Morgan explains, “The bigger problem all exists in the debt markets, and the debt markets is where the problem is really. When that problem blows up, there’s going to be a run to gold unlike anything in the history of mankind.
The spillover into silver will be phenomenal, as well, because once it (debt markets) starts down, everyone that understands what’s going on, which will be very few, will be running to gold.
They will try to get gold in any form that they can, and again, a huge spillover into the silver market. All of a sudden, even at the retail level, and at the wholesale level or commercial level, or the futures market or bar level—it’s over.
A big ETF type or silver holding company will call up and say I want to buy $50 million of silver, or $150 million or $200 million, which is peanuts compared to the bond market. The answer is going to be ‘we don’t have it.’ When that happens, it’s over.”
Morgan goes on to say, “These types of events are anomalies. Few people see them coming, and with the silver price being so low the last three years, a lot of people who once believed us are going to say that these guys just can’t be right.
The paper manipulators are going to keep prices under control forever, but they won’t. It will be an event that will be unlike anything we have seen.”
On the recent strength of the U.S. dollar, Morgan says, “John Exter’s upside down pyramid explains it very well. The derivative markets blow up, and you go down the pyramid of liquidity.
The step above the run to gold is the U.S. dollar. Most people who are under educated about money think if you have physical dollars under your mattress, you are in the safest position you could possibly be in.
If you have all of your savings in physical greenback, you don’t have to worry about a bank failure. That is the most important step until that doesn’t work.
When that doesn’t work, faith in the dollar is lost or being lost, then where do you go? The answer is you go to money that has lasted for 5,000 years.
So, to see the dollar have all this strength and look good, that’s just the step before you go to the last step, which is a run to gold. So, it (the strength of the dollar) doesn’t surprise me.
It’s part of the process and the run to the dollar is a precursor that is absolutely necessary before the next step down the pyramid.
This is the big picture, and I see how things narrow down and why precious metals are so important in today’s financial system.”
Morgan admits that his low of $18.17 silver did not hold and now thinks that the next “price spike” for silver “will be going lower.” Morgan explains, “This means we would get a spike down of maybe a dollar or something like that, from $18 to $17 or maybe even in the $16 range.
I think that would be a spike that would be a dramatic drop. It would be primarily a paper driven situation, and it would take place in a short duration.”
Morgan goes on to predict, “Silver will be back in the $20 per ounce range, and the high $1,300 per ounce range for gold by the end of the year.
That just presupposes that the system, as it is, continues, and the paper markets continue, and the derivative markets continue, and the powers that be are able to manage this price as they see fit with the derivatives. In the event that something happens, that whole scenario could go away very, very rapidly.
That’s why you really want to be 6 months too early than 6 minutes too late.”
Join Greg Hunter as he goes One-on-One with David Morgan of Silver-Investor.com.
(There is much more in the video interview.)
This article is brought to you courtesy of Greg Hunter from USA Watch Dog.