Quote

Silver Stock Report "...As always, silver trumps gold, in my opinion, since so much silver has been consumed in jewelry and flatware and industry. If the silver to gold ratio returns to the historic 15:1, we will make 3 times more money in silver, than in gold." (4/5/08)

ReportGold
TitleSilver Trumps Gold
Quote"Now, I want to address people who will inevitably ask me, "What will happen if there is deflation". I will respond, "There isn't any deflation". They will respond, "But so-and-so thinks there is deflation." I will respond, "Well, so-and-so is wrong." They will respond, "But what if things change, and we actually have deflation?" OK, there's a real question. I will respond, first of all, there is no deflation, the money supply is soaring. Before the money supply can actually shrink, it has to slow down growing, and we'd see that first. Then, the money supply would have to be stable. Then, the money supply would have to actually stop. Bankruptcies would vastly increase. Bankruptices are one of the only things that can actually cause deflation, as that destroys credit and money in the banks when banks go belly up. When banks start going bankrupt, how confident will people be to let their money sit in bonds in the banks? Not very. They will start to buy gold even faster than they do today, since gold is not anyone's liability. If that happens, gold will go up until bonds start paying more than gold is going up each year, AND until banks stop going bankrupt. So, if there is deflation, gold will go up more, and for longer, until people trust banks again, which could be a very long time.

This is why the Fed is doomed. Printing more will not work. Printing less will not work. Printing nothing will not work. All the inflation of all the years from 1913 until now is beginning to crash down on our heads, and it will keep crashing until it stops. And when will that be? Until bonds start paying more each year than gold is going up each year.

As always, silver trumps gold, in my opinion, since so much silver has been consumed in jewelry and flatware and industry. If the silver to gold ratio returns to the historic 15:1, we will make 3 times as much money in silver, than in gold. But due to the rarity of silver, because it has been used up, because it is hard to find, and because only about 8 times as much silver is mined than gold each year, silver will probably exceed the value of the historic 15:1." (4/5/08)