed drove rates off the page. Short-term rates and long-term bond rates like 30-year bonds went from a yield of 7 12% to 12%. Okay, right now we're around five. Okay, so 7 and 12 to 12% vertical. Not just the Fed on the short end, but the long bond rise in rates. Gold exploded all during that time. It replicated the rise in yields. It didn't wasn't hurt by Okay. And this has happened before. There's other times when gold's had a big move and yields have gone up and it hasn't mattered. That was a particularly strong evidence. But there's too many times that's not the case. meaning I bet I could do a moonphase analysis and come up with a better correlation for gold than whether the rates are going higher or not. Okay. Uh and then with the stock markets the same story. Yes, there are times where during a ongoing bull market like 2001 to 2011 in gold, gold went up eightfold. Okay. In the middle of that move in 2008, the stock market had been going down for an entire year from 2007 to 8. Gold wasn't going down. Then in October, August, no, September, October particularly of 2008, the stock market, a year off its high, way off its price high, had what you could call a collapse month, more than 30% in one month, in weeks. In other words, gold participated. In other words, it took a break in its major uptrend. It had a huge down month in sync with the stock market. At that point, Bernani came in with a page out of the Japanese book and instituted QES in November of 2008, a year and a month off the bull high. He'd been cutting rates all the way down. It didn't work. Okay, he did QE. And if you look at what happened to stocks starting in November 2008, they collapsed through March 2009. QE didn't stop the decline. Almost two more quarters of decline. Gold during that time shot back to its highs and made new highs. Gold immediately turned on the institution uh when they instituted QE in October, but November when they instituted headed back up. So, it had an interruption and yet people think, "Oh, that was with the trend." No, it was a one-mon in sync situation in what was a longer term uptrend and a longer term bare trend because the stock market took until 2013 for the S&P to ever even get back to its 2007 high. God, gold did like, you know, eightfold move. Okay, so and yet the stock market was a wasteland. So all these correlations that people like to talk about, I think they're driven by fear. Other words, what could hurt me? Rather than the correlations that indicate, boy, if they raise rates and go berserk, if they do, uh then uh gold will go up because if I do the correlation the other way, then I'd say, oh boy, I cheer that. Okay. So the public is uh too narrow in their view and I think they're motivated more by fear than than greed. >> Now gold has been in a pretty similar position to silver recently chopping sideways since the Iran war began. I would love to get your forecast there. Do you expect a major move up this year in line with silver's path to 300? Do you think the markets will perhaps bifrocate and and operate more independently as as opposed to being correlated? No, they will be the same. And uh a lot of people like to think of silver as an industrial metal. And if you go back and study, for example, the Bloomberg commodity index going back decades and look at copper for example or oil or any of these things, they tend to move in large waves with not necessarily monthtomonth, but big move to big move with the Bloomberg. In other words, they move like a commodity. Okay? Silver doesn't. Silver moves with gold. And there are plenty plenty of times. So for example, gold made a bare low in 2015. It went down to it went up and doubled by 2020. Went from a,50 to over 2,000. Okay? And then went sideways a couple years, but it doubled in price during that same late 2015 to mid 2020. The Bloomberg went down the whole time. Commodities went down, gold was going up, silver went up with gold. Okay? So, I expect them to trend together, but I do expect gold to create something dramatic, but it won't be percentwise anything like what I expect out of silver in terms of relative performance. So, yeah, watch gold. Uh, it's a good place to be, but silver during this move to a new reality is a better place to be by far. And so are silver miners versus the gold miners. And when you plot charts, spread charts, relative performance between silver and gold, you could see that back last November, we took out a 10-year range high at very low relative levels, silver to gold, like a percent and a half area, closer to 1%. Okay. Uh heck, in two in 1980, it was 6 and a half% the price of gold. In 2011, it was 3.1. And right now, we're still under 2%. So if silver even just gained regained some of those old highs on the relative performance, it's already taken out those price highs. So why doesn't the maybe the relative performance is going to catch up as well? Then silver will double, triple, or whatever versus silver versus gold. And the same with the silver miners versus gold miners. If you plot them as a spread chart, you can see they broke out several months ago. And sure enough, since then, silver miners have actually month to month been beating the gold miners. Uh, nobody notices that, but it's it's measurable event. And I think that's where you want to be in the monetary metals. Where could gold go? I don't know. All I can say is twice before since legalizing, it had two eight-fold moves, different time spans, but both were eight-fold dimension gains from bare low to bull high. I've said this before to you on your show. And if we have another eight-fold move, we'll be $8,500 because our last low was $1,50. Now, even JP Morgan came out with a report several months ago, fundamentally based, no doubt, that argued for $9,200 gold