The Silver Lining

Howard Ruff
The Ruff Times
Sep 19, 2009

Gold and silver took an unexpected upward jump, probably triggered by Chinese TV telling 1.3 billion Chinese people to invest in gold and silver, which they could buy from their local bank. This resulted in an orgy of metals buying from the local banks.

Gold and silver have been profitable but modest performers over the last year or two, probably because inflation is a big trigger for gold and silver, and society is not entranced with deflation due to the weakening economy, rising unemployment, and consumers increasing savings.

Temporary Phenomenon

This is a temporary phenomenon. Sooner or later, the trillions of dollars created by government and given to the banks will be loaned out, as the banks will realize they can't make enough money just depositing all their money with the Federal Reserve while repairing their balance sheets.

Sooner or later they will start lending the money into circulation. The velocity of money, combined with the huge quantities of money, will create monster inflation, but first, we have to wait out the present deflation.

Perhaps it should tell us something, that despite the deflation, gold and silver are still rising. So what do you expect when the deflation is over and the velocity of money increases?

I believe there will be a veritable explosion of monetary inflation, and gold and silver will respond. In the meantime, they are not doing badly.

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Howard Ruff
email: corporate@rufftimes.com
website: www.rufftimes.com

Howard J. Ruff, the legendary author and financial advisor, has re-edited and re-issued his 1978 mega bestseller, How to Prosper During the Coming Bad Years, still the biggest-selling financial book in history, with 2.6 million copies in print. He is founder and editor of The Ruff Times financial newsletter. This article is from The Ruff Times. The newsletter is much more comprehensive and deals with a broad spectrum of middle-class financial issues and includes an Investment Menu from which you can build your portfolio. (You can learn about it here). The Ruff Times has served more than 600,000 subscribers - more than any financial-advisory newsletter in the world. His updated and revised book, How to Prosper During the Coming Bad Years in the 21st Century, is in book stores or at www.rufftimes.com. You can get it free when you subscribe to The Ruff Times, or if you buy the book at your favorite bookstore, you can deduct $10 from the subscription price.

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