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“Silver could easily see $75”, James Turk says

Silver bugs anxiously waiting for a the next big move in silver could get one soon enough.  Goldmoney’s Founder James Turk is out with his next call for the silver price.  He believes silver could reach between $60 to $75, “easily,” but wouldn’t put a time period for that target range.

Turk does, however, expect a technical breakout of the silver price from its consolidation to take place sometime in November, which he expects will embolden the bulls to race prices through $50 and to all-time highs.  After $50, the sky’s the limit for silver.

“Silver is forming a beautiful, long-term, flag consolidation pattern,” Turk told King World News, Monday.  “The flagpole started in 2010 at $18 and peaked at $49 earlier this year.  We are now in the flag and we can expect a breakout, I think, within the next few weeks.”

As one of several old hands of the bullion business, Turk understands what drives gold prices—therefore, silver prices.  He takes publicly available Federal Reserve data to estimate the expected change in the Fed’s balance sheet and calculates to a ‘fair price’ for gold and silver.  He calls his simple, yet elegant, model, “The Gold Money Index”.

As traders watch for any hint of a Fed announcement regarding more QE, the matter before the Fed appears to be fait accompli.  As a reminder of the grotesque U.S. budget deficit, expected to reach at least $1.6 trillion for fiscal 2012, the U.S. Treasury issued a news release on Monday, announcing its funding needs for the quarters of Oct. – Dec. and Jan. – Mar., totaling $628 billion, or a 35 percent jump from the equivalent six-month period a year ago.

Here’s the widely-known problem with Treasury’s plan to fund additional deficits at this time:

Foreigners, who have propped up U.S. deficit spending for more than two decades through increasingly higher amounts, have been net sellers of Treasuries lately, not net buyers—and that 35% increase in additional funding needs comes at a time when foreigners are withdrawing from the dollar to debase their own currencies.

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Posted by on November 6, 2011. Filed under Precious metals. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

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