Members of the political and financial establishment prefer that you place your faith in their paper promises. In addition, you must trust the Central Banking system. You should avoid the barbaric relics gold and silver, unless of course you’re purchasing jewelry. Make sure you have a credit card available. You don’t want to handle those nasty germ-ridden bills.
A version of this article appeared on Laissez Faire Today as “Gold’s Redheaded Stepchild is Stumbling Back.”
Don’t you think we ought to find out if silver is a rock-solid investment. Of course, if you prefer to believe in Federal Reserve promises, you don’t need to read the article. Maybe you get the “warm fuzzies” listening to Janet Yellen and company.
Right now, I believe silver could be a better choice than gold, although I don’t think you can go wrong accumulating some of the Midas metal. You might notice that $16 per ounce seems like a support level for silver. Now could be the time to accumulate more. Of course, you might wonder if it is still a buying opportunity if it slides below its support level.
The traditional ratio between gold and silver is 16/1. Although I am not much on historical ratios, the current 75/1 ratio seems out of line, especially for a perfectly useful commodity like silver.
Worldwide demand outpaces the supply of silver. The future outlook for the precious metal remains bright. It possesses the least resistance of any metal and transmits heat well. I have to say that it will find many more uses for high tech. You may be aware of the use of silver as an antibiotic. It could be a good investment just for the above reasons.
Let’s say the crack up boom finally appears. It would be wise to possess some junk silver coins or Silver Eagles. Precious metals can also do well during a deflation.
Here’s a simplistic, but realistic video that explains the business cycle.
Here’s what I said about artificial economic booms in the 7 Destructive Economic Illusions Conquered “As I explained in the section on the classical definition of inflation, increases in the quantity of money cause economic distortions. During the past 25 years, we’ve been “blessed” with considerable increases that resulted in the tech boom, the stock market boom and the housing boom. When Alan Greenspan lowered the Federal Funds rate to practically nothing (to counterbalance the effects of the tech collapse), he guaranteed there would be an unsustainable boom somewhere in the economy. Conditions dictated that much of the inflationary money found its way into the housing market. Illusions are just that—illusions. Right now, it appears that economic illusions are in abundance. Let’s face it. All artificial booms end in busts.”
Both gold and silver supply you long-term protection from the Fed’s ill-fated monetary policies.
Enter price manipulation
“With silver, you also have a relatively easy commodity to control because, along with other commodities, it’s price arises from pure speculation on futures markets.
The reason why it’s easy to control is that relatively little collateral or a lot of leverage can be gained with very little money down in these markets, so large entities, speculators, can afford to manage price at a relatively low cost.
In terms of price manipulation, if you have control over the price, you can also, of course, leverage those positions for profit, profit that is very easy to look back and notice is a very consistent thing if you are the one controlling the price.
This conveniently fits with the higher order agenda required for maintaining ‘confidence’ in a currency by preventing anyone from knowing the relative value of anything.”
According to Zero Hedge “Currently, the crypto-currencies are experiencing huge gains over the past several months. It doesn’t matter if an individual agrees with owning Bitcoin or one of the many crypto-currencies, the important thing to understand is that the tremendous price increases in many crypto-currencies are likely due to concern to the massive amount of Central Bank $1 trillion in asset purchases in the first four months of the year.
Furthermore, crypto-currencies are a likely a GOOD INDICATOR of what will take place in the gold and silver market when investors realize most STOCKS, BONDS and REAL ESTATE values will continue to implode as the U.S. and Global Oil Industries disintegrate.
The gold and silver prices are being capped because paper contracts can be added as more funds move in. However, crpyto-currencies do not have this problem because the amount of Bitcoins, as an example, are limited.”
Do you get the point? Currently, there’s nothing but investors’ subjective values to affect the price of Bitcoin; however, the price of silver is capped because of the addition of paper contracts, causing more funds to move in. You can imagine what’s going to happen when market bubbles burst. It will be up, up and away for silver…possibly creating shortages.
The Future of Silver
If you expect short-term or even intermediate profits from your silver investments you could suffer some disappointment. It’s possible that it could produce some quick returns. However, silver is a long-term solution that protects you from a monetary system run amok.
My concern is that once enough investors and even non-investors catch on to the unhappy fact that dollar devaluation sinks as a failed monetary policy, prices will explode and move out of reach for those who aren’t prepared for the tragic outcome.
Jim Rickards says “As you may know, I write and speak frequently on the role of gold in the monetary system. Yet, I rarely discuss silver. Some assume I dislike silver as a hard asset for your portfolio. That’s not true. In fact, in an extreme crisis, silver may be more practical than gold as a medium of exchange. A gold coin is too valuable to exchange for a basket of groceries, but a silver coin or two is just about right.”
I advise you to read his article Silver — Once and Future Money.
Trusting your wealth to members of the political and financial establishment seems rather unwise, unless of course you believe it’s your duty to practice the “virtue” of self-sacrifice. The rationally selfish individual understands the dangers of paper promises.
Freedom relies on money that is beyond the control of greedy politicians, special interests and banksters. Gold, silver and cryptocurrencies offer lovers of liberty hope for a vibrant personal and financial future. Yes! You definitely want to protect your personal liberty and economic freedom with these rock-solid investments.
A person with modest savings would probably do better investing in 1 ounce Silver Eagles or silver junk coins (pre 1965) and maybe buying 1/10 ounce Gold Eagles.
RA Meyer – Master the Social Maze
Note: None of the above should be considered investment advice. Always consult a professional before making investment decisions.