Silver is a basket case in terms of paper prices and the emotions that come with it. Of course, the metal itself, (when held out of the system in personal position) does not do much at all. It is worthwhile to keep this in mind during the next inevitable illegally induced price move lower, and to check to see that your metal hasn't "done much".
While silver isn't the only strategic metal, it is certainly special in its unusual supply and demand character compared with its depressed price.
For the most part, the metal remains far off the mainstream radar. But make no mistake; the waves unleashed by a disorderly return to reality would wreak havoc on the Deep State.
What is the Deep State?
Deep State refers to the National Security State which enables the American Empire, a vast structure that incorporates hard and soft power (military, diplomatic, intelligence, finance, commercial, energy, media, and higher education) in a system of global domination and influence.
Otherwise known as the elite, the powers that be, the propaganda machine, big brother, etc.
Silver fits into this machine in much the same way it aligns with individual (ultimate) value investors. It has unusual properties that make it essential for the military industrial complex. And it serves as the great "unmentionably" monetary asset for the many. More of the same properties make it such a vital industrial commodity - in addition to its rarity.
Many respected fiduciaries believe that we will see strengthening in the dollar before serious inflation. They believe that dollar printing benefits the European monetary zone because it prevents them from going through their re-capitalization (debt write-down) or de-leveraging.
Others cite concerns from Japan that we could see the dollar strengthen as the Yen weakens. The Yen suffers from its own balance of accounts and public/corporate debt debacles.
But ultimately, it's more of the same "cleanest dirty shirts" or "lesser of two (or three) evils”. The dollar may have unofficial petro-poltico-military backing, and indeed prospers from a lack of alternatives. But for how long is this sustainable?
In another scenario, those who run the Deep State will do everything in their power to support the dollar. By definition, the complex seems omnipotent and immune to risk.
Traders currently stand in awe of the Fed for pulling a veritable rabbit out of its hat in terms of keeping interest rates low as they've begun to taper in earnest. Obviously, this is just one more manipulated asset class. In this case, it is achieved by financial repression that, in addition to controlling rates, urges banks to be buyer of debt (in addition to some curious sovereign entities, like Belgium).
The effect is that U.S. bonds retain not only their bubble status, but also gain a measure of confidence that fuels the continuation of the safe haven bid. All of this, of course, coming on the eve of War.
The strategy of the Deep State American economy was to inflate like crazy in stealth mode. This strategy would mean effectively exporting policy (inflation) to foreign countries so that foreign factory workers get the blunt of inflation's negative effects.
However, certain unexportable (at least not yet) services like childcare, education, primary housing, and government entities (such as military, police, law makers and attorneys) receive inflation adjusted income and become relatively wealthier than the fading productive class.
The war on poverty, much like the war on drugs, is more a class warfare. Lower end services (non-managerial) are kept in check by importing labor (illegal aliens, H1B tech workers, construction workers, and imported doctors in small towns). Meanwhile, the middle class disappears under the weight of higher food and energy prices.
Bureaucracy controls masses through powers of policy and procedures. He who dictates power (lawyers in the government) is king.
The moderns systems we rely upon, working unseen all around us, are extremely complex. They are by definition non-linear and, therefore, fragile. While it is fascinating that such systems can appear to prosper via such misunderstood complexity, as a whole they are not prepared for randomness.
Not everything is scripted - not all scenarios are priced in or accounted for.
Many assume that if we view the International Monetary Fund as a quasi-central banking entity, then it is not difficult to see all the room on their balance sheet. They would effectively be the last entity capable of absorbing the fallout from the next crisis. If they were to issue special drawing rights, the dollar could be transferred to this new world currency. This is congruent with the "Deep State", new world order thinking for decades.
The other big issue is what does the dollar weakening have to do with precious metals? Where does the correlation reside? Certainly not in terms of fundamentals.
Deflation or inflation, we are still dealing with bullish physical fundamentals held together by a thin thread of COMEX control.
And that is the lynch pin no one wants to pull, whatever fancy scenarios we can envision. The underwater beach ball analogy may be overused, but it continues to be a valid description of the deep state of silver. Once the road is clear for the elite to profit from a return to fair price reality, it will happen in an instant.