Are Nations About to Start Shifting Their Strategic Purchases to Silver?

Welcome to our newsletter, offering in-depth insights into the world of finance, investments, and precious metals. It's designed for those who want to actively manage their assets and make informed decisions in all economic conditions.

General Overview

• Oil prices have significantly risen due to the war in the Middle East. A prolonged decrease in Iranian production in the event of escalation could drive oil prices to $100 or more per barrel.
• The unemployment rate in the U.S. slightly decreased in September to 4.1%, which is 0.1 percentage points better than the previous month and just as good as economists' expectations.
• The European Union (EU) will impose tariffs on Chinese electric vehicles, which will now be up to 45% and will be valid for five years.
• The ECB is likely to lower interest rates again at its next meeting, as the decline in inflation could exceed the targeted goal of 2%.

What Are the Limits of U.S. Debt?

• As of October 1, the total U.S. debt exploded to $35.7 trillion, which is $345 billion more than on September 27.

What Are the Limits of Global Debt?

• Global debt has now surpassed $300 TRILLION and continues to rise rapidly. The increase in global debt is concerning, as both public and private debt levels are growing quickly.

In the Upcoming Period, We Will Observe Increased Liquidity in the Markets. What Will Be the Positive and Negative Consequences?

• Global liquidity is entering the next bull phase of a long-term cycle.

One of the Negative Consequences… Inflation?

• Expectations regarding inflation have steadily increased since the Fed's decision to lower interest rates. Currently, the level of past resistance has become a level of support, indicating pressure on inflation and higher living costs in the coming years.

If we add inflation to the stagnation scenario, we get “STAGFLATION.” In which investments should one diversify funds?

• This is a return table from the period of 1970–1980 that we should not be familiar with if you ask the government and money managers...
• Stagflation is an economic condition characterized by high inflation, low or negative economic growth, and high unemployment. This was a rare occurrence that surprised many economists since inflation and high unemployment typically do not occur simultaneously.
• The most pronounced stagflation occurred in the U.S. between 1973 and 1975, when global events such as the 1973 oil crisis (the Arab oil embargo) took place.
• The annual return of gold was exceptional. An investor risks or "loses" a lot if they do not have an investment in gold.

Gold Also Performs Well During Recessions

• Historically, gold has performed well during periods of economic turbulence. Next time likely won’t be any different.
• Gold is often considered a safe investment that retains its value when facing economic crises, inflation, or uncertainty in financial markets. This has been proven in the past, as investors often redirected their investments into gold to protect their capital.

There are increasing price forecasts for gold in the future.

• According to the most likely and cautious predictions, the price could approach $5,000 per ounce by 2030. ??
• Is it true that the highest probability is that the price will rise to $5,000 per ounce by 2030? In euros, this would mean more than €160,000 per kg.

Why Does Russia Also Desire Silver?

• Russia may be preparing for a significant change in its strategy regarding precious metals, with silver potentially becoming a key asset in the expanded state fund.
• According to a report released this week by Interfax and summarized by Bloomberg, the Russian draft federal budget includes plans to significantly increase stocks of precious metals in the coming years. In addition to gold, platinum, and palladium, the budget is set to include silver for the first time.

Should the Price of Silver Be $89 Per Ounce?

• Currently, the price of silver stands at $32 per ounce.
• Historically, the gold-to-silver ratio has ranged between 1:15 and 1:100, with 1:30 representing a period of stability and market equilibrium.
• Based on a gold price of approximately $2,670, silver is expected to trade around $89 per ounce.

Undervaluation of Silver #1

• The price of silver in euros has reached the level of 2011, while in dollars, it has hit the level of 2012.

Undervaluation of Silver #2

• Price movements of gold and silver.
• Silver has always caught up with gold during bullish cycles.

Raw Materials Are Becoming Important Again

• The mining industry will require $2.1 trillion in new investments by 2050 to meet the demand for raw materials in a net-zero emissions world, according to a report by BloombergNEF (BNEF).
• Despite a decade of growth in metal supply, the current availability of raw materials remains insufficient to meet rising demand.
• The world may need as much as 3 billion tons of metals between 2024 and 2050 to support low-carbon solutions, such as electric vehicles, wind turbines, and electrolyzers. This figure could rise to 6 billion tons to achieve net-zero emissions by 2050.

Best regards until next time!

Peter

The newsletter "Financial View Peter Herman" does not constitute an investment advisory service. Its content does not constitute recommendations for purchase or offers to purchase. For all advice and suggestions, I am available with an individual consultation or via email [email protected].