The Coming Bond Market Collapse And Silver Bull Run
It is no secret that paper money has lost its cherished value long ago. It became self evident the moment the Western United States state of Utah allowed gold, silver coin to be used as legal tender.
As the interest rates are maintained at record lows and QE after QE take turns, inflation becomes a given. Currency begins to shed value. And in order to maintain your position on the right side of the inflation curve, you begin to dig deep into precious metals.
So, what will you opt; poor man’s gold that is silver, or rich man’s privilege that is gold? You may already be aware that you can get 50 times of silver for the same price of gold.
“If the central banks of the world are going to print money big time to try to keep their anaemic economies afloat then there are consequences good, bad and indifferent. For one thing savers are the losers because the value of their hoarded cash will gradually be whittled away by inflation and low interest rates.” writes Peter Cooper in an article.
Now, as governments begin to print money on titanic scales, it goes without saying that people would eventually lose interest in bond markets.
“Eventually savers must realize that they are being duped by money printing as inflation is destroying the spending power of their cash in the bank, and when they pull that money out the bond market will collapse.” Cooper continues.
This has already been witnessed in Spain and Greece, he says.
“And if history is any guide then when bond markets crash this is the moment that the most money is transferred into the very limited supply of precious metals and that sends their prices up like a rocket.” Cooper continued.
“We are just breaking out at a time when public sentiment was negative and the majority of precious metal assets are still selling at fractions of their true value. In a true bubble, mining equities would be selling at multiples of their true value. Instead, they currently represent bargain purchases, which continue to be bought by major players placing large bets on the long term upward trend in our chosen sectors of gold, silver, uranium (URA) and rare earths (REMX).” writes Jeb Handwerger in another article expanding the realm.
“We may be in the early stages of a major move in precious metals which could be jaw-dropping. When the taxicab driver starts talking about junior mining stocks then we will know that we are near a top. We are not even close. Most investors are unaware of the potential upside in the junior mining market.” he added. “Covertly and without much media coverage, China continues to purchase undervalued natural resource assets such as CNOOC’s (CEO) deal with Nexen (NXY). Rio Tinto (RIO) outbid Cameco (CCJ)for the purchase of Hathor’s Roughrider Uranium Deposit. Paladin signed a major deal with utilities. In the rare earth arena, China is looking to import heavy rare earths which could cause a major supply shortage. The list goes on and on.”
Add to this the case of resource nationalisation and one may see a terrific and sometimes terrifying image popping up: a superb bull market in precious metals and bear market or even collapse of bond markets.
Source: CommodityOnline
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