As Usual, Gold & Silver Will Rise Again

The S&P 500 index peaked in October of 2007 around 1,575.
It subsequently crashed below 670 in March of 2009, a loss of about 57%.
But it climbed back to nearly 1,600 in April 2013, a rally off the low of over 135%.

Gold was priced at nearly $200 in January of 1975.
It subsequently crashed to about $100 in August of 1976, a loss of about 50%.
But it climbed back to over $850 in January of 1980, a rally off the low of over 750%.

Crude oil peaked at over $147 in July of 2008.
It subsequently crashed to under $36 in December of 2008, a loss of about 75%.
But crude climbed back to over $114 in May of 2011, a rally off the low of over 210%.

Gold was priced at about $1,920 in August of 2011.
It subsequently crashed to about $1,350 in April 2013, a loss of about 30%.
Gold will probably climb back to a large number in the relatively near future.

Silver climbed to over $48 in April of 2011.
It subsequently crashed to under $23.00 in April of 2013, a loss of over 52%.
Silver will probably climb back to a very large number in the relatively near future.

Markets rally, correct, rally, and correct again.  Some of the corrections are so severe we call them crashes.  In the big picture it hardly matters whether the crashes were accidental, encouraged, manufactured, or all three.  In the big picture, what matters are the market fundamentals.

Important Questions for Gold & Silver Investors: 

  • Are the central banks of the world still rapidly expanding the money supply?
  • Are the derivatives and currencies bubbles in danger of crashing?
  • Are governments still spending much more than their revenues?
  • Are central banks, governments, and wealthy individuals continuing to buy gold?
  • Is total debt rapidly increasing?
  • Is faith in unbacked paper money decreasing?
  • Are faith and trust in banks and politicians decreasing?
  • Are the above imbalances unlikely to improve in the next few years?

If YOUR answer to most of the above questions is “yes,” then gold and silver are probably very good investments for you, in addition to being valuable insurance in case some or all of the above imbalances do NOT resolve favorably and safely.  Yes, this is likely to end badly.  Link is here.

The recent crash in silver and gold was one for the record books.  But, gold is not the same as Enron stock.  Tangible physical metals, that have been a store of value for over 3,000 years, are not the same as a paper promise made by less than reputable individuals and organizations.  In the world today, it seems there are many disreputable individuals, corporations, and governments, all pushing paperWe have been warned!

History suggests we should side with 3,000 years of history during which gold and silver have been a store of value and the ultimate real money.  History suggests that we should not trust our savings with either the paper pushers or their unbacked paper money.  Don’t let the paper pushers frighten you out of your investments.

GE Christenson
The Deviant Investor

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