This week I have talked about Quantitative Easing and how it can only continue. QE has triggered currency induced cost-push inflation.
Recognizing these trends are important. Understand what is going on around you and you can take advantage of it.
Quantitative Easing is having its expected effect. QE is debasing the purchasing power of the dollar. This has caused gold and silver metals prices to rise.
In 2011 this trend will continue.
And because of this I sincerely believe you should shun real estate and look to Silver as the best investment for your money, particularly if you are someone looking to buy into the real estate market for the first time... or if you are nearing retirement and looking to invest the proceeds from you bubble inflated housing asset.
If you haven't seen it before, I highly recommend you read Sprott Asset Management's Double-Barreled Silver Report
- "While gold dominates the headlines, the silver market actually enjoys a superior fundamental supply/demand story than that for gold."
Sprott explains the complete rational for this statement and it is worth checking out.
Some have speculated that they believe 2011 will see an economic retrenchment in the markets which will bring down gold and silver in the short term - repeating a situation like we saw in 2008. The stock market crashed and metals/commodities came down with it.
I don't think that will happen this time around. I believe, in 2011, we may well see another Lehman type event in the first half of 2011, but the effect will be quite different from 2008. You will see a strong demand for physical metals in preference to any paper substitutes.
Instead of a rush for liquidity and a flight to the safety of the US dollar, I believe the flight this time will be to the safety of physical metals.
I also believe, in the short term (meaning the next two and a half weeks), we are going to experience another strong upturn in the price of silver.
Since late August silver has moved up in stages. After an initial run from $19 to $23, silver had a pattern of sharp price increases, followed by three-week consolidations.
The latest peak was about three weeks ago so, history would suggest that we are about to rise again. I have been looking for this week or the first week of January for the next move.
So far this week silver is up over $1.50 and sits, as I write this, at a new high for 2010 of $30.85.
I see silver moving to $32.50- $33.00 with an outside chance of $34.00 over the next 2 weeks.
Let's see what happens.
As for those of you who worry silver and gold are in a bubble which is about to burst, I say: not a chance. Precious metals are a long ways from a bubble yet.
Ask yourself, how many of your co-workers talk about real estate?
Now... how many talk about silver or gold? How many even know the current price of silver or gold? Put it to the test... ask them tomorrow.
In the meantime, check out this youtube interview of Harvard students on how the current state of the economy has affected their lives. Most of the students were very optimistic on the economic future of their country.
Towards the end of the video, the interviewer offers all these Harvard brainiac's the chance to buy an ounce of silver for $5 (this was posted on youtube on December 14, 2010 when silver was at $29.50/oz).
Not ONE of them accepts and appear to disdain the idea of buying silver.
Bubble? Not by a long shot.
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