How To Grow Your Gold And Silver Bullion

By Larry LaBorde – Re-Blogged From http://www.Gold-Eagle.com

With the zirp, (zero interest rate policy) savings and bonds are not paying any significant interest. In Germany some bunds are paying negative interest rates. Few stocks are paying big dividends and most pay none at all. Everyone is trying to find a decent return on investment without taking on too much risk. The old 5 ¼% savings account interest rates that never seemed that interesting in the past now look mouth-watering.

One of the problems with precious metals has been the fact that they do not pay any interest or dividends. In today’s ZIRP market that is becoming less of a problem. However, some people have done quite well trading the gold to silver ratio. Simply trading their gold for silver when the ratio is high and trading their silver for gold when the ratio is low has proven to be quite profitable in terms of more metal at the end of the trade.

When trading gold and silver back and forth you always have a position in either one or the other. The object is not to worry about the price of either metal but to simply accumulate more metal at the end of your trades. In a long-term bull market in metals you will end up on top if you have more metal at the end of the decade.

The chart of the gold:silver ration shows a long term ratio over the last 30 years. For the past 20 years or so if you traded your gold for silver when the ratio was 75:1 and then traded your silver for gold when the ratio was 50:1 you would have made the following trades:

December 1996                trade 10 oz gold for 750 oz of silver

December 1997 trade 750 oz of silver for 15 oz of gold

February 2003    trade 15 oz of gold for 1,125 oz of silver

March 2006                         trade 1,125 oz of silver for 22.5 oz of gold

October 2008     trade 22.5 oz of gold for 1,687 oz of silver

November 2010                trade 1,687 oz of silver for 33.7 oz of gold

December 2014 trade 33.7 oz of gold for 2,527 oz of silver

Unknown date  trade 2,527 oz of silver for 50.5 oz of gold

Of course there would be premiums to pay depending on what form of silver or gold you purchased as well as sales commissions. These fees would make the trades less profitable than shown in our illustration but you get the general idea.

If you would have been careful enough to trade when the ratio was a little above 75:1 and a little below 50:1 you would have done even better. But why get greedy when these ratios are so easy to remember and execute? Just write them on the wall in big numbers and watch for them on the chart every few years.

At all times you would be holding a position in either silver or gold so you would still have a precious metals position throughout the entire time frame in either one or the other.

Also note that I did not pick the average tops of 80:1 or the average bottoms of 47:1. Tops and bottoms are hard to pick so I just chose a pretty conservative 75:1 for the top and 50:1 for the bottom.

If you have not swapped gold for silver in this current cycle you may still want to jump in and give it a try. Currently the ratio is around 73.3:1 and falling. So now you might want to hurry and trade some gold for silver. It is a pretty boring trade where you only swap every 1 to 6 years but with patience it can pay off pretty well for an asset that doesn’t pay any interest of dividends.

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Gold Miners’ Strong Q3 Results

By Adam Hamilton – Re-Blogged From http://www.Gold-Eagle.com

The beleaguered gold-mining sector continues to be plagued by monumental universal bearishness.  Nearly everyone assumes the gold miners are doomed, that they can’t survive for long in a sub-$1200-gold environment.  But this belief is totally wrong, a consequence of extreme fear’s fog of war.  The gold miners’ underlying earnings fundamentals remain very strong, as evidenced by their recent Q3 results.

In all the stock markets, corporate profits ultimately drive stock prices.  Because a stock simply represents a fractional stake in its underlying company’s future earnings stream, all stock prices eventually revert to some reasonable multiple of those profits.  These earnings are truly the only fundamental driver of stock prices.  All deviations from righteous valuations based on profits are just the temporary products of herd sentiment.

The gold stocks are suffering such an extreme psychological anomaly today, drowning in mind-boggling depths of popular fear and despair.  The leading HUI gold-stock index just slumped to a brutal new 13.3-year secular low this week!  The apathy and hate for this sector is nothing short of astounding.  Anyone masochistic enough to make a bullish contrarian case on gold stocks will be peppered with scathing ridicule.

But in the midst of any universal sentiment extreme, prudent investors and speculators must disconnect from the herd emotions to take a rational look at the underlying profits fundamentals.  And there is zero doubt today that prevailing gold-stock prices are truly fundamentally absurd.  The last time gold stocks were priced at these levels per the HUI ages ago in July 2002, the gold price was merely trading around $305.

