Insiders with GoldSilver will be familiar with our ongoing update of a chart idea we first saw posted at the Screwtape Files blog. The chart takes the ratio of the U.S. Treasury yield (as a funding cost proxy) and the silver price (most sensitive to economic activity) in predicting metals price runs.
Based on the current read, we think the bottom is in.
We returned to their chart idea in response to recent changes in silver prices, gold prices, and bond yields, and in keeping with our penchant for monitoring the supply of currency and credit based on those bonds. After all, borrowing cash into existence against collateral reserve-able or otherwise DOES matter–as experience has shown (pointed out by both David Stockman, and separately the U.S. Treasury Borrowing Advisory Committee):