David Morgan: This is very likely going to be the biggest move in the precious metals complex in modern times
As societal and political structures continue to breakdown worldwide, survival instincts are heightening. This inspires self-organizing communities and a decreasing confidence in central banking and other key infrastructures. Precious metals as a medium of exchange has thousands of years of tried-and-true history, so people run to these safe havens. David Morgan thinks gold and silver have already hit bottom, and because of the unique situation in the world today, he wouldn't rule out gold lifting to $10,000!
With silver, we are starting to see a contraction in supply, but the main thing driving prices up is the general public trend towards precious metals. When silver goes above $26, concurrent with gold above $1,550- and they stay there for a few weeks, we will see an acceleration up to the old highs. We should at least come close to this by the end of the year, and certainly by sometime next year.
One of the main reasons silver has been trading so differently this year is that many bullion banks are continuously short on precious metals, and as the price increases they continue to short. This builds up the open interest from the amount of metal that is shorted. The other side is taken on by the Shanghai Gold Exchange, which puts us in a position that we have never been in before. If you are producing a product and have a lot of capital tied up in equipment and labor, while legitimately hedging, the exchange will give you an advantage because commodities will actually be produced.
David thinks that precious metals stocks will eventually go down with the general market, but gold is the most negatively correlated commodity to the general market. Precious metals will be the first thing to come back up in a meltdown, followed by mining shares. Also, people will exceedingly flock to mining shares if the physical market becomes so tight that people aren't selling much.
Among other businesses, David is the CEO of a new corporation- Lemuria Royalties, which deals with royalