jcsok wrote:Getting the thread back to financial topics,....Higgenbotham, do you have an opinion of whether a person should buy PMs at this level?
First, as you guys know, I'm not surprised gold and silver are down from their 2011 highs. But I am surprised and puzzled as to why US stocks got over their 2011 highs. I just can't understand why no matter how hard I try. I mean, I can come up with the typical stuff like Apple but in the big picture I just don't get it.
Now silver has gone from $50 in late April of last year down to about $26.70 tonight and is sitting near its post $50 low from last year. To me, that's the easiest chart to operate with at this time. I still think that $26 low will break and then gold will follow silver down but not be as weak.
Getting back to stocks, the US stock market was about the only major stock market in the world to exceed its 2011 highs, maybe the only one. New Zealand is the only other one I know of but it didn't exceed its 2011 high by much. I still believe US stocks are going to crash. When they do, it should be about the same story as 2008 at first, but at some point I believe there will be a divergence and precious metals will begin to decouple and move higher while the rest of the financial system including the dollar goes down the drain. If I had to make a guess, I'd guess that silver will make its ultimate bottom at $14 and gold at $800. Meanwhile, I think things like oil will make lower lows than they did in 2008 before heading higher and the US stock market will ultimately go to zero.
Having said that, I find it very hard to say whether people should buy precious metals or not at these levels because the markets are getting more chaotic and harder to make sense of. We could see stocks crash and precious metals go down a little, then start going up fast.