Is Silver Really Set For A Major Leap In 2016?

Thursday, March 24, 2016

If the economy is really poised to fail, does that mean that silver might be set up for even greater success in 2016?

That’s the question today as we look back on silver’s performance for the year and consider whether 2016 may indeed be the year that the world starts feeling the pain from baby boomer retirements.

Robert Kiyosaki Sticks by His 2016 Doomsday Predictions

For Robert Kiyosaki, author of the book “Rich Dad, Poor Dad,” 2016 has been a year to watch—since at least 2002.

As MarketWatch.com notes, Kiyosaki has consistently pointed to 2016 being a red-letter year for the world economy. According to Kiyosaki, this is the year when the United States will really start to feel the effects of the baby boomer generation starting to retire—and withdrawing money from their retirement accounts. “We’re rich on schedule,” Kiyosaki said, stating that he is sticking to his prediction for the year.

Why 2016? According to Kiyosaki this is the first year that baby boomers turning 70 and a half will be required to start taking out distributions from their retirement accounts. If this happens in big waves, logic dictates that there will be less money in the markets and in investments—which means big troubles for a stock market that already appears to be teetering on the edge.

At this point, you might be thinking: what does this all have to do with silver?

Is Silver Poised to Function as an Important Hedge Against Collapse?

It’s no secret that precious metals are viewed by many as a hedge against financial collapse and inflation. If there’s nowhere to run in the stock market, and banks are discouraging savings with low and even negative interest rates, then there are few other places to go than real tangible assets—which include precious metals.

Gold is an obvious choice for many, but don’t rule out silver just yet. Some of the more aggressive silver bugs see it approaching something more resembling gold prices. It has already performed very well in 2016—and the year is still young. According to Profit Confidential, only lumber, gold, and the S&P GSCI have outperformed it.

The key may be in the traditional gold to silver ratio, which suggests that silver is actually underpriced right now relative to its historical ratio to gold. That means that within the precious metals, investors may want to consider the possibility that silver may be an even better bet.

Silver “Set to Soar?”

“For silver and gold to rise significantly, relative to other instruments of value, value will have to be diverted away from those other competing instruments. The stock market, in particular, has been the biggest obstacle to a rise in precious metals, due to it sucking up most of the available value on global markets.”

If Robert Kiyosaki’s prediction about the baby boomers and the problems with the world economy is on target, it’s possible that silver may indeed be “set to soar.”  

Darren Capriotti

Darren Capriotti has been a market analyst for the past decade and is an expert in precious metals. He prides himself on his ability to analyze the market and offer true value to investors with questions about gold, silver, and other precious metals. Highly educated, incredibly passionate, and more accurate than most, Darren offers a true, unbiased look into what investors can expect in the precious metals market. You can reach Darren at dcapriotti@gold-eagle.com.