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I have written several times over the last few years with my investment advice, which is namely buy guns ammo gold and silver. Had you followed this advice you are doing quite well for yourself financially and are more prepared the 95% of the country. I came into the silver game relatively late buying my first silver rounds in the low teens. So I come at this from an entirely different view than someone who either bought in the 40’s or has sat on the sidelines watching.
First, silver has gone from $2 to $50 in a decade, anyone who was early to this game was handsomely rewarded for their patience. So people can say today “silver is a crappy investment” but anything which has been up several hundred % in the last decade of two major market crashes has not been a crappy investment. Some people say that it has topped, and run out of steam here at $30. Seeing as we’ve been here for a year and a half this argument seems somewhat valid. My view of the rise of silver and gold post 2008 is that they assumed their roles as inflation hedges and protection against tail risk, so when the Federal Reserve embarked on endless QE’s and Bush and Obama had their respective giant “stimulus” the world took pause and didn’t know exactly what to expect since such reckless monetary policy had never been undertaken by an economy of such size. Inflation has been constant (as it has been since 1913) but it hasn’t been hyperinflation. As with anything over time even the extreme can seem normal, 10’s of billions in Fed money creation and trillion dollar deficits are now normal and don’t even have an effect on the stock market. The pure crazy of DC and the Fed doesn’t surprise anymore, billion dollar companies going bankrupt is nothing but a weeks worth of news.
So what will it take for gold and silver to head to all time highs? More unexpected craziness. This could take several forms, loss of reserve currency status, war, derivatives implosion, trillion dollar stimulus etc. Any of these things could be a catalyst for rockets in the precious metals sector.
I gave my last Gold and Silver advice in Sept 2011 (time flies) and I stand by every word of it.
The bottom line is this, only you know your financial situation. I think it is paramount to have your preps in order and I see precious metals as nothing but preps for your financial future, they are not necessarily preps post SHTF, so don’t think you can forsake guns and ammo and post SHTF just buy body guards, you will be in for a rude awakening.
I am of the opinion having very carefully observed the market for the last 5 years that major events will happen in a short time frame, until then we are on the slow burn, don’t expect to look online one day and see triple digit silver without major events going on in the world.
Eric is the founder of Nanex, and one of the most knowledgeable people on HFT’s and Algo’s running roughshod over the markets.