Thursday, 4 December 2008

The coming boom in gold and silver stocks

The inflation scare has become a reality and it has the world's central banks afraid. Their only hope now is to inflate together - or face a relentless, slow death and the destruction of their economies. Inflation is on its way and its dynamic unstoppable. All the political mantras of the last fifty-sixty years are about to be ditched as the central banks begin printing money rather than just borrowing it. This is euphemistically known as "quantative easing".

The world's currencies will fall in value while gold, silver and PM stocks will rise, probably to astonishing values from where they stand now. Mining stocks are at their most bombed out levels for at least forty years. And this at a time when countries are having to nationalise or part nationalise their nations' banks, to save them from bankruptcy. The taxpayers are having to bail out irresponsible banks, insurance companies and motor manufacturers. The latter should have been making economic vehicles and improving the fuel efficiency of their cars. Instead we lived, and to some degree, are still living in the four-wheel-drive SUVS.

For gold and silver producers the high octane combination of lower fuel and other important input costs together with rising precious metal prices should spark a boom in PM stocks, the likes of which has not been witnessed for a very long time. Juniors will also thrive as they will become takeover targets by big miners looking for replacement ounces. The chance to pick up good explorers for a song will prove irresistable and bidding wars will likely emerge.
For gold, silver and related stocks time there has never been a better time to buy! Many Gold and silverbugs have been "all in" for some time. Whether the rise begins in earnest before the end of this year or early 2009 is surely academic.

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I teach Film, Media and English Lit.