Q: Most people do not value silver and prefer to invest in bonds from big governments. Why?
A: Most people would prefer to follow the herd because following the herd is comforting and often correct. Occasionally it is disastrous. I suspect the next few years will see the herd slaughtered. (Bubbles always pop and bonds are in a bubble.)
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Q: Silver has gone down for almost five years. Will it continue to drop?
A: Probably not, but if you are stacking for the long term, you care little! Silver was valuable and minted into coins 2,000 years ago in the Roman era. It will remain valuable 1,000 years from now, long after the Federal Reserve, the EU, the Bank of Japan, and dollars, yen, euros, and pounds have been forgotten.
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Q: The global financial system is based on debt and is no longer backed by gold or silver. Why?
A: Banks are far more profitable if they are not constrained by a gold standard. Also politicians can easily spend, buy more votes, and receive payoffs under a fiat paper currency system not backed by gold. Military contractors profit from the wars that would probably not happen under a gold standard. Borrow and spend is the “battle cry” of politicians and bankers because it works for them – at least for now.
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Q: Former Federal Reserve Benjamin S. Bernanke was critical of gold. Why?
A: Consider the source, his loyalties, and what he was selling. Does the Chairman of Wal-Mart encourage people to shop at Target? Do Ford managers buy Chevys? Does the Pope advocate for Muslims? Do US Presidents discourage military adventures or Wall Street?
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Q: People say the silver and gold markets are manipulated. Does that mean I should NOT purchase silver and gold as insurance against the coming financial catastrophe?
A: Banks and central banks have admitted manipulating interest rates, sovereign debt markets, stock markets, ETFs, gold swaps, governments, wars, politicians, and more. Given that commercial and central banks have manipulated so many other markets, why would you think they don’t manipulate gold and silver prices? That fact alone confirms that silver and gold are even more necessary for insurance against a financial catastrophe. Further, deflationary forces and the manipulators have pushed prices down for over four years thereby making it easier to accumulate more ounces of silver and gold.
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Q: Why did banks create a $1,000 Trillion derivative monster?
A: It was profitable for them. In the 2008 crisis taxpayers and central banks bailed out their bad speculations. In the currently developing crisis depositors (via bail-ins – think Cyprus), taxpayers, and central banks will probably try to bail them out again. No matter what happens, the bankers have already collected their commissions and are smiling all the way to their private gold vaults. (They may publicly denounce gold but privately some of them know better.)
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Q: Mr. Silver Market, why are you such a pessimist?
A: The world, including bankers and politicians, is what it is. You will get hurt far more by what you think you know that is wrong, than by what you don’t know, so examine the global financial system realistically and not through “Wall Street” colored glasses. Seeing clearly is sensible, not pessimistic.
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Q: Why should I put money into gold and silver?
A: For all of the above reasons and more ….
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Q: How high will gold and silver prices be in the year 2020?
A: Mr. Silver Market is omniscient, knows all, and sees all. However, he is not telling. But in the words of Alan Greenspan, you can legitimately expect that prices will be “measurably higher.” Mr. Greenspan provided a good hint regarding the coming carnage in global financial systems. Expect much higher prices for silver and gold.
Gary Christenson
The Deviant Investor
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