Cheap Gold and Silver Prices: The Deal of a Lifetime?

Jeffrey Lewis Gold and silver prices have fallen dramatically in the wake of Fed talk about tapering its QE programs. The pricing in of such talk has also triggered a yield spike in southern Europe that could deepen that region’s existing debt crisis. Furthermore, sharply rising interest rates have resulted as billions of investors exit perhaps the largest financial bubble ever seen. The end of cheap real estate refinancing has finally arrived as mortgage rates approach 5%. Rising government bond rates mean more money that will increase the chances of stealth inflation.  The Fed acting to crush the effects of inflation may even lead to more money printing. Rising oil prices have cut into already lofty equity valuations, as fallout from the ‘Black Swan’ in the Gulf of Mexico expands. Gasoline prices are already rising. The social unrest developing in various parts of the world is indirectly the result of exporting inflation, which is collateral damage from currency depreciation wars. The precious metals mining sector is dying, as paper metal prices are now well below the cost of production. New supply matters little for gold. For silver, by the time the sector catches up with demand, there will be no silver left. Bullion banks are currently long buyers, yet they are still maintaining a concentrated short position in the futures market. This could be an intentional effort to suppress physical metal prices by selling paper so that they can accumulate real metal more cheaply. In short, it is unfathomable how low the precious metals markets are by any measure. Technically, the market could still go lower, but that doesn’t change the fact that investors have been presented with the precious metals buying opportunity of a lifetimes. Click to Read Full Article