"More creation of Federal Reserve Notes [...] means units already in existence, as well as those newly created, will be worth less and less until they are worthless. This foregone conclusion strongly supports the case for physical silver and gold whose underlying strength is naturally as monetary metal." -Biz Bluetree
I've learned a lot from the readers of my articles since scribing for Seeking Alpha. While many of us agree the macroeconomic picture is bleak and something has to change before it gets better, one undeniable truth is: precious metals are not coveted by everyone. Some folks just don't buy into the hedge, insurance or survival argument for silver and gold and are quick to point out why.
And through debate of intelligent minds more is learned
However, I still believe in the salvation of silver and gold and have not changed my mind except to be more convinced that I'm charting the right course for my family and our future by continuing to stack the shiny stuff. Why? Because the reasons for my initial game plan have not changed. In fact, the reasons are more prominent now than before.
Perhaps the Q1 2014 debates in the U.S. will prove historic
Good advice is to read everything from all sides. Discuss the state of government, politics, economics, finance and the markets with as many informed voices as you can, and perhaps we will all agree on a solution.
I've put my stock portfolio on hold to be reassessed in April. Cashing out some positions and trimming back others, I'll hang on the sidelines increasing my swaps of Federal Reserve notes for physical silver and gold - physicals, not paper contracts - and maintain an emergency cash stash.
The ruling class in Washington, both sides, with their constant bickering and inability to come together for the greater good is one of my reasons why. One of the same reasons, incidentally, the Fed has no option but to continue quantitative easing. Which is another of my reasons why.
More easy money will exacerbate the problem
When I look at Europe, the U.S. and Japan it's difficult to decide which government has the worst debt problem while only the staunchest Keynesian sees no problem. But, at the bottom of all these central banks creating more and more currency and debt to prop-up their economies lies the reason silver and gold prices are at undervalued levels. The powers that be cannot afford to have these metals out-perform their fiat currencies.
But this will not go on forever
It can't. And I say if there is concerted manipulation of the metals market, let it continue. I'm not done adding to my pile. And when a time comes - and it's coming - that the value of silver and gold are no longer measured by price of dollar, euro and yen, etc., but rather we are asking, how much silver does that house cost, I will be ready. When an ounce of gold or less equals the Dow, I will be ready. When the silver to gold ratio is 20 to one, 15 to one, 10 to one or better, I will be ready.
John Embry of Sprott Global Assets says about the current undervaluation of silver and gold:
"…anyone who isn't taking this opportunity to invest in hard assets is making a serious mistake."
"Anything I say about gold, and I'm extremely bullish on gold, you can just double that for silver. The simple fact is that silver is a materially smaller market than gold, so any significant amount of money hitting it will have a more outsized impact. Besides that, silver has much smaller above ground inventories and a very significant proportion of what is being dug up out of the ground is being consumed in industrial uses. So, when this thing really gets going, the silver price is just going to explode."
The best offense is a good defense
Therefore, when it comes to a stock market that is thriving on earnings and easy money, and a president, senate and Congress doing their best Keystone Cops impersonation, and the world's central banks filling the skies with helicopters with the U.S. Fed chairman head of air traffic control, I'm content to sit on the sidelines buying and stacking physical silver and gold at a bargain.
But don't listen to just me, a respected organization such as Elliott Wave International is also disseminating advice as such:
"..it's way too late for talk. Prepare ahead of time for the day of financial reckoning."
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.