For this veteran newsletter writer and author this was not his first book on precious metals. He wrote one of the best selling investment books of all-time in 1978 about how to survive the coming bad times and then also strongly recommended buying gold and silver.

300% gain

So six years on from his latest bullish book on precious metals – after more than two decades as a bear – and you can only conclude that the maestro got it right again and knows what he is talking about. Gold and silver have both trebled in that time.

Just think how other asset classes have or have not performed since 2006. US housing is a disaster and stocks have gone nowhere. The whole world hase been through a major financial crisis and recession and now teeters on the brink of a double-dip.

But Ruff’s observations are still relevant for two reasons. First off, we are nowhere near the $5,000 gold and $100 silver prices that he forecast back then. Secondly gold and silver have gone up by the same amount, silver has not outperformed.

Momentum trade

At face value then gold and silver will both at least triple again if Ruff’s thesis is correct, and it has been for six years now. The money printing that he very clearly and specifically identified as the reason for these price rises not only continues but is accelerating as central banks become more and more desperate to head off another financial crisis.

Will Ruff ultimately prove correct about the outperformance of silver as well? It looks highly likely. The silver price spike last April to its 1980 all-time high did demonstrate outperformance, albeit briefly. Silver supplies are tight and in a smaller market than gold so such volatility can quickly re-emerge.

The last issue of ArabianMoney highlighted ways for investors to gain the most from a surge in the silver price (subscribe here and we will send you this issue free). Howard Ruff got their early but the best is still to come for silver investors.

On jobs, El-Erian said that ‘let’s not also forget the numbers outside these headlines…we should not lose sight that we have structural issues that are not being dealt with.’ Also, ‘my gut says we are likely to see [QE3], but the question is when and how big.’

On the jobs data:

‘It is a strong report. We should welcome in job creation of 243,000 and welcome unemployment rate of 8.3 per cent. But the qualifier, and it is an important one, is let’s not also forget the numbers outside of these headlines. I look at long-term unemployment, those that have been unemployed for 27 weeks or longer, that is stubbornly stuck at 5.5 million, and second, youth unemployment is stuck at 23 per cent.

‘We should welcome the headline numbers. They are really good, but we should not lose sight that we have structural issues that are not being dealt with. That’s going to be the question mark. Is this just a cyclical bounce or can this hand off into a secular bounce, which the economy needs?’

On Bill Gross saying it’s a risk-on trade:

‘It is a short-term risk-on trade. Markets are dominated these days by short-term trade for good reason. There are so many uncertainties about the global economy. People are not clear what Europe is going to look like, and whether you get the political response the American economy needs.

‘A lot of investors have lost long-term conviction and are now focusing on the very short term. It is a risk- n trade in the short term, and in the longer term we will have to deal with these issues confronting the global economy and therefore markets.’

On what the jobs report means for QE3:

‘So far, the Fed has been dismissing the short-term data…They have been looking beyond the cyclical bounce, and saying that secularly the economy is still weak. What does it mean for policies, don’t expect any change in the signal that they intend to keep interest rates float at 0 or at exceptionally low levels until the end of 2014. In terms of QE3, my gut says we are likely to see it, but the question is when and how big.

‘We need this handoff in two places in particular. First, hand off from short-term growth that is prompted by stimulus. We have massive liquidity pumped into the system. We have a savings rate that has come down from over six to four per cent. These are all short-term effects.

‘We need to hand off to a long-term engine of growth, and secondly, we have to remove uncertainties like Europe, the Middle East, and Iran. We need these two hand offs, and critically so far, it is a good cyclical story, but the structural and secular story remains worrisome.’

On whether America needs a payroll tax extension:

‘This economy does not have enough indigenous growth. First, the savings rate for households has come down to 4%. There’s a limit to how far down you can bring it. Second, the rest of the world is slowing.

‘Third, business investment is only going to happen if businesses are convinced that we have this sustainable bounce. Therefore, if the government takes away too much too quickly, we will lose momentum.’

On where the global economy is headed:

‘It is very balanced right now. It is what we have called here at Pimco the morphing into bimodal distributions – the two ends of the distribution of potential outcomes is high. I would look in the short term critically to Europe. The ECB has managed to press the pause button on the European crisis using a very powerful tool, the LTRO, and we have a second one coming up.

