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Best of Howard Ruff
Recently after silver had taken a beating for two or three days, I was walking out of church and a friend said to me, "Why are you recommending silver; it's so cheap?"
I attempted to restrain myself. "I thought you were supposed to buy low and sell high." You can't buy low unless you buy when things are out of favor. Today gold and silver are out of favor, and that has created a great opportunity. When it was raging to the upside, I was worried that it would be a very expensive entry point. Actually, you can pay almost any price near these levels and some day brag about how smart you were, but you get better opportunities when the market is down. This correction is a good chance to load up. If you don't load up at times like now, how can you possibly buy low?
I'm really talking about the psychology of the investor. When the markets are going crazy, everyone wants to jump in. That's just an observed fact. But this time the metals have given us a real opportunity. These are the opportunities I lust after.
I recently gave a copy of my new book, How to Prosper in the Age of Obamanomics, to a doctor friend of mine. He told me he hadn't taken my advice before because he had listened to his financial advisor when he pooh-poohed gold and silver.
I told him that when he read the book, to buy quickly while the metals are depressed, and if they go lower buy some more.
Opportunity abounds in alleged bad times. I recently did a radio interview when someone read off the titles of several of my books and said, "You've been wrong before, what makes you think you are right now." The only book I was wrong on was the one about Y2K because I under-estimated the government and industry's ability and resolve to fix the problem. The analysis of the problem was correct, but I under-estimated their ability and resolve to fix the problem in time.
Other than that book, I was right even when I wrote about the Inflationary '80s. While there was less inflation (you might even call it disinflation), in the final analysis there was inflation all through the '80s, although it was diminished from the '70s. It was still an opportunity, but I found better opportunities in other places and concentrated on those.
In the final analysis, if you bought during the '80s, you would have bought cheap; you just needed time for it to pay off.
When will this rally be over?
I'm often asked when it will be time to sell the precious metals. In reality I'm being asked when it is time to transfer your gold and silver into greenbacks.
That time may never come. We may be seeing the total destruction of the dollar - the final collapse. The Obama Administration is determined to weaken the dollar, which is a standard procedure for governments. It means they can borrow a lot of money and pay it off with cheap dollars. They can manipulate the currency to make it possible. That is what is happening now. The Fed and the Administration are determined to drive down the dollar, so why on earth would you want to change your investments from metals into greenbacks?
The only time to sell the investments on my a la carte Investment Menu is when the liquidity of the active stock market, such as the mining stocks is diminishing. You will then switch into bullion and coins. Not yet, as there are still plenty of profits to be made, and the market is still liquid, but some day liquidity will be endangered.
If you are concentrating on the things that are going up, like my Investment Menu, you are actually gambling that you will get out before the dollar bottoms out. Any investment denominated in dollars, other than gold and silver, will be a big problem one of these days - but not yet.
Go to my website (www.rufftimes.com) and click on "Free Stuff." You will find an article that describes how we are doing with the Investment Menu. It is up 86.9% through October of this year. Is that good enough?
In the final analysis, you will be happier that you owned some coins and bullion than some of the high flyers. Fly high for now, but be prepared when I tell you to liquidate those things and buy bullion and coins. I doubt I will ever tell you to liquidate precious metals and buy greenbacks.
I think the dollar is in its death throes. When you buy gold and silver you are not just looking for a profit, you are looking for protection against the decline of the unit of account - the dollar.
Howard J. Ruff is financial adviser and writer of the pro-hard money investing newsletter The Ruff Times. Ruff is the author of Famine and Survival in America (1974), How to Prosper During the Coming Bad Years (1979), Survive and Win in the Inflationary Eighties (1981), Making Money (1984), and other books. He has recently updated and re-released his most successful book, re-titling it How to Prosper During the Coming Bad Years in the 21st Century (2008).
An Answer to the Biggest Question Investors Face Right Now
By Chris Weber, editor, The Weber Global Opportunities Report
October 8, 2009
One year ago, in the October 1, 2008 issue of the Weber Global Opportunities Report, I used as a title "The Immediate Danger is Deflation."
