The Great Silver Bull: Crush Inflation and Profit as the Dollar Dies by Peter Krauth

Author:Peter Krauth [Krauth, Peter]
Language: eng
Format: epub
Published: 2022-05-02T22:00:00+00:00

Chapter 27: Past is Prologue –

The Silver Roadmap

With a good perspective on history, we can have a better understanding of the past and present, and thus a clear vision of the future.”

Carlos Slim Helu,

Mexican business magnate

Silver enjoyed a massive secular bull market from about 1971 until 1980 and another major bull from about 2001 until 2011.

Most secular bull markets reach a period, usually about halfway on the time scale, where the commodity’s price falls by roughly 50%, sometimes more. This is an observation by legendary commodities investor Jim Rogers.

In my own experience, this is often the case, but sometimes the price correction is less severe if it’s drawn out over a longer period. Corrections are typically short and deep, or long and shallow. There is no rule, and it’s never the same.

Let’s dig into these previous bull markets to give us an idea of how silver has behaved. This will provide a roadmap for what may lie ahead. Spoiler alert: looking back on how silver performed in the past points to much bigger gains ahead.

In the 1970s, silver rose from a low near $1.30 in 1971 to a $50 peak in 1980. That produced a whopping 37 times gain or 3,700%. Every $1,000 invested in silver at $1.30 in 1971 was worth $38,000 at the peak in 1980. That’s a testament to the massive potential silver bull markets offer.

Then, silver entered a long bear market and eventually bottomed in 2001 at $4.14. That’s when it began a new bull, rising all the way back to $49 in 2011. Investors who had positioned themselves early enjoyed a 1,180% return.

Now let’s dissect both of these bull markets in more detail, because understanding how they behaved can help you better prepare.

As you’ll see, silver is volatile. But if you want to benefit from its big gains, you have to be willing to hold on through what is sometimes a wild ride.

1970s Silver Bull

As I said, silver bottomed near $1.30 in October 1971. That’s when its 1970s secular bull market began.

Silver Price Performance 1971 – 1980

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