In the decades before 1971, the money supply saw small growth. In the following decades, the money supply ballooned. Monetary inflation is followed by price inflation, and massive monetary inflation is followed by massive price inflation. Gold and silver will remain in bull market regardless of their fundamentals.
A final note on last the bear raid. Many analysts said it was because of the Fed’s statement that there was no need for another quantitative easing program at this time, which suggested that monetary policy would be “tight over the foreseeable future.” The Fed could withhold printing another single dollar, and we will still face massive price inflation. Now, concentrate on the graph for the years following 2008. Enough money has already been printed to guarantee continued price inflation. This dip should be bought although there’s no way of know how much further prices will fall before they stabilize and afterwards rebound.
Another piece of advice from by Richard Russell: a bull market will bailout your timing mistakes. Don’t worry about buying a little too soon. Only one investor buys at the absolute bottom.
Bill Haynes is president and CEO of CMI Gold & Silver Inc., a gold and silver bullion dealer based in Phoenix, Ariz.