The Pause That Refreshes

As I foresaw then foretold, both of our metal guideposts to the death of the fiat world have been retrenching since the options expiry worked the legs-out-from-under trick on both gold and silver. As it has been, as it will be for the near future, the large traders will rule the roost.

The roost still moves higher though. That's what I focus on and how I explain to those who ask my advice when the perennial question of - "Should I buy now? Is it too late, or is this the best time to buy?" All variations of the "I want to make money on this purchase instantly and for the price to sail ever higher from here, never a dip below!"

My answer is always "In a year, these prices will seem cheap."

Thus far, for the most part, that answer has been correct. The last year and a half have been treading water more or less, but still with an upward bias.

Treading or consolidation phases are there to shake out the weak hands so that just before the real action begins, all the profit skimmers have fled to suppposedly greener pastures while the stalwarts hold tight and ride to the financial heavens.

Buy late and sell early can work wonders for the right minded, calculating investor. Most of us though are better off buying early, then selling before the crowd fills the segment up. Not too early, but earlier than the crowd. The crowd still has no idea what gold and silver are doing nor do they understand why they should care.

I can do nothing but express my thoughts and be detached if people chose not to listen or decide not to participate. At least my voice and thoughts are clear on the reasons why gold and silver are destined for the pinnacle of power in the financial world once again. So long as those I try to reach have their reasons for not participating in this tectonic shift, may there plans work well for them.

Reviewing the top 3 reasons for owning gold:

1. It always holds some value, never reaching zero like every other fiat currency.
2. It is no ones debt instrument unlike all fiat currencies which are debt units.
3. It is a worldwide, redeemable, transaction unit, universal currency in all places at all times throughout history. Even when it has been outlawed, it was recognized as having value.

Reviewing the top 3 reasons for owning silver:

1. It always holds some value, never reaching zero like every other fiat currency.
2. It is no ones debt instrument like all fiat currencies.
3. It is historically undervalued and very likely to increase in inflation adjusted value much faster than most commodities.

With these slighly different considerations in mind for the dynamic duo, there is timing strategy that makes the most of these differences.

Like a rhymning song, the strategy goes:

Little bit of gold, heavy on the silver
Ride silver high, sell out for gold
Ride gold higher still.

This pattern seeks the optimal value increase from the rhythm of hyperinflation, the stagflation, then deflation. The timing is not exact, just close is all you need to be. Silver will at some point drop relative to gold. Gold will end up supreme in the currency heap. Silver will be highly valued, but not have the upside.

We are years away from needed to employ this strategy, but when the time comes, those who do ride these ways will have orders of magnitude higher returns.

Let the waves roll on!