25 April 2006

This Is 1969, Not 1979

Kitco - Commentaries Dave Skarica: "You think you see the bubble? Heck, the last silver bubble was in 1980, when she whacked $48.88. Those were 1980 Fednote dollars, worth double what 2006 Fednote dollars are. So you ain’t seen no stinking $48.88 bubble in silver until she hits $97. We are a long, long way from there. Try to plot a straight line between $1.29 and $48 silver; it cannot be done, except over the long haul between 1966 and 1980. Ditto gold; $35 to $800-something. Took twenty years, plenty of turbulence intervening.
Sure there is froth at these stopping points. You get about 6 hours’ notice to reload. That will be it. If Morgan is right and we’re in for a summer-long doldrums, so much the better. Time to see the lawyers and accountants and get out of the Delphi pension plan and in to something real. Be fearless. The right mining juniors will do you well. But be afraid as well. Those paper dollars you hold won’t even get the kindling in the woodstove alight.
This is not the “bubble” of 1980. The by-w6rd here is “fungible.” Metals and commodities are fungible. Silver is silver is silver, the world over, no matter where it’s made. Dollars are not fungible, especially if they say, “Made In USA.”. What you are hearing is the deafening racket of copper, zinc, lead, uranium, concrete, rebar and oil, clamouring for a free-market price so they can catch up with the price of a loaf of bread, or even the cost of real estate in Wallace. The market cries out for Justice. And, replies Silver, Justice will be ours. Selah."

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