Trade Gold for Silver as hyperinflation threatens US

NEW YORK (Commodity Online): With the independent think tank NIA (National Inflation Association, USA) expecting hyper inflation in US, silver has suddenly become an attractive commodity; or so the NIA thinks. They argue that, “with the gold/silver ratio back up to 43, those who exchange their gold for silver now will at a very minimum see their purchasing power increase by 2.6875 times during the next 2 to 3 years if NIA is right and the gold/silver ratio declines to 16 or lower. Silver has dipped enough where we now feel comfortable to start buying it once again using money that we currently have in gold.”

They rule out the possibility that Bernanke would raise the interest rates. NIA argues:

“If Bernanke rose interest rates to let's say 20%, the interest payments on our national debt will soar to approximately $2 trillion per year. Instead of a $1.645 trillion budget deficit we will have a $3.44 trillion budget deficit. The U.S. government will only be able to fund the deficit by having the Fed print the money to buy U.S. treasuries, which would cause hyperinflation. Bernanke is in a very bad position. Even raising interest rates dramatically won't prevent hyperinflation at this point. In NIA's opinion, silver will rise over the long-term no matter what Bernanke does.”

Silver buying opportunity

“Silver may have dipped after reaching a new all time nominal high of near $50 per ounce a few weeks ago, but adjusted for real inflation, when silver hit $49.45 per ounce in 1980 that would equal about $400 per ounce in today's dollars. Silver has not seen its high, we can promise you that. This is a buying opportunity that won't last for long"—says NIA.

Silver mining stocks

“It is always safer to buy physical silver because mining shares have many different factors affecting them, such as geopolitical risks and the experience of management.”—NIA says.

“However, if you do your homework and spend a lot of time researching silver stocks, there is a lot more money to be made owning the right silver stocks than owning physical silver. Just keep in mind that not all silver stocks will be winners. Some silver mining companies will fail and eventually go out of business”—they add.

“When silver broke $40 per ounce and made a move to almost $50 per ounce, silver stocks did not make any gains during that $10 rise in silver. It is almost as if the stocks knew silver was running too far too fast and would need to correct.

From their highs on April 28th to their closing prices last week, physical silver has declined 29% while silver stocks have only declined 18%. Silver stocks appear to be at a bottom and when the price of physical silver begins to rebound, we believe silver stocks will likely rise 2 to 3 times faster, with a select few small-cap silver stocks rising 4 to 5 times faster than the silver bullion itself.”