Anyone can question the reasons gold and silver have run up recently, and they should question the fact. That’s simply doing ones due diligence. But scoffers should dig a bit deeper than dismissing the runup as a bubble.
If you want to see bubbles, just look at the price of nearly stock stock today compared to its fundamentals. The Fed’s nearly free money has created the mother of all asset bubbles in the US, as well as call into question the soundness of the $US dollar, which is part of the reason gold and silver have run up and why global central banks are buying it by the ton instead of rolling over the treasuries they are holding in their foreign exchange accounts.
Yes, only gold and silver are “real money.” Everything else --be it the $US, Euros, etc.-- is just an unbacked promise that much of the world is ceasing to trust. Hence, the increasing de-dollarization amongst the BRICS members and partners.
What scoffers at the run up in silver prices are failing to understand is the increasing use of silver as an industrial metal, the diminishing supplies, and the choke points in the supply chain, which the videos I linked lay out.
Trade the rally, or ignore it as you choose, because it is not as if that’s the only game in town.
from an article posted at Zero Hedge: “Silver’s advance is being mischaracterized as another speculative cycle. The more important signal is not the magnitude of the move, but where stress is emerging. Regional price dislocations, product failures, and abnormal behavior in London’s bullion plumbing all point to a market struggling to intermediate physical demand.”
This is simply one of dozens of articles that have commented on what’s going currently in the precious metals markets. Those articles can be dismissed as sheer speculation. But they shouldn’t be, because the gold bugs, like the professional shorts, tend to do very superior fundamental research. Overwhelmingly, their facts aren’t wrong, just their timing, about which the late, great economist, Yogi Berra had this to say, “It’s hard to make predictions, especially about the future”
Some very savvy economists are predicting $200 silver in 2026 and $10k gold. I’m not willing to bet against them, not when I’m sitting on the 200% and 300% gains I’ve made so far in the past year from betting that prices for gold/silver will continue to go higher.
If this happens and it’s NOT a bubble (that is, the price increase either stabilizes or advances) there are rather dire implications for the USD and all the assets and activities that rely on it.
Wendy
I am never going to take anything from ZH as fact. Too much made up nonsene, endlessly.
I can say businesspeople I met with in Boston at our family Christmas Eve party think the US will default on the debt. If you need any excuse for speculation in precious metals that is now it. Many people are concluding we will default.
Though correlations tend to 1.0 when markets are under stress, there is never a single market, nor just a single side to take. The opportunities to profit simply become less obvious. But they always exist for them willing to think “out the box” and to take on a bit of risk.