Buy Silver?

This past month one of our long time member passed away. Cat was many things along the way but in the past few years his message was "Buy Silver!" The following was a bit of my look into Silver as an investment and I can certainly say he was right! Silver might very well be one of the best investments in the coming few years.

With the governments around the world teetering on financial collapse and in the US, numerous municipalities, states and even the federal government running head long into bankruptcy... this can only boost the run towards something safe. Some are speculating 2011 may be the year we see the end of the EU and the Euro. And with all the secret deals cut behind the scenes between the Fed and the European central bankers, it might not be long after that the US Dollar will also be in dire straights, even with the Chinese kicking in a trillion or two (I tend to believe that's more theatre than reality).

From what I can gather my gut feeling is about March we'll start to get a good picture of all the actions of the governments and the Federal Reserve... and I don't think it's going to be good news. One must also weigh in new regulations (like the idiots trying to regulate the internet at the FCC), the pending Obamacare debacle and the rising Bond interests rates, these all point to further erosion of confidence and hindrances to business growing. In addition, the budget cuts to state and local public services will only increase the drag on the economy... which means either more federal stimulus or QE3. More money printing!

The following graph shows how borrowing has lost its value to the economy... more borrowing is actually reducing output yet the government continues to borrow more!

If you look at the graph below... notice that if one prices the US economy in gold... the drop in real value of the economy becomes obvious. The papering over by the Fed is very apparent. And if one compares this to other charts like US housing starts, the state and local government revenue, or the real unemployment rate, it certainly gives the gold line much more credibility than the government's figures. And this can be repeated in other commodities or currencies and in almost every case it reveals the economy isn't growing, it's sinking.

What this graph should also reveal is the suppression of gold's true value.Which only means another upward indicator for precious metals. We certainly know the economy hasn't been cut in half!

In addition, there is still a rather blatant issue hanging over the commodities market regarding trading practices and paper inflation of the actual physical amounts of gold and silver. There is also a "Buy Physical Silver" grassroots campaign that, with the help of the internet, is gaining momentum. And I haven't even mentioned some of the unique things that make Silver even more valuable. The fact that it is an industrial metal used in many modern applications, the cost to mine an ounce of silver, it's ratio to gold traditionally has been 10-15 to 1 throughout recorded time and it's currently in the 50 to 1 range or, and most importantly, it's a much more appealing commodity for the average individual to purchase in a time of upheaval compared to other commodities. You can't store barrels of oil in your basement very efficiently!

The gold and silver ratio over the past 20 years.

Do you see a trend? And here's a little more historical perspective on the relationship. This has happen before.

I'm saying... silver looks pretty damn good! Here's just a little more information that's important.




And here's some of the "Sell" signs I'd consider. 1) the Fed dramatically raises interests rates in an attempt to save the dollar... 2) a ounce of gold and the Dow come to equilibrium 3) Everybody is buying in... even the average person on the street is trying to get their hands on silver... 4) all the troops come home, they dismantle the interventionist foreign policy and slash government spending.

How likely are these to happen?

In regard to the market manipulation allegations. Here are a few short videos.



Andrew Maguire, the CFTC and GATA in regard to Silver manipulation in the market.



And did you know silver has many other useful characteristics?

Silver in Health


Is there proof Silver works against disease?




It's amazingly simple!





I had to add the article from The Asia Times...near the end of the article... And the best part is that buying gold and silver is so obvious, and so easy, that you laugh in merriment, "Whee! This investing stuff is easy!" 

Paul the Brave

And some other articles for reference.


The price of gold and Silver from 1919 to 1923 in the Weimar Republic

An interview with Max Keiser in Paris on market manipulation

NIA's Predictions for 2011



***Update***
Unprecedented buying of Silver in January