Sunday, April 4, 2010

What will happen in an honest precious metals market?

The National Inflation Association sent out a great letter yesterday.  It's a comprehensive look at the Andrew Maguire/CFTC situation.  Bottom line?  To feel safe buying precious metals now, you don't have to believe that metals will rise, only that the dollar will ultimately fail.
The silver market provides a window into what is happening in the gold market. Because the silver market is very small and its short position is so concentrated, its price is easier to manipulate than gold, but the same manipulation is taking place in gold on a much larger but less noticeable scale. In our opinion, the CFTC is under pressure not to do anything about the manipulation because the lower gold and silver prices are, the stronger the U.S. dollar appears to be. If we saw an explosion to the upside in gold and silver prices, it would result in a complete loss of confidence in the U.S. dollar.

I strongly recommend reading the entire letter, and subscribing to their newsletter while you're there.



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