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How to maximize your profits as silver prices take off again

Posted on 31 January 2012 with 1 comment from readers

How to maximize profits from an escalating silver price is the topic du jour taken up in the latest issue of the ArabianMoney investment newsletter published in Dubai for subscribers only (click here).

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.

Posted on 31 January 2012 Categories: Gold & Silver

1 Comment posted by readers:

Comment by Bill in Slidell - 01 February 2012

Wall Street closes with the best January gain in 15 years.
You will love this, Peter. Some guest on CNBC (I missed his name, but I have seen him before, and he is considered a major financial expert.) just said that the euro will go to parity with the US dollar. He said that Europe MUST print money.
His target for silver is $50 and ounce, and he said gold will go to $3,000. If he is correct, people holding the euro are going to get killed. From $1.30 down to $1 is a huge decline. I forgot how to do the percentage, but it isn’t small.
And QE 3 might be coming with the bad housing price fall.
Many people think Obama will beat Romney by between 1 & 2%.
Unemployment is at 8.6 in the USA and yet, business owners constantly complain on TV that they can’t find welders and machinists. Hey, why work hard in the heat and cold when you can get a government check for watching TV?
We now have so much natural gas that the price fell 9% TODAY. Too bad we can’t run a pipe to the UK or Japan.
Queen Elizabeth is heading for 60 years on the throne. WOW! She could have probably run the place better than the elected politicians. Doubt it? Look at the debt level, and you might reconsider.

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