Gold & Silver Plunge as the Fed's Inflation Trap Tightens -

Welcome to this week’s Market Wrap Podcast, I’m Mike Gleason.
Coming up don’t miss a tremendous interview with first-time guest Steve Penny of <a href="https://silverchartist.com/">SilverChartist.com</a>. Steve shares his interesting story and tells us about how his experiences as an Air Force rescue pilot and how the events of 9/11 ultimately laid the ground work for him to go down a self-education path that ultimately brought him into the world of silver and sound money.
Aside from his fascinating personal story, Steve gives us fantastic analysis of where we are in the metals right now given the recent weakness in the sector. He also shares his price targets that he’s looking for down the road for gold and silver and if and when we may get what he calls a “1979 moment” – referring to the blowoff top in the silver market at the end of the 1970s bull market that led to spectacular price moves in the white metal.
So, stick around for an enlightening conversation with Steve Penny about that and a whole lot more, coming this week’s market update.  And as a reminder please download, like, rate and subscribe to this podcast wherever you consume this content. That would be a big help to us, and we would be highly appreciative.
Gold and silver investors are taking a major beating this week, yet again, as both metals extend a painful losing streak that has now totally wiped out all of their spectacular gains from earlier this year.
Gold has fallen below the psychologically important $4,000 level, while silver has been probing below $50 an ounce. The bears remain firmly in control, with little indication the selling spree has yet run its course.
So, is the great precious metals bull market coming to an end? Or are investors witnessing another brutal correction within a much larger upward trend?
We'll examine both possibilities, along with the Federal Reserve's latest interest-rate decision and what the widening gold-to-silver ratio might be telling us.
But first, let's look at the markets.
Gold was in positive territory for the week through Wednesday but then fell about 1% in yesterday’s trading and is off a good bit more than that today and has now fallen below $4,000 with today’s further selloff. The yellow metal currently comes in at $3,909 an ounce, down 2.4% for the week and registering a 4-month low.
Silver meanwhile is once again faring even worse, trading at $49.80 as it appears on the verge of outright surrendering the $50 level that had served as major resistance for decades before last year's historic breakout. For the week the white metal is off nearly $5 or 8.7%. It has now fallen nearly $12 in the last three weeks. Holy smokes.
The technical picture for both metals is decidedly bearish. Gold has broken below several important price levels. On the upside, gold would need to regain approximately $4,065 to show signs of stabilization. Silver, meanwhile, continues making lower highs and lower lows; holding this $50 level is very important. We’ll see if it can do that.
The immediate problem is the Federal Reserve.
At its meeting this week, the Fed voted to leave interest rates unchanged, holding its benchmark rate between 3.75% and 4%. Two officials wanted another quarter-point hike, but the majority decided to wait for more information.
With inflation remaining stubbornly elevated, traders are now assigning roughly a 75% probability of another rate hike in December.
The latest inflation numbers aren't encouraging. Consumer prices accelerated in September, with rising gasoline prices and broader increases in goods and services putting additional pressure on household budgets.
Meanwhile, oil prices surged about 4% Thursday following renewed Houthi attacks in Saudi Arabia, raising concerns about further disruptions to global energy supplies. And the latest unemployment claims report showed a surprisingly strong labor market, giving the Fed less reason to worry about an economic slowdown.
All of this reinforces expectations that interest rates will remain higher for longer. That's bad news for gold and silver in the short term because higher interest rates make interest-paying investments more attractive.
But there's something rather absurd about the situation.
Gold is being sold because inflation is getting worse and the Fed might raise interest rates to fight it. Think about that. Investors are dumping an asset historically used to protect purchasing power because the very thing it protects against is becoming more entrenched.
Of course, markets don't always behave rationally over short periods. And the Fed itself is caught in a trap.
As our own Mike Maharrey pointed out in an article this week, the central bank needs higher rates to contain inflation, but lower rates to keep America's enormous debt burden manageable.
With the national debt approaching $40 trillion, Washington can hardly afford indefinitely elevated borrowing costs. The Fed can try to fight inflation, or it can help keep the government's debt machine running smoothly. Doing both at the same time is becoming increasingly difficult.
And speaking of the Fed, Chairman Kevin Warsh announced an interesting change this week. Beginning next year, the central bank will devote some of its regular meetings exclusively to longer-term strategy rather than interest-rate decisions.
