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Precious Metals Get Hot, Silver Should Participate in Gold

    PlatinumAmericanEagleCoin

    We've been recommending precious metals in case of an inevitable currency crisis. Gold has risen over $ 1,900, and some experts see it going as high as $10,000 per ounce.

    I am confident that the gold rally is warming up and will last until at least 2007. Its value is expected to rise from $ 3,000 to $ 5,000 an ounce.

    The latest information on gold is as follows: The Federal Reserve Board of Governors has announced that it will not release M3 data on the amount of banknotes issued in the United States. In 1980 the United States had a financial system of $ 6,966 for every ounce of gold. That's $ 1.8 trillion in total. At the end of 2005, the total real money supply exceeded $ 10 trillion. For every ounce of gold there is $ 40,000 in circulation. So the question is: how much is a dollar really worth?

    China, Japan and most of Southeast Asia are all shifting away from the dollar. For the Chinese, the weak dollar is neither solid nor reliable. Yu Yongding, a member of the Bank of China's monetary policy committee, told the China Securities Journal that he was concerned that the United States would cut interest rates in 2006, which would put pressure on the dollar and yuan. China recently monetized about 2.4 percent of its dollar reserves to buy gold. China Galaxy Securities quietly hinted that China's central bank should quadruple its gold reserves in the near future.

    The latest information on silver is as follows: In the long run, gold will sell at 30 times the price of silver. In 1991, it took 98 ounces of silver to buy 1 ounce of gold. It is currently being sold for 62 times the price of silver.

    If the value of gold continues to rise sharply, silver will gain at least 700%. Despite the shortage of silver, it is in demand in industry. In contrast to gold, there is still no exchange trading fund for silver. To set up an ETF, the bank or financial institution must actually buy enough underlying assets (in this case silver bars) to cover all of the dollars invested in the fund. Barclays Bank is about to launch a silver ETF, which will cause silver to explode.

    For a deeper and broader discussion of this and related subject matter, refer to our eBook How to Buy Gold Online and Safely Store Offshore. Here you can view the eBook.