Today's Daily Reckoning is brought to you by the precious metals. There is plenty going on behind the scenes. Let's start with silver. If you were thinking about buying anytime soon, don't knock on the Perth Mint's door. They have run out of 100-ounce bars and won't have any for six weeks. Is this the sign of a bubble, or the early stages of a bull market? The superficial (and ignorant) answer is silver has had a great run over the past year and latecomers are piling in at the top. The explanation we favour is silver is in the early stages of re-monetisation. This is a process that will last for years and will likely see the silver price breach its all-time high of US$50. It was set back in 1980 when the Hunt Brothers infamously tried to corner the market. Now, instead of two blokes with a scam, millions of people around the world want to swap a portion of their paper wealth for real money. Yes, silver like gold is real money. For thousands of years silver was the money of the people. As Milton Freidman said: 'The major monetary metal in history is silver, not gold'. http://www.dailyreckoning.com.au/a-bird-in-the-hand/2011/02/11/
Turk says 'extreme backwardation'... http://kingworldnews.com/kingworldn...ation_for_Years,_Possible_Hyperinflation.html
In Japan the word bank uses the character for Silver. In China it tranlates to something like silver house. So if asian countries have traditional words still in use that employ the charater for Silver then Milton might just be right. Even a young person I have met believed the silver coloured coins, in color only, have silver in them.
I loved that article. The Daily reckoning is always a good read. I credit it with 'my awakening'. Made me a lot more aware of global politics and economics. I love the half sarcastic writing style of bill bonner.
