Dear FutureMoneyTrends.com Subscriber,
Silver is down again, back in the $22 range. I had no plans to purchase any today and in all honesty probably shouldn’t be as I already have a high percentage of my net worth in it, but I forced myself to because when you know the fundamentals for a good investment and find it being beaten up by the market, the best thing to do is to be on the other side of that trade. Remember, for all the selling going on in the precious metals, there is a buyer on the other side of every trade, so a lot of buying is going on as well despite what the media would have us believe.
I don’t know the floor for silver. In December of 2011, we made a video saying that if silver went to $22, that all hell would break loose in the physical markets, which is exactly what is going on right now, shortages, high premiums, and MAJOR delays on receiving your orders is occurring throughout the bullion industry. Now my worst case scenario prediction has been $17.50, at that price you are going to see silver mines shutdown, please understand that the ‘all in’ cost for mining companies is about $28-$30 per ounce.
Can silver fall to $10? Yes and here is the scenario where I see that happening, if silver continues to remain bearish while stocks soar, Japan is up 46% year to date, the Dow is at all time highs, and inArgentina where they really take their money printing serious, has become the highest moving market in the world…So these markets clearly have a lot of air under them. If the U.S. markets, for example, saw a crash and silver was trading for under $20, it is very possible that silver would fall to its 2008 low during an event where panic selling hit all assets. I am not saying this is going to happen, but if the Dow goes down in a crash, silver will follow it in my opinion; and if a global crash starts with silver at $20… it won’t be pretty.
I still believe that the Dow is headed to at least 20,000, despite the economy being in a depression, the FED and other manipulators are pushing this rally with easy money. Without evengoing into details, does anyone else think it is odd that the Dow never has back to back down days? That any “down” days it does have, are followed with rallies the next day that recover all the losses from the previous day.
Mathematically this just doesn’t make sense, however I am buying stocks almost on a weekly basis. The FED has stated that they want more inflation, so if that is the case, then I want to own real things.
Trend Mail Q&A
What is safe? Seriously… cash sucks, precious metals have only lost value for the past 2 years, and stocks are going up on air? What is safe?
Joe, this is a tough one because it has more to do with your perception of “safe.” If you value everything in dollars, yet don’t believe the dollar has real value, then you are going to lose your mind. If the dollar has value, then nominally you can keep your wealth in cash. Now I fall into the camp that I believe the dollar has no real value, it’s just a medium of exchange that changes in value vs. other things on a daily basis. If you think like me and it sounds like you do, let me answer your question by ignoring the value of your assets priced in dollars.
What is safe to me? I like storing long term wealth in physical precious metals, cash flowing real estate, and international companies that annihilate their competition. Those assets I consider safe, do they move up and down in dollar terms every day, yes, but I believe they will have real value next year and in 100 years. To me, something that I can give to my children and sleep well at night knowing my savings won’t be gone when I wake up are “safe.”
For example, let’s take one of my favorite companies, Becton Dickinson (BDX). The business of selling medical equipment is recession proof, the shares may go down, but that has NOTHING to do with the business, they will absolutely keep paying a dividend and making a profit in my opinion. They even raised their dividend during the 2008 crisis.
Safe in dollar terms, I can’t help you…throw it in a checking account, but to me that is HIGH risk! Safe in terms of real value, it is all around you, go buy a rental in Houston, Texas, where real jobs are being created. Or store it in a precious metal like silver, where miners spend $28 to mine it and you can buy it for $23 minted.
This is a tough one for all of us as the government and central banks have conditioned us to price and value everything in their worthless manipulated privately controlled currencies. You have to mentally overcome the brainwashing and really think about what is real value and financial wealth.
Share Disclosure: I am LONG on BDX