as a as a working target. I don't think it's a target. I think it's merely, oh, I did it again. I've had another eight-fold move. Well, what's so that's nothing extraordinary. It's done it twice before. Eight-fold gain. Uh, this time we have fundamentals that are far more far more dynamic and and nuclear than any ones we've ever had before. We have a government bond crisis. Like Jamie Diamond told us two weeks ago, you got to have a government bond crisis now and you're going to have to deal. We're going to have to deal with it. And he didn't mean 10 years from now. He meant it's coming. It's now. We can't keep pushing it off. So, that's an event that the public and and financial TV really hasn't put up front as a major issue. I don't know why. That's fine. They'll figure it out later. >> Yeah. Well, I think those controlling the media probably do not want people to be aware of that for starters. But I do want to dive a little deeper into gold and silver mining stocks because if we use the SIL ETF as a proxy for silver miners, um this is something you report on regularly and look at a one-year time frame, it clocks in at around 110%, but silver is at around 128% over the same time frame. Do you think we'll eventually see uh the miners break out more versus the silver price particularly if we enter this new reality for silver the 300 to 500 range? What would that do for the silver miners? >> Probably more than silver. Yes, I agree with that. Uh and if you measure them historically like even the gold the gold and silver miners via the XAU index which has both silver and gold miners it goes back decades to the 1980s and if you look at it it's like you know 8% XAU divided into an ounce of gold. Heck, it used to live in a range for decades that oscillated with a median about 25%. It's 8%. There's a base we're breaking we're trying to break out of. In fact, XAU marginally nipped out of it a couple months ago in the recent surge and it pulled back a little bit. The relative performance readings I'm talking about divide XAU into an ounce of gold. Okay. 11-year wide range with a fairly clear ceiling. You punched up through it marginally. But when we do GDX versus gold, it didn't quite break out. It's pressing at it. It's like third time at the same level trying to get through. when we see both XAU and GDX break out on a spread basis above that 11-year wide range of relative performance at very cheap levels. At that point, we think the miners will gush not just in relative performance but in net price in a way that will shock people. Now, what might motivate the miners more than the metals when the public gets nervous about the stock market? And we think the stock market is in a topping process. We thought we would get a rally to new highs back when we were under pressure because of the quote war news. People selling that were stupid. You don't sell headline news. That doesn't top a market. Headlines come later. The real headlines like federal government debt crisis, uh, a debt collapse, private credit, and so forth. Right now, they're focused on, oh, tariffs. Well, that worked for about 2, three months if you shorted it and you got killed. Okay, tariffs didn't go away. And now the Iran thing, it hasn't gone away really. And yet the market made a low and then shot up to a new high which we expected. I suspect we're going to top out in this quarter in price S&P. And when we start to roll over in a way that tends to upset the investor and analyst, other words, get their attention because right now they're all measuring new new targets up there, you know, u and there's nothing but good news. You know, that's the environment you want when you top. You want all to be happy news. Iran war somehow melts away, civil disorder there, the revolution on the ground level, you know, etc. uh or Ukraine Russia war goes away. There's a lot of evidence that's about to happen uh because Putin is in political trouble in terms of maintaining power. there's elements within his government that you know are poed at him big time and there's a lot of foreign uh policy analyst in Europe especially and intelligence analysts who say there been you know he's been under extreme protection from parts of his the state structure that might want to overthrow him uh and he's losing the war and that's now pretty much admitted I think even she recognizes it that the Russians are not winning this for and uh once that sentiment hits Russia, the populace and the hierarchy and the government, they're going to say, "What the hell are you still doing this for? You either quit or you're gone." Okay, so that could end, too. But wouldn't it be neat to have no more world uncertainty and the market tops with all smiles and then the reality takes over? We have a government bond crisis that we've been pushing off for decades. and it's going to, you know, have massive wave effects. Uh, that's the kind of atmosphere I'm looking for. And I think it's going to occur this quarter where you make this happy high. By the way, we did a study in the weekend report, the market is not making new highs. NASDAQ 100 and the S&P are, but it's really the S&P 5 that's making new highs because when you look at the subsectors within the S&P like XLF, financial sector, industrials, healthc care, you know, you're going down the line, consumer discretionary, which is a high-risisk sector supposedly, consumer staples, all these sectors are collapsing relative to the S&P on spreadsh ignored And finally, the market got the word the S&P did and collapsed as well. But right now, we're having it really inside the market. You're not doing what you think the S&P is doing. So, but anyway, once that occurs, the average investor is going to want to do what? Well, they're not going to want to buy bonds. Uh, and