Why you ask is silver the strongest buy that it has ever been. Quite simply Chinese inflation is out of control and the measures necessary to quell it will lead to political unrest and an economic implosion.
This in turn will lead China to stop buying US Treasuries in the next couple of months and effect the US will face bankruptcy. China must buy food and commodities to feed its people. US Treasury bills will take a distant second and the US will wreak of hyper-inflation.
Actually I totally disagree. Why? Because I let the market or reality tell me what people will do and from what I have seen of the dollar during all this unrest it is the total opposite. The dollar has done terribly, been very weak, even against currencies like the Euro which are doomed. So given that I don't see any signs in currency markets that this is occurring in a mass way.
Keep in mind we have flood the world with US dollars for almost 40 years.
Well the simple math regarding how much money as a function of GDP isn't made up. Nor are import pricing rising 1.5% per month (15% annually). Producer Prices rising 11% on compound annual basis. Or Wholesale prices as of today rising at wild rate as per the latest statistics.
I'm with David Einhorn of Greenlight Capital that after reworking the current calculations of inflation 3 times over since the 1970's the current system which the US Government uses that incorporates hedonics (mind you their are no hedonics calculations to the downside) are wrong is in fact correct. The calculations are wrong. Go buy a vacumn cleaner or blender. Sure you get them for $15 or $60 at Wal-Mart now go to your local landfill and look in the bin for junk like that. You'll find it is packed $15 dollar blenders simple don't last.
PS It is a free market you can always go short against my opinions.
What do you mean. People haven't factored in the situation in China which has the highest inflation of any industrialized country in the world. This will lead to instability in the country or if they choose to quench the inflation the real estate bubble will pop and either way China will not be able to buy our debt.
Couple that with more debt than I can count and you have someone playing with a lighter in a refinery.
At the last big economic crisis, Silver crashed from the $20's down to near $8.xx
Silver is NOT a safe haven in a market crash (although gold can be a safer choice)
See you have anchored your mind the past and not taken into account what the future will look like with to much money all over the place. That is a different kind of crisis don't you think?
If China can't buy the US debt the budget deficit which is the highest it has been since 1945 as a percent of GDP:
the deficit will hit 2.2 Trillion overnight. Since Japan is utterly insolvent their is no entity on the planet big enough to float the US debt.
Complete chaos is very evident on the horizon.