The Fourth Turning by William Strauss and Neil Howe (pg. 276)

In foreign affairs, America’s initial Fourth Turning instinct will be to look away from other countries and focus total energy on the domestic birth of a new order. Later, provoked by real or imagined outside provocations, the society will turn newly martial. America will become more isolationist than today in its unwillingness to coordinate its affairs with other countries but less isolationist in its insistence that vital national interests not be compromised.

The Fourth Turning by William Strauss and Neil Howe (pg. 258)

When the society approaches the climax of a Crisis, it reaches a point of maximum civic power. Where the new values regime had once justified individual fury, it now justifies public fury. Wars become more likely and are fought with efficacy and finality. The risk of revolution is high–as is the risk of civil war, since the community that commands the greatest loyalty does not necessarily coincide with political (or geographic) boundaries.

The Fourth Turning by William Strauss and Neil Howe (pg. 256)

  • A Crisis era begins with a catalyst–a startling event (or sequence of events) that produces a sudden shift in mood.
  • Once catalyzed, a society achieves a regeneracy–a new counterentropy that reunifies and reenergizes civic life.
  • The regenerated society propels toward a climax–a crucial moment that confirms the death of the old order and birth of the new.
  • The climax culminates in a resolution–a triumphant or tragic conclusion that separates the winners from losers, resolves the big public questions, and establishes the new order.

Bullish SIL

Global X Silver Miners ETF

In the long-run, I am essentially bullish Gold and Silver related plays across the board, but if you were looking for an entry point for a Silver trade, then here it is.

Below, is the Gold/Silver ratio. This ratio tells you how many ounces of Silver it takes to buy one ounce of gold. When the ratio is high, it means that Silver is cheap relative to Gold.

Historically, when this ratio comes down, it marks bull markets for the precious metals. I view Silver as a leveraged investment to Gold, so if it is getting more attention than Gold, then that means that people really think that Gold will go up, and are willing to speculate on its more volatile partner.

From the chart below, one may infer from my viewpoint that the precious metals play is historically hated as people have apparently no interest in Silver relative to Gold. From a value standpoint, Silver is at least historically cheap relative to Gold.

If we zoom in on this ratio, then we see that it has been bouncing off ~20 year overhead resistance the past few weeks, but it appears to have reversed. This suggests Silver may begin to outperform Gold, and this reversal is further confirmation that the bull market in precious metals may be upon us.

If we view Silver alone, then the move becomes more visible. I have provided 2 different charts of Silver with differing timeframes for you to view the current move.

A run to $16 appears imminent, and a breakthrough of $16 would be very encouraging to further confirm that the precious metals move is on.

January 11, 2016 to July 4, 2016 – Silver moved from ~$14 to ~$20 (~+42%)

January 11, 2016 to July 4, 2016 – SIL moved from ~16 to ~47 (~+194%)

I believe this is a nice time to build a position in SIL due to the recent breakout in Silver. SIL is a basket of silver mining companies. Miners tend to move multiples of their respected commodity due to rapidly increasing margins.

I would exit the position of SIL if Silver falls below $15.20. For long term investors, this position should play out in due time, and short-term fluctuations will be irrelevant. Hopefully, the move is now though.

The Fourth Turning by William Strauss and Neil Howe (pg. 237)

Lacking any guarantee that slow-but-steady, follow-the-rules, and trust-in-the-future behavior will ever pay off, 13ers tend to view the world as run by lottery markets in which a person either lands the one big win or goes nowhere. They have constructed a flinty ethos of self-determination in which being rich or poor has less to do with virtue rather than with timing, salesmanship, and luck. What people get is simply what they get and is not necessarily related to what they may or may not deserve.

The Fourth Turning by William Strauss and Neil Howe (pg. 236)

Unraveling-era 13ers, males especially, have been hit with a one-generation depression. From 1973 to 1992, the real median income for young-adult males fell by 28 percent, more than it did for the entire nation from peak to trough of the Great Depression. (During those same two decades in which youth incomes were plunging, real median income for seniors rose by 26 percent).