By 2028, the Fed plans to hold just six rate-setting meetings annually, with two others dedicated to strategic discussions.
Perhaps giving the central bankers more time to think will improve their decisions. But changing the meeting schedule isn't going to fix the underlying monetary problems.
Now, let's turn to silver, where another important development is attracting attention.
The gold-to-silver ratio is expanding again. For listeners unfamiliar with this measure, the ratio simply tells us how many ounces of silver it takes to purchase one ounce of gold.
When the ratio rises, silver is becoming cheaper relative to gold. And that's exactly what's happening now.
The ratio had fallen to around 46-to-1 when silver reached its January peak above $120 an ounce. But as silver prices collapsed, the ratio began climbing again. It has now reached approximately 78-to-1.
In other words, silver has been losing ground against gold, even as gold itself has been declining.
Historically, periods of extreme silver underperformance have sometimes preceded powerful rallies. During the market panic in 2020, for example, the ratio briefly surged above 120-to-1. Silver then rallied more than 150% over the following several months.
That doesn't mean history will repeat itself. But it illustrates how dramatically the relationship between gold and silver can reverse.
There are legitimate reasons silver is struggling more than gold right now. Central banks continue buying gold, while silver doesn't enjoy that same level of official-sector demand. Silver also has a substantial industrial component, making it more vulnerable to concerns about economic growth.
And there has been a significant improvement in physical silver availability.
After the shortages and delivery squeezes that helped propel prices higher last year, inventories in London vaults have recovered substantially. According to Metals Focus, London silver holdings reached a four-year high of approximately 932 million ounces at the end of September.
Meanwhile, investors have been pulling money out of silver exchange-traded products, releasing metal back into the market. Retail investment demand has also weakened sharply following the speculative frenzy earlier this year.
So, the immediate physical market isn't nearly as tight as it was during silver's dramatic run-up. Metals Focus even believes silver could remain under pressure in the months ahead, with the possibility that the market's supply deficit could give way to a surplus in 2027.
That's not particularly encouraging for investors hoping for an immediate rebound. But there's another side to this story.
Silver has experienced five consecutive years of structural supply deficits. Over that period, demand exceeded available mine and recycling supply by more than 700 million ounces.
And while higher prices are encouraging conservation and substitution in some industrial applications, silver remains essential to a wide range of technologies.
The bigger question is what happens when investment demand returns. Silver is a relatively small market, and when investors begin moving significant amounts of capital into it, prices can rise very quickly.
Metals Focus itself acknowledges that silver could begin outperforming gold again once markets start anticipating an end to aggressive monetary tightening.
Neither gold nor silver has established a convincing bottom. But the fundamental monetary problems that helped drive these metals to record highs haven't disappeared. Washington continues spending money it doesn't have. The federal debt continues climbing. And the purchasing power of Federal Reserve notes continues eroding.
The Fed may have hit the pause button this week, but the government's borrowing and spending machine certainly hasn't.
Gold and silver can suffer brutal corrections. They always have. But the politicians and central bankers responsible for our monetary system have given us precious little reason to believe that fiat currencies are about to become more trustworthy.
And that's why the case for owning physical precious metals remains compelling, even during weeks like this one.
Well now, without further delay, and for much more on the state of the markets, monetary policy, geopolitics and the metals, let’s get right to this week’s exclusive interview.
<div class="pl-3">
Mike Maharrey: Greetings! I'm Mike Meharry and I'm joined today by Steven Penny. Steve is the founder of SilverChartist.com, which features a pretty unique investing strategy that I'm going to let him tell you about. So how you doing today, Steve? Thanks for joining me.
Steve Penny: Yeah, thanks Mike. I'm doing awesome. Look forward to a good discussion. I've been following Money Metals for a long time and big fans of you guys and thanks for having me on.
Mike Maharrey: Yeah. Well, it's a pleasure. I'm excited to talk to you about what you're doing because you kind of do have a unique approach, which is cool. As I was thinking about how I wanted to start this off, I had two questions that I wanted to ask first, and obviously you can't ask two questions at the same time, but you can. So that's what I'm going to do. I'm actually going to tie these two questions together and let you weave them. And basically it's just first off, just give us a little bit of a glimpse of your background and then you can kind of work that into what you're doing over at Silver Chartist and talk about your approach. I figured those two things probably link together, so I'll just let you go with that.
