The Silver Chain Gang

Hey there fellow silver bug. Are you tired of being stuck working on the silver chain gang? Silver has been doing pretty crappy for the last years or so, having peaked around $50 an ounce after the 08 financial meltdown, and having seen a low of $14 last year. When will silver break free of this prison range between $14 and $18 an ounce?? Soon…

Silver works as a hedge against inflation and is cyclical. The government has purposely under-reported inflation for the past several years, in an effort to not have to pay for rises in the cost of living for social security and the like. Meanwhile, inflation has been rather obvious in home prices, car prices (used car prices are up 17 percent last year alone), food prices (steak for instance), etc. Finally, we have gotten to the point where the official stats say we are near full employment – meaning, that those seeking jobs actively basically have them already. This is a late point in the economic (business cycle) where metals and industrials traditionally outperform. As the job market tightens, wages will finally rise. Corporate earnings are also at all time highs. The Trump Boom is only starting. As wages and inflation pick up in the next year or two , the government will not be able to hide from the fact. Inflation will finally have to be acknowledged, and this will result in demand for silver, which maintains its buying power in such periods.

The other thing is that scrap metal recycling from pawn shops and the like has steadily declined and is now near record lows. Meanwhile, cell phone and electronic sales at companies like Apple and Sony remain strong, and those devices consume silver. Solar panels are on the rebound, and that also uses tons of silver.

Technically, silver set a strong base last year around $14.50 per ounce. It likes to go up to $17.30 or so and then back down to $16.00. It has been stuck in this pattern for a few years, and many silver investors are quite frustrated. Fortunately, for those with a very long term view and lots of patience, this has been a good time to accumulate silver coins and bars on the cheap.

I advise to stay away from smaller individual gold and silver stocks at this time, due to dilution, though some that trade over $10 a share could be good deals in the long term. My advice is to go with silver coins at this time. The Mexican silver Libertad is extremely popular with collectors at the moment , due to its beauty and its fine made qualities. Coins from the Perth Mint in Australia are exquisite, and tend to double in value every 5-10 years. Silver coins from small islands such as the Cook Islands, Bahamas, Cayman Islands, Fiji, and more are a great way to go since they are low mintage and grand to look at. Also I recommend old world silver coins such as old swiss coins in uncirculated condition , as well as one year types such as the 1958 Canadian Totem Dollar, otherwise known as the Totem of Death.

I did well investing in coins back in 1999-2000 and sold after the recession in 2001 for a good profit. Then I collected again and sold after the 08 financial meltdown caused silver to spike a year or two later. So I have a good track record and am fairly confident that silver is still a good long term investment. It trades inversely to FANG and the overall economy though. So it wont shoot completely through the roof until the inflation turns into hyper-inflation (due to government spending and debt), and then really does great during a COLLAPSE.