While metals prices continued to dance around in the relatively narrow trading-range which they have occupied recently, this hides the fact that it was truly a momentous week for news – none of it good. Gold appears set to end the week somewhere around the $1580-level, while silver has once again dipped down close to $27/oz.
Meanwhile, all week long we had one ominous economic news item after another. Earlier this week we found out that the U.S. manufacturing sector has once again officially plunged into recession (while unofficially the Greater Depression has never ended). In a single day; we saw China lowering its interest rates, the EU lowering its benchmark interest to nearly 0%, and a very weak reading in the U.S. service sector – to accompany the bad news in its manufacturing report. I noted this triple-header of bad news in the commentary “Crash Warning”.
Today this “bad news” week was capped off by another terrible U.S. employment report. The official claim is that the U.S. economy added 80,000 net jobs in the month of June. However, the (fraudulent) “birth/death model” added 124,000 fantasy-jobs all by itself. Subtract just that one falsification, and already that number changes to -44,000 jobs for the month of June – and that doesn’t account for any of the other BLS exaggerations.
So while we had the (nominal) metals prices slipping slightly, we had the economies around us (and the currencies and bonds which they supposedly “back”) sagging noticeably. In other words, while precious metals were becoming a better “buy” because the nominal prices declined, they were becoming a much better value -- because the paper they (supposedly) compete against is all significantly ‘more worthless’ than one week earlier.
This is a concept which few precious metals investors consider. I maintain (emphatically) that because of the rapid speed at which our economies are collapsing (and their paper bonds and paper currencies) that silver and gold are more undervalued today than they were 12 years earlier; with gold priced at under $300/oz and silver at under $4/oz. While we may feel frustration that the nominal prices for gold and silver are only a laughable fraction of their real value, the converse to that sentiment is that we can buy without fear: knowing that we are obtaining our gold and silver today at phenomenal prices.
The news around us is terrible, and steadily getting worse. Obviously we never buy our silver and/or gold “hoping” that this deterioration is going to continue. We do so because we fear there is no other possibility, given the horrific economic catastrophe concocted by our bankers and politicians. As this economic devolution continues unabated, we can console ourselves that despite the lack of change in the nominal prices for our precious metals holdings that their real value continues to appreciate – and at an escalating rate.