Morgan: Over The Long Run Gold & Silver Will Be The Ultimate Currency

In his latest interview, David Morgan from The Morgan Report gives his view on the gold and silver outlook for 2014, how the dollar is steadily losing trust, why mainstream loves to talk down gold, and whether this is a good time to accumulate physical precious metals.

The gold and silver outlook for 2014:

I think we are close to the end of this [2 year] consolidation. 2014 should be a better year, but better does not necessarily mean “great.” It will take time. The key levels to watch are $26 silver and $1550 gold. Once we are able to break up from those levels and maintain them, then we will be able to build a really solid base and go higher.

What to think of the anecdotal evidence that foreigners increasingly do not want to hold the dollar (for isntance, in Europe and even Israel):

This is the writing on the wall. It is the death spiral of the dollar. Generally speaking, a lot of people have the misconception that a dollar collapse happens overnight. That can happen indeed, but generally what happens is a “backing away.” People back away from the dollar, it gets to a point where nobody is willing to buy except for the Federal Reserve itself (it is right now already buying 70 to 80%). So the dollar becomes an internal currency. That is the trend; this trend is continuing and it is getting stronger.

There are two thoughts on this [two scenarios] :

  1. Debt liquidation: some currencies become the place to be and cash becomes king.
  2. What history taught is that no paper currency survives. Gold and silver become the ultimate currency.

I believe that, over time, some currency or currencies could look better than the dollar, but over the long run gold and silver will eventually, in real terms, go into levels that exceed the expectations of most people.

Morgan’s view on why the mainstream keeps on talking gold down:

It is the paradigm, it is the establishment based on a mindset that everything is ok. People have a need for financial planners, stocks, etc. Gold is the most contra asset to stocks. Gold is valuable because people believe it is. Prior to August 15th 1971, under Bretton Woods, all international trades were settled in gold. Why? Because of the gold standard! Gold cannot be brought to the surface without labour; it is true wealth. That is contrary to the current “get something out of nothing from the Federal Reserve” system. Only a very small minority understands from history what happens in today’s monetary system.

Whether it is good time to accumulate metals now:

When it comes to precious metals, “you have it or you don’t.” You should not worry about the price. At the end of the day, it comes down to you: either you own precious metals or you don’t. There are distinct possibilities that when the day of reckoning is there you will not have access to the metal.

The other scenario is an inability to get it, because of the transport system, the electronic system, or a bank holiday. By waiting you could be unable to obtain it at a certain point in time. If you think there could be disruptions in the system in the not too distant future, the best thing to do is simply buy it now and do not leverage or get worried about the mining shares. Just hold it.

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