you may not have the dough available to get on the gold train? Or maybe you think that I'll get into it on the next pullback? However, did you not have this decision point before and passed? When gold rose from $1275 to $1325 back in June, did you get in? How about your second chance when gold rose from $1400 to $1500 in late July, early August? The point is this, there is fear in investing, especially for ordinary citizens with limited resources. This is why I say to you, here and now, why not choose...
The Poor Man's Gold
SILVER! That's right. The other precious metal like the slogan for pork, the other white meat. Historically, and I'm talking about the period before central banks came into power, silver had a gold ratio of 16 ounces of silver for one ounce of gold. After the Fed came into being in 1913 that spread began to widen. Silver fluctuated from 25 to 40 per one ounce of gold. As central banks pushed gold out of the monetary equation, the spread continued to widen. Today, it runs up to 95, but generally stabilizes around 89 ounces for one ounce of gold. This is why silver is even a better opportunity than gold.
For the remainder of this piece, I will refer to gold unless more clarity is needed. The reason is simple: if gold rises, so does silver and the opposite is also true. Let us look at gold.
Hitting All-time Highs versus...
all the major currencies: the euro, the British pound, Canadian dollar, Australian dollar amongst others. This makes the precious metals a world-wide event. As a result new money is entering the commodity. If you have more people in the store, you will have more sales. However, there are two threats...
Fed and Banking Industry
The Federal Reserve and central banks throughout the world picked fiat money ages ago. They will seek to protect their choice. Their problem is printing without responsibility has devalued fiat currencies and excessive debt has got to a point where not only do they need to keep interest rates low, but seek even a lower formula. This has led them to negative yields. These intellectual midgets think that they can engineer an economy. They play God. By doing this, they oppose their old argument against gold. They use to say that gold does not pay any interest and it cost money to store it (Like each of us has so much that we need a safe deposit box). Now, with the push into negative bonds, your dollar value will be less than your original purchase price. You lose money! Gold on the other hand always maintains value and it can also rise to a value 10x any interest rate. Keep in mind, that all fiat money has no value other than the government declaring it legal tender. If another chooses not to accept your dollar, then what?
Gold never has this problem because it always maintains value. It is not political. It cannot default. It does not need government compliance which is one reason why government hates it. Gold protects the citizen by keeping its value while government has lost its focus to put you first.
The danger is this: the Fed can manipulate interest rates and it can use the media as its pulpit.
Sadly, our media does not possess the strength of character to oppose central banks. They do not foster an opposing view or find economic disciples like myself to offer an opposing view to central banks policies.
The other danger with the Fed is in its second Congressional mandate: stabilize prices. In the past the Fed and central banks worked together. They would announce an agreement like Bretton Woods. They could do this again. I don't think that they can get it going until some new crisis develops like the Brexit event with the EU. They will try something. You can "bank" on it.
The other danger is the banking industry. Lately, large institutional banking firms have come out to say that gold is in a bull market. They have raised their target price and they have purchased large investments into precious metals. Dear Reader, these people stand with central banks and fiat money. There are been many prosecutions of traders in large firms like J.P. Morgan Chase for trying to manipulate the precious metal market. Mainly, they short metals to which keeps the price low. They may try this technique again since they have a large investment into the precious metals. This is risky for them as new money enters the market, but bumps will appear along the way. This is why it is for your benefit to understand charting and resistance levels.
Back to Hi, Ho Silver!
The above trend helps make any investment into silver less risky. The charts are bullish on it. Last Friday, silver closed at $18.34. The momentum is strong. The present continuous contract reached almost 500 million. The next target price is $19.71. That's a ironic number because in 1971 Nixon took us officially off the gold standard. Anyway, silver has enough energy to pass that level. The real resistance point is $21. If silver maintains its strength, and passes this point, there is no resistance until $35. That people, is a rocket ship that you can afford and put some eggs in your nest basket. Personally, I like Wheaton Precious Metals (WPM). It is a streamer and it has very little risk. It gets around half of its value from gold and the other half from silver from mining companies that they financed. It pays a dividend, but if you reinvest the cash, the company pays you 3%. If you cannot afford to buy shares, then get some silver coins. You can finance them in a IRA account. Another option is to buy "junk silver." Those are old silver coins that use to flow within our currency back in the day of the gold standard. The last year for these coins is 1964.
Finally, since silver is the tail of gold, let me give you its projection. Currently, gold is aiming for $1575. Once it reaches this level, a pullback is in order. Gold could fall back to $1480-1490. If it does, jump into silver with both feet. The Fed is trapped. The banking industry really cannot afford to fight the tape and together, this gives you a chance of a lifetime. As the Lone Ranger would say, "Away, Silver!" That's beautiful. Peace.
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