10 Reasons to Buy Silver now
10 Reasons to Buy Silver now
- Silver is undervalued relative to gold – one ounce of gold currently buys 53.2 ounces of Â silver and the normal historical average is about 17 ounces of silver to 1 ounce of gold
- Silver has underperformed gold since April 2011. Every period of underperformance in the silver price has been followed by a significant period of outperformance of silver versus gold in this 11 year bull market in the metals for example the silver price dropped 19.5% in euro terms in 2008 but bounced back in 2009 (up 44%) and 2010 (up 91%)
- Every down year in the silver price has been followed by at least one and usually 2 or 3 strong up years – 2011 was a rare down year, 2012 looks set to be a solid up year and the likelihood is that 2013 will be a very strong up year in the silver price
- Our clients can purchase legal tender silver coins VAT free through our sister company ‘buy silver OU’ Â based in Tallinn in Estonia.
- If gold offers capital protection in a time of wide-scale wealth destruction silver offers the prospects of significant capital accumulation
- Silver is up over 19% per annum on average since 2002 – this compares to gold being up 15% per annum on average in the same time frame.
- The US elections – regardless of who wins the presidential election in the US that country will continue to run trillion dollar deficits and will continue to print money to finance that deficit rather than slashing government to help the US economy recover its former vigour. Once the elections are over the market will focus on the ‘fiscal cliff’ – this is highly supportive of gold prices and by extension, is extremely bullish for silver over the next 6 to 12 months.
- Spain – budget deficits exceeding 9% last year and still growing as the Spanish government struggles to stem capital flight and loss of confidence in that countries banks means the next European bailout is a matter of when not if. And that means more wobbles in the Eurozone and the Euro currency meaning the value of that currency will fall along with the dollar versus the precious metals.
- Mario Draghi’s commitment to ‘unlimited bond buying’ – the money to do this has to be printed alongside Bernanke ‘open ended’ purchasing of mortgage backed securities until there is a noticeable improvement in the labour market in the US. More money printing means higher priced gold and silver over the next several years.
- Mass market apathy – the main investment market now respects gold and silver as investments but remains lukewarm on actually allocating significant portions of their portfolios to the metals. The general direction of media and investor interest is still in stocks and property despite the fact that the metals have trashed these asset classes in the last decade. The factors that have driven this outperformance remain in place and are arguably stronger now than ever – massive money printing, overly large government and public sectors, massive debt overhangs at individual and government levels. Despite this there is misplaced optimism that western economies are turning the corner and improving – this is complete nonsense and the deteriorating debt situations of countries like Ireland, the US and Spain tells the real truth.Â Silver will be a huge beneficiary of these trends and those who ignore short term noise (US elections, Irelands return to debt markets etc) and focus on long term fundamentals will deservedly capture big returns over the next decade.