Buy Gold

Learn how to buy and sell gold in our online guide to gold investing
Subscribe to RSS feed
Gold News | Gold Investing | Scrap Gold | Buy Gold Bars and Coins | Buy & Sell Bulk Bullion | Sell Your Gold | Gold Forums
Wednesday, December 19th, 2018 - Buy Gold - Bringing you trusted gold news and gold investing information since 2006

Silver Breakout Has Serious Fundamental Legs

Silver has recently broken above all time highs (nominal highs) and investors should consider buying silver here with a tight stop loss at the Hunt Brothers’ high form the 1970s or $30 depending on risk tolerance.

Hyperinflation occurred in the U.S. during the Revolutionary War and during the Civil War and has occurred in many countries throughout world history. People who have lived through the actual collapse of a currency are the best people to learn from if we are heading for a collapse in fiat currencies globally – whether you agree with this hypothesis or not it is still something to consider. I like the following video on hyperinflation, as this guy didn’t need a Harvard Education to understand the collapse of the USSR and the Soviet currency (click here for the video).

I like to study research by those who have experience with a currency collapse first hand, because it’s far more believable and really drives home the point that the “Full Faith and Credit” is not what it used to be in the United States. Silver’s rally is an exact measure of the loss of purchasing power of global currencies which the filmmaker argues is happening right now in the U.S. and in Canada. Truly, there is no alternative to silver if you want to preserve your wealth during the collapse of a Central Bank or of a country’s currency and fear over reckless government spending (and money printing) is driving commodities higher worldwide.

Even if you believe that everything is just fine, and that QE2 is a free lunch, the absolute size of the deficits and long term off balance sheet liabilities of the U.S. federal government have created a hidden tax on U.S. workers and savers that is benefiting those with assets at the expense of the poor and widening the wealth gap. Over the past 100 years, farming has dropped from being 40% of the workforce to just 2% of today’s U.S labor market and increasingly structural issues such as disruptive technologies have made many professions obsolete. Jacking up equity markets only makes the situation worse one might argue, as shifts to jobless business models are happening even more rapidly given unlimited new investment in technology spending. With the valuations out there for cloud computing in the 100 PE range, for example, one would be a fool not to try to aggregate large segments of the digital economy into one database in the cloud.

Here are five Commodity Index Funds that will maintain an investor’s purchasing power in the event of a default or devaluation by the United States on the ever mounting pile of liabilities we call Uncle Sam (which right now seems to be under control of the guys getting the $1.6 trillion handout, i.e. defense and NSA). With the advent of nuclear arms, it is clear that spending incredible amounts on defense is totally redundant and could be a lot more cost effective if we simply put a billion dollar reward out for Osama Bin Laden (we spend $500 billion a year “fighting” him anyways!) We already have enough nuclear weapons to destroy 50 planet earths, so what is the point of spending borrowed money on guns and ammo? The wars we are fighting are very similar to the ones fought by the Soviets (who also spent ridiculous amounts on defense) right before they went bankrupt and the result was that citizens had to wait in mile long lines for bread. Hopefully Bernanke is also a student of Russia in the 1990s and of the Roman Empire.

(DBA) – Agriculture is an industry suffering from underinvestment and tight supplies. DBA is a good play on soft commodities and grains.

(RJA) – The Rogers Agricultural Index is a good way to play grains as well, but these ETN’s have risks involved from a bank run perspective.

(RJI) – The Rogers International Raw Materials Fund is a diversified basket of commodities with oil making up around 35% of the allocation.

(PSLV) – The Sprott Physical Silver Fund is one of my favorite investments/currency hedges on Earth right now.

(DJP) – This is a less diverse basket of commodities but tracks the the Dow Jones-UBS Commodity Total Return index and is an ETN offered by UBS.

So all in all, I hope I am wrong about silver and that it crashes by 50% from today’s breakout prices, however the government has decided to flood the world with dollar bills and if some type of collapse begins, there is not much time for a re-do. I would hope our leaders would put a real economist like a John Hussman or a Jim Rogers in a position of influence within our economic budgetary structure. The conflicts of interest are the problem, not liquidity – you can’t fix the Quadrillions of derivatives floating around out there with low interest rates and a slap on the wrist. People actually need to go to jail and Glass Steagall needs a rebirth.

Disclosure: I am long DBA, PSLV, RJA, RJI.

Additional disclosure: I will sell them if Ron Paul is elected president.

The original article is published at

Looking for a precious metals provider that sells gold coins and bullion (including junk silver)? Click here to visit our favorite provider (FREE SHIPPING!).

© Copyright 2018, Buy Gold