Silver's Rise

I did an interview with Germany's investigative reporter, Lars Schall, last week. We covered everything from the Middle East Uprisings to Oil Prices to Silver Prices to the still weak global economy. He put the transcript up on his website yesterday. Here's the tidbit on silver, given today's continued hike in that metal:

Question: In general, do you think both metals (silver and gold) will go much higher?

Answer: Yes, I think they will. There is a fundamental weakness in the global economy. There is a fundamental weakness in the U.S. economy. The Federal Reserve chairman Ben Bernanke, President Obama, and Treasury Secretary Geithner are all talking about this recovery we are supposed to be in. Apparently, to them, we have been in a recovery since the middle of 2009, but real individuals don’t see that. The less they are finding jobs, the longer they are out of jobs, the more expensive it is to buy food, gas, and other basic items, including their health care, and the more people facing foreclosures amidst the month of lowest housing prices since this ‘recovery’ officially started, the more apparent it is, that we aren’t in a recovery.

We are in a weak, not a stable, situation despite all this talk. The dollar is weak, and that takes money out of the pockets of for instance, Americans, that pay more for imported items, and get less on exporting them. Also, our Treasury debt has gone up from $5.4 to $9.4 trillions in two years, that is an exceptional amount and increase. This is debt with which the government buys its own currency and circularly, its own debt, but it doesn’t get out into the real economy. As long as that is the case, as long as the economy is weak and immense debt is used to prop the dollar, and as long as there exists speculative capital seeking somewhat sure investments, at least short-term, the metal market will continue to go up. There might be days where it comes down on profit taking or other reasons, but in general it will climb higher.

The rest of the interview is here. What do you guys think?