The macro environment makes me very bullish long term for precious metal. I'm just giving a bearish scenario just as food for thought.
For precious metal to be bearish long term, there has to be cheap energy and a bullish equities market (pick-up in the economy without inflation). There would be no need to hedge against inflation and everybody would be piling into stocks. The only way I see this happening is if the natural gas bill passes. There would be natural gas fueling stations built throughout the country. Truck engines would be converted to natural gas. Oil and coal prices would tank. Everybody would have extra discretionary money after they fill up their cars. Demand for goods and services would go up. Energy prices would be cheap (due to switch to natural gas)which would control inflation. The cost of agriculture would go down due to cheaper transportation, tractor costs, pesticides, storage etc. We would see growth without inflation due to cheap domestic energy. It would be time to leave precious metal in a hurry...at least for me.
I don't think the natural gas bill will pass because the oil and coal lobbyists are far more powerful than the natural gas lobbyists.
I've really enjoyed all the analytical postings I've been reading. They've all been very helpful. I value reading opposing ideas very much. Thanks to all who have been posting in a mature and intellectual manner.
The other problem with Nat Gas is that even though the price is very low right now if we started using more of it we would rather quickly run into supply issues that could only be solved by more development of the shale reserves and I happen to personally know many people who hate just the idea of fracking. It would immediately be a huge environmental fight with cancer scares and dying babies and children paraded out whether real or not. I know a fair amount about fracking so, while I have some intelligent concerns, this hysteria is not my viewpoint. I am just stating that the supposedly abundant Nat Gas in America could very well be held hostage to endless government interference; so if you're counting on Nat Gas to cause a fall in the price of PMs I would seriously consider looking elsewhere. JMHO