I just returned from my favorite local coin and bullion dealer where I had hoped to buy my monthly investment allotment of physical silver. Was I surprised to discover that they were out of nearly everything! My first choice was 90% circulated (pre-1965) U.S. silver “junk” coins. None were available – no half dollars – no quarters – no dimes. So I inquired about Silver Eagles, Canadian Maple Leafs, Mexican Onzas, etc. The answer again was none, none, none and none. They also had very few gold coins – just a few fractional U.S. gold Eagle coins were left. Keep in mind that my favorite local coin and bullion dealer is the largest bullion dealer in a greater metropolitan area encompassing nearly three million people!
I have discovered that it is the same story everywhere that I checked, and not just in the United States. It is the same story around the globe including areas as far away as Mumbai, the financial capital of India, where one of the largest precious metals markets in the world can be found.
This shortage of physical precious metals is the result of the largest discrepancy in history between the price of real physical precious metals and the paper price of precious metals, which has been manipulated by investment bankers, governments and Central Banks in order to counter inflation fears in preparation for the immense buy-outs of failing financial institutions in the U.S. and abroad. (See my previous blog post A Golden Opportunity and a Silver Lining! Load up on Gold and Silver Now!)
With the recent collapse in equities, many people are panicking because they are losing much of their money. I am hearing some say that they are even thinking about storing their money under their mattresses. This would be a good plan, if they would remember to store real money under their mattresses rather than paper money with no backing. Real Money has always been and will continue to be gold and silver! The dollar is declining at a real inflation rate of 13% (Yes, that’s the real rate, not the bogus rate quoted by the government. See http://www.shadowstats.com/.) With the immense amount of money creation that the governments are currently engaging in, to bail out banks and Wall Street, this rate of inflation is sure to surge to even higher levels in the years ahead. As more and more Baby Boomers retire, the government will have no choice but to continue running the printing press at full speed to print more unbacked paper money to pay off their 55 trillion dollar obligations. (Since no currency today is backed by real money, there is absolutely nothing preventing governments from printing as much money as they need – nothing that is except inflation fears, which is why the prices of gold and silver were not coincidentally manipulated to the downside right before all the bail-outs began.)
This all spells inflation, folks!
And not just a little inflation – but eventual hyperinflation!
So what is going to happen to that paper money that people put under their mattresses? The same thing that is going to happen to the money they leave invested in stocks. Its spending power is going to gradually disappear! What should you do to protect the spending power of your hard-earned money? What does well in an inflationary environment? The answer is gold and silver. (And I believe that silver will greatly outperform gold on a percentage basis, for reasons that I have discussed in previous posts, and in my ebooks The New Survivalist and Silver, The Poor Man’s Gold.)
I am confident that the prices of silver and gold have recently bottomed. The huge artificial discrepancies between the paper prices and the real values of precious metals can not continue indefinitely. In a market where commodities are traded freely, price manipulations can only be temporary, as the fundamentals of supply and demand will eventually bring the prices back in line. The artificially low prices that we have seen recently have resulted in a run on physical metals that is world-wide. I believe that silver and gold are poised, like a spring that has been compressed to its max, to explode to the upside.
Protect yourself from the hyperinflation that we are about to endure. During inflationary times gold and silver maintain the buying power of money, because their prices will go up along with inflation (and exceeding inflation when everyone else discovers this opportunity.) If you have been waiting to invest in metals, now is your opportunity. You will never find a better one. This is a once in a lifetime investment. Raise as much cash as you can and buy physical metals now – both gold and silver but especially silver!