My view was, to put it briefly, that the world's central banks can try to inflate as much as they can, by creating money and supplying it to banks. But if banks are afraid to lend it out, or are rebuilding their capital base, and if businesses and consumers are afraid to borrow - and rebuilding their own balance sheets, meaning saving more and spending less - then there is not much that central banks can do.
One year later, I am sorry to see no real evidence that things have changed. If anything, consumers are even more afraid to borrow and spend now than they were a year ago. The heightened threat of becoming jobless may have a lot to do with this. Those who borrowed madly in the past are now in a kind of hangover. They are now trying to save more.
The markets themselves are bearing witness to this. If they feared inflation, interest rates would be much higher than they were a year ago. Instead, they are lower. A year ago, the US 10 year T-note yielded almost 4%. Today it yields just 3.17%.
The Commodities Index, CRB, has fallen from 325 to 259 in the same year. Though the Dow Jones has risen sharply since last March, remember that last October 1 it was close to 11,000, not the 9,700 area it is now. London's FTSE is up a bit: from 5,000 to 5,100. But that's just 2%. Japan has fallen from over 11,000 to 9,800.
Nearly every piece of real estate can be purchased for less money today than was the case one year ago. In other words, cash has been king this past year. And that is another way of saying that deflation dangers have still not gone away.
But one area has done better than the rest. Let's turn to precious metals.
One year ago, gold was $860. Now it is $1,042. Silver was $12.30 last September 30. Today it is $17.43.
For my readers who have been with me for years, I know I have been repeating the same mantra for all that time: Have the core of your net worth in a mix of cash and precious metals.
For my new readers, I repeat this, and point out that this approach has saved a lot of money that would otherwise have been lost. Both cash and precious metals buy more than they did one year ago, two years ago, and even farther back. I meant it as a cautious method to conserve money in perilous times, but it has turned out to be pretty much the best approach one could have.
There are those who are absolutely certain that the future will be high and even hyperinflation. There are others equally certain that deflation will be our eventual outcome. To me, it seems like nothing has changed in the 35-plus years I've been in this business. Back when I started out, there were the same arguments, the same certainty on both sides. Only the names of the combatants have changed.
For me, let's just say I'm not smart enough to know what the outcome will be. The only thing on earth that I am absolutely certain of is that I will die; that indeed everyone alive today will one day die. Speaking only for myself, I may die tonight or I may live 50 more years.
Beyond that, I am reasonably certain that history shows that paper money not backed by gold or silver loses value over time. One million dollars 50 years ago was a lot of money. It was even more money 100 years ago. Today, well, it's not chicken feed, but let's say it doesn't buy what it did 50 years ago, or even 20 years ago.
But in terms of assets like stock and property, one million dollars (or euros, etc.) buys more than it did one year ago.
This may just be a temporary development; it may be the start of a new trend. I am not going to bet everything I have on either one or the other. Instead, I've been protecting myself from both. And that's why I have been owning and building cash right along with the precious metals I own.
I have cash in case I am wrong about inflation vaulting the price of gold and silver higher. I have gold and silver in case I am wrong about the value of holding cash. I have tried to protect myself against both inflation and deflation. I own some real estate in case that goes up. It would make sense for me to own some general stocks that would do well if the world economy does well too.
In other words, my watchword has been to protect yourself in case you are wrong: to protect yourself against being hurt by any eventuality. This was my view one year ago, and it remains my view today.
To me, the future is unclear right now. We stand on a kind of knife edge. On one side lies deflation, and on the other inflation. I have tried to hedge myself against both, and yet not be hurt if either happens. The recommended combination of cash and precious metals has not only done well in the past year. It has done well since 2000.
And while I am watching developments every day, I see no reason to change my approach, which has worked so well. Of course, it has worked in the sense that it has given me more money in my net worth than a decade ago. But more important, it has enabled me to sleep well during all that time - a decade which has been very turbulent and disappointing for many if not most. And to me, this gift is priceless.
The Greatest Currency Trade of the Millennium
By Chris Weber, editor, The Weber Global Opportunities Report
June 27, 2009
Even though gold has been in a correction during these last few months, it is important to step back and see how it has out-performed every other currency since this decade, century, and millennium began.
