Michael Oliver’s Potentially Shocking Silver Forecast…

Mike Maharrey: Greetings, I’m Mike Maharrey, and I’m joined today by Michael Oliver. Michael has been in the financial services sector since the mid 1970s, and he’s developed a very unique technical approach to market analysis that we’re going to get into. He’s been pounding the pulpit for silver, and I’m really excited that we’re able to get him on the show today. How are you doing today, Michael?

Michael Oliver: Great, Michael. Good to be here.

Mike Maharrey: Well, I’ve been watching some of your videos and some of the stuff that you’ve talked about with silver, so I’m really eager to get into the nuts and bolts of the silver market here. But before we do that, I would like for you, since this is the first time you’ve been on this particular show, I’d love for you just to give a little background and let folks know who you are and where you’re coming from.

Michael Oliver: Well, I started after being a futures broker since April ‘75, a few months after gold was legalized. I worked for EF Hutton in New York, their headquarter commodity division. It was a novice. I didn’t know technical analysis from anything. But my boss who was head of the Hutton’s commodity division was also chairman of the COMEX at that time up through 1980, in fact. And I learned raw bar chart type of technical analysis, but I evolved in the early 80s into using my own method of momentum analysis, not the stuff on your screen like RSI or MACD, but I take price and I convert it to momentum bar chart of price. Where is it in relation to a given average? And I oscillated. Okay, created an oscillator. Okay, wow. And it has technical structures just like price charts, uptrends, floors, ceilings, the whole thing. The only difference is almost always before a major turn occurs in the market, its momentum will have broken first.

We’ll have given the signal. So it’s a good early warning system and it’s helped us a lot. So I started MSA momentum structural analysis in 1992, mainly with institutional clients. In 2015, I opened it up to retail subscribers. And we’ve focused on all the major asset categories, but of late, especially the monetary metals because we have argued over the last year, two years, in fact, that the upside in this bull trend in the monetary metals is not going to be a normal bull market. So, any dimensionalities or overbought levels you think are applicable, forget them. Not going to be true.

Mike Maharrey: Yeah. So, when you’re looking at momentum structural analysis, can you explain the difference between that and the more traditional price analysis? What insight are you able to gain?

Michael Oliver: Well, once you plot … Everybody overlays moving averages. You see a price chart with like a 200-day or something like that. Well, you could take the 200-day even and then you can plot the, where’s today’s high, low close in relation to that average? It’s a certain percent above it, a certain percent below it or where. So, you plot the bar not at the price level, but relative to that number. How much above? It’s the high, low and close. And you create an oscillator over time that gives you a different visual picture than when you look at a price chart. Quite often they’re in sync. They agree with each other. But usually, at turn points, uh-oh, they deviate and momentum starts to tap you on the shoulder like, “Uh-oh, this isn’t what it looks like. ” And anyway, this time around in gold and silver, we’re flexible.

I mean, in gold, for example, in 2011, December, a couple months after the high of that bull market peak that hit $1,920, we started to turn bearish and turn full bearish in January 12, much to the complaint of many subscribers. And it hovered around for a year and then crashed all the way down to $1,050. No, excuse me, $1,500 in 2015.

No, I’m sorry. It was $1,050, whatever. Anyway, and we’ve been in a bull market since. Now it’s 11 years old, so it’s quite old, but it is not even the same dynamics as the prior two bull markets. Think about this for a minute. When you look at a price chart of gold, you say, “Oh golly, I got to take profits.” Okay. If you go back and look at the 1976 corrective load near 100 to the peak in 850 in 1980, that’s an eightfold gain in price. Bear low, bull high. Eight-fold, eight times. Same thing, 2001 to 2011, eight-fold gain in price. The bull market took 10 years, different time span, same dimension. Well, our bear market started where $1,050. We’re only four-fold. Okay? You get the point. So, a lot of people who think this is overdone, we’re only half the dimensionality of the multiple gains seen twice before.