Steve Penny: They do. Yeah, I love that question. And it's been a while since I've been asked that, so I got to think I don't have a canned answer. But yeah, just going back to, I guess my wake-up call was nine eleven. I was still in college at the time. I'm 45 years old now. And that was when I really started to learn, I guess, how the world really works, not necessarily what you're taught in school, but how the world actually works, central banking, debt-based fiat currency, geopolitics, what all these foreign conflicts are really about because it's never about what they say. And that's what really ignited my curiosity. Fast-forward to the 2007, 2008 financial crisis, that got me interested in learning a lot more about the financial markets. I'd already piqued my interest in central banks and debt-based fiat currency, but that financial crisis really accelerated my learning curve.
I mean, I was reading a book a week and I like to say self-education has the highest return on investment. I went to college, but the most valuable lessons I've learned have been self-taught. You can go read 10 good books, 10 great books on a given topic, and you know more than most people who went to college on that topic. So I was an Air Force pilot. I served 18 years. I was a rescue pilot. That doesn't mean I'm for all these conflicts that we're involved in, but I was a rescue pilot and I left after 18 years. And that's a hard thing to do because anyone who knows about the military knows you get that 20 years, you get a pension. But I like to say everyone has a sweet spot calling where your passions and your abilities intersect and life is short. And yeah, I could have stayed that extra two years, but I had launched Silver Chartist.
It was getting traction, and that's my sweet spot. That's where my passions, my abilities intersect. So, I did it. I left the Air Force, went guns blazing into Silver Chartist and God's blessed it. It's done really well. We've got an awesome community over there and we do have a unique approach. As your listeners know, this is the biggest global debt binge in all of history and I believe we're not going to get politicians to solve the problems. We have very little control over that, but what we do have control over is what we do with our own lives. And one of the key steps towards guarding against all the things that are happening in the world is having some physical metal stored outside of the banking system. So I think that's a good foundation. But for those who are really interested and have a little bit more time to put into it and are interested in the financial markets, you can actually amplify your returns over time through the use of mining stocks.
And I like to generate income by selling options. So that's what we do at Silver Chartis, and hopefully that kind of wove together in somewhat of a coherent answer.
Mike Maharrey: No, that's fantastic. And you hit on a couple of important points that aren't even necessarily really investing oriented, but just really resonate with me. One of those things is that self-education. I think you get a better education when you take the time to create your own curriculum, so to speak, because you're kind of spoon-fed a conventional wisdom. Let's just leave it at that when you're in school. And so you can pick up these books and you can learn so much. I became a constitutional expert. I kind of shiver at that because it's weird because in my head I'm not really an expert, but I've written two books. But simply by reading original documents and studying, it's amazing in this world we live in how much access to knowledge that we have and conversely how dumb some people have become. So why gold and silver? Your strategy seems to really focus in on precious metals.
Why did you pick precious metals as your area of focus?
Steve Penny: Yeah, so I am drawn to them because I think they represent honesty and they're honest weights and measures, but when I trade and invest, I got to take off my philosophical draws to things. So yes, I believe in silver and gold as an honest weight unit of account and honest money. So I love what the Gleasons are doing with the Sound Money Defense League and all that. That is awesome. But when I'm a trader and speculator, I look for asymmetric setups where risk reward is favorable. And whether that's gold or silver or something else, my goal is financial freedom. It just so happens that I believe silver and hard assets, silver, gold, platinum and uranium really present the most favorable risk reward setups right now over the next handful of years. With this kind of fundamental backdrop where I think we're headed into persistent inflation higher than forecast inflation, hard assets are the prime beneficiaries in this exact environment.
And you can go back millennia, silver and gold always do a full accounting for the expansion of debt-based fiat currency. They just always do 100% of the time. So, I'm not investing in silver and gold because I believe in them philosophically. I'm investing in them because I think they have the highest upside potential over the next few years.
