An interesting article on Seek Alpha, titled Silver Will Rebound: 7 Ways to Profit reports silver has been dipping in price lately. Yet, despite the recent price correction in precious metals investing in gold and silver is in reality a no brainer. Silver is an industrial metal and will always have demand in jewelry, silverware, and dentistry. Much of the economy continues to limp along, except the record setting stock market. However, sticks can tank at any time.
Stocks may soon undergo its own correction because it is a bubble that is about to burst, and when it does those who bought silver at todays discounted price will reap significant speculative profits. Investors should take pause when they look at stocks, because the economy cannot produce enough jobs to lower unemployment and most new jobs are only part-time. There really is no reason for stocks to be setting records and a big correction is looming. Silver will go up as a result.
Inflationdata.com says as the real worth of our dollars continues to decline and the main media brings the news to the masses more folks will be looking at gold and silver to protect their assets and way of life. However, gold sells for almost $1500 per ounce even though it is thought to be under-valued, while $24 per ounce silver is a bargain. Most people do not realize that silver offers safe haven qualities similar to gold, but costs much less. If you cannot afford gold, silver is the way to go.
As industrial demand increases and more people turn to discounted silver its price will increase. When it does you can sell for a profit, or keep it long-term to protect paper assets like dollars, stocks, and bonds. Silver and gold actually cushion the blow when inflation erodes the dollars’ worth and when the inevitable stock crash comes. Stocks will come tumbling down; it is unavoidable. When this occurs gold and silver too will rise in price. Expect this scenario to happen in the very near future.
While no one can predict what the markets will actually do we can take a look at the forces that typically influence them. For example, we know the Federal Reserve is committed to stimulating the economy. They are accomplishing this by purchasing $85 billion worth of mortgage bonds monthly. Normally, this would cause inflation to be high; however the FED’s low interest rate policy has kept inflation in check. This has skewed the financial markets. The result is a record setting stock market that has no reason to be high and lower gold and silver prices that should be setting records. Inflation will eventually shoot up because the FED’s stimulation policy cannot be sustained.
The dollar is weaker, and stocks are flying high for no reason. The FED is pumping billions of dollars into the economy yet artificially low interest rates have kept inflation and economic growth low. Eventually the hens will come home to roost, and when this happens silver will once again start going up in price. Silver investing is indeed a no brainer.