So, if gold even just matches the prior bull market peaks in terms of, oh, how much did it go up on a percentage basis? We got to go to $8,500 and that’s only to say, “Oh, I did it twice before.” We’re in far different conditions than we were then in terms of the fundamental, macro, technical and fundamentals. I don’t think it’s going to stop there, but I think just as a reference point, think about that. Another eightfold move, big deal, $8,000. And yet people are all eager to take profits. I don’t think they appreciate what’s going on this time. It’s Not the same.

And silver is a dog. It’s been a dog for so long, it’s now catching up and it’s going to catch up in such a horrifically fast and dimensional way that people are just going to sit back and say, “Golly.” Anyway, go ahead.

Mike Maharrey: Yeah, it’s interesting watching people respond, particularly to the silver market. Today, I think we were over $90 this morning. I think we still are. And it’s amazing because just it seems like yesterday we were talking about, “Ooh, we’re at $50.” So a lot of people look at this and they say, “Oh, it’s moved up so fast. It’s got to be a bubble.” I’ve got a lot of people saying that. I get emails every day, “Hey, Mike, should I take my profits?” What would you say to those folks?

Michael Oliver: We’ve been arguing for about six months now that since middle of last year when silver was approaching $35 for the third time. It hit $35 in October of ‘24. It hit $35 in March of 25. It got bagged. And on its approach back up to that high, we said, “Okay, silver bull market is now going to accelerate.” This was based on momentum factors. Well, we went from $35 and then huge chunk layers we advanced, but something else happened in October, and this is not evident on price charts. When we measure the relationship between silver and gold, and the way we do it is this, we take an ounce of silver price and divide it into an ounce of gold and express the answer as a percent. Early this year, silver was down to 1% of the price of an ounce of gold early this year.

It started to surge, particularly in April, May. Okay. It’s now up. It’s doubled in value, relative to where it was then. But when you go back 50 years and look at where silver was during the bull market periods, that would be 1979 to 80 when we were approaching 50 in the box, the 50-year range of price. And then also 2010 and 11, silver was in a dynamic bowl. It also went up to 50. At those two times, the spread value of silver versus gold was 6.5% the price of gold. And in 2011, 3.1. Okay, I’m talking monthly peak closes.

We came from 1% early this year. What do you think is going to zero? Okay. The point is this spread, when you plot that spread chart, connect the dot type thing. Where did it close this month? Put the thing on the what percent? You plot it on a chart. There was a ceiling that goes back 10 years on that spread that we blew through in October and November. And since then, what’s happened to the net price of silver? Boom. Not only has the spread gained, but its net price has gone vertical. The same type of behavior was signaled by that same spread action in summer of 1979, just before it almost quintupled in the next five months. And in September of 2010, when it doubled and a half, in the next six months, prices silver did. So the spread breakout wasn’t just relative to gold.

It also indicated a power infusion into the silver market itself. And we’re seeing that now. Both of those moves lasted a couple quarters. Once you broke out, you surged dynamically for a couple quarters. Okay. We’ve now blown out the old archival $40 to $50 range that persisted for a half century. On most markets we’re well above that comparable range, by the way, copper even led. Gold never stopped at the 1980 high in 2011. It went way above it. Silver did. And silver only just recently went through that box. Silver is stating to us in long-term momentum and its relative valuation levels that it’s going to entirely new reality. And I’m going to suggest the following. In the next handful of months, expect to see silver in the couple hundreds and quite possible $300 to $500.

And also see those old spread relationships between silver and gold, 6.5% of the price of gold, 3.1% of the price of gold to be challenged and possibly even taken out. You do the math on that. If gold were to merely replicate its old eightfold move and go to a high this year, let’s say of $8,000 or something, I think it’d go way past that, but let’s just assume it does it again. Okay. Ho-hum. Puts 3% of 8,000. What’s 6.5% of $8,000? You’ll fall over. Okay? Silver’s going to a new reality and it’s going to do it so rapidly that those who are used to normal trends will miss it because they’ll say, “Oh, it’s overbought. I got to get out. ” They’re going to miss the move. That’s our assessment.

