I don’t care that the bottom has seemingly fallen out of gold and silver. Yes, I understand that historically all the significant gains in the price of those metals have happened over the last decade or so and before that they had been stagnant for about twenty years. Gold has dropped almost ten percent in the last week, while silver is down ten percent today alone. The fact of the matter is that the global economy was smaller and more robust twenty and thirty years ago. That is why gold is so high now and silver was chasing it.
Countries may have been leveraged to their eyeballs, but it wasn’t on everyone’s radar, nor was there a common currency in Europe that was dragging some countries to their deaths while others flourished. The state of the global economy is such today that many things have become much more volatile in the last five years and yes those things include gold and silver. Here is the thing though; neither gold nor silver will ever drop to a point where they are worthless. They just won’t. There are too many commercial and industrial uses for the metals for all demand for them to drop to nil. Why, just last week I read a story on the probable consumption of gold in small quantities that are at this time less than profitable to recover. However, investments in gold are now waning. Why? I don’t know but think about this.
Investment in precious metals or bullion is a rejection of governmental money and finance. You are stashing your wealth in something that is not backed by any government but instead used to back all of their currencies. Money moving into precious metals reflects that they are a better investment than stocks, bonds, treasury notes and the like. Money flowing out of bullion is probably money flowing back into stocks and etc. This might mean that it is a great time for anyone who wants in on gold to get some.
However, you may be hard pressed to find those who are willing to sell at such low prices. Your average gold hoarding, Bible thumping, gun clinging, conspiracy theorist won’t be getting rid of his. These prices are a direct reflection of the gold market in general not about what specific individuals are doing with their gold.
The United States is currently in the midst of a terrific bull market. This is despite the fact that unemployment numbers remain nearly unchanged over the last five years, around 7.8-8.0 percent, and yet job participation is at an almost 35 year low, just 65.3% meaning that over 90 million people have dropped out of the workforce. This means that the QE 1,2, and 3 the government has popped out hasn’t done a damn thing for the employment problems in this country but all those freshly minted 1s and 0s are able to have an effect on the markets. This is because all that created voodoo money has very few places to go. It can’t obviously go into the pockets of
people who aren’t working. Besides they are busy getting other 1s and 0s through unemployment benefits.so all this leads to a surplus of American money being used to artificially inflate the stock market. Don’t get too deep in or when it collapses under recognition of how idiotic the run up actually is you could lose your shirt. Then we’ll watch gold and silver go on the rise again.