Melman on Gold & Silver
November 2020 by Leonard Melman
While present official numbers remain quiescent at below 2%, we strongly believe the seeds of future inflation have now been laid via virtually unlimited currency creation by various central banks around the globe.
If the costs of financing the national debt increase in a manner described in this study, that should, in our opinion, be regarded as a long-term plus for the precious metals.
Although the risk of a federal tax audit remains low, thanks to the Internal Revenue Service’s secret audit selection process every prospector, miner, and mining-related business owner has good reason to fear an audit, but only if they are not prepared.
Perhaps the most important phase of our chart analysis work is to find indicators that have proven reliable in the past in terms of providing indications of future market direction. One of our favorites is the “Bank Index,” better known by its trading symbol, BKX.
Well, we are now almost two months into the new Biden Administration (as of our mid-March press deadline) and there most certainly have been some changes in direction from the preceding Trump years.
In terms of gold and silver, if this mountain of unbacked debt, now reaching several trillions of dollars, Euros, Yen or other currencies begins to truly collapse into an inflationary spiral, we will witness the onset of the mother of all precious metals bull markets.
I believe gold and silver prices, to at least some extent, negatively mirror the society's confidence in the ability of government to continue providing economic and social services.
Perhaps the heart of our pro-gold thesis is this consideration: governments are inherently inefficient, they attempt to provide services far beyond their genuine fiscal ability and these trends result in deficit financing, growing debt levels and ultimate “watering” down of currency values.
The Bawl Mill • Ask The Experts - A metal detector for Ghana? • Ask The Experts - Is a detector a good return on investment? • Ask The Experts - Concern that gold and silver aren’t considered critical? • Exploration Rush at Tonopah, Nevada • Prospecting Old Mine Dumps With A Drone • Hard Rock 101: Blasting With Kinepak Explosives • Ancestral Yuba River Placer Gold Deposits • It's Not Always El Dorado • Gold Prospecting for Better or Worse: Coyote Poop Gold • National Forest Closures in California • Mining Stock Quotes and Mineral & Metal Prices