As we prepare to put the final wrap on 2013 – there is one thing I know for certain. Neither gold or silver shined this year. In fact, neither metal has shown promise for several years, respectively. But the winds of change have me rethinking my nearly year-long resistance of adding more metal to my personal stash. For what it’s worth, I’ll pass along my opinion and then the decision to buy, or not, is all yours. Since this site, nor I, sale PMs (precious metals)…… I see no reason to “cheerleader” the unbiased facts.
Precious metal is testing the faith of even the most devote PM holder all while other asset classes confidentially climb. The DOW is on fire by rewarding her faithful nearly 30% year-to-date. Some parts of the country’s real estate market are feeling the same positive appreciation as historically low interest rates support rising home values. So, what the heck happened to PMs?
It took only a couple of years to undo gold’s decade long reputation as a steadily climbing safe haven. Folks today view gold, especially silver, as a high-risk asset with expectations of more decline. This expected decline is based on recent performance more than commonsense or an economic mindset.
The next rise in PM is imminent in nature but the unknown is how low will both metals fall before the next great rebound. We can argue short-term expectations (gold or silver) but long-term speaking leaves little room for discussion. Not even the most economically optimistic person can name one growing asset unsupported by central bank intervention.
The ability to support an economy with fiat currency can not last forever, but it can outlast the faith of many folks entrusting silver and gold.
The 60%, or so, Americans still willing to trade effort for a paycheck are divided into two wealth classes. The first class is working to pay monthly bills all while attempting to build wealth (capital). The second class has wealth and is now trying to preserve it or, maybe better put, not lose it. The option to own physical silver or gold is reserved primarily for this second wealth class, but not exclusively (ones living check-to-check most often end up selling physical PMs soon as times get tough).
Now here is where things get interesting. Citizens of America are beginning to realize the biggest threat to their wealth is political. New laws like the Affordable Care Act are less about providing healthcare and more geared toward political control and wealth distribution. Think of it more like a well camouflaged form of modern-day taxation (penalty). The hook is now set and the wealth of America is ready to reel in thanks to unaffordable premiums or fines for opting out.
A rising DOW is nothing more than the distracting hand of an illusionist. Controlling political power is only possible by controlling the wealth of the people. When the majority depend on social programs then those in charge, politically, will stop at nothing to find creative ways to transfer your wealth in order to sustain their political power.
Why it’s nearly time to buy more gold.
The political climate we’re facing is more than just a loss of freedoms. We now live in an age of inherit confiscation meaning all exposed wealth is in jeopardy of some kind or another. This realization, or awakening, bodes well for physical precious metal and the soon-to-be-seen rising values of both silver and gold. In other words, the PM bottom rests in the faith of the masses.
Today’s dollar value assigned to each ounce of silver or gold is a byproduct of PM faith.
Precious metal has lost its illustrious shine as of December 2013, don’t even mention silver. By example, CNBC recently led with an article entitled “I wouldn’t buy gold with my worst enemy’s cash”: Strategist
The article mentions how, “gold doesn’t have many friends”. I agree, but articles like this are partial proof why the time to stack more PMs is close at hand. Since 1970ish, the economic rule of thumb proves one downtrodden asset will climb soon after one faith-filled asset begins to tumble. I know of no crowds lined up to buy physical silver or gold. In fact, PMs are as far off the radar as they’ve been in decades or, as the article’s author puts it, “friendless“.
Sure the reduction in mining due to lower than expected prices in 2013-2014 plays into our “buy or not buy” scenario but not nearly as much the geopolitical & economical climate we’re living. A reduction in mining is only but one of many forces leading to the perfect storm of metal prices rising.
Is all this proof enough to run out and buy physical silver or gold? No, it’s not, at least not for those already protected and looking for the right time to add more. But this does mean the time is nearing. Until then we should live life and be thankful for what we’ve been blessed with.
QUESTION: Do you have plans to buy more silver in 2014?
TPS Reply: Thanks for the great question. As you know, I bought little PM in 2013. The PM market was too unstable therefor I held my wealth in cash all while patiently waiting for metal prices to stabilize. But those already holding physical metal have this option. If you’re new to PMs I strongly encourage you to consider taking a hard look at trading dollars for PM.
Honestly, I have no plans to buy or not buy in 2014. I don’t use a calendar to determine my next purchase. I’ll base my decision on the political climate as much as anything else. It could be hard to deny the temptation of $18 to $20ish an ounce physical bullion, I’ll admit. By the way, I view my PM holding in terms of ounces over dollar value. Dollar values of physical silver, and gold, fluctuate along with the paper PM market and can be misleading (one event is all it could take to send PM prices soaring).
My opinion is we will soon see a great separation between paper and physical PM. Until then- more of the same should be expected.
COMMENT: My identity was stolen this year, you can’t believe the never-ending hassle it has caused. My bank keeps reminding me they will stand behind my losses but I can’t help but wonder if this is a sign of the times. You often mention the safety of storing wealth in precious metal but I can’t help but wonder if the same theft risk is possible. At least my bank is willing to replace what’s lost.
TPS Reply: I’m sorry for the trouble you mention. I’ve heard from at least six other readers this year alone who’ve had their identity stolen, same as you. Cyber crime is the newest threat to our banking and financial system. This crime is unlike any form of thievery before since technology only recently offered such an opportunity to transfer digitized wealth from owner to thief. Online security measures are nowhere near par with today’s cyber threats, this is concerning as you know.
The threat of cyber crime is nonexistent with wealth stored in physical silver or gold. This is one of the benefits of storing physical metal in a safe/secure location over storing wealth in a traditional savings account at your local bank (dollars). You’re right, most banks are doing what they can to resolve bank related cyber crime but online security experts claim this will not always be the case. Some banks will only stand behind depositors who can prove they are doing a depositor’s part of securing online activity.
My guess is banks will soon impose a “cyber protection fee” to depositors and credit card holders. This fee could fluctuate according to cyber threats and a bank’s losses. Please add cyber crime threat as yet one more reason to consider owning physical silver/gold AND physical dollars. HAPPY NEW YEAR TO ALL.
DC Carlton is founder of The Prospector Site and author of the Amazon Kindle #1 Bestsellers Why Silver and Gold Will Go Higher and Storing Silver & Gold. If you’re looking for trustworthy PM assistance feel free to contact DC regarding his personalized consulting service. TPS doesn’t sell silver or gold; we represent you, the buyer, looking for affordable precious metal from honest trustworthy sources. Feel free to register here for his free online newsletter that provides precious metal insight rarely mentioned from mainstream media sources.