|'Accumulate as much silver as you can' |
To simply follow the silver price without trying to understand the extreme stress in the global paper currency system today would be folly.
Since August 15, 1971, when Nixon closed the gold window, the world has been floating on a sea of fiat currencies, supported only by its one reserve currency, the U.S. dollar, which is nothing more than an I.O.U.
During the days of the true gold standard, a country was required to disgorge its gold reserves if it ran consistent trade deficits. Of course, these days, in the absence of the gold standard, countries have been at liberty to print as much currency as they deem fit.
This has led to a scenario of competitive devaluations. We are now at a point where the smart money is losing its faith in this paper currency system, and is viewing it as a giant, Ponzi scheme, the likes of which the world has never witnessed before.
The U.S. dollar has abused its privileged status as the reserve currency via extremes in fiscal and monetary policy. We are now at a breaking point. Make no mistake about that. To protect itself, real wealth is starting to abandon the paper Ponzi system in earnest. Smart investors are accumulating real money, namely, gold and silver.
This was the degree of fear at the Comex – that the silver market could bring the Exchange down, along with its bullion banks. So they decided to cut the legs from under the hedge funds. Unable to come up with the extra margins, the hedge funds were forced to liquidate.
However, the supply-demand situation in silver has not changed, Supplies are still tight. But by increasing margins by frightening amounts, the Comex has revealed its hand. It has shown the world that they are mortally wounded, and that they are fighting back with everything they’ve got
Here is what I think will happen next. The hedge funds, as a group, will have learnt their lesson. They now know how to beat the Comex. They will now go and buy physical silver in the market, and abandon the Comex. The next time the bullion banks short silver, there will be none left to deliver. There is a short window you have in which to accumulate as much silver as you can. There may never be another opportunity like this one.