In news which will please the Mogambo Guru, in a recent King World radio interview Ben Davies, of Hinde Capital here in England, predicted that silver is about to go through a price revolution. You can read Hinde Capital’s own report about that, here:
The 12-minute Radio interview is here:
Mr Davies actually dared to employ the word ‘Austrian’ in his situational explanation, thus demonstrating high intelligence, discernment, and refinement. This deep level of insight was further displayed by his disentanglement of the complex picture underlying the extraordinarily complicated silver markets. Here is a very brief synopsis of his fascinating exposition:
- Since Mao’s edict banning the personal holding of gold and silver ended in 2003, China has been a major player in both the growth of demand for gold and silver — Davies believes that China may even move into a much greater usage of silver coinage, basing this move upon the ‘Silver Panda’ coin
- [The word ‘Yuan’, one of several names for Chinese currency, itself derives from the Mandarin word for ‘Round’, which symbolises the ancient Chinese reliance upon round silver coins — the Japanese word ‘Yen’ also probably derives from ‘Yuan’, indicating a close historical connection to commodity money in the Eastern cultural mindset, which augurs well for the eventual re-adoption of commodity money in the moribund West, when we see how well the East does with it]
- Silver has been held down like a cork underwater, particularly because of its use in complex short future and option derivatives positions, but this cork may be about to be let go as these derivatives markets are cleared up
- [The historical ratio between gold and silver was generally around the 15:1 mark, which could indicate a forthcoming Great Leap Forward in the price of silver, especially if the Chinese move steadily towards a standardised silver coinage and abandon paper completely, with the ratio currently at approximately 65:1]
- Davies also believes there isn’t enough silver to go around because of industrial demand, with big moves up in the silver price from September onwards
