Thoughts on gold and silver

Gold and silver finally seem like they are ending a year down in price. Like Jim Rogers said, given their unusual 12-year straight bull-run, they are likely to have an unusual process of bottoming too. In my post on 22 Aug 2009, I made some predictions just for kicks. They can be viewed here:
http://silvernjin.blogspot.sg/2009/08/greatest-wealth-transfer-ever.html.

In my mind, I wish the bottoming process takes a longer time to complete. Given that the fundamentals are so good, the longer it is that prices stay this low, the more opportunity there is for one to buy. This year alone, I've increased my position by 50%. If prices continue to go sideways or fall in the months ahead, I hope I can increase my gold/silver holdings by another 50%.

Anti-gold bugs everywhere, however, continue to criticise this investment. When asked why it is a bad investment, the answer is always the same - that they think the metal is useless. They better hope that the market also think the same way in the years ahead. Other than this bit of argument, there isn't any other thoughtful analysis by them. History, fundamental economics, and the way currencies work are totally ignored. These people will rather attack precious metals investors than focus on their own money-losing investments. They are the only source of headache (but yet, fun) for me. I guess I have no choice but to put up with it, given that I am so outspoken about precious metals and the evils of central banking and market interventionism.

The price of silver continue to be irresistible for me. I am looking to start buying big-time into agriculture as well - starting from sugar probably. In the next few months, I am producing some nice reports on precious metals and agricultural commodities for those who are interested.

Immense pain ahead.

This is obviously sustainable in the long-term!

S&P vs Uncle Sam

Will S&P dare to downgrade the US again, when it has been slammed with a $5 billion lawsuit by Uncle Sam for downgrading the US slightly back in Aug 2011?

Then again, another feeble downgrade is still not reflective of the true value of the govt debt.

http://www.businessinsider.com/sp-qa-on-the-debt-ceiling-debate-2013-9#ixzz2gPKK92I0

No taper.

Back then when everyone believed that the Fed will taper in sept 2013... only to find out that the Fed is not even doing a token $1b or $5b of taper.

Ben's deep thoughts

I don't mean to inflate the issue, but I can't taper off my criticism.

Dishonesty

http://www.bloomberg.com/news/2013-09-20/buffett-says-federal-reserve-is-greatest-hedge-fund-in-history.html

Good comments from the readers.... this comment sums it up nicely:

"Buffet is a cunningly dishonest man. He is conveniently not telling us, 1. The purchases of those bonds were paid for by the people's money being debased and worth less against our will. 2. As interest rates rise, which they already have begun to do, those profits will turn into losses. I would bet that happens by the end of the year. Of course the Fed does not care, because as Buffet says, the Fed has no need to deleverage, it can force us to pay as much as it needs to bail out the banks because we have choice but to use it's (sic) debt as our money. This is freedom?"

Immorality of inflation

Dr Paul: Think about it in a moral sense. What if he gets his 2% (inflation)? What right does the Fed have to take away 2% of their purchasing power automatically? What right does they have to punish the elderly who save money? I asked Bernanke and Greenspan the question and they throw their hands up and say that they feel some people will benefit from this.