he ne won't necessarily want to go buy silver futures or calls on silver. he might want to buy miners, you know, stocks, uh, especially the bigger ones. But anyway, I think that's when you may get the money flow that boosts the miners and catch up to silver and and in valuation. I want to touch on the energy space as well because I had Colonel Douglas McGregor on recently and he said that if the war in Iran continues and the straight of Hormuse remains closed, we'll likely see oil at $200 a barrel before the end of the year. From a momentum perspective, do you think that's a realistic forecast or do you see energy markets playing out differently? >> No. Um, we turned bullish on the commodity complex last October, Bloomberg. I'll get to the oil in a second. That's October. Okay. Bloomberg was 10650. It's now 140. No headlines. Oil was a late contributor to that late. It didn't break out via our long-term momentum metrics until January. Price of WTI then was $65. Okay. War didn't happen. It was late February, early March the war began. And that's when the crowd came in, the headline chasing idiots and bought oil and paid probably paid 100 bucks, 105, etc. for it, thinking it's going to go to 200. Well, it's probably going to 200, maybe three or 400 over the next year or two. But it isn't because of a stupid headline that's temporary in passing. Okay, that's not the way it works. Um, and those guys are likely to be reamed and I suspect somewhere in the next few weeks or whenever we get some obviation of this Iran thing. Uh, already it's down to 91 today. Well, almost 90 at one point today. So, I think it could go deep into the 80s. Our buy signal was 65. And any sharp pullback now you have to view as an opportunity. But what you want is a sharp pullback that flushes those headline chasers. that makes them wish they hadn't been headline chasers. You know, $20 loss in their oil position, that kind of thing. And I think therefore oil is sort of vulnerable to that kind of pullback. The commodity complex, by the way, by the time that war began, Bloomberg was already up to 120. It had already gone up big, not because of oil, but because of other components within it. So, it's a broader thing. And a lot of people are thinking, oh, the quote inflation, they don't know what inflation is. They think it's CPI or something. It's really money supply growth. But anyway, they think inflation is solely effect of oil. No, it's not. The broad commodity complex turned up. Uh oil joined in late this time. Last time around between 2020 and 2022 when the Bloomberg came off of a effectively free low in the 50s on the Bloomberg index, uh it went up to 140. And then when the war began, by the way, it peaked three weeks after it peaked. Uh three weeks after the war began in late February, Bloomberg and oil peaked and went down. Okay. Uh so war isn't always positive, but in this case, they bought oil because of that war, because of the nature of where it is and effect on oil. But no, that's a transient thing. The real reason oil will go up is simply that it's a cheap commodity. And by that I say do the following. Take a take WTI price monthtomonth. Go back 10, 20 years, plot it in a percent of what the price of the S&P is, and you'll see this collapse. It's like it's free almost compared to the S&P. Compare it to gold or silver. It's off the page cheap. Uh, in terms of the Bloomberg, it's only in the middle of the range of the last decade or so. So, it's not even at the upper end of the performance range that it's seen before relative to the Bloomberg commodity index. So oil by all kinds of metrics is simply a cheap commodity. It's even cheap compared to its own history. We had two prior peaks at 140 and 130. 2022 it was 130 and now we're you know 90. That's still cheap compared to that. Uh I think once the Iran thing goes away then the real driving forces of oil will take over. But they're not so dramatic that they create sucker buying. It'll be an ongoing process. I'm not sure how high go oil will go. But I think what will shock people is if the Iran situation sort of goes by the way and later after that, six months later, three, whatever, oil takes out those 140 $130 highs and people say, why is this doing this? Well, the main reason is the commodity complex overall, oil included, is vastly cheap to reality to any other asset. meaning the money the Fed has printed went primarily into the stock market, especially since 2009. Once that money starts to flow elsewhere and they print more to save the bonds, it goes somewhere. And if you're a smart investor, you like to buy cheap and sell high. And right now, you can see the commodity category is quite steady firm. And in fact, we ran some spread charts in the weekend to report relative performance of oil uh XLE for example, the oil sector versus the S&P uh XME, the metals and mining sector versus the S&P and uh XAU index, gold, and silver miners versus the S&P. And you compare those spread charts, which are explosive. They came out of the hole like rocket ships. They beat the pants off the S&P over the last year. and compare it to any other sector within the stock market, you can't find a better asset category to be in. And I think that's what's going to happen is the money is going to move into that which is cheap. And we're going to have a readjustment in asset class valuations. >> And where else are you seeing this sort of massive upside potential outside of precious metals and energy? um whether that's commodities or elsewhere that this this capability of for investors at the moment to buy cheap and and see these potent these prices rise dramatically. >> The grain sector looks good to make grains look good. They're not explosive. They've broken out by our metrics to indicate the