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Bulletin:

Staying focused on the long term picture

By Richard J. Maybury

6-May-11

 

Dear Reader,

 

I do not know what to tell you about the correction in raw materials — especially silver — that I haven't said many times before.

My warnings about this have all boiled down to some version of, the route for raw materials including oil, gold, silver and platinum is onward and upward against the US dollar and probably against all other currencies (expect perhaps the Swiss franc), but expect an increasingly scary white knuckle ride. We will have terrifying drops along the way. Fiat currencies are dying but they will not go down without a fight.

I know it is very hard to stay focused on the big, long term picture when in the here and now prices are plunging, but that's what we need to do.

If governments become rational and honest, and give up their fiat money experiment, I will become pessimistic about the long term prospects for raw materials, but what are the chances of that?

I cannot emphasize strongly enough that the world economy has been in an unprecedented crisis for years, and the evidence says there is a lot more of this chaos coming. Never before have all currencies been fiat with one foot in the grave and the other on a banana peel.

Fasten your emotional seatbelt, grit your teeth, and expect a lot more of this wild ride.

You might consider drops like we saw this week in silver as buying opportunities, but I haven't the slightest idea where the bottom is. The world is in new territory, and I have no faith whatsoever in any kind of financial analysis, be it fundamental, technical or otherwise.

Again, as I've said many times, fasten your seatbelt and expect a lot more of this kind of chaos until governments give up their fiat experiment and go back to currencies that have substance.

You are never far from my mind. When things grow frightening, please talk them over with a trusted friend. It helps.

 

Sincerely,