ZLATO a STRIEBRO

The bullish case for gold, that has been made in this article, is even more powerful for silver. Whereas most of the gold that is used, eventually gets recycled, most of the silver that is used, ends up in landfill. Small amounts are used in every cell phone, computer, refrigerator, TV set, laptop, satellite, electrical switches, medical wound coverings, water filters etc.

During the recent drop in silver a few weeks ago, the number of ounces in the SLV, silver ETF actually increased! A very bullish development!

Silver seems to bottom towards the end of each quarter: March, June, September and December often carve out a bottom in silver. The drop in March came right on schedule.

It was my pleasure to meet Mr. Nelson Bunker Hunt at a convention; just after the Comex board changed the rules on silver contracts, and finished his run at silver in early 1980. I asked him about the gold to silver ratio. He told me that he felt that in time, the ratio would shrink to 10 ounces of silver for an ounce of gold.

More than 25 years have passed since that conversation, and many more uses for silver have been discovered. Less and less silver is being found. Due to environmental concerns it is more difficult now to open a mine than at any time in history. (Congress is currently discussing mining legislation HR 2262). It is my belief that the ratio between gold and silver will shrink in time, to 5 ounces of silver buying an ounce of gold.

A word of advice to those of you who are confused by the different views offered by a myriad of advisors: Keep a simple record of their predictions. Mark the name, the date on which the prediction was made, the nature of the prediction etc. Then keep track of the predictions, and weed out those advisors who are accurate less than 50% of the time, since flipping a coin will give you 50%. You’ll soon notice that when a hot-shot analyst tells you that he expects gold to drop $100.00, he is usually back a few days later with a new forecast.

Mr. James Sinclair, the CEO of Tan Range is predicting that gold will rise 80% by early 2011. He is backing this prediction with a 1 million dollar bet. I’ve listened to Mr. Sinclair speak at one of the New Orleans Seminars. He knows gold! I doubt if he will lose this bet.

We are a long way from having to be concerned about an exit strategy from our gold and silver positions. For those of you who worry about tops, I’ll share my exit strategy with you. When 2 ounces of gold or 10 ounces of silver are equal in value to the daily quote for the Dow industrials, I’ll start making plans to sell most of my metals, and I’ll buy blue chip stocks or real estate with the proceeds. Today the ratio between gold and the Dow is 13.6 ounces of gold or 700 ounces of silver versus the Dow. That is a long way from my exit.

Zdroj: Goldseek.com

18.04.2008

"In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value."   Alan Greenspan