Is Silver (finally!) Set to "Cross the Rubicon"?

David Smith David Smith

David Smith

December 8th, 2020 Comments

History is full of intriguing sayings coming down to us from other cultures that inform our thinking and behavior.

"Managing a large state is like cooking a small fish." – Lao Tzu.

"A stitch in time saves nine." – A 1700s sewing reference.

"Healing is a matter of time; sometimes a matter of opportunity." – Hippocrates.

One I especially like tracks back to Julius Caesar after ending his governance of the Roman province of Gaul and being ordered to disband his army. Under no circumstances was he to come closer with it than a small stream outside of Rome.

Yet Ceasar decided to cross the Rubicon and march on the capital, knowing there was no turning back and his likely fate if the venture failed. He supposedly told his men "The die has been cast!"

I have followed the ups and downs of a certain white metal since reading Harry Browne's books in the 1970s on life, living... and silver.

Somehow surviving the 1980 Hunt Brothers' debacle after the run to $50 and subsequent collapse below $5 over the next 22 years, I happened into a local coin shop in 2000 and spied a printed copy of Jim Puplava's "The Perfect Storm: Rogue Wave" about a financial tempest that would generate a massively destructively wave coming seemingly out of nowhere, carrying gold and silver to huge gains.

It motivated me to get back into the game.

For almost as long, I've been reading Ted Butler's missives about how "someday" silver would break the chains of suppression, market indifference, and compelling supply/demand metrics and make a massive historic move to the upside never to be undone or repeated.

I've worked for a long time with "The Silver Guru" David Morgan, learning a lot from him about markets in general and silver in particular as I toured mines, wrote reports for The Morgan Report, and presented at North American conferences.

And we have both been exponents of LODE, a project constructing a digital (silver and gold-backed) money of the future, enabled by the blockchain.

For several decades, both David and Mexico's Hugo Salinas Price (via the latter's proposed silver Libertad coin) have sought some way of returning silver to the world for wealth preservation and "honest money" for everyone – roles that for millennia it has faithfully served.

Recently, I've come to the conclusion that we're getting awfully close to the day – after all these years – when the price of silver is about to Cross its Rubicon.

Why am I so optimistic about silver right now?

Ted's most recent interview about the change in J.P. Morgan's status from the biggest short on the COMEX to perhaps its largest long…

…seeing silver being mined at just a 9:1 ratio to gold as mill head grades dropped 60% in the last decade…

…understanding that the entire gold and silver sector is less than 1/3 the market cap of Apple stock…

…watching the effects of unprecedented financial mismanagement worldwide exacerbated by COVID, and seeing a flood of money from investors large and small pour into both metals, whether prices rise OR fall... the list is almost endless.

Total Demand Silver (Circle Chart)

Something (other than a price rise) happened recently to Bitcoin. It's been estimated that the electronic "mining" of new Bitcoin results in the addition of about 900 coins per day.

As you've heard, "the program" dictates that there can never be more than 21 million bitcoins – several million of which have already been lost.

Along with the explosive popularity of blockchain applications in general, it's estimated that Square and PayPal alone have acquired the equivalent of all BTC mined this year.

Once the Rubicon is crossed, there is no turning back.

When I bought some Bitcoin a few years ago at $235 apiece and watched it drop to $180 soon thereafter, I didn't think it would rise 90x.

Yes, Bitcoin could have and might yet "drop to zero" like some naysayers still claim. Even if it had, I would not have lost too much because of the incredibly skewed risk-reward nature of the bet... something that wager has in common with silver.

Unlike Bitcoin, silver has been the trusted money of last resort across cultures for thousands of years. And it has not, nor will it ever likely go to zero!

In my studied opinion, the case for a price explosion to the upside has never been more compelling, nor dare I say, felt more imminent. Whether it launches very soon, or sometime in 2021, its day of reckoning is relentlessly bearing down.

"The Die is Cast" for Silver...

The pressure building under silver is like the tremors that shook Mt. St. Helens before the pyroclastic explosion which tore out the side of the mountain and buried several states under white ash. Even today the surrounding landscape has not "returned to normal."

I can remember palladium trading at $180. Once it "impossibly" rose above $1,100, it from there tripled and never looked back. Rhodium went from $600 to $14,000. Amazon traded in 1997 at $20 and hit $3,500 this year. And Bitcoin is not likely going back to $200 anytime soon.

Silver Bullets:

  • Following David Morgan's dictum of investing "small money to attempt big returns," silver today is still a wildly asymmetric trade.
  • Holding some physical (and maybe a few well-selected mining stocks) serves as insurance, inflation protection, a liquidity vehicle, and a savings habit.
  • Like the "lost Bitcoin" mentioned above, and unlike the gold supply, most industrial-bound silver is never recycled, thereby permanently dropping out of the supply equation each year.
  • Some 75% of available silver is now lodged in ETFs. What happens to the price if a company or hedge fund launches a drive to stockpile the rest, analogous to what took place regarding Bitcoin with Square and PayPal?
  • Ted Butler concludes that "when silver goes off, it will be like an atom bomb on a hydrogen bomb on a neutron bomb... I don’t think there will be anything like it again in my lifetime."

Are you willing to take the other side of this bet by passing on the opportunity to acquire some "hold in your hand silver"?

When it "crosses the Rubicon" there will be no turning back. It will be a one-time historic event. The price and supply terrain will fundamentally transform for a long time to come. Because when that day arrives, the die will have been cast. There will be no Second Chance.

On which side of the stream will you be standing?

David Smith

About the Author:

David H. Smith is the Senior Analyst for, a regular contributor to as well as the LODE digital Gold and Silver Project. He has investigated precious metals mines and exploration sites in Argentina, Chile, Peru, Mexico, Bolivia, China, Canada, and the U.S. He shares resource sector observations with readers, the media, and North American investment conference attendees.