The Phaserl


Silver Rides a Runaway Expense Train

by Gary Christenson, Deviant Investor:

The US government will spend nearly $4 Trillion this fiscal year – starting last October 1. Of course it projects a massive deficit, increasing national debt, uses “funny” accounting, and does not address unfunded liabilities.

Business as usual…

Examine the last 100 years of US government expenditures and national debt – on a log scale in $ millions. Note that official government expenses have increased from about $750 million to about $4 Trillion, an increase by a factor of over 5,000.


National Debt (official – not including unfunded liabilities) has increased from about $3 billion to nearly $19 Trillion in 100 years, an increase by a factor of about 6,000.

Expenses increase, national debt increases more rapidly and … based on 100+ years of history, both will continue their exponential increases for a long time.  The 100 year exponential increase in government expenses has averaged about 8.9% per year.

The Excel calculated statistical correlation between US government expenses and official national debt for 100 years from 1915 – 2015 is 0.97.  No surprise here.

What about silver prices?

Silver in 1915 averaged about $0.56 cents per ounce, per  Since then national debt increased, the dollar was continuously devalued, and silver prices increased.  Business as usual … the train runs down the track.

The Excel calculated statistical correlation between US government expenses and silver prices for 100 years is 0.82.  The government spends more, goes deeper into debt, the dollar devalues, and silver prices rise.  Business as usual … train running down those tracks …

But if we look at the ratio of silver prices to the official expenses of the US government over the past 30 years, we see a reversal in the years around 2000 – 2003.  Call the turning point September 11, 2001.


From 1985 to 2001 the (1 trillion times) silver/expenses ratio declined as the paper (stocks, bonds and debt) economy boomed, commodity prices, including silver and gold, languished, and the ratio dropped from about six to two.  But after 2001 the ratio climbed to a high of nearly 10 in 2011, and has since dropped to about four.

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