we look at the price of gold, oil and silver since Q1 1980, we see a much different picture than the S&P 500 and Dow Jones. As we can see, the average price of gold during Q1 1980 increased from $620 to $1,210 today (chart was made before the big move up on Friday). Also, the price of oil has increased from $36 in Q1 1980 to $48 today. On the other hand, the price of silver today at $16 is less than half of what it was in the beginning of 1980 ($35).If we look at these two charts, we can plainly see the massive increase of debt made its way into the broader markets rather than gold, silver or oil. As I stated in the beginning of the article, THIS WAS DONE ON PURPOSE. Why?
Investors were motivated to put surplus funds to feed the Great U.S. Paper Ponzi Scheme. We must remember, a Ponzi Scheme can only work if there are new suckers willing to contribute funds in hopes of being paid off in the future.The U.S. Govt & Wall Street funneling of Americans funds into a Paper Ponzi Scheme kept them from investing in physical assets such as gold and silver. This kept the value of gold and silver depressed Inflation was kept low because fund flows went into the broader markets and not into energy or commodities. Basically, inflation since the early 1980’s was forced into the broader markets rather than into energy and commodities. Which means, most Americans have this false sense of WEALTH, when in all reality, they are completely broke. They just don’t know it yet.
When the markets really CRACK in a big way, investors will flock into gold and silver… just like they are doing today on a lousy jobs report. However, I believe silver is a great deal more undervalued than gold. This can be seen looking at the change in price of gold and silver since 1980. Gold has at least doubled, while silver has fallen in half.
Moreover, nearly half of all silver produced was consumed by industry and is lost forever. In contrast, most gold produced since 1980 is still around in private hands as jewelry, small bar and coin form or in large bars in Central Bank vaults.
Lastly, when the markets finally CRACK… and crack they will, silver will be the best performing asset in the precious metals class.
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