Guide To Investing in Gold & Silver: Protect Your Financial Future

by Michael Maloney

Kemp-Roth tax cut,

Ron Paul.

In every instance I find in history, inflation happens to a nation of savers, and deflation happens to a nation of big spenders.

Whenever things go really wrong in an economy there is an emotional backlash. First everyone wants to place blame. Second, they overreact with a knee-jerk response. Lending standards will be tightened, making the problem worse.

First the threat of deflation, followed by a helicopter drop, followed by big inflation, followed by real deflation, and then followed by hyperinflation.

If you take a close look at GATA’s evidence you will see that it is on to something. I urge you to go to their Web site and check it out at gata.org

The only way to tell if it’s cheap or expensive is to figure out how much stuff it can buy you. When it’s buying you too much stuff, compared to historical averages, then, and only then, will it be expensive.

Here is but a small example of the multitude of uses for silver: batteries, bearings, biocides, brazing, catalysts, coins, electrical conductors, electronics, electroplating, jewelry, medical applications, mirrors and reflective coatings, photography, silverware, solar energy cells, soldering, water purification.

I buy both silver and gold when the gold/silver ratio is between 50 and 80. When it is over 80 I buy almost all silver and when it is under 50 I buy mostly gold.

Generally, the Dow is undervalued in terms of gold when it costs less than 4 ounces of gold, valued fairly at about 6 or 7 ounces of gold, and overvalued when it costs more than 10 ounces of gold.

When the gold and silver bull market explodes, the financial news will react just as it did in 1980, and the only thing you will hear about is gold and silver. At that time there will be market analysts all over the Internet, radio, and TV, proclaiming to everyone the greatest investment of all time—gold and silver! The rarity of silver will go from something that a small fraction of the world’s population knows about to something everyone is now an expert on.

A plan should have a goal, a strategy (the big picture of how you’re going to get from A to B), and a tactic (the specific methods to be employed to implement the strategy). As an example, here’s my plan:

Once again, in the portfolios that I control, physical precious metals constitute about 50 percent to 70 percent of the investments. Roughly 20 percent to 40 percent is allocated to precious metals stocks, 5 percent to 10 percent is divided between energy stocks and stocks in other commodities, and the remaining 5 percent is cash (you know what I think of cash). So far this has served me well.