Mike Maharrey: Yeah. And that’s what I’m hearing from a lot of folks. I just literally five minutes before I got on…

Michael Oliver: And only lately, I suspect too, you’re hearing that.

Mike Maharrey: Yeah. This guy was telling me that he’s convinced that silver’s going back to $35 because he said that’s where it is [overbought]. And he doesn’t see any reason that given how much the CPI has gone up, that the silver has gone up so much more. So, he’s kind of doing a CPI comparison.

Michael Oliver: Oh, God. That’s not good inflation metric, by the way.

Mike Maharrey: Well, no, it’s not. Not at all.

Michael Oliver: M2 is a better one. And if you look at an M2 chart, it’s gone parabolic. Okay. Why shouldn’t the silver?

Mike Maharrey: I’m glad you mentioned that. I’ve been hammering that point for about three months and people don’t want to listen to me.

Michael Oliver: Well, it’s fine. I like that because that means if you’re right, you don’t have the mob behind you until late in the move. That’s when you want to see them show up late in the move.

Mike Maharrey: So, I’ve heard you say that copper and lead have shown similar dynamics in their breakouts in the past.

Michael Oliver: Long time ago. Long time ago.

Mike Maharrey: Yeah. Can you-

Michael Oliver: I’ll give you one example. We did this not just to show that it’s not unusual. It’s rare, I admit, to see what silver’s going to do is a rare event for a market to go to a new reality. But copper, for example, was caught in a range from 50 cents to $1.50 for decades. Late 1970s, 80s, 90s, 2000, 2005. And late 2005, Copper finally said, “Oh, I’m going to break out of the old reality,” like a buck-fifty highs. Like a ceiling. Silver had it for 50 years – 50 bucks. Copper had a ceiling for many decades at a buck-fifty. And literally several quarters, copper went to $4.50 on its own. It wasn’t part of a gold move. It wasn’t part of other base metals that did it on its own. Then you look at lead, same sort of base, not basing, range bound reality for many decades, boring as hell.

And in 2007, a year and a half after copper did its thing, lead quadrupled plus in several quarters when it broke out of its old reality. In other words, it just destroyed any notion of overbought. It destroyed any notion of arithmetic swing measurements, and it went fourfold in several quarters, two to three quarters, and lived in a new reality after that. In other words, yeah, you have a selloff after that, but it was like four times the average price of what had existed in the prior reality. Well, if you look at a silver arithmetic chart round, you see this four-bucks to $50. So, you see a $45 range. Okay. It suggests arithmetically dollar to dollar, you’re going to go up 45 bucks. The range was $45. Go up to $95. Let’s approach $100. Okay. We’re there now.

Maybe some idiots want to sell it here. But if you do a logarithmic scale dimensionality, ratio scale move, when you go from four bucks to $50, that’s more than a tenfold move. You did it twice in 50 years. Well, tenfold past $50 is what? $500. Okay. Don’t be stunned. Okay? Anyway, that’s the reality we’re facing. And I think you’re going to find all the excuses or headlines you want to have assigned to this later in the year after much of the event has already occurred. Political instability, Federal Reserve in total doubt, who cares anyway, then we don’t even need it. All kinds of fundamentals and assumptions that have prevailed for a very long human lifetime, like the Federal Reserve, just over a hundred years, are going to come into question. And people will say, “Hey, I want something real. My grandpa told me about this. I wish I’d kept his silver coins he gave me.” You get the point? They want to feel grounded and silver and gold are that. They are money. They are money.

Mike Maharrey: It’s interesting. I play hockey and I’m on a team with a lot of really young guys in their mid 20s and they seem to be more interested in precious metals than a lot of the folks that are closer to my age. And it’s almost like they intuitively understand that their money is broken.

Michael Oliver: Yeah. Yeah. No, look at M2 again, M2 chart, money supply.