Mike Maharrey: Yeah, that's a really good point. I'm curious because you're hitting on a very difficult psychological thing for a lot of people. I mean, I struggle with it. We have these philosophical ideas and we believe that certain things should be certain ways, and yet oftentimes the markets don't read things the same way. I'll give you an example from my perspective, the Federal Reserve. Everybody's convinced that the Fed is on this long-term hiking cycle. I'm convinced that they're not because of the levels of debt as you've already kind of alluded to. That being said, the reality in the markets right now is that there's a lot of headwinds for precious metals. So, how do you separate out that philosophical worldview and your psychological leanings and just focus purely on the metrics of what's going on in the market, even if you think that the market is doing stupid things right now?
Steve Penny: Yeah, there's a couple of ways to do it and it's psychologically and emotionally difficult for me too. For example, and I don't say this to be prideful or anything, but we took major profits within a few days of that peak. I sent an alert out to members at $117 and every bit of my emotions and my psychology did not want to push that sell button because I know silver should be even going much higher over the long term. So I guess a couple of ways that I handle that and mitigate that psychological hurdle is by having buckets. So I've got my long-term physical metal. I don't plan to ever touch that. That's a generational insurance policy against these out of control central planners. And then I've got a longer term investing bucket with some top tier mining stocks. So psychologically, I've got a plan for that bucket of investments where I'm going to hold through the volatility and I've got a separate bucket over here where I've given myself permission in advance when things get overheated to the upside, hey, it's okay to push the sell button in that one, even though I think it's going much higher, even though my philosophy and philosophically, I think silver should go much higher, it's okay to push the sell button.
So, by compartmentalizing my investing into different buckets and then just having an array of different indicators, I look at sentiment, I look at the commitment of traders report, I look at technicals and short-term fundamental headwinds to give short-term sell signals so we can use that volatility to our advantage.
Mike Maharrey: Yeah. So basically what I'm hearing is have a plan and work the plan.
Steve Penny: That's it. Yeah. I should have just said that.
Mike Maharrey: Well, no, no, I like the way you said it better. I'm just summarizing. But it is hard. You get on X and you see this headline and it's like, oh, panic. We're in a 30-second news cycle. It may even be 15 seconds at this point. It's pretty absurd, so it's difficult to do that, but you seem to have a really good system in place and that's a good thing. So let's talk a little bit about the markets right now. Let's start with silver. I was perusing some of the interviews and stuff that you've done over the last couple of months. And earlier this year, I think it was back in the summer, you said that silver's 1979 moment is still to come. What do you mean by that? What is the 1979 moment and why are you still bullish despite the fact that people will tell you silver has lost nearly or more than half its value this year?
Steve Penny: Yeah, because we've seen this movie before. I was born in 1981, so I didn't live through the 70s bull market, but I've studied it closely and a lot of people focus on what I call the 1979 moment. And a lot of people don't know that that decade for five years in between, silver just went sideways between four and $6. And I think that's the churn we're in now. And by the way, I think the 1970s has a lot of similarities to the current bull market. So in the 27 months leading up to 1974 where silver had an interim peak, it had gone up 420 something percent in 27 months leading up to February of 1974. So in the 27 months leading up to this January, silver had a very similar move. It went up 480% in the previous 27 months. So you can almost overlay that same couple year period to what we just saw leading up to 1974 peak.
So, I think right now we're in that moment where it's been said silver will either scare you out or wear you out. Well, I think it'll do both. It's scaring us out now. Now I think it's going to wear us out a little bit longer than people think, but to take heart, our 1979 moment awaits. And in 1979, silver went up 8X in 12 short months, 8X move. And there's some differences too between the 1970s. They had a Paul Volker come in and raise interest rates up to 16, 17%. Can't do that with a $40 trillion national debt. We collect five trillion in federal tax receipts thereabouts every year. So every 1% rise in interest rates on a $40 trillion national debt is 400 billion extra in interest expense. So you just can't do it. The math doesn't math. They can't raise interest rates like they did in the 1970s.
So, it's different too. So I think this is going to be an amplified replay of the 1970s without a Paul Volker coming in. Instead, I think it's going to be some draconian new financial system they try and introduce, and who knows what that's going to look like, but I think it'll probably involve less freedom, less sound money, and they're going to try that first before.
Mike Maharrey: I suspect that you're right. You make a really good point. There's no way that you could ever see… I don't think it would take 20% interest rates in today's market, but certainly more than 5%. I've been saying ever since the Fed started hiking that they wouldn't and they haven't done what is necessary to really wring inflation out of the system, which is evidenced by the fact we're at what, 67 straight months above the mythical 2% target. So I tell people all the time that inflation is the plan. They'll tell you that, oh, we're going to fight inflation. We're going to get inflation under control. Inflation under control just means that they're going to continue to devalue your money at 2% every year.