I first recommended gold and gold stocks back in February 2002 because the trend I saw of currencies cheapening themselves against their trading partners. You can call this "competitive devaluation." This had not been seen since the Great Depression, and to me, even back then, was a signal that the world economy was heading into tough times.
Since about 2001, whenever any currency rises too much, the local manufacturers or farmers – or anyone who lives by exporting – start to scream about it. Their local governments respond by doing all they can to lower the value of that currency, having it fall in value and thus making exports cheaper, all this in the hope that the domestic economy will become better.
Pick any period so far this young century and you'll see how this is true. For instance, right now you see it in those countries whose currencies have soared the most in the last few months. Let's focus on a recent highflying currency...
The New Zealand dollar has soared 23.6% against the U.S. dollar from mid-March through mid-June. That's the best three-month performance for the Kiwi dollar since way back in 1971, when currencies began floating against each other. New Zealand depends on exports, especially agricultural exports. Total export prices have plunged 8.2% from last quarter 2008 to first quarter 2009. This is not an annualized rate, either, but a quarter-to-quarter drop. If it continued at that rate, it would mean a 33% fall in export income over the year.
Now, the New Zealand monetary authorities are doing all they can do cheapen their dollar. That includes slashing interest rates to just 2.5%, which is a shock to those of us who remember Kiwi interest rates as being the highest in the world. They are printing money and talking about actively intervening in the currency markets to sell their dollar short. New Zealand's Finance Minister, Bill English, just came right out and said that his government would prefer a weaker currency.
The same thing is happening in Switzerland, Australia, Canada, and Norway, which have all seen their currencies strengthen recently.
At any given time in the last few years, whichever currencies have been strongest have screamed about it. A year ago, with the euro at $1.60, Germany – a huge exporting country – basically said it wanted a cheaper euro. It got it: The euro fell to $1.23 within months. The UK wanted its highflying pound, then $2.10, to fall to boost domestic and foreign demand for its goods. It got its wish: Within months, the pound had plunged to $1.45. And on it has gone for a few years now.
As all the countries with unwanted strong currencies move to cheapen them by printing more money, slashing interest rates, or just "talking" it down, the question remains, just what are those high currencies declining against?
If you answer, "against the currencies of their main trading partners," well, yes, this is true. But it is only temporary. If they are successful in this, then the trading partners don't want their own currencies to go too high, so at some point they try to cheapen them.
It has become an endless round-robin game, except to call it a "game" is a little perverse. All holders of currencies suffer in the decline of the purchasing power of their money. You go lower, but then your partners go even lower, and then you have to cheapen your money yet more... It's an endless cycle that really doesn't help the world economy in the long run.
But there has been one money that has benefited from this huge trend. Moreover, it has benefited by giving profits of hundreds of percent –minimum – to anyone on Earth who has owned it since 2000. It is the oldest money of all, a money that has been used long before any of the other currencies were even dreamed about and will be used long after all of them are memories in history books. It is a money that cannot be printed at will and artificially cheapened. And even though all central banks own it, it is the creature of none of them.
I'm speaking, in case you haven't guessed, about gold. Sure, you can play the currency market. I've done it for over 35 years now, and have done nicely. You can buy a currency that is way too cheap and wait, getting paid nice interest while you wait. (At least you could have done that until recently. Now no matter what currency you hold you get paid nearly zero.)
But shall we now see what gold has done in terms of the major currencies of the world?
The South African rand has been the strongest currency so far this year. It is a big gold producer. Yet look the price of an ounce of gold since 2000 in terms of the rand.
Now let's go to another currency which has risen sharply this year, the Aussie dollar.
You see the pattern. Now, gold has not gone up in value against the Chinese yuan (+200%) as much as it has against the U.S. dollar (+260%). Still as great as the Chinese economy has been over the past decade, as powerful as it has become, gold has still soared in terms of the yuan.
It has soared against the Canadian dollar (+178%), the Russian ruble (+360%), the Mexican peso (+417%), and even the Swiss franc (+155%), a currency that has long been regarded as the strongest on Earth.