And it’s just blown off the page. I mean, you go decade to decade, it increases in quantity supply, the M2 chart by about 80% every quarter, every 10 years. Okay. Well, I mean, that means when your dad or granddad built a house, it cost him 4,500 bucks. When your dad built a house, it was $45,000. Right now, the mean price of a home is $450,000. What does that tell you? The degradation of the money unit. So if you bought a stock 10 years ago and it’s doubled in price, you haven’t made any money. You just kept even the decaying value of that piece of stuff in your wallet. Once that reality hits, and it’s not just US, it’s Japan, it’s Europe, it’s UK. Their debt markets are in jeopardy. The government debt markets, bond markets, 30-year UST bond looks like hell if you look at a chart, it is comatose.

They can’t get it off the high yields. They can’t get it off the price floor. The Fed even announced in November, the head of the New York Fed, William, said, “We’re going to start quote buying bonds.” And his excuse for that was, “Oh, just to provide some liquidity for the market poll.” They did it to provide support. We have a crisis in government debt. This is not a mortgage crisis like seven through nine. This is a US government bond crisis, Japanese, UK, any one of which goes the whole western world goes. Silver and gold know this. And if the central banks react to it by printing more money, what does that do for gold? Fuel in the tank. Yep.

Mike Maharrey: My friend, Greg Weldon, I don’t know if you know Greg or not, but he’s a pretty good analyst in his own right. And he’s coined the term the debt black hole to kind of describe this situation. It’s not just government debt. It’s corporate debt. It’s individual personal debt. And I love that term because it kind of alludes to the fact that when you have all of this debt in the financial system, it warps everything just like a black hole. The gravity warps everything in its proximity.

Michael Oliver: Well, the Fed’s going to have to fight it. They know that that’s what they’re paid for, okay? Especially to save government debt. Well, that takes a lot of money, babe. That money supply growth is going to accelerate. We’ll look like the Wymer Republic here soon, not just us, but Japan, Europe, UK, which I understand is in dire straits. It’s a horrendous black hole that’s spinning and yet few people recognize it yet because primarily the UST bond market is comatose dead, but it hasn’t dropped in price risen in yield through the recent ceiling on yields because they’re trying to restrain it.

But even with all their money, they can’t seem to get it to go the other way, which says, oh God, if it starts to go broke through those ceiling highs on yields or go through the price lows that we’ve recently seen. In fact, right now T-bond futures, 30 year bonds are 116. They had a crash low effectively in October of 2022 at 117. We haven’t been able to get off the floor in three years. That’s how sick they are. And if they go down to 111, it’s flush city by our technical measurements. And they’ve been there before. You can’t go there again and you’re going to have a crisis, an emergency type ambush in the US government bond market. There’s so few people are paying attention to right now.

Mike Maharrey: Yeah. You talk about a new reality, specifically talking about the silver market. We’re running into a new reality. What do you think causes assets like silver, gold, whatever, to get mired in an old reality for so long?

Michael Oliver: I don’t know. That’s a good question. I mean, there are legitimate arguments and proof that silver’s been manipulated. Why isn’t it done what copper did 20 years ago or lead did 20 years ago and say, “Hey, I’m going to go to a new reality.” It didn’t take some great external product. They did it on their own or gold will repeatedly take out the old highs and buy multiples and yet silver stay in a box. What the hell’s going on there? Well, if in fact it’s been manipulated, probed constantly by certain banks, possibly backed by the central banks, whatever, they’re fighting reality. And whenever you fight reality and start to lose, that market eats you up. It’ll go even more so to correct its error than it would if it were doing it incrementally. In other words, most markets, you’ve seen it before, bubble tops in the stock market.

When they fall apart, they really fall apart because they made a mistake by being too high priced for too long. Even if the underlying reality was true, like for instance.com, the 2000 top of NASDAQ 100, all the claims made by the internet people were absolutely right. It would change their life for the better. And yet NASDAQ 100 and two years dropped 82%, corrected an error. And it took it till 2016 to get back to its old high. So we have the opposite with silver. And also you can measure that, not just in its own compressed state for 50 years, but relative to gold. Relative to any other asset, it’s dirt cheaper and it said, “Hey, no, I don’t belong down here. I’m going to have a tempered tantrum.” And if you take the money factor, M2 growth, and you factor that into the old price eyes of silver and say, “Well, where should we be now given the money growth?” You probably talk a couple hundred dollars silver, for sure.

