Archive for December 14th, 2009

The Silver Lining of Gold

Monday, December 14th, 2009

Unless you’ve been rummaging about in a cave for the past few months, you hare well schooled on gold’s steady and awesome forward march.  With recent prices now hovering around $1,150 per  troy ounce, the same for platinum, $365 for palladium and the mid $18s for silver, the most precious metals are on a world class roll; matching or exceeding other once in a life-time investment/financial chances for prosperity.We best start out on the right foot.  Gold is, has been, always will be the premier- the king of value storage world-wide.  What’s even more magnificent about gold as represented by this cycle’s wild bull-run is this.  Where’s the inflation? Isn’t gold the unsurpassed leader; the utmost inflation hedge?  Of course!But we don’t have any inflation you say; in fact we have stagflation- even deflation in several key economies such as housing.  Right you are and this anomaly uncovers an even more astounding truth of supply, demand and FEAR.  This time, the economic depression has scared the wits out of individual investors, fund managers, central banks- entire nations; ours included.When third world power houses such as India continually increase their hard asset (gold bullion) holdings by another $7 billion through their government controlled central bank, the hand-writing is on the wall; it’s undeniable.Here’s the deal.  We’ve got a whole new ball game folks.  Gold along with its subordinate siblings has exploded from its cocoon of a monetary and inflation (only) safe harbor to the shield against global economic leadership collapse and the explicit trepidation of leadership vacuums across the cosmos.What are we suggesting?  Perhaps you heard it HERE first.  Gold, and its brethren to a lesser extent provides the only perceived, world-wide envelope of protection against global trade budget deficits, resource shortages, geopolitical conflicts; even actual currency collapses and military coups.  It’s happened plenty of times in the past!While the deflationary forces in the economy(s) are strong and seemingly getting stronger, gold has reached and exceeded its all-time record high; a 62% increase in price since last November alone.  But here’s the bonus NEWS for YOU.  Silver.  We think silver might be even better than gold-at least for the mid-term run.While gold is still well below its inflation adjusted record high, set in January 1980 of $2,290 per ounce, silver at $18.45 has already surpassed gold’s growth at 71% and needing only 9 months, not 12, to achieve.  Moreover, silver’s inflation adjusted record high is more than $40 per ounce even eliminating the artificial Hunt brothers manipulated markets of 1980; the real price target is $49.50.Silver is obviously far more affordable than gold making it far more available as well to so many more folks.  Additionally, silver ETFs are rapidly driving up demand and foreign buyers are beginning to own the landscape of silver’s popularity.Unlike gold, more than 50% of all silver goes for industrial uses and the long term demand for silver-zinc batteries (replacing lithium batteries in electric cars) enjoy decade’s long prosperity.  Mostly though it’s the pure math; the undeniable ratios of gold to silver.Historically, one needed about 16 ounces of silver to buy one ounce of gold.  Today it’s a whopping 62 ounces of silver to buy one ounce of gold! Do you see the same profound problem with this picture as we do, especially considering the superior performance of silver already for this year?  Take a real hard look at SILVER as your new protector.

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