I was just looking at some interesting charts.
I read a lot of business news. Everyone has been cheering 2010's 11% rise in the stock market. This magical feat was accomplished by some of the greatest manipulation I have ever beheld. High Frequency Trading. (HFT) Banks buying stock thanks to the repeal of the Glass Steagall Act. The FED literally making money out of thin air and giving it to big banks. Waiting like a bunch of vultures for the rest of us to get in so they can dump that stuff on us.
Interestingly enough, you would have made 30% by simply buying physical gold last year. No forms or applications to fill out. No great market collapses. No taxes to pay. That is a very significant advantage. The government cannot take a bite out of your ass. Yet.
Anytime you make money and the government cannot prove it or steal it from you, you win. This has to piss banks and the government off.
I watched that very thing happen last week. A gal came in, plunked 200 ounces of silver on the counter and received 6100 dollars. She turned to me and said she bought the silver 25 years ago for 1200 bucks. She would have made an additional 400 dollars had she sold it on Monday morning. Had she waited her entire life for that moment? Was silver a good investment? Sure. She made something net of a 15 to 20% gain every year she held those bars. And you can bet that 6100 bucks ain't going to find it's way onto a Federal Tax form 1040.
Silver made 80% last year. It finished 2009 at 17 bucks an ounce. There is significant evidence to show that silver has been manipulated and held artificially low for some time by the same entities that want you to invest in the stock market. That would be the government, the banks, and the wall street vultures. Everyone gets a cut of your dough that way. They get nothing when you buy physical precious metals, hold it, and sell.
Then it dawned on me. Obamacare had that sneaky little provision that forced business owners to file a 1099 every time they conducted business transactions in excess of 600 dollars. When does that law go into effect? How do you get around that? That's when I got the idea that buying gold and silver in significantly small physical amounts made a lot of sense. An ounce of silver, despite some wild ass predictions out there, is not going to trade beyond 600 bucks any time soon.
In 2011, as the Bernank continues to artificially ramp up the man made world of paper, you have to ask yourself. Do I want to invest in wood pulp, gold, or silver? Do you really think the demographics support a younger and smaller generation making less and buying up stock supplies? Do they have the capacity to gobble up all of that over priced wood pulp while they are being taxed to death? Not hardly.
Here's to another wonderful year. Let's see who this year's out performer is again. Let the bankers eat cake.