Buying silver is a bet against faith, confidence and human perception, given that the silver market’s price discovery mechanism is being increasingly usurped by obsessive technical analysis and computer driven trading that largely amounts to picking up nickels in front of a steam roller.
Buying Silver in the Age of Transitory Inflation and Other Political Delusions Spokespeople for the U.S. Federal Reserve have been saying that rising food and energy prices are transitory. They have now been pushing that illusion on the market for ten years, and some traders are still waiting for inflation to fall. Nevertheless, the fact is that these price rises are not transitory, and they are instead permanent, systemic and intentional. Furthermore, prices are going to keep on getting higher and higher by all rational indications. Debt Expansion Policy Makes Inflation Inevitable When Ben Bernanke was first appointed Chairman of the Fed by then-‐President Bush in February of 2006, the U.S. Treasury’s funded debt was ‘only’ $8.183 trillion. Nevertheless, by last December, when the FOMC announced its latest monetary policy measures, the U.S. Treasury’s debt had more than doubled to hit the even more astronomical 16.376 trillion level. In other words, the Treasury’s funded debt had increased by more than 100% over a period of almost seven years, averaging a rise of roughly 14.6 percent per year during that time frame. Commodity price rises in U.S. Dollar terms have been relatively subdued in comparison with this remarkably high level of U.S. debt expansion. Silver as the Financial Solar Plexus The solar plexus of the human body is where the connection between the body and mind -‐ the organic and the non-‐organic — come together. Silver is like the solar plexus of the world of economics and finance, acting as both a tradable commodity and a monetary asset. In the silver market, the relatively primitive market laws of supply and demand interact with the higher level market-‐driving factors of faith, perception and behavior on the part of its human participants to determine a market price. Read the rest of the article.
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