The reactions to last week’s hammering of gold and silver further exhibits that we are still in the early stages of a long-term precious metals bull market. With the declines in gold and silver, sentiment turned bearish almost instantly, which is what the sellers wanted.
Why, silver bulls ask, has the price of silver not outstripped the price of gold? In past bull markets, most notably the 1973-1980 bull market, the price of silver shot up 25 times while the price of gold rose only seven to eight times.
Many investors liquidate their holdings to coin shops in their areas because they do not want to go to the trouble of shipping their metals, mistakenly believing that shipping precious metals is not safe, is difficult or is costly.
Gold has long been one of mankind's most prized possessions. Yet most people have little idea where gold comes from, other than from "gold mines." Mining gold today often is monumental undertakings, some of man's great engineering feats.
Unfortunately for the dollar, though, much of the Japanese savings are in dollars, including the Bank of Japan's treasury debt holdings of nearly $900 billion. The Japanese will have to sell some of their treasury holdings for funds to rebuild.
China and Japan came to own their US Treasuries because both countries produced goods that America's wanted to buy. The Fed came to its hoard by simply turning on the 'equivalent of an electronic printing press.'