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Silver has rallied as much as 1052% from its low in August 2001 to April 2011.
Silver price in April 2011, it just reached half of Silver Inflation Adjusted in December 1980.
Silver real value from 1979 has been reduced to almost nothing but inflation.
To assess the effect of inflation, see below the Silver nominal price and Silver inflation adjusted price chart from 1980. | Inflation Rate |
Silver inflation adjusted chart - end of month April 2013
Investors who bought Silver in year 1979 are just getting half of Silver inflation adjusted price from 1979.
They had to wait 30 years for this moment.
Many people believe that Silver is good investment. So far they were right. Short term Silver has rallied as much as 1052% in the last 10 years.
In low interest rate environment the cost of holding Silver positions in the Market is small.
In high interest rate environment, the cost of holding Silver positions in the Market is rising and investors may start thinking why not selling Silver, deposit money and collecting high interest.
The chart below - US 3 months Bill Rate yield, shows that in 1979 as interest rate got above 8 % P.A. Silver bubble begin to deflate See chart above.
Would the history of 1979 Silver bubble repeat?
In low interest rate environment the cost of holding Silver positions in the Market is small.
In high interest rate environment, the cost of holding Silver positions in the Market is rising and investors may start thinking why not selling Silver, deposit money and collecting high interest.
The chart below - US 3 months Bill Rate yield, shows that in 1979 as interest rate got above 8 % P.A. Silver bubble begin to deflate See chart above.
Would the history of 1979 Silver bubble repeat?
Small percentage of people may still holding Silver because they simply believe Silver is a good investment, but the risk is that they could wait another 30 years to get half of Silver real value or Silver price inflation adjusted.
A Million dollar question. How long Federal Reserve can maintain this low interest rate environment? | US Interest Rate |
Silver Nominal Historical chart - end of month April 2013
Silver Nominal chart - end of month April 2013
Silver
all time high inflation adjusted chart - end of month April 2013