You can talk about or trade the merits of one paper currency against the other, but they've all been falling against gold.
Put another way, every person on Earth over the past decade, regardless of where they live, would have made hundreds of percent in terms of their own currency had they just owned gold.
Most people do not hold mostly gold and silver in their portfolios. With this fact, I believe that both have much more to rise before their bull markets are finished. Well into the future we'll see the phenomena of the average person piling in, as happens towards the end of every bull market... We'll see the same action in gold; it's just a matter of time.
S&GS Notes: If you've been watching silver prices this week, you would know we've seen a significant drop in spot prices
from the high $18.70's to the current price in the $16.90's. This is the typical volatility seen in a bull market, according to
many of the top precious metals experts. Not to lose heart… What caused this week's dramatic price drop? A couple of things:
1) "The loss of Mass. to the Democratic party has had the effect of causing the fear of evaporation of their political base. The immediate reaction landed deservedly on the banksters, but quickly it was realized that as much as Main Street hates the banksters, it is jobs and the general economy that has the power to deem this administration a one term wonder." The lack of investor confidence caused dramatic drops in the Stock Market across the board this past week.
2) In a highly volatile bull market, it is typical also to see fairly frequent corrections as the prices surge, then fall back, surge & fall back on a gradually upward trajectory.
A Critical Number for Silver Investors
By Chris Weber, editor, The Weber Global Opportunities Report
January 23, 2010
Six years ago, on January 15, 2004, I officially recommended silver for readers of my Weber Global Opportunities Report.
We'd had silver stocks, and I'd owned silver personally, but I was waiting for silver to fall in order to get in at a better price for the newsletter readers.
We got in at $6.18 per ounce... It soon went to $8 and then fell back to $6, and then climbed back to $8, where it stayed a couple of years before mounting a new rise in 2006.
I tell you this to show how wide silver's swings can be ($6 to $8 is a 33% gain in a few weeks' time, then $8 back to $6 is a 25% plunge in an even shorter period). I also want to show the long periods of flat prices that characterize the metal as well.
So now silver is over $18.50. How high can it go?
I've often mentioned that a key thing for silver is for the metal to get back to test the 50% level of its huge decline from 1980 to 2001. This level represents a retracement of 50% from the highest point it reached in the previous bull market to the lowest point it got in the bear market.
On January 21, 1980, silver's London fix price was $49.45. It has never been higher. From there, it began a plunge that would take it to a low of $3.5475 at the end of February 1993. That was a plunge of 92.8% in just over 13 years. A 50% retracement of this loss would be around $26. So far, it has not done that. I'm still waiting.
However, I want to give silver more leeway than gold, since it is so much more volatile. My feelings are that when and if silver soars, it will do so in a fairly short time and go to levels that are hard to believe today.
Several years ago, I thought if silver broke above that $25-$27 level, it could get to $50 in 2010. If it did, in real terms, after inflation, this would still be a lower price than the $50 silver briefly reached 30 years ago. In real terms, $50 in 1980 bought what it would take over $130 to buy today.
I think we are a long way from prices like that. Again, first I want to see how silver handles that 50% point. Maybe we'll get a chance to see that soon.
Already this year, the gold/silver ratio has fallen. This ratio shows the number of ounces of silver one ounce of gold will buy you. The ratio ended last year at 65:1. Now it is 59:1. Even this ratio is historically high for silver. The chart below shows the average annual gold/silver ratio from 1792, when the U.S. dollar began, to 2005.
The next chart updates this, and gives a view of the last 10 years: We've seen the traditional ratio is about 16 to 1. However, at the peak of the last precious metals bull market, back in January 1980, silver went as high as just 14.8 ounces per one gold ounce.
So far, in this bull market, silver has not gotten below about 45:1, back in 2006. I'd want it to make another attempt at that ratio, and then see what happens. This, too, I think will happen in 2010. It's something precious metals holders will want to watch closely.
