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Fundamentals of Precious Metal Market



Richard Greene gave out 21 reasons why precious metals are still sensible investments today.

1. Government spending were out of control with little regard for bringing budget deficits into balance;

2. Trade deficits were to mount toward new records despite a more than 30% decline in the value of the dollar;

3. Inflation rates were actually much worse than the Government's reported figures;

4. Real interest rates were to remain negative for an extended period of time, not only destroying the purchasing power of savings, but also encouraging the misallocation of capital to assets with artificial demand;

5. Government sales of gold and silver were to subside or diminish;

6. Production of gold and silver were declining;

7. Demand for gold and silver were rising;

8. There were huge short positions in gold and silver that could not be delivered;

9. Loose regulations on the CFTC to encourage dangerous short positions existed;

10. A major lawsuit were underway to uncover the manipulation of gold and silver prices from attaining true market prices, (allowing us the gift to purchase almost unlimited amounts of gold and silver now at what is surely below market prices);

11. The masses, particularly in the US, were so uneducated in the histories of fiat money systems and historical prices of gold and silver, allowing for the buying opportunity of the millennium;

12. The true meaning of the word inflation was widely understood;

13. The size of the gold and silver markets compared with all of the existing asset bubbles could be considered;

14. Gold and silver stocks had a negative beta, making for the perfect fit in a diversified portfolio or fund-of-fund to increase risk-adjusted returns;

15. Foreign governments would get in the spirit and competitively devalue their currencies against the US dollar, where gobs of paper have recently been printed;

16. The idea of once again backing currencies with precious metals got underway;

17. Armed conflicts were underway with their never-ending budget busting calls for more inflationary spending to achieve their military objectives at any cost;

18. There existed incomprehensible leverage in the financial system, largely in the form of financial derivatives, (last estimated by the BIS at $234 Trillion notional);

19. The biggest savers in the world, Asians, believed in gold and silver;

20. Other commodity prices such as gas and oil were soaring;

21. Gold and silver were at attractive long-term buying points.

Source: The Kirk Report

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