By
Michael Webster: Syndicated Investigative Reporter.
Opinion:
I’ve
been advocating for years that in my humble opinion the average
person like me should buy silver, real silver not paper or
certificates but rather coins, bars, bullion and even silver jewelry.
I’m
not a financial adviser, financial consultant or in anyway benefit
from sharing with my readers what I do and it’s up to them what
they do.
I
believe to further protect yourself if you do buy silver take
physical possession and hung on and buckle up as the silver ride soon
starts to unfold upward.
Silver
is the poor mans gold, as of this writing silver spot is around
$20.00 dollars per OZ. That still means a relatively small amount of
money will buy a lot of silver.
The
extraordinarily bullish fundamentals of the Silver Market suggest, at
current prices, that investing in silver could offer investors one of
the single best long-term investments today. It is no secret that
both gold
and silver
are recognized as a store of value. What is not so well known is that
while gold has demonstrated a solid trend of price appreciation since
2001, more than quintupling in price, the price of silver has in the
past outperformed that of gold.
In
fact, between January 2, 2009 and December 31, 2012, the price of
gold increased over 90%, while the price of silver increased over
160%.
In addition, there is a compelling argument for silver investing
because the economic and monetary fundamentals in place today are
even more bullish than the conditions of the 1970s when the silver
price exceeded $50 per ounce. Yet today's market prices, at well
below the $50 level, are a mere fraction of levels projected by
silver industry experts for the future
In my
opinion investing in silver is the best hedge and defense against all
future economic forecasts including a predicted devaluing U.S.
dollar, recession, depression, inflation, deflation and
hyperinflation.
Let us
look at what others are saying about the economy, investing and the
future.
Clive
Maund is an English technical analyst, holding a diploma from the
Society of Technical Analysts, at Cambridge University, Cambridge
England. Maund warns, "Watching investors fleeing into the
perceived safety of US Treasuries is akin to watching people board
the Titanic in the movie – you know that they are doomed.
This is
because the United States is totally bankrupt – more than bankrupt
in fact, since its debts are physically impossible to repay in any
circumstances and what we are witnessing now is the cowards way out –
the creation of money in whatever quantity is necessary to prevent
total gridlock…..This has one inevitable outcome –
hyperinflation, which, incidentally, can take hold even in conditions
of deepening recession/depression."
Investment
manager Puru Saxena expresses his view this way. "It is worth
remembering that our world’s financial system has been hijacked by
money-printers. Whether it is the Federal Reserve, Bank of England or
the European Central Bank – they are all creating money ‘out of
thin air’ and inflating the supply of paper currencies…..Whilst
paper currencies (cash) regained some purchasing power in the past
few months due to forced liquidation in the asset markets, there is
no chance that they will maintain their value over the medium to
long-term. History is littered with numerous paper currencies which
became totally worthless and I suspect many of the current ones will
also disappear."
Even the
largest financial entities are suspect. Analyst James Quinn writes,
"Hank Paulson dished out $180 billion to the largest 30 banks
in the country in an effort to keep them solvent. It has now become
quite clear that the largest banks in the country, with the
‘smartest’ MBAs, took excessive risk, created and then bought
their own toxic derivatives, and lied to the public and their
shareholders about their true financial position."
The
money managers, the talking heads on financial TV, and the
perma-bulls have been proven wrong. It’s time to start listening to
the people who have been right. They have all warned about the
dangers of runaway money and credit expansion. Most people are still
underestimating the extent of this crisis. They are hoping the stock
market will continue to recover and everything will be alright. What
will happen is unknown, but it’s dangerous to base your beliefs on
the things you want to have happen. If you only want to listen to
Wall Street types who constantly express optimism, you can lose even
more.
Dr.
Krassimir Petrov, writes, "Unfortunately, the depth and length
of the crisis are currently being discounted. At the moment, the
crisis is in its initial phases."
Analyst
Christopher Laird would agree. He writes, "The U.S. accumulates
$9 trillion of national debt in 240 years, and in a mere year and a
half, adds another $8 trillion? And for what? The credit markets are
still frozen solid." He continues, "Over $1000 trillion of
leveraged markets are unwinding, and if you add up all the central
bank efforts to loosen credit markets and do bank bailouts, it adds
up to roughly 15 to 20 $ trillion. Well, $20 trillion is not near
enough to stop $1000 trillion of markets deleveraging. So, the
efforts are doomed to fail."
James
Quinn conveys this worrisome message. "There are $50 trillion of
credit default swaps still outstanding. The hundreds of billions in
taxpayer funds that have been poured into AIG have been used to pay
out CDSs [credit default swaps].
According
to the brilliant bank analyst, Chris Whalen, at least $15 trillion of
these CDSs will need to be paid out. All the Central Banks in the
world cannot create that much paper out of thin air."
Quinn
continued, "Colossal amounts of credit card debt and auto loans
will be defaulting. Consumers currently owe $3 trillion of consumer
debt, up from $2.1 trillion in 2004, or a 30% increase…. the credit
card losses will be much greater than $100 billion. JP Morgan, Bank
of America, and Citigroup will sidle up to the taxpayer trough again
due to these unforeseen losses. Nationwide, an estimated $575 billion
in new and used auto loans are written every year by auto
manufacturers, banks, credit unions and other lenders…..With the
average length of auto loans exceeding 5 years and the tremendous
downturn, there are millions of consumers underwater with their car
loans…..It is quite clear that consumers are collapsing. The toxic
combination of reduced spending and mass layoffs will bring down the
last remaining pillar of the economy, commercial real estate…..After
the coming horrific holiday sales, weak heavily indebted retailers
will be filing for bankruptcy en mass. Mall owners that had expanded
hastily with generous amounts of debt in the last few years will see
rents dry up and their debt payments will choke them to
death…..Office occupancy will decline and rental income will tank."
What’s
an investor to do? How do you protect yourself? After the Treasury
gave Citigroup $300 billion, one of the bank’s financial analysts
wrote these words. "Gold is poised for a dramatic surge and
could blast through $2,000 an ounce by the end of 2014 as central
banks flood the world’s monetary system with liquidity."
Although silver isn’t mentioned, it should be clear that the
reasons for a rise in gold will also boost silver, probably even more
so.
According
to silver analyst Ted Butler “This decline in base metals and
silver byproduct output, as well as the deteriorating world economic
conditions have afforded you the opportunity to take advantage of a
truly exceptional situation. The circumstances have converged to make
silver a better buy than ever before, thanks to the sharp sell-off
since summer. Its one thing to say silver is a better buy than ever
before, and another to back that statement up. Here’s the backup -
It’s in tighter supply than ever and that supply threatens to get
tighter. It’s at reasonable prices now. World economic conditions
favor it more than ever. It has more one-way converts and strong
long-term holders daily. The manipulation is closer to ending than
ever before. The only thing you must avoid is waiting too long to buy
it.”
