Monday, December 18, 2006

Year end truths and silver

It's been a while since my last post, sick kids and a week in the bush attempting to kill Bambi has kept me too busy to write. I'm just working on learning a few missing survival skills but it's apparent I'd be better off gardening as I'd never feed myself hunting. Personally I think a week in the bush hunting Central Bankers would have been more productive, more satisfying and better off for the environment (at least the financial environment).

The Christmas insanity is on us and it looks that no one is taking heed of the warnings of recession and over indebtedness. The malls are still packed and the people I hear talking seem to be melting the plastic at a fantastic pace in an attempt to buy happiness.

Canadian trade figures are well off due to lower energy prices and a major (16%) reduction in cross border auto sales. The impending U.S. recession will further curtail our exports as we still are too dependant on that one market for the vast majority of our international trade. A fundamental change in the western life style is about to rammed down our throats, as debt, both personal and government will soon destroy our ability to continually over consume resources. While not falling yet, I suspect a softening of housing prices in Canada by spring as manufacturing layoffs increase and as availability of liquidity suffers from a stock market slide.

Inflation, an immoral tax on our savings by government is still too high. Government numbers are too high even after being massaged and the real numbers I see on my monthly household bills are much higher than the government claims they are. The only investments that have kept pace or outpaced inflation for the last 5 years are commodities and I don’t see that trend changing any time soon. Of course silver and gold are both money and commodities and you can own them physically rather than a paper contract or certificate, near perfect with the exception they do not generate interest.

Things don't look good and the more I read, the more I fear the crashing end of the paper pyramid that today’s economy is based on and the more convinced I become that metals will be my means to protect my wealth in the coming chaos. I've had this blog up for about 6 months and I hope I've been able to help someone else escape the pain I see coming. I hope this site has at least made you ask questions and look to other sources than the Feds to get your economic truths.

It seems my call for end of year $14 dollar silver is going to come up short. We came close in the last couple of weeks only to get thrashed Friday by nearly a dollar and today a further .50 by noon.

Am I disappointed?, not greatly. Money being such as it is, I was unable to take part in the bottom feeding frenzy during the last correction and would like to increase my stake now. If this correction continues I suspect it would bottom out no lower than $11.50-12.00. I could be wrong but my current buy is any point below $12, with a 100 oz bar being my likely purchase. Long term I still believe in 100 dollar silver but it makes no sense to pay more than you need to and I see no need to may more than $12 right now. Unfortunately the Canadian dollar has weakened so $12 dollar silver is not as cheap as it should be.

Of course as the New Year approaches, it means the 2007 maple leafs are now available and I'm interested in seeing what if anything replaces the 2006 1/2 ounce wolf. These both have a high premium as an investment but I will pick some of these coins as the pretty things portion of my hoard or to give out as gifts.

Happy Solstice silver bugs.

My Christmas/New Year advice, if you can't afford it don't buy it.

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