Silver did hit its intraday all-time high of around $50.36, January 18, 1980, and it was there for a very short time. Most that we can determine is minutes. Some of the floor traders think maybe up to an hour, so I’m going to stay in that range, but no longer than an hour from everything I can determine. I know it was intraday, so it briefly touched the dollar mark due to the Hund Brothers buying and a speculative frenzy that was taking place. The Morgan Report with David Morgan. Discover how to build and protect your wealth at themorganreport.com.

David Morgan of themorganreport.com. Well, I’m actually at The Money Show in Las Vegas, and I’ll be speaking again tomorrow, but I wanted to get this weekly perspective. I decided to talk about this $50 silver price in 1980 and put it in proper context because I think there’s a great deal of the silver community that actually don’t realize what took place and how long silver was at $50. So silver did hit its intraday all-time high of around $50.36, January 18, 1980, and it was there for a very short time. Most that we can determine is minutes.

Some of the floor traders think maybe up to an hour, so I’m going to stay in that range, but no longer than an hour from everything I can determine. I know it was intraday, so it briefly touched the $50 mark due to the Hund Brothers buying and a speculative frenzy that was taking place in basically the whole month of January. January 21st was Martin Luther King Day, and the market was closed. And then January 22nd, 1980, when the market reopened, silver crashed hard, falling 20% that day. From there, the prices continued to plummet as the regulators had changed the Morgan requirements, basically had sell-only orders.

Summary is it wasn’t in multiple days. The market was incredibly volatile, module requirements were increasing, and regulators were intervening. The rapid price spike to $50 was a speculative blow-off, top not a sustainable price level. Key facts. The COMEX, this says 50-36, as I mentioned at the beginning. The London fix was posted at $49.45 the same day, and the Chicago Board of Trade’s intraday peak was $52.80 on January 18th. By the end of the day, it had retreated, and the daily COMEX close was about $46.80. Throw the chart in from the last peak in the last day of April 2011, and from this chart, you could see it was $48.58.

So again, we never hit $50 on a closed basis. And the context is an aftermath. So COMEX imposed Rule 7 on January 7th, increasing margin requirements intended to curb speculative excess, and this did help precipitate a swift price reversal. Within days, it dropped 20%. And a deeper crash occurred on Silver Thursday, which is March 27th, 1980. There’s a link to Wikipedia. You can look it up on Wikipedia if you want to read more about it. Silver Thursday. So the takeaway to me is that using the $50 plus intraday silver peak on the 18th of January 1980, as short-lived as it was, lasting probably only minutes before the market reversed, needs to be put in the context.

So if you look at the silver market from a longer-term perspective, you would see that the 1980 average price was $20 per ounce. So I think that is actually a fair price to use as a high rather than an intraday spike. I very often said in many of my interviews that one day doesn’t make a market. In fact, a lot of technicians that use price will throw out the highest and the lowest and get rid of those and then do an average from there. So the idea that I would use maybe to get it maybe a more accurate idea would be to use the average price of 1980, $20.

Or you could round it up to 25 and use that maybe as a price basis rather than a basically a momentary price. Not saying it didn’t reach that level it did, how many contracts were traded there. Well, it was only minutes, believe me, as few. And having the history in silver that I have, but a lot of people don’t know and I’ve said this on shows in the distant past and have not said it recently, that on Sepulveda Boulevard in Los Angeles, there were in those days probably the 7980, there might have been 10 gold and silver dealers just on that one long street.

Regardless, the point is that on that day of January 18th, $50 and of course they don’t have the internet connections and Bloomberg terminals and all that, but the communications at the time was showing 50 and the dealers were paying 35. They’d been back that $15 spread just to protect themselves. There were very few coin dealers in the country that were giving you that price. And again, it didn’t close there, although it closed in different markets. I showed you what the NYMEC closed the CBOT and the London market. So that is it. I’m going to leave it there.

You can make up your own mind what’s valid or invalid or how you want to measure it. I think the best way to measure it is against other goods and services, what’s an ounce of silver buy. And I think using more of a basis as far as the sustained price or price level would be more accurate. I mean, that’s kind of the argument on Bitcoin. It’s so volatile. How can you really price anything? It changes so drastically. Well, here’s an instance where silver was doing that. So you’re going to take that little bitty part of history and use that as a basis as like a sustained level.

It wasn’t. So again, I’m not bashing silver. I’m probably still one of the biggest silver bulls out there. And I’ll go on record. I think I’m the first one to predict digit silver. Certainly, I’m not the only one these days. There’s others that are looking at four digits silver. Well, before we get there, we do have to get through 50 and sustain it. But I think that I predicted $100 silver or more in my first book in 2003. So certainly, I’m still bullish. I think silver is going higher, but I also want to put the $50 high mark.

So I want to put it into context. You can make up your own mine. Use whatever price you want. You can project whatever you want, however you want. But as far as I’m concerned, I think if you use 25, 1980 price, and then protect it from there on whatever basis you want to use, you’d probably have what I would consider to be a more reasonable number due to the fact that we had an intraday spike. This is David Morgan signing out for The Morgan Report.com. The US government debt is about to cross $37 trillion.

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