I was gratified to see that the spot price of gold went to a 17 year high ($459 per ounce) yesterday, while silver closed at $7.21 per ounce. (See my metals price ticker.) I expect some brief profit taking for a few days (and perhaps into October–which has traditionally been a weak month for precious metals prices), but then the metals bull will probably resume his full-tilt charge in the winter. How high will the top be? Who knows… But consider that when adjusted for inflation, the $805 top that gold saw 25 years ago would equate to around $2,200 per ounce, today.
Only one thing is for certain: Like all of the other “fiat” (by decree) unbacked paper currencies of this new century, the U.S. dollar is doomed. Any investment that you buy denominated in dollars is a loser in the long run. Because of both the huge balance of trade deficit and the Federal government budget deficit, someday–probably within the next five years–there will be a full scale dollar crisis. When that happens, expect to lose 40 to 70% of the value of all of your dollar-denominated paper assets overnight. Poof. Finis. Gone!
Your solution to all of this is to buy tangibles. Buy productive farmland. Buy guns, buy ammunition, and buy storage food. Once that is done, buy some silver, and then perhaps some gold. Then you will be sitting pretty. Take the time to read through my Profiles of retreat owners. You will note that tangibles investing, including plenty of precious metals investing is a common thread. They do this for a reason: These folks are not the Generally Dumb Public (GDP). You should invest likewise.
My current prediction is that the U.S. Housing Market Bubble is likely to burst sometime in the next two or three years. There will likely be a concomitant stock market collapse and perhaps a dollar crisis. This will make the Crash of 1929 look like a summer picnic by comparison. And depending on which party that the Powers That Be (read: The Banksters) want to occupy the White House and to control congress, then these events will be orchestrated either before or after the next mid-term elections. (Pardon my cynicism.) In any event, buckle your seatbelts.
Parenthetically, I still think that silver has a better chance of doubling or tripling than gold in this bull market cycle. So if you have the room, buy more silver than gold. Besides, all of those 55 pound bags ($1,000 face value each) of pre-1965 silver coinage make great ballast in the bottom of a gun vault–making your vault that much harder for burglars to haul away. (Which is not to say that you shouldn’t also bolt your vault to the floor, too.)
Aside from my steadfast faith in God, the reason that I sleep well at night is the knowledge that my home has a very full larder, large stores of fuel, and a full gun vault. The last thing that I see when I drift off each night is the reassuring glow of a Colt 1911’s tritium sights beside my bed.