‘The question is can other European entities press the rewind button to bring the crisis back? That is the main issue to look at. Keep an eye also on small things – Portugal, the Greek PSI discussion, they can press play again. So, focus on the very short term on Europe, on the longer term, position for the reality that we are living in this bimodal world.’

Elliott Wave theory takes patterns established for past price movements and uses them to try to predict the future. It is far from infallible but has quite a good record of success. It can also be rather complicated with its use of mathematical series.

Wave three

Mr Field explains: ‘Silver, as with gold, is starting intermediate wave 3 of Major THREE, which should be the longest and strongest wave in the bull market. It should certainly be longer than intermediate wave 1 which was the gain from $8.77 to $49.52, or +464 per cent.

‘Thus the gain in wave 3 of Major THREE should be larger than +464 per cent. It should be a gain of at least 500%. Starting from the $26.39 low, a gain of 500 per cent would produce a target price of $158.34 for silver. That is the number which equates with the $4,500 price forecast for gold and produces a silver to gold ratio of 28.4 ($4,500 divided by 158.34).

‘The gain in gold was forecast to be 200 per cent for this move while the forecast rise in the silver price is 500 per cent. Silver is again predicted to perform better than gold based on these Elliott Wave calculations.’

However, Mr Field is careful to add: ‘A word of caution is appropriate at this stage. All Elliott Wave studies are based on probabilities. While the wave counts may provide a high degree of confidence in the forecasts, one cannot be 100 per cent certain of any forecast.

‘It is necessary to have a point at which it is obvious that the forecasts are wrong. In the case of this silver study, the line in the sand is at $26. If the silver price drops below $26 the odds are that the above calculations will not work out.’

Volatility warning

Finally he adds something readers of ArabianMoney have all heard before: ‘A further word of caution: silver is not for the faint hearted. Silver is considerably more volatile than gold and the corrections are much larger. Silver corrections can and do happen quickly. They are emotionally gut-wrenching and it is easy to get shaken out of one’s position near the bottom of a large correction.’

That said Alf Field’s analysis counts for a great deal in the world of precious metals and must be stacked up with the other evidence that made silver the pick of the year for this website (click here).

Digital media only represented around four per cent of regional advertising spend at $160 million last year. But it is the fastest growing sector of the local advertising market and forecast to top $200 million in 2012.

Flip Media was founded by Martin Diessner and Dinesh Lalvani in 2003 with the encouragement of AME Info, then the largest business information website. It grew rapidly as Internet advertising gained traction and received private equity investment from HSBC after the latter concluded the $24 million sale of AME Info in July 2006.

Why sell?

Why sell out now? It is a good question. Digital media is the growth area in a pretty moribund local media industry this year. Arabic TV news is the only other hot spot.

New digital player Adzouk has created a regional Google-clone in the past six months and now handles advertising for over three hundred websites, including ArabianMoney, making it the largest platform for web advertising ahead of Gulf News or AME Info.

Flip says it sees the benefit of being a part of a larger group to take the company to the next level. Presumably somebody also wanted to take their money out of the business.

Like AME Info the Flip story is one of enterprise and leveraging the Dubai digital media opportunity, latterly with the help of HSBC Middle East Private Equity. Their forte is taking small companies through the corporate governance and accounting strictures necessary for a sale to a large multinational and often negotiating the deal.

It is certainly a far more creative and practical role than some hedge funds who invest speculatively in such start-ups and never actually contribute anything more than their money.

High ROI

However, the returns for investors in the early stages of these companies can be formidable. But they literally start from nothing and can also end up being worth nothing. The trick is backing the right people in the right sector at the right time, although patience can be a substitute for correct timing.

Patience for private equity investors is not so much a virtue as a necessity. Even great businesses can fall foul of a global economic slump, for example, and start-ups are often very vulnerable to such force majeure events. Still for Flip Media the pay day has come.

Will there be more Flips and AME Infos? It is inevitable really as the large groups are not always the greatest innovators and often prefer to buy successful start-ups rather than try to do it themselves.

Last night we checked out a special menu at Ruth’s Chris restaurant, inclusive of drinks in honour of the great American novelist Ernest Hemingway who spent a lot of time in Spain where he grew very fond of a good steak and red wine.

Central location

You’ll find the Dubai branch of the famous Texan chain on the upper deck of the lobby in the Monarch Hotel right opposite the World Trade Centre tower. It has large Texan leather chairs with space for the largest guest and a luxurious interior mainly of marble.

Hemingway would have liked the live music of Spanish guitar played to quite a high standard even if it made conversation difficult for those without a booming voice. He would also have very much approved of the very strong cocktail as an aperitif.

The Hemingway night menu included a bottle of house red and a cigar to end the meal. However the real deal was the menu itself of course. AED495 might not be everybody’s idea of a bargain but this is one of Dubai’s top steakhouses and the tab is usually much higher.

We tried the onion soup with large cheese crouton and the mushrooms stuffed with crabmeat. Both came in hearty portions and tasted fine.

Cooking secret

The steaks are cooked at 1800 degrees and topped with butter so that they stay sizzling on arrival at the table. It is certainly a way to keep the meat hot, and indeed you have to be careful not to burn your tongue. Perhaps it does add something to the taste, and at least it is not something you could do at home.

Two side-orders could be selected from mashed potato, spinach and broccoli. We would have appreciated more choice here, maybe a jacket potato or mushrooms.

The dessert selection was smaller with a choice between creme brulee and a chocolate creation. We both plumped for the rich creme brulee. Ruth’s Chris is not a place for anybody on a diet. Go there to celebrate life as Hemingway always did!

Silver rose above $34 an ounce in Asian trading yesterday while gold is above $1,750 again. The bulls are talking about how long it takes to exceed the $48 and $1,923 highs set last year.

Dubai Souk

The talk of the Dubai Old Gold Souk is that silver will hit $58-60 an ounce by September (click here), though it is still hard to find anybody prepared to stick their neck out beyond $2,000 an ounce for gold, albeit possibly within a couple of months.

Global equities have rallied in thin trading on the back of economic data that is already history. When the statistics for January come out they will likely confirm a global slowdown in trade and exports. The eurozone crisis and particularly cold winter weather will see to that.

Market traders have also become bored stiff with the Greek debt crisis. However, it still threatens to drop another Lehman on to bullish complacency that flies in the face of the reality of a recession in Europe and slowdown in Asia.

Manufacturers now reporting increased output may find themselves with goods left in their yards this month, and anecdotal evidence of further redundancies suggests unemployment is still moving in the wrong direction.

Will stock markets soon be plunging from their current six-month highs? The notion of an economic recovery is surely an obvious illusion when we know that the world’s largest economic bloc is already in the midst of a double-dip recession.

Greek gifts

Boring as it is the interminable negotiations of the Greek crisis are not going well. They should have wrapped up almost a week ago. Never trust Greeks bearing gifts as the Trojans learnt to their cost.

That probably means the precious metal price surge is going to reverse alongside a re-run of the 2008 global financial crisis, unless the ECB can pump so much money into its banking system that a Greek default can be easily absorbed and then all that liquidity will push up gold and silver to even higher levels.

For precious metal investors this could be the annus mirabilis when everybody piles into hard assets because they are running scared from paper.

China’s manufacturing unexpectedly expanded last month on increased new orders, suggesting the world’s third largest economic bloc is withstanding Europe’s debt crisis and a government-induced property slowdown at home. Kwok spoke with Rishaad Salamat on Bloomberg Television’s ‘On the Move Asia.’

Meanwhile in Hong Kong the government has announced $10.3 billion in spending to counter an expected fall in GDP growth from five to one to three per cent. House prices are off six per cent since last June and HSBC is firing staff.

Hong Kong officials seem far more pessimistic about the outlook for exports in the first quarter than the Chinese despite the fact that most of these exports will be re-exports from China. Something is not quite right here.

Of course we have the epic manipulation of the Fed to thank for this confusing scenario. It is artificially depressing bond yields to support the stock market, and yet that is not the whole story.

Foreign support

Foreign buyers do presently see dollar-denominated assets as something of a safe haven and are prepared to tolerate historically low returns on bonds for that percieved safety, or for that matter take a risk on US equities.

However, sooner or maybe later this conundrum has to be resolved. The stock market will not carry on rising indefinitely if a recession threatens to thump corporate profits hard. Those selling equities would then buy bonds and push the yield still lower.

Or is that what will happen? If you look at Spain and Italy you have pretty low stock markets with very high bond yields. Bond holders demand and get high yields because there is a rising risk of default as debt levels are so high.

Could the United States go the same way in a recession with stocks on the floor and bond prices decimated by very high yields? That tipping point in bonds could come very suddenly if history is any guide, and stocks would actually be the better investment in that scenario.

