I will write my intended column on Virginia City and the absolute beauty and wealth creating ability of silver on Thursday. The below seems more appropriate now.
The Dictionary says commodities are things “bought and sold,” or “a useful thing.” Currently, commodities are down in price. Why? Because as far as home building commodities are concerned, such as lumber, steel, copper, bricks, roofing, and even tools and trucks, there is no demand. No demand, because of millions of foreclosures and millions more to come. Home building is at an absolute standstill, and likely to remain so for a long time.
Oil is down $30 a barrel. Why? Because even China admits its needs are greatly reduced as are its imports. The high price of gas and diesel have cut usage of these fuels everywhere in the world, simply because of their cost. Demand lowers, supplies increase, and prices go down. Public transport is booming and cars are being left home. SUVs are a glut on the market. Markets always win.
Why are gold and silver down? They are certainly commodities, and maybe the most important ones in the world. Why important? Because they are the only real money around. The dollar has crept up a bit, but it really hasn’t. It hasn’t, because prices are still high in dollars. What has happened, is that the buck has increased a bit in comparison to other world scrip. All have gone down. All are being printed with no backing, so a dollar’s ’increase’ is merely market hype. At 73, remember it used to be 125!
A year ago, gold was at $650, so even with this massive correction, persons buying it a year ago would have made over 30%, and the same with silver! A year from now, they will probably be another 30% higher. Who manipulated the prices? Did anyone manipulate them? I have no idea, but the market always wins, and it has won with a big correction. I am certain that futures traders were greatly injured or even wiped out. The market always wins. Now guess what? A correction like yesterday or maybe today, is merely a buying opportunity. No holder of physical has been wiped out. No holder of physical has had a margin call. Only holders and buyers of physical have had, and are still having a field day!
I am certain that holders of physical, who bought recently, are not too happy, but just wait a while, and it will all be happiness again. Guaranteed. More and more people are becoming alarmed at world conditions, and even conditions in the USA, regardless of the PPT propping up the stock market. The stock market prices are a grand illusion, and sure to crash…in my opinion. Many predict that gold and the Dow will cross at about 4,000, and I think its possible. Look at what’s happening. Big banks refuse to give out much more than a couple thousand in cash, because they don’t have any, and the big ones are being propped up by the Fed. Banks are shaky everywhere, at least the large ones who foolishly ’invested’ in shaky mortgages. GET YOUR DOLLARS OUT OF THE BIG BANKS. The FDIC has but a teensy bit of dough on had to bail out banks, and if needs be, it will print. $800 million, or is it billion is being printed to bail out Fannie and Freddie, and we’re getting involved in the Georgia-Russia dispute, which is NONE OF OUR BUSINESS. How can gold and silver, which are the only source of genuine security, stay down in scrip? They absolutely cannot.
Are Iraq and Afghanistan anywhere near being finished? Will they ever be finished? The hundreds of billions in printing press dollars being used to pay for those troops and equipment are destroying the buck, so it will go down again. True money remains the same beautiful stuff it always has been. Only its prices will go higher, thereby making them a refuge against scrip becoming ever more worthless. More and more are thinking, and our phone lines are busy. Manufacturing capabilities are being strained. Silver bullion bars and coins simply cannot be made fast enough to fill the demand, so there is a delay. No shortage of silver, just manufacturing capability. Why silver, and not gold? Because silver is the “poor man’s gold,” and the cheapest way to enter the wonderful world of real money. Protect yourself.