The way to best play silver is just to buy it, and wait. Be prepared to see it very volatile, and don't have so much that you panic every time silver plunges. In silver bull markets, that's what silver does. If you can, just put your position out of your mind entirely, or at least at the very back of your mind.
But expect silver to run higher in the coming years. Nearly every government in the world wants their currency to decline in value to make it easier to service debt. That means real, timeless currencies like gold and silver will continue to rise in value.
SG&S Notes: I am seeing so much being written on this subject now… I could send out this newsletter DAILY to get you the latest information - important information - you should have… but then you'd all unsubscribe because you'd be overwhelmed and annoyed with me for cluttering up your mailboxes… So… I'm attempting here to summarize the information… keep in mind that many of the experts I'm reading have no conflict of interest in the matter of precious metals (e.g. they are not involved personally in making a living from the sale of precious metals). They are just market analysts…
The content below is really a compilation in my own words of other experts. I take no credit here for the creation or originality… Admittedly, this week's news is lengthy… as I mentioned before… there is A LOT of important information being written right now… I hope you find this helpful. If you don't want to keep this in your mailbox… just bookmark our RSS Feed page at http://www.silverandgoldshop.com/View/Rss.aspx?groupId=1
Will Atlas Shrug?
Information compiled by Mary Beth Maidment
January 7, 2010
Okay, I'm going to attempt to synthesize some of my reading this past week. There is a huge volume of finance and investment experts and other 'market analyzers' out there all talking about these things.
I don't know how many of you are great readers of literature. Personally, I love reading, listening to audio books and the like. Awhile back I made my way through the volume of Atlas Shrugged by Ayn Rand on audio. I haven't tackled it in print yet, but am considering it.. (it's about 1-1/2" thick… so a daunting task for bedtime reading). But at any rate, I heartily recommend it… it's a great epic novel on capitalism.
There's a wonderful quote by one of the characters, who is refuting the notion that 'money is the root of all evil'. (That quote, by the way, is inaccurate also… Scripture says 'the LOVE of money is the root of all evil'. BIG difference!)
Here's the quote:
"Whenever destroyers appear among men, they start by destroying money, for money is men's protection and the basis for moral existence. Destroyers seize gold and leave its owners a counterfeit pile of money. This kills all objective standards and delivers men into the arbitrary power of an arbitrary setter of values. Gold was an objective of value, and equivalent of wealth produced. Paper is a mortgage on wealth that does not exist, backed by a gun aimed at those who are expected to produce it. Paper is a check drawn by legal looters upon an amount which is not theirs: upon the virtue of the victims. Watch for the day when it bounces marked 'Account overdrawn.'" - Ayn Rand
Atlas Shrugged was published back in the 1950s… but the issues Ayn Rand was spotlighting then are even more apropos in 2010. The looters and destroyers spoken about in Atlas Shrugged were the majority of corrupt politicians, bankers and big corporate executives… Those translate into the same today along with the criminal banking system called the Federal Reserve.
Our currency used to be backed with a gold standard, as provided for in the US Constitution. But the fiat currency scam cannot be run with a gold standard in place because you cannot manufacture money out of thin air like you can with a printing press. Politicians cannot reward the powerful individuals and lobbys that get them elected by creating trillions of dollars in currency and handing them 'bailouts' when a gold standard is in place. The Federal Reserve cannot 'loan' currency to the US Government at exorbitant rates (when it only costs them pennies to print all denominations, and then they 'loan' it to the US Government at face value plus interest!) when there is a gold standard.
These schemes cannot last indefinitely. There will be a paying of the piper. The 'prosperity' our country has enjoyed for the last half century has been built on a house of cards - the fiat currency system - which, like Humpty Dumpty is going to come tumbling down. In addition, our country has followed the Keynesian School of Economic thought, which is built upon leveraging such things as real estate and stock markets with the philosophy that these can only go up . As we have seen with the housing market and now with the commercial real estate market, real estate CAN go down… even further… and stock markets CAN founder on the rocks of a fiat currency system in which excessive printing of currency, job losses, and bankruptcies are the norm.
