Market Sentiment: Silver price forecast reaches $130

CNBC is featuring a talking head half forecasting that silver could reach $130 but covering himself by saying "I don't know if it will reach that level, but that trade is not over yet."

What's interesting is that he makes a logically false assertion with a silly pie-chart: he has all the different kinds of demands for silver, and then he realises: "uh oh, summing up all these items gives us a total demand for silver  of 127%". When you split something into it's components, the components cannot be bigger than what was the whole, that is, you cannot get to more than 100%. Yet, the absurd conclusion he draws from his silly chart allows him to make a forecast: silver will reach $130, from the almost-historical level of $34.

What I stated before for oil:

Irrelevant of these points, and even more importantly, these kinds of crazy forecasts happen only in periods of extreme and irrational exuberance. It is fair to assume that two years ago, when oil dropped to $30 a baril, the supply and known reserves were about the same as today and that the fundamentals over a period of 10 years didn't change so much during these past two years to justify a price move from $30 to $300. So my opinion is that Dow 36,000 and Oil $300 and Gold $5,000 forecasts are generally made close to long standing market tops than floors. I'm thinking that oil will trade at $20 before it trades $300.

Is naturally all valid for silver:

Irrelevant of these points, and even more importantly, these kinds of crazy forecasts happen only in periods of extreme and irrational exuberance. It is fair to assume that two years ago, when silver dropped to $9 an ounce, the fundamentals were not different enough to justify the price to move within two years from $9 to $34. So my opinion is that Dow 36,000, Oil $300, Gold $5,000 and silver $130 forecasts are generally made close to long standing market tops than floors. I'm thinking that silver will trade at $15-$20 well before it trades $130.