Richard Russell - Its time to Buy Silver Once Again

With the US dollar attempting to stabilize and gold and silver off the recent lows, the Godfather of newsletter writers Richard Russell had this to say in his latest commentary, “Europe -- Aside from France and Germany, Europe appears to be falling apart. First it was Portugal, Ireland, Greece that were in trouble, and now you can add Italy, Belgium and Spain. Wait Spain? Spain is the fourth biggest economy in Europe. Thus the US dollar and the euro are perched on a see-saw, juggling back and forth, first one is up and the other is down, then it's vice versa.”

Russell continues:

“The net result is doubt being cast on all fiat currencies and most of the economies of the world. As far as my subscribers are concerned, the net result is higher prices for honest, Constitutional money -- gold.

Silver -- According the Constitution of the United States, only gold AND silver are money. Silver is a lot cheaper than gold, and for a while the "crowd" rushed in to buy silver as a " safe haven substitute" for gold. Silver turned into a speculative bubble, and when the bubble broke, silver suffered a crushing drop from a price of 49.75 to 32.

I wrote that silver's upward post-crash correction might surprise most silver-haters and silver shorts. As I write silver has rallied to above 37. The bull market in gold is still very much intact, and I believe gold will take silver UP with it.

Remember I said that during recessions, silver is treated as an industrial metal, but during periods of inflation silver is treated as a monetary metal. With inflation built into America's future, I see silver following gold to higher levels. And I see the public once more rushing in to buy silver as a safe-haven currency against a shaky dollar.

(Above) I include a daily chart of silver, going back two years. Like gold, silver seems to respect a 150-day moving average, which I have drawn on the chart (blue line). Also, note that silver is still severely oversold, as per RSI.

Confession -- I had sold much of my silver prior to the big break (I didn't like the parabolic action of silver and the accompanying public excitement), but I have changed my mind about silver. Now that silver is trading above 37 again, I like it and suggest positions in SLV and CEF.”