start of something and they're very cheap just like oil is. Cheap compared to their own history, cheap compared to the commodity category, cheap compared to the S&P, you know, cheap versus everything. Uh cotton recently broke out, isolated, but it's still part of the complex. Copper is continuing up. Not explosive yet, but you know, it used to it went from 50 cents to a buck 50 for multiple decades. Then in 2005 shot up to 410 and by three quarters, okay? Then lived in a new reality with an average price of about three and then recently broke up above five, taking out the old highs. Now we're six and a half area we're pushing. So, you know, it's probably going to seven, eight bucks, if not a lot higher. But all these things are going up. So, there's it's a good place to be. And I don't think you're chasing late because this only just began. And this this move is likely to last several years. And so, from an investment grade point of view, I don't think you have to come in with call options or lever positions. I think you could simply establish a broad commodity based or commodity stockbased investment portfolio in that category and it's not going to be hot and frenzied at this point at least. It's just going to be glacial and later on it may get hot and frenzied. Okay. But uh right now I think it's a great place to be and I I hesitate to try to pick which is the better place. Oil sector, grain related. I I would throw a dart basically say you can pretty much throw darts at commodities and you're probably going to have winners at each each hit. Okay. uh other sectors. Uh by the way, I'd include uranium in that in that mix as well. Uranium stocks, it's had a nice pullback since its wake up bull move that occurred, you know, peaked a couple years ago, uh year or so ago. Uh I don't think it's that dynamic, but I think they're all going to go up. Some of them may be more dynamic than other components during that process, but that could rotate as well. Um trying to think of any other category. Most stock markets of the world look similar in the sense that when they if the S&P tops as we expect and shows evidence of the top in the third quarter, not this quarter. It may top this quarter but not show the evidence that people see as a top. Um other markets in the world in especially including bubble markets like the nick is a bubble market. We're a bubble market in terms of too much gain too long. Um, Europe less. So, China will likely top with us as well, but it is certainly not a bubble market. Its price is only double and a half where it was in 2009. S&P is 12fold. NASDAQ 100 like 24fold above its 2009 low. Uh, so their market is not bloated like ours. So, it may trend down with us because after all, China's part of the world economy. If the world economy goes into negative zone, then it's likely to hurt. But it isn't going to hurt like ours. Uh simply because of what we did and they didn't in terms of the stock markets. Uh but I can't find a a stock market really to be in those that are more commodity related such as you can call it a basket. The EM emerging markets should might even go up but certainly not down like the S&P. So, if I were going to play a sophisticated trade called global market neutral, million bucks in this and a million bucks, million bucks long, million bucks short, I'd short the S&P and I'd buy EM and make money on the difference. So, even if EM did go down, it's going to go down if it if it went down, it's going to go down a lot less than the S&P. So, you make a lot of money on the spread. Okay? So that would be my stock market strategy, global neutral. >> Well, momentum structural analysis is available at oliversa.com. That's going to be in the description below. Uh why don't you tell us about uh what what people can expect from that service? >> Well, we look at all four major asset categories because especially this day and age, you can't just have these blinders on and say, "I'm long, gold, and silver, and I'm gonna watch their dayto day." And that's usually a mistake, too. Don't watch dayto day. Doesn't mean jacks. Okay. uh you can get even the last three months you may look back or you will look back and say hey what a bunch of noise that was you know so too many people are impressed by what happened today not the bigger picture and so we look at the usually we focus on the the larger trend pictures the ones that matter uh and relative status of categories versus categories because that's what an investor wants to do wants to be in the the better performing asset arena uh and that is no longer the stock market. Gold and silver made that statement last year. They're the leaders now in terms of gain miners as well. Uh so anyway, it's Oliver MSA is the site and um study our we explain in pretty detail our unorthodox methodology and uh ask for some samples. >> Great. Well, I'm going to as I said put the link in the description below so people can check that out. I receive uh your letter and tons of incredible information. You put out a lot of great work. So definitely recommend people check that out. Thank you once again, Michael, for coming on the show. >> Thank you, Jesse. Thank you. >> Thank you for joining us today. Our sponsor is Arc, Silver, Gold, Osmium. They have some great prices on precious metals bullion products. They are on your screen right now. These are subject to change and while supplies last. So reach out to owner Ian Everard today at 3072649441 or by email at ianarchsg.com and make sure to tell him that commodity culture sent you. And I'll see you guys in the next episode. Commodity culture is a series on commodities and natural resources. If you would like to see more, be sure to subscribe and hit the bell notification so you're always up tod date with the latest episodes.