Steve Penny: Exactly.
Mike Maharrey: You have to plan for that. So what are some of the things that give you this bullish sentiment that we may still have some leg left in the silver bull market? Because a lot of people I'm hearing are say, oh, it's over, we're done. We're going to go back below 50 and then that's it. What makes you feel bullish right now?
Steve Penny: Sure. There's a lot of factors, but going big to small, like you said, inflation is the plan. That actually benefits these central planners. They don't want deflation. You can't tax deflation. When there's deflation, they get the blame, but the people don't understand inflation. Inflation erodes away debt and it benefits debtors. Well, who's the biggest debtor in the world? It's the US government, so inflation erodes away the real value of that debt. But this is the biggest global debt engine all of history. So big picture, we have a $40 trillion national debt and we're on a trajectory where interest will eventually consume 100% of tax receipts. And obviously the variable in that equation is interest rates. So that's the trajectory we're on. And I like to say problems have solutions, predicaments have managed outcomes. There's not really a solution to this problem, this debt problem. There's only unpleasant managed outcomes and silver and gold going back through all of history are the prime beneficiary of this exact environment.
This is the biggest global debt engine we've ever seen. So that's the big fundamental backdrop. So any kind of short-term headwinds about them raising interest rates for a few quarters is just noise. I mean, it may delay it a little bit, but it doesn't change the fundamental drivers. So, we're headed to that point and there's no way that this is over. This cycle is not over and it's not going to be over until this debt situation is resolved either through default or massive devaluation of the currency. One of those two things has to happen and we know they're not going to choose to default because then they get the blame.
Mike Maharrey: It'll be anything that they can project the blame onto something else, that's for sure.
Steve Penny: Yeah.
Mike Maharrey: Maybe they'll luck out and have another pandemic or something because I'm convinced that the pandemic kind of bailed the Fed out after all of the fiscal malfeasance during the Great Recession. But it's interesting because the silver market and the gold market are obviously closely linked. And so looking at gold, are you surprised that it's held $4,000 despite the headwinds of much higher yields and all of the issues that have been caused by the war with Iran?
Steve Penny: No, I wouldn't say I'm surprised. Every week I kind of update my admittedly subjective probabilities that 3,900 is going to hold. And it's a lower probability now, but I have given it like a 75, 80% chance that that $3,900 level holds from a technical perspective. It's a little bit less now, but I do still think it's more than fifty-fifty chance that 3,900 holds. But if it gives away, I wouldn't be surprised to see a brief dip down of 3,500. That's a possibility that shorter term traders should plan for. But no, I'm not terribly surprised. I mean, we had just gotten so far technically stretched that this kind of pullback is really not surprising.
Mike Maharrey: Yeah. It's interesting too. I've kind of noticed it anecdotally just watching the tickers. And one of the things that I've noticed, and this has been going on for months, if you watch the markets when the US opens, so 8:30 or 9, around that time, you almost always see this little dip. The Western traders come in with their sales. If you go to the end of the day, when the Asian markets are opening, you almost always see this little uptick. And just today I wrote an article and going off some reporting by Bloomberg that Chinese households and investors are really supporting this market right now. They're coming in and they're buying those dips on virtually a daily basis. Have you noticed that and what's your thinking about this kind of almost a shift of gold from the West to the East?
Steve Penny: Yeah, I have noticed it. There's so many anomalies in the silver and gold market that I certainly don't think they're perfectly freely traded markets at all. I do think there's some level of manipulation. But yes, I do think the price discovery mechanism is gradually shifting from the paper discovery mechanism here in the West towards more physical supply demand situation in the East. And we saw that even during the run up in January where the Shanghai Futures Exchange was showing $20 premiums to the Comex price. A lot of people don't really realize here in the West, let's just say theoretically, 20-million of us just went down and went to our coin shop and bought a bunch of silver right away. And then you watch the price, it doesn't do anything. But what does happen is if you go buy paper contracts on the commodities exchange, well, that's what drives the price.