Okay. It’s likely to overshoot whatever is a logical new reality because it’s going to have a tantrum and investors aren’t aware of that.

Mike Maharrey: Yeah. Yeah, I guess it goes to show markets aren’t always rational like we would like to think that they are. People make mistakes, right?

Michael Oliver: Yeah. And you overcompensate sometimes, but that’s what silver is going to do.

Mike Maharrey: And it’s interesting you talk about price manipulation. It’s just like anything, right? When you fight against economics, eventually economics is going to win, right?

Michael Oliver: Yes.

Mike Maharrey: And I think the Fed’s in a similar position. They’ve been trying to manipulate interest rates for decades, and I think they’re about to lose control of that game.

Michael Oliver: Yeah. Once it hurts the average guy, once, for example, I think oil’s about to ambush everybody. Everybody’s talking, “Oh, oil’s going to go to 40. There’s so much oil. We don’t need oil, et cetera.” Our technical work says you get above $63 on oil right now, we’re pushing $62. They likely blow your head off because we’ve got technical structures on momentum, not price, not price. It won’t alert the price guys. If you get above that $63 level during this quarter, especially on a monthly close, our metrics say, don’t be shocked by even a 50% surge in oil price. I mean, the average guy pumping his gas and Trump said, “I’m going to keep it low.” Okay. So far he’s smiling. It’s the one thing he could smile about. That could go away in matter of a couple months with the technicals that I see. And it won’t even need an excuse.

Michael Oliver: It’s a pricing level. Yeah.

Mike Maharrey: Larry Kudlow was on his show the other day talking about how the dropping oil price was the greatest story never told, which incidentally is the same exact thing he said in December 2007 about the Bush economy.

Michael Oliver: Yeah. Well, anyway, yeah, the Fox guys are defending this. And of course, Trump is not the free market guy he said he was. He wants to intervene here, there, and everywhere, determine the prices of credit or credit cards, deny housing speculators from buying houses, only residential people can buy them. All kinds of things that you would expect a socialist government to do, and he wants to print, print, print.

Mike Maharrey: Yeah. Yeah, that’s the thing that I’m really focused on is just the incessant money printing.

Michael Oliver: Everything’s upside down, in other words.

Mike Maharrey: Well, as you say, we’re entering a new reality and ultimate economics will win. And I’m really fascinated with your technical approach. I’m not a good technical analyst. I’m more interested, or not interested, but I’m more savvy with looking at macro factors and things like that. So, I’m really fascinated with what you’re doing. And I think it’s an approach people should avail themselves of because I think what you’re talking about here, you’re seeing things earlier based on what you’re doing than some of the people that are just looking at price are getting. So, what I would like for you to do is let folks know where they can follow your work and maybe dive into it more deeply if they’re so inclined.

Michael Oliver: The website is Oliver MSA from Momentum Structural Analysis, Olivermsa.com. We explained our unorthodox methodology. Again, we’ve been around since ‘92 doing it, and we’ve been very successful in timing major market turns, not just monetary metals, but stock market bonds, et cetera, and request some sample copies, simple as that.

Mike Maharrey: Yeah. So folks do that because I think it’ll expand and help you broaden your market analysis. Well, Michael, I know that you’ve got things to do today and I want to get you out of here and be respectful of your time, but I really do appreciate you coming on and just giving us kind of a taste of the work that you’re doing. Folks should go just Google Michael on the internet and you’ll find several really good interviews that are an hour plus that go much more deeply into it than we were able to in this short time we have here. So avail yourself with that info. Michael, thank you so much for coming on. And as we move forward, I would love to have you back on again in the future if you’re so informed.

Michael Oliver: Well, Michael, thank you very much for inviting me. Thank you. Absolutely.

Mike Maharrey: Have a good afternoon.