Noted economist, Murray Rothbard warned against this long-term borrowing by government to pay for public services when he wrote,
"Deficits and a mounting debt … are a growing and intolerable burden on the society and economy, both because they raise the tax burden and increasingly drain resources from the productive to the parasitic, counterproductive, "public" sector. Moreover, whenever deficits are financed by expanding bank credit--in other words, by creating new money--matters become still worse, since credit inflation creates perma-nent and rising price inflation as well as waves of boom-bust "business cycles."
The Feds and politicians in Washington are going to be caught in their own scam. It reminds me of my reading in Scripture in the book of Psalms 7: 14-16
14 He who is pregnant with evil
and conceives trouble gives birth to disillusionment.
15 He who digs a hole and scoops it out
falls into the pit he has made.
16 The trouble he causes recoils on himself;
his violence comes down on his own head.
Psalm 9:16 "the wicked are ensnared by the work of their hands."
Here's the domino effect: The Fed will continue to try to keep its finger in the dike by creating more liquidity, but this will cause the dollar to continue to fall. As the dollar falls, the bond market will sink to protect itself. Interest rates will then move higher, which will, in turn, put pressure on the economy.
The only alternative would be for the Fed to stop the printing presses and creating more money. If they do that, the economy will sink into a deeper recession. Something has to give. This can't go on for very much longer.
Which choice will the Fed make? Bernanke seems to be committed to letting the dollar fail, in a desperate attempt to wring forth an inflation of assets. I think he believes that eventually his dollar creation and resulting liquidity will reverse the deflationary tide.
Richard Russell, publisher of the Dow Theory Letters writes,
"The Federal Reserve took our money system away from the discipline of gold and kidnapped it for its own benefit. As I see it, over the coming years we'll see gold again come into its rightful place as the true money of the land. For this to happen, a lot very painful changes will have to take place.
I'm sorry to say it, but the great advance in the US standard of living has been due to the Fed's systematic policy of inflation. You can't manufacture prosperity via the printing press, or I should say that you can't manufacture perpetual prosperity via printing. The US's long love affair with Fed-created inflation is coming to an end."
So, if you're a thinking person, you're going to be asking "When will this end be taking place?" Experts are all talking about this… here are some of the signs to watch for:
1) Gold breaking the $1000 mark - heralds the collapse of the dollar Eric deCarbonnel
2) Increase of world-wide investment in precious metals we're seeing record amounts of investment being done in China, India, Russia, other major countries who are stocking up as a hedge against what they know and believe is coming soon - the collapse of the dollar and other fiat currencies of the world. We're also seeing record amounts of physical metals being purchased by domestic investors.
3) Decline in supply of gold and/or silver (shortages) - Mark O'Byrne of GoldCore says that
" In 1900 there were 12 billion ounces of silver in the world. By 1990, the internationally respected commodities research firm CPM Group say that figure had been reduced to around 2.2 billion ounces of silver. Today, that figure has fallen to less than 1 billion ounces in above ground refined silver. It is estimated that more than 90% of all the silver that has ever been mined has been consumed by the global photography, technology, medical, defense and electronics industries.
On current supply/demand trends, the amount of above ground refined silver is projected to shrink to even lower levels in the coming years. Industrial demand has been outstripping mining supply for most of the last 20 years, driving above ground supply to historically low levels. Few in the investment world are aware of this important fact.
Silver production has been flat in recent years while demand has been increasing. This hasn't resulted in significantly higher prices yet because the world has been able to fill the gap from inventories and official government stockpiles. However, today the U.S. government's stockpile is all but gone, and sales from other official sources, such as China, Russia and India, are declining, too. The decline in refined silver stocks, from around 2.2 billion ounces in 1990 to around 300 million ounces today means that silver stocks are near an all time low."
As for gold, Eric deCarbonnel writes,
"With the difficulties and irregularities in the COMEX delivery process, many, including gold brokers like JB Slear, have doubts as to whether there is gold in inventory to match existing warehouse receipts.
Like others involved in the gold market, Slear believes that there are real shortages of precious metals that have yet to be exposed. "
4) Drop in the gold/silver ratio - Dr. Jeffrey Lewis of Silver Coin Investor says…
"Throughout history, gold and silver have been tethered together in the eyes of investors. Once one of the metals moves too high or falls too low, investors are quick to switch their holdings from the relatively overpriced metal to the relatively under-priced metal.