It's supply and demand of these paper contracts that can be created artificially, synthetically at will. So, that discovery mechanism, that price discovery mechanism is shifting to more of a supply demand driven market, which is unfortunately set in the east. I wish we could have honest and free and fair markets here, but that's not the case in silver at least and gold.
Mike Maharrey: Yeah, I agree with you. And I think it's true in the gold market maybe to a lesser degree just because the gold market's much bigger. I think you can see the impact of these kind of manipulative efforts in the silver market more clearly than you can in gold, but I completely agree with you. I'm curious, I'll talk to folks sometimes and especially among our circles, there's a lot of folks who are aware of this kind of government malfeasance and this kind of manipulation and whatnot. And I know some people that absolutely will not touch precious metals because they say it's a manipulated market. How would you respond to that objection?
Steve Penny: Well, I would say you can use that manipulation to your advantage because if they weren't manipulated, the prices would be much higher. So, you're getting something on sale at an artificially low price. That's especially true in silver right now. And I would also say that throughout all of history, manipulations are nothing new. This is just what governments do. They lie, they cheat and they steal and they manipulate. But manipulations, especially in the silver and gold market, they always fail. They tried this in the '70s. They tried it with the London Gold Pool. Even in 2011, the bankers got overrun. They eventually squashed it with those CME margin hikes, but manipulations always fail. The free market always prevails. It just is taking a little bit longer. So I would say use that to your advantage. You're buying something on sale.
Mike Maharrey: Yeah. Yeah, that's almost the exact answer that I got from one of the guys that works over at GATA, the Gold Antitrust Action Committee. And that was kind of his thing too. Yeah, it's manipulated, but that manipulation can only go so far and it can only last for so long. And he made that same point, you're effectively getting metal on sale right now, which is a good deal. And I'm happy to take advantage of whatever they'll give me because like you said, the government's not often giving us gifts. All right, I've got a fun kind of question before I get you out of here. What is your favorite gold or silver bullion product? So it could be a coin, it could be a bar, whatever it is that comes to the top of your head. It could be because of sentimental reasons or whatever. I'm just curious, what's your favorite gold or silver bullion product?
Steve Penny: Well, okay. Yeah, that is a fun question. So, I'll just be brutally honest. I've got some that were given to me as gifts. I do a lot of ministry stuff with churches and things, and some people have given me some really cool silver coins with some Bible verses on them. So those always mean a lot to me. So, those are really special. But when it comes to dollar cost averaging, I do like the sovereign minted coins, the silver eagles, just because they're so recognized and I like to buy them when the premiums are low on them. You can get an upside kicker where sometimes those premiums inflate to dramatic levels on silver eagles. So when the premiums are low, I like silver eagles. But in general, what I generally tell people is just get as most metal as you can for the least amount of dollars, so lower premiums.
So generic rounds, generic buffaloes are fine with me too. So yeah, I don't have any really cool fun coins that I collect or anything like that, although that is fun. I like seeing them.
Mike Maharrey: Yeah, I'm the same way. I like to look at them and say, oh, that's cool. But when it comes to actually buying, I'm like you, I'm more interested in getting as much bang for the buck. And so yeah, I agree with you there. Most people that listen know this, but I'll tell you since we're having this conversation, my favorite's the Kruger simply because my grandfather gave me some. So you do have those kind of sentimental things. Do you have a price forecast midterm and long-term for gold and silver?
Steve Penny: Yeah, and I don't mind answering it, but I'm always reluctant because the headline will be, Steve Penny predicts $15,000.
Mike Maharrey: And that's why I asked you the question, right? We want people to watch the show.
Steve Penny: Yeah, no, I get it. But if you just did an average of the previous two bull markets, the 1970s and the 1999 leading up to 2011, if you call that a separate bull market, the average return on gold was about 15X. And I believe this one started about January 2016 at $1,000. So if we just have a replay of 15X from $1,000 base, that gives you $15,000 gold. And that's just an average. And I think it's reasonable to expect that this is an amplified replay of both of those bull markets. And then let's just say you take $15,000 gold, give it a 50 to one gold silver ratio, which is again, very conservative. So that gives you about $300 silver. No, that can sound sensational maybe to some people, but I mean, look at in the early 2000s, what was oil of a dollar or two and then it went up to 150?
So, we've seen these kind of moves and commodities before, so I don't think those are unreasonable forecasts over the longer term, in the next handful of years. I'm not predicting that by the summer or next couple months.
Mike Maharrey: Yeah, I promise you we won't make a headline, “Steve Penny predicts $15,000 gold next year.” We won’t do that.
Steve Penny: I'm confident it's coming. I really am.
Mike Maharrey: Well, I am too. It's funny because I remember I started working in this space, it's been about 10 or 15 years ago now, and I remember back in the middle 2010s when people would talk about $10,000 gold, and that just seemed so radical and extreme, and it was headline producing it. And now honestly, when you look at the trajectory that we've seen over the last couple of years, when you look at the macro situation, you look at all of the debt, you look at the inflation, you realize that inflation is accelerating and this money destruction is accelerating. 10,000 does not sound unreasonable to me at all. And I don't think it does to most people who are kind of investment savvy. 15, it sounds a little bit more sensational, but it's just not unreasonable at this point, I don't think. I think that's a very fair, not even really a headline kind of thing.
Steve Penny: Sure. And if I can add one more point to that.
Mike Maharrey: Please do!
Steve Penny: I know you're familiar with this too, but obviously the dollar is never changing unit of account, so why measure in dollars? Rather, I like to look at gold. How many shares of the Dow can I buy? How many median US homes can I purchase? So ratios are a better way. And in the 1970s bull market at the peak 1980, the Dow bottomed at 850, gold peaked at about 850. So there's your one-to-one ratio. So ratios are a better long-term target in my opinion.
Mike Maharrey: Yeah, agree completely. All right, so let folks know where they can go to find you and what they can do if they're interested in getting involved with your group and your strategy.
Steve Penny: Well, yeah, love the discussion. Thank you so much for having me on. Thank you for the opportunity to say that. Yes. SilverChartist.com is the website. It's a really cool community. It's a fully transparent over-the-shoulder service. I show everyone exactly what I'm doing. I make mistakes. So you see that too, and we're really there to sharpen each other as we navigate these wild markets together. And one unique thing we do is to generate cash flow. For example, this morning I sold a put option, so I collected 300 bucks for agreeing to buy a silver related investment. I won't give tickers and stuff at a lower price, and we're already down low. So I promised, "Hey, I'll buy something in the next month or so, but you got to pay me 300 bucks to do it." And you could do that a couple times a week. So, it's kind of a unique strategy to generate cash flow while we wait for these headwinds to turn into tailwinds.
Mike Maharrey: I love the fact that you emphasize community. That's so important in this day and age. That's something that's playing on a loop in my head as we delve deeper into this world of AI and digital. And it seems like people are getting drawn farther and further apart. So putting together people in community and working together and having that kind of hive mind, I think it's a fantastic thing. So that's a really appealing aspect of what you're doing to me, and I wanted to emphasize that for folks.
Steve Penny: Thank you so much.
Mike Maharrey: Yeah. So thank you so much for being on the show. I think this was a great discussion and would definitely be open in having you back at some point if you're interested. I love that. As things continue to unfold, it's always good to have another analyst who kind of understands the macro. I feel like a lot of folks in the mainstream, they get the technical stuff, but sometimes they miss the bigger picture because of their philosophical blinders. So thank you so much again for taking time out of your day and thanks. Appreciate it.
Steve Penny: You bet.
</div>
I certainly enjoyed hearing from first-time guest Steve Penny, and we will certainly look to have him back on in the future. Really good stuff there and I hope you too got a lot out of that discussion as I did.
Well, that will do it for this week. Be sure to check back next Friday for our next Weekly Market Wrap Podcast. And don’t miss our second weekly podcast, the Money Metals Midweek Memo available each Wednesday. To check out any of our audio programs just visit <a href="https://www.moneymetals.com/podcasts" target="_blank" rel="noopener">MoneyMetals.com/podcasts</a> or find them at places like Spotify, Apple Podcasts Google Podcasts, and other popular podcast platforms. And as a big help to us we would ask you to please like, subscribe, download and rate our podcasts. Doing so helps us extend the reach of this material.
Until next time, this has been Mike Gleason with <a href="https://www.moneymetals.com/" target="_blank" rel="noopener">Money Metals Exchange</a>, thanks for listening and have a wonderful Halloween weekend everybody.

Read The Original Article