As gold prices started their flight upwards back in 2002, silver prices followed a similar pattern. Below is a price chart of monthly silver prices since 2001—when gold was trading just below $300.00 an ounce.
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Submitted by Michael Lombardi, for Profit Confidential
Chart courtesy of www.StockCharts.com
Silver
prices traded as low as $4.00 an ounce in late 2001 and climbed to
highs of almost $50.00 an ounce in 2011. While silver prices have
retraced a bit, the metal is still up more than 675% from its lows in
2001. Meanwhile, gold prices have risen by about 466%; from $300.00 to
around $1,700 an ounce today.
I see a future where silver will
become the focus of investors, while gold will be bought by the central
banks. We are starting to see that happen at accelerated pace now. You
have read extensive articles in Profit Confidential documenting the gold buying of many central banks. And investors are already rushing to buy silver.
To
give you some perspective, the U.S. Mint has halted its sales of 2013
American Eagle silver coins, because it ran out of them. Yes, the U.S.
Mint ran out of 2013 silver coins! Sales for 2013 silver Eagle coins
surpassed five million ounces. (Source: Reuters, January 17, 2013.)
In
addition, investors are turning to alternative ways of buying silver.
The biggest Exchange Traded Fund (ETF), called the I Shares Silver Trust
(NYSE/SLV), saw its holdings of silver rise to the highest level in
five years. The fund has purchased $579 million worth of silver to bring
its total holdings to 10,735 tons.
According to data collected by
Bloomberg and Barclays plc, the demand for silver investments is 19,114
tons through exchange-traded funds globally, which equates to about
nine months of supply from mines.
This sudden investor interest in
silver shouldn’t be surprising to my readers. As central banks print
more fiat currency, accordingly, silver and gold prices will rise.
With
the economies of many countries suffering, money printing will be the
“savior” of choice for central banks, and because of that, I expect to
see silver prices increase significantly over the next couple of years.
Michael’s Personal Notes:
The
jobs market in the U.S. economy has attracted attention, as the
employment rate has fallen marginally below eight percent for the first
time under the Obama Administration. Some are even going as far as
saying the U.S. economy is witnessing economic growth.
I have a
different view. I believe the jobs market is fundamentally broken and,
hands down, the biggest hurdle to economic growth in the U.S. economy.
The truth of the matter is that the jobs are being created in industries
where wages are low and there are millions of Americans who are still
unemployed.
Now, after roaring into a new year, some U.S.
companies are facing hardships as their sales outside the U.S. come
under pressure. We have already seen companies like Morgan Stanley
(NYSE/MS) and Citigroup, Inc. (NYSE/C) make cuts to their domestic
workforces. Companies like American Express Company (NYSE/AXP) are
following in their footsteps.
Amex, as it is better known, is
planning to cut 8.5% of jobs, or 5,400 jobs, from its workforce.
(Source: Reuters, January 10, 2013.)
Sadly, it’s not only the
private sector witnessing job cuts and poor jobs market conditions;
local governments are doing the same. In December, 11,000 jobs from
public schools were slashed in the U.S.—this marked the fourth straight
month of local government cutting jobs. (Source: Reuters, January 4,
2013.)
Longer term, since August of 2008, local governments in the U.S. economy have cut about 300,000 teaching and other school jobs.
Could
the U.S. jobs market rebound be nothing but a hoax? If you take out all
those low-paying jobs being created, the jobs market situation is
indeed frightening. You can’t have a real economic recovery when job
creation is concentrated in low paying jobs like retail and service
industry jobs. U.S. consumer spending accounts for 70% of U.S. gross
domestic product (GDP). At the rate we are going, low-paying jobs will
soon account for 70% of all U.S. jobs!
The longer the jobs market
stays shaky, the longer it will take the U.S. economy to see economic
growth. If people don’t have well-paying jobs, or they are earning less
than they did before, they will spend less, as savings can only last for
so long. Hence, you can see why I’m so suspicious about the so-called
economy recovery more and more people are talking about—something I
simply don’t believe exists.
Where the Market Stands; Where it’s Headed:
The
higher the stock market moves in the next couple of weeks, the harder
it will fall. I don’t believe corporate earnings in 2013 will justify
rising stock prices. This is why I see 2013 as a turning point for the
stock market rally that started in March of 2009.
What He Said:
“As
a reader, you’re aware I’m not a Greenspan fan. In the years that lie
ahead, I believe we (and our children) may pay dearly for the debt
bubble Greenspan created during his tenure as head of the U.S. Federal
Reserve.” Michael Lombardi in Profit Confidential, March 20,
2006. Michael started talking about and predicting the financial
catastrophe we began experiencing in 2008 long before anyone else.
Originally posted at: http://www.profitconfidential.com/gold-investments/silvers-up-675-since-2001-heres-why-it-will-go-higher/