The current market conditions indicate that gold has become overpriced and silver has become underpriced, suggesting there will be a shift in assets from gold to silver."
Greg McCoach of Amerigold says ….
"There is approximately 17.5 times more silver than gold in the world which coincidently, is very close to the 16 to 1 monetary ratio of silver to gold that existed for thousands of years. As problems with the dollar and other national currencies continue to worsen, some of the wealth fleeing national currencies will flow into silver, causing the ratio of the precious metals to decline as it has since the ratio was over 100 in the early 1990's.
…Eventually I see silver returning to its 16 to 1 ratio with gold before all is said and done with the secular bull market in the precious metals. What does that mean for how high silver could go? Well, if gold is 1200 an ounce and you divide by 15 you would get $75 an ounce silver. If gold goes to make a true inflation adjusted new high, which would be roughly $6,500 an ounce, silver based on the 16 to 1 ratio would be $406.35 an ounce! Right now the silver to gold ratio is 62 to 1 but with what I see happening in 2010 I think you will begin to see this ratio cut in half."
5) Explosion in the price of gold (silver will follow) - Again, Richard Russell says,
"This is one of the greatest and longest-lasting bull markets in history. The record is shown below. Ten years of successively rising gold prices. I study the listing, and I ask myself, "What does 10 years of steadily rising gold prices mean?"
Last day of the year quotes (spot gold).
2000 -- $273.60
2001 -- $279.00
2002 -- $348.20
2003 -- $416.10
2004 -- $438.40
2005 -- $518.90
2006 -- $638.00
2007 -- $838.00
2008 -- $889.00
2009 -- $1096.50
First, we must understand that gold is the immutable standard against which all other values are measured. The price of gold is the universal standard; it never changes. The price of everything else changes in terms of gold. I study the list above, and this is my conclusion -- "What it means is that it requires more dollars each and every year to buy one ounce of gold. In other words, year after year, the dollar is being devalued; the dollar is systematically losing its purchasing power." The reason? Too many Federal Reserve Notes (we mistakenly call them "dollars") are being created by the Fed. The more dollars that are created, the weaker the dollar's purchasing power. The listing of gold's annual year-end price is stark evidence of the diminishing purchasing power of the US dollar. This depressing picture highlights the fact that the government has two ways of robbing the people of the fruits of their labor: (1) taxes and (2) the systematic destruction of the purchasing power of the dollar. There is only one way out of this slow disaster. Get rid of the Fed and allow the United States to issue its own legal Constitutional money -- money which is preferably backed by or convertible into gold. The year-end closing prices for gold tells the tale that the Fed and the media are afraid to disclose. Did you see a single reference to this ten-year gold story? Imagine if the S&P had been higher 10 years in a row. It would have made headlines in every newspaper in the land. "
With Regard to Silver prices, Dr. Jeffrey Lewis says,
"Silver's Ascent Won't Be Slow
In relation to gold, silver tends to make much larger percentage movements more frequently than gold, which is most likely due to its inexpensiveness and the volatile industries that demand so much of the metal each year. In addition, silver has a tendency to enter into short but strong periods of price strength and decay very slowly. This can be confirmed with any silver chart; each uptick period is short but strong, while the dips tend to happen very slowly.
Why You Should Buy Silver Now
The mixture of silver's volatility and the shift in demand from gold to silver as an inflation hedge provide rationale for buying silver today, rather than waiting. As many have seen, when silver heads higher, it does so quickly and often without tell-tale signs of strength. Thus, to take advantage of any future climb in the value of silver, investors should be quick to buy now, rather than wait until after silver makes its next move."
The following two signs almost go without saying… these are
6) Collapse of the bond market
7) Crash in the stock market
But just keep in mind.. by the time these last two signs appear … the prices of gold and silver will be almost out of range for the ordinary person looking to protect his/her assets, and widespread panic and chaos will be the rule of the day.
Some references for more reading: