Okay, as you all know, I love gold and silver. I'm also not stupid and realize that they've been artificially suppressed for years. In a true free market, Silver would be north of 75 the ounce. Gold, over 3,000. But we don't have a free market in either metal. Their prices are derived from paper contracts. Basically, they can make the price anything they want and yeah, it's demoralizing.
Recently both have been pretty hot. In fact Gold has NEVER closed out a month, over 2000 the ounce. Until now. Silver, while nowhere near its highs, has also done quite well. Which begs the question, are they finally going to get some room to run? My optimistic side, says yes enough situation is in place whereby they both should go. My pessimistic side taps me on the shoulder and says.. " we've seen this movie before." He's usually right.
But one thing we have working for us is time. The longer time goes on, the more "precious" and in the case of silver, rare it becomes. However, we also have another positive working for us. The eco-nazi's and their climate agenda, says they have to increase the use of solar by something like 3X over the next several years. Well, they use silver for solar panels. This means more demand.
Bob Rinear | December 1, 2023
Okay, as you all know, I love gold and silver. I'm also not stupid and realize that they've been artificially suppressed for years. In a true free market, Silver would be north of 75 the ounce. Gold, over 3,000. But we don't have a free market in either metal. Their prices are derived from paper contracts. Basically, they can make the price anything they want and yeah, it's demoralizing.
Recently both have been pretty hot. In fact Gold has NEVER closed out a month, over 2000 the ounce. Until now. Silver, while nowhere near its highs, has also done quite well. Which begs the question, are they finally going to get some room to run? My optimistic side, says yes enough situation is in place whereby they both should go. My pessimistic side taps me on the shoulder and says.. " we've seen this movie before." He's usually right.
But one thing we have working for us is time. The longer time goes on, the more "precious" and in the case of silver, rare it becomes. However, we also have another positive working for us. The eco-nazi's and their climate agenda, says they have to increase the use of solar by something like 3X over the next several years. Well, they use silver for solar panels. This means more demand.
What about gold? It isn't commonly used as an industrial metal. This is correct, whereas silver has always been both a "money" and an industrial metal, gold has only served as money, and ornamentation (jewelery) So then, why is gold going higher? Well, a number of factors actually. One is that people tend to want gold in an uncertain world. I can assure you the world is quite uncertain. We've got a war in Ukraine, a war in Gaza, North Korea making waves again and a host of other tensions.
But I tend to think that there's more to the gold story than just a safe haven. It's of my opinion that at some point, gold is going to be the base for several currencies. Remember, until 1971 the US dollar was "gold backed" and while we had inflation of sorts from the 1940's to 71, it really went nuts when Nixon shut the gold window. We were off the gold standard and our money was only backed by 1) our taxes and 2) our military.
Since 71 our money has lost 90% of its purchasing power. People see that, they feel that. That trip to the grocery store is frightening. New cars cost more than most people make in 2 years. Housing is out of reach for the masses. And all of this was brought on by the US going to a "fiat" system, that says "we declare" the dollar to be worth "X". Each year, X gets less and less.
Nowhere can you see just how perverted our monetary situation is, than to look at our Federal Reserve. They state as policy that they want a goal of 2% inflation. They think that's their sweet spot. But by definition, if you have a finite value of something, and let's use the dollar...then if it loses purchasing power by 2% a year, doesn't that mean that at "some" point it has NO value? Yes, that's exactly what it means.
I tend to believe that enough of the world has lived through enough of these fiat currencies to say enough is enough. They want their money backed by something and the most probable something is gold. That's why So many countries have been buying it. Unlike a treasury that might default, gold just sort of sits there. It doesn't have counter party risk. It doesn't owe debts and derivatives. No, it just hangs out and has the value placed on it by the currency that buys it.
Gold has been money for as long as man has history. It is a unique metal, and all throughout history people have recognized its value. It takes labor to get it. Labor is valuable. It doesn't rust or corrode. It's so malleable you can stretch an ounce of it 50 miles. Of all the things that one would think of to be "money" gold came out on top.
So, we've got both gold and silver going higher recently. Now, I'm on record for years saying that Gold will one day trade over 3500 the ounce and silver over 75. I absolutely believe that to this day. But frankly, if the manipulations could be ended, and the metals traded, not via paper contracts but by open market commerce supply and demand, both would be significantly higher than those numbers.
At 1 pm on Friday, the spot gold price was 2,072.00. Silver was 25.45. Now here's the question of the day. Is there going to be another beat down and you're going to be able to buy both cheaper? Or, is this the new floor and prices will only go up from here. I don't know. Despite saying gold was going higher in the long run since the year 2000, I have never at any point in that time line said "you have to buy it right now, because it will never go lower." Never said that and won't now.
But what I will say is that I love both metals. I love silver a bit more, simply because it gets used up. The above ground inventory of it, consistently goes down. Think about it like this... There's a small amount of silver in say cell phones and solar panels. When those phones are dead, and the solar panels worn out, what happens? They get trashed. So the silver in them, gets removed from the above ground inventory. So, the mining of the metal constantly has to increase to offset the industrial loss.
That balance is already on very shaky ground. There's been times the US mints simply didn't have any to make coins from. But that isn't to say that I don't like gold, not at all. If China and Russia and other sovereign nations are buying it, they're not doing so to toss their money out the window. They all feel Gold has a significant future ahead of it.
So, no I won't say that you'll never get these metals cheaper at some point. Maybe they will fade back again. But in the LONG run, I think they have upside. And when I say long run, I'm talking years. I first said in the year 2000 that I thought gold would hit 1000 the ounce in ten years. It was trading at 280 dollars, and seemed foolish. This was the tech years, the NASDAQ years and Internet was the future. Who would need gold. But a funny thing happened. Gold did hit 10,000 within ten years. But it didn't go straight up, it popped, dropped, wiggled, went sideways, you name it. But ultimately it went up.
Same reasoning here. If you're in it for the long run, does it matter if you buy some here and it fades off some? Not really, you buy some more and average down.
The world is a very scary place. We've got lunatics what want us eating bugs and maggots. We've got space freak looking blowhards that want you to own nothing. We've got war mongers all over the place, lusting for more. Having the stability and safety of two tremendous precious metals is just a good thing to do. Remember this as I sign off...NO fiat currency has ever lasted for ever. Every one of them went to zero. Gold has never in human history been zero. Nor has Silver. That says "something", so listen to the something.
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