Or look at the United Arab Emirates. Majid Al Futtaim is about to issue bonds with a 5.8 per cent coupon, very low for a UAE private sector company, while at the same time the local stock markets are trading close to seven-year lows.

So both the UAE stock markets and bond markets are consistent in pointing to recessionary business conditions. Strange that really because business revived quite strongly in 2012, and both stocks and yields ought to be rising.

Let us stick to the US conundrum first. Transport data for January suggests the bond market is telling the correct story and that the US stock market is topping out for 2012.

Eurozone disaster

That is consistent with the horror stories from the eurozone about the return of the world’s largest economic bloc to recession in the fourth quarter. It is consistent with a Greek default and second global financial crisis.

And it would be consistent with UAE stock and bond markets indicating a renewed downturn in business activity this year.

Could it be that US stock market optimists are simply wrong and the bond market is correctly judging the future? Perhaps. But if so the US bond market is also in mortal danger and is no safe haven.

The ArabianMoney investment newsletter (click here) is advising its subscribers how to buy silver, gold, oil, even real estate to achieve maximum capital returns. These are hard assets, not paper like currency, stocks or bonds.

The readership numbers are staggering but what do they mean? Can Facebook turn its hundreds of millions of casual users into hard advertising dollars? And if they can, why not do so before the IPO? Why the rush now?

Google paradigm

Google sold a technology company that had monopolized the advertising power of the Internet. It’s profits just had to grow with the Net. Only now that Google clone companies are supplying the adverts for websites like ArabianMoney is the giant beginnning to lose its grip.

AOL was an Internet service provider with a very large subscriber base that managed to convince the executives of Time Warner to buy it in the largest takeover in US history at the top of the dot-com bubble, bigger even than the Facebook IPO.

It proved to be a complete turkey and worth far less than the $165 billion paid in January 2000. Time Warner shareholders took a huge hit though the AOL brand still exists, just about.

The simple truth about Facebook is that it generates nothing like sufficient profits to justify its valuation, and never will. It is being sold at the top of a mountain of hyperbole to maximize an IPO price, albeit with the hope that more stock can stil be shifted for a higher price later on.

However, that is not why ArabianMoney would suggest caution is called for in this IPO. Our view is that the Nasdaq itself is well over due for a correction given the recessionary outlook for the global economy. Think a mini dot-com crash.

Dot-com bubble mark 2?

Is that not obvious in the way that the dot-com bubble looked about to burst in January 2000? You don’t buy a trip on a small boat with a storm approaching.

It is remarkable to us how financial bubbles continue to emerge throughout history, a triumph of hope and stupidity over experience. In Facebook you have a sociological phenomenon yes, an opportunity for investors to make money it is not.

The Facebook valuation is an obvious bubble. A year ago we commented that Facebook was worth more than the entire silver market (click here) and the valuation has doubled since then.

Having tipped silver as going to be the top performing asset class for 2012 (click here) it is naturally the next step to consider best how to actually put your money into this precious metal. Readers of our newsletter will get this advice.

We can only note that from an investment perspective this makes our newsletter a very good buy. Even a modest investment in silver last month would have risen by more than enough to cover the subscription.

Getting gold

Gold is a far easier and better understood investment than silver. Dubai investors can buy physical gold in the souks of this city tax-free and for only a tiny percentage above the spot price. The gold ETFs are well known and there is one quoted in Dubai too.

Yet silver holds out the promise of higher returns than gold as the bull market for precious metals gains additional traction. Occasionally bearish analysts scare investors with stories of deflation and depression that would impact on gold and silver.

But these tracts always ignore money printing by the central banks and the huge creation of money by the global central banks. Consider this chart from our friends at Agora Financial:

If that is not monetary inflation staring you in the face then you have very bad eyesight. That is why silver prices are up tenfold in a decade and the gold price by a factor of seven. Both metals hit all-time highs only last year.

Recently the ECB joined in with $645 billion in a new credit line for the eurozone banks, and that is going to be extended to $1.5 billion in February. And meanwhile the Federal Reserve is well known to be lining up QE3 in readiness for a blow-up in the eurozone crisis. China is also easing up on its recent money tightening for the same reason. The UK and Japan are big money printers.

Anybody who thinks this is going to end well for paper money just has to be joking. We have seen the debasement of the past decade and its impact on precious metals. This is only going to get worse, or rather better for gold and silver.

Silver outperforms gold in an upswing, so it is only logical to consider how best to leverage up in silver.