Silver: Should You Help Inflate The Next Big Bubble?


Let's say you incline toward the Ron Paul position on the Federal Reserve —that it, and other central banks across the world, require the kind of cleansing that can only be achieved through statutory abolition.

But, despite your instinctive distrust of paper currency, you believe it's possible that there may be a gold bubble(Though the article cited is from last month, the spot price of gold right now is at almost exactly its November high. But perhaps that's just a coincidence.)

So what are you to do in you search for greener?

Well, for one thing, you could search for the Next Big Asset Bubble—and get in on the ground floor. Bubbles are only bad—for you, at least—if you don't get out before they pop.

Never mind that most people don't get out before the bubbles burst—which is nearly, by definition, the nature of a price crash.

Also, let's ignore for the moment the disastrous effects that bubbles can have on the overall wellbeing of an economy. (Housing prices, for example, come to mind.)

Heck, you're not a central banker—charged with the responsibility of maintaining the overall health of an economy. You're just an ordinary guy, trying to turn a buck.

Therefore, I present to you: Silver!

Silver is currently at a 30-year high. According to an article in The Financial Times, silver has risen 10 percent in the past week alone—and 66 percent since August.

The culprit? Likely it's QE2 specifically and monetary easing in general. (Also, European sovereign debt bailouts.)

If you expect those currency debasement induced trends to continue, now may be your time to jump into the silver market.

Remember silver's last big high was reached in 1980—when it hit a $50 an ounce.

Granted, that was due to the Hunt Brothers attempting to corner the market (Yes, the price eventually collapsed after Nelson and William Hunt made their play for the corner. And Nelson Hunt was later forced to file for bankruptcy in 1988.)

However, according to the Bureau of Labor Statistics CPI calculator, $50 in 1980 is worth $132.71—so, perhaps, we've got a long way yet to go.

Just remember to fasten your seatbelt if you want to try to take a spin on the back of the asset bubble tiger: You may be in for a bumpy ride.


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