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Gold Stocks’ Major Breakout

By Adam Hamilton – Re-Blogged From http://www.Gold-Eagle.com

The left-for-dead gold stocks have rallied dramatically this past week, surging to a major breakout.  This pivotal technical event reveals the hyper-bearish psychology plaguing this sector in recent months is dissipating, paving the way for investment capital to return.  And given the fundamentally-absurd price levels in this battered sector, this new gold-stock buying is likely just the initial vanguard of a massive new upleg.

Even among contrarians, the overwhelming consensus view is that gold miners’ stocks are doomed to grind lower indefinitely.  Pretty much everyone even aware of this obscure sector totally despises it, the inevitable result of recent years’ dismal price action.  The flagship gold-stock index, the NYSE Arca Gold BUGS Index better known by its symbol HUI, certainly reflects the unbelievable misery in this business.

Over 4.0 years between September 2011 and September 2015, the HUI plunged 83.5% in a bear market of apocalyptic magnitude!  This incredibly-large bear excelled in annihilating all interest in this sector.  Almost everyone capitulated, scared away by the brutal mauling.  Adding insult to injury, the benchmark S&P 500 general-stock-market index soared 63.5% over this same span.  Gold stocks have been dreadful.

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Fed’s Vast Gold/SPX Impact

By Adam Hamilton – Re-Blogged From Zeal LLC

Yesterday’s Fed decision was one of the most anticipated ever, with much potential to really change the global financial-market dynamics going forward.  But thanks to the Fed’s incredible market distortions of recent years, Fed meetings spawning exceptional volatility is nothing new.  Fed decisions’ impacts on gold and stocks have been vast.  And this next tightening cycle should reverse their Fed-imparted directionality.

Before we get started, a big caveat is necessary.  While this essay was published the morning after that Fed decision, I had no choice but to research and write this draft before yesterday’s momentous 2pm event!  Producing one of these weekly essays takes a lot of time and effort, and even after writing 670 of them there was no possible way to start this process after the Fed and still make the publishing deadline.

That presented a challenging quandary, as the Fed’s decision and surrounding posture is all anyone is interested in this weekend.  I’ll discuss the specifics of everything the Fed did and said in great depth, as well as the resulting market impact and outlook, in Tuesday’s Zeal Speculator weekly newsletter.  But leading into that hyper-anticipated event, I wanted to do some background research on the Fed’s market impact.

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Switzerland: Ultimate Safe Haven For Liberty, Wealth And Gold

Re-Blogged From Gold Silver Worlds

I am often asked what we would do if, for example, the US comes out with a confiscation order. My reply is: We would do nothing whatsoever! Why? Quite simply, because no one in Switzerland has the political power to execute such an order! Even if Swiss politicians would support such a confiscation order, the Swiss people would likely have the final vote. I am confident that any such confiscation order wouldn’t have any chance to reach a majority in Switzerland, especially when it concerns assets held outside the banking system such as physical precious metals. Even in the unlikely case that it would be accepted, the vote would take at least twelve months, thereby giving the persons affected enough time to move their assets. In my view, this is the main advantage of a direct democracy, it assures that the people and not the politicians in power have sovereignty. The federalist structure of Switzerland additionally guarantees that political power is reduced to a minimum. “Confederation Helvetica” might be the old name for Switzerland, but it is just as valid today as it was in the past.

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This Financial “Seismograph” Signals A Monetary Earthquake

Re-Blogged From http://secularinvestor.com

Stock markets in the U.S. are trading approximately 2% from their all-time highs, the German DAX has slightly retraced from its all-time highs, the Nikkei index in Japan has almost surpassed its 2000 highs in recent days, the Shanghai stock index used to be a laggard but is making up at an incredible pace (currently trading at 7-year highs). Indeed, it feels like nothing can go wrong.

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It’s Ugly If You Look Under The Hood

My plan for today was to write a very basic piece hitched to the one written yesterday “the money has to go somewhere”.  The plan was to point out that gold (and silver) will be the final destination for monies dislodged from crashing markets all over the world.  Along came the Q1 figures for U.S. GDP, a disaster on many levels.  So switching gears, let’s look at the first quarter, how quickly the economy has deteriorated and what it means in the future and in relation to the past.  I do plan to tie this together at the end because no matter how you look at it, gold is a magnet for what will be shaken loose.

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