Let me tell you the shining truth about this market — the one secret that can help you make boatloads of money when others lose their shirts:
As long as governments globally continue to print and spend money, gold and silver will continue to move inexorably higher.
It’s that simple. If you try to bet against gold and silver, good luck with that. You might catch a short-term downdraft and walk away with a few bucks in your pocket. Or you might get so skinned you can’t sit down for a week.
As for me, I’m playing the BIG trend. And just recently, I got new buy signals on gold and silver. And that tells me that not only can I make money in gold and silver, but I can make even more money with select stocks and funds that are leveraged to the underlying metals.
Over the past couple weeks, I’ve told you about forces driving gold and silver higher. Two weeks ago, I told you about 5 Forces Driving Silver Higher. Then, last week, I told you about 4 Forces Fueling Gold’s Next Move.
There are plenty more reasons why gold and silver are going higher. In fact, I believe this move is becoming unstoppable, and it is scaring the crap out of Central Bankers and Wall Street banks alike.
Why? Because their financial world is built upon a foundation of paper currency — currency they can manipulate and print at will. Rising gold and silver prices shine the harsh light of truth on how the actions of shadowy men in the halls of power are making the paper currency in your pocket worth less and less every week.
Take a look at this two-year performance chart:
The money in your pocket has lost more than 11% of its value in the past two years — this, at a time when the babbling heads on TV are telling us all is well. Gold and silver know the truth. All is NOT well. Not by a long shot.
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Our financial system is under incredible stress, and there are cracks showing at the seams. It could all fly apart. And even if it doesn’t come apart — even if Wall Street and Washington manage to patch up this sinking balloon and keep the entire system bobbling along in defiance of common sense and gravity — even then, you don’t want to have all your money in plain ol’ U.S. dollars. Not when those dollars lose value every year!
Gold and silver on the other hand, look like smart investments to me. And the miners that are leveraged to gold and silver could be the best bet of all.
After all, if a miner has a total cost of $8 an ounce for silver, and it can sell that silver for $15 an ounce — which it could early last year — it makes a profit of $7 on every ounce.
But what happens when the price of silver goes up to $38 an ounce? The miner is making $30 on every ounce of silver. The price of silver has gone up 153%. The miner’s profit margin, all else being equal, has surged 375%! Wow!
You know what? That miner really exists. It was in my $50 Silver and $2,500 Gold report, which went out in October. And the open gain on that position was recently 137% before commissions. Individual gains may differ.
Now, I still think we’re going to $50 silver and $2,500 gold — and maybe a lot higher than that — and I’m starting to see clues that the next blast-off may be around the corner.
Clues like …
Clue #1: High Oil Prices Are Fueling Inflation. The price of West Texas Intermediate crude oil — America’s benchmark — recently soared above $108 a barrel.
Worsening and spreading violence in the Middle East and surging demand in China and other emerging markets are keeping the heat on oil prices. Higher oil prices are bullish for precious metals prices in a couple of ways.
- Higher oil prices are inflationary, and investors and ordinary citizens alike buy gold as a hedge against inflation.
- A sustained increase in energy prices could send the economy slumping toward recession. That makes it more likely the Fed will launch another round of quantitative easing — increasing the money supply in an effort to stimulate the economy. This is bearish for the dollar, and since gold and silver are priced in dollars, it’s bullish for precious metals.
The Fed may go ahead with quantitative easing even if we don’t have an official recession, because some parts of the economy are still in terrible shape. Abysmal home sales and low employment gains are a tempting target for another Fed-funded money gusher.
Clue #2: The Investing Public Is Starting to Wake Up. Most investors have no awareness of the surge in gold and silver. If anything, Americans are more focused on selling gold than buying it. And I’m okay with that — while they sleep, we buy on the cheap.
Now, Americans may be about to wake up from their sleepwalk. I’m seeing a lot of ads for U.S. gold and silver eagles and Canadian maple leafs on websites that didn’t use to have them. I’m talking about newspapers … political websites … even entertainment websites.
When ads for bullion dealers start to stand shoulder-to-shoulder with gossip about American Idol, we might be seeing a sea-change in
Americans’ financial awareness. Well, it had to happen sometime, and the swoon in the U.S. dollar is just the kind of spark many Americans need to look at harder currencies — like gold and silver. But if this is the beginning of the big rush into metals, look out! It has a long way to go. Look at this chart …
The bar chart from CPM Group shows gold as a percentage of global financial assets over time. In 1968, gold represented nearly 5% of financial assets. In 1980, the level had fallen below 3%. That figure had shrunk to less than 1% by 1990 and has remained there since.
You can see that the amount of gold in investor portfolios is rising. But it still has a long way to go to get back to its old highs.
Clue #3: Europe Is Headed for Another Financial Crisis. As much as I kick the ol’ U.S. dollar for its woes, the euro is potentially in worse shape. The cost of insuring Portugal’s debt rose to an all-time high as that country struggled with a financial crisis. Ireland’s banking sector is pleading for an extra $34 billion to stave off collapse. Other financially strapped countries in Europe are whistling past the graveyard, and Spain could be next. We may be approaching the point where the only way for some countries to dig themselves out is to leave the euro.
Why? Because if individual European countries let their currencies float again, they can fix their trade balances pretty quickly. However, a side effect could be the shredding of the euro’s value.
A sinking euro could prop up the U.S. dollar. However, the last time there was a serious worry about the euro, Europeans stampeded into gold. This time around, I expect they would buy gold AND silver.
These are three clues that tell me gold and silver may be on the launch pad … with a lit fuse, ready to blast off.
The Next Surge Higher Is Coming
This year, I expect gold to go to levels at which select gold and silver miners are even more profitable. And silver may get to $50 and gold may surge to $2,500 a lot sooner than many people expect.
The central banks are playing a dangerous game with the money in your pocket. Remember, paper currency requires the full faith and confidence of the people who use it. Confidence takes a long time to earn and a minute to lose. If confidence evaporates in fiat currency, it could take a generation to regain.
And the best way to protect yourself from such a potential calamity — and profit in the meantime from the inevitability of higher metals prices — is to buy gold, silver, and well-positioned miners and funds.
I have 11 such picks in my new silver and gold report … 11 Gold and Silver Champions for 2011.
This report comes out on April 12th … next week … only a few days away! Your opportunity to buy this report at a discount is coming to a close … the time for waiting is almost over.
Act now … or you’ll wish you had.
Yours for trading profits,
Sean
P.S. My new report will sell for a cover price of $295 — but I’m going to offer my special report to YOU for a limited time at a special price of $195 — a HUGE discount! My new report would be cheap at triple the cover price. Don’t miss out on this opportunity. Call 800-291-8545 to order your copy of 11 Gold and Silver Champions for 2011 today. Or just CLICK HERE to order online.
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