An intro piece that was part of yesterday’s edition of The IKN Weekly, IKN592. Long live Red Dog Stick, Keif.
The silver price as explained by Red Dog Stick
“That which can be asserted without evidence,
can be dismissed without evidence.”
There was once a man who declared he had worked out that the price movements of silver were predictable. This was based on a clear and unquestionable fact, Red Dog Stick, and the obvious implications that came from Red Dog Stick. Once his theory was perfected, he declared in public, “The price of silver will go up because Red Dog Stick.” Most people ignored him, but a few people heard and one or two bought on his advice. When, the next day, silver rose sharply it wasn’t just our central figure talking about Red Dog Stick any longer. Within a week, by simple word of mouth between a couple of friends, a dozen people were sitting on healthy profits because A) they had heard the man’s message about silver and Red Dog Stick, B) they had bought some silver and C) the price of silver had indeed improved again.
At that point, there was a bit of noise being generated by Red Dog Stick. The man who’d worked out that the infallible fact of Red Dog Stick means that silver goes up was creating quite a following and, when silver’s move started accelerating, his next online video went viral. For a few weeks, older hands start looking at this new Red Dog Stick theory and some even became interested, but one fine day and just after publishing a new video forecasting silver’s move to $100/oz thanks to Red Dog Stick, the price of silver collapsed at market. Not an easy day for a lot of people, as there were also margined newbies on the bandwagon by then. Many people wondered if our new media celebrity would quietly fade into the background in a fog of excuses. But no! He showed his face when things got rough as well, this man was no sly con artist! He believed fervently in Red Dog Stick and was more than willing to defend Red Dog Stick in public, as it had been proven near-infallible before other market players noticed its success and started underhandedly manipulating the market against its true course.
Enough of my silly stories. Sorry people, silver is not gold, stock is not flow, this is a recession and the buyers of silver bullion, i.e. the people who stopped supply from overwhelming demand in 2q20 and 3q20, will now stop buying because they are not Central Banks and bought a speculative commodity when they thought they were buying a store of value. So expect silver to drop against its true benchmark, gold, as the year draws to a close. However, let us also be clear that my authority is weak on silver, having made a basic error of analysis and snatched defeat from the jaws of victory. Mark The Functioning Anal yst recognized that silver would improve against gold for a while, but then the winds of recession would cause its headwinds and the Gold/Silver Ratio would bounce back up. Mark The Dumb Anal yst also thought it would also happen on his preferred time window and not get too overbought in the process before the market turned. Wrong. And wrong. However, that doesn’t negate the baseline call and now, with silver investors suddenly short of money to buy that next 100oz bar, the metal’s demand dynamics are no longer those of gold.
The bottom line: Red Dog Stick can be anything. It can be charting or historic trading ratios or musings on the contents of the Earth’s crust. It can even be the secret plans of Deep State to monetize silver and turn it into the accepted coinage for the next generation currency, coming to you soon from Davos. My point is quieter and isn’t touted as much by those who want you to spend money on things they like (a.k.a. analysts): The price of silver goes down in a recession.