Regardless of Stocks' Direction, Don't Forget Gold and Silver

By: Ryan Jordan | Tue, Jan 28, 2014
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With global equity markets finally showing that they can go down as well as up, it is worth asking what this negative movement in the equity markets has to do with the future of gold and silver prices. I think the idea that the stock market is going to collapse while the precious metals recover all of their losses since 2011 is more than a bit premature. In fact, going back to 2009, I really felt that most investors should be at least agnostic on the future of the conventional stock markets, with central bankers trying to levitate financial asset values for all of the reasons made clear to us with policies like quantitative easing. But, at the same time, by trying to ensure that no one loses money in the conventional markets, I suspect that that will also take away any explosive returns from these investments. I'm thinking here of what happened nearly 80 years ago once bank deposits were insured - their real rate of return declined.

Of course, since I haven't actually seen central bankers come out and tell people that stock investments are risk-free, I'm not so convinced that central bankers aren't willing to at least start the process whereby some of the exuberance is taken out of the broader stock indices. Might gold and silver catch a bid if people realize that the central bank put under stocks doesn't exist?

On the other hand - and looking out longer term - whether or not central bankers are able to control the direction of the markets, it certainly seems as though they are hell-bent on creating inflation- something that we have had very little of recently. Are gold and silver prices reflecting this long term desire for inflation? I don't think so.

 


 

Ryan Jordan

Author: Ryan Jordan

Ryan Jordan
Silver News Blog

Ryan Jordan

Ryan Jordan has been blogging about the precious metals since 2010. However, his interest in the precious metals markets spans nearly 20 years as both a coin collector and private trader. Ryan believes there is a lack of serious discussion of how undervalued precious metals like silver are, and he aims to explain the many reasons why people should take silver investing seriously without relying on hype, sensationalism, or scare-tactics. Ryan Jordan recognizes that assets like silver serve a dual function: one, as a real asset that can provide portfolio insurance as a non- correlated investment, and two, silver can appreciate significantly in a short period of time. Silver could be the best performing asset you could own, with or without a significant crash in the dollar, or other financial mishap. Ryan Jordan's articles have appeared at financialsense.com, gold-eagle.com, investing.com, jessescrossroadscafe.com, silverbearcafe.com, silverstrategies.com, wallstreetformainstreet.com and numerous other sites.

Ryan Jordan believes a historical perspective is absolutely essential for anyone trying to navigate today's financial markets. It is this unique historical perspective that he tries to work into his analysis of the silver market. Ryan received a B.A in History from the University of California- Los Angeles in 1998, a M.A. in History from Princeton University in 2001, and the Ph.D in History from Princeton University in 2004. His professional research involves the history of social movements, religion, and freedom of speech in American history. His two most recent academic books include: Slavery and the Meetinghouse: The Quakers and the Abolitionist Dilemma (1820-1865) and Church, State ,and Race: The Discourse of American Religious Liberty (1750-1900). As a peer-reviewed historian, his articles have appeared in The Journal of the Early Republic and Civil War History. Ryan has taught US history at all levels, ranging from undergraduate to graduate students, at Princeton University, Lafayette College, the University of California-San Diego, Mesa College and Palomar College. Currently he teaches at the University of San Diego and National University, in La Jolla, CA.

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Source: The Contrarian Take http://blogs.forbes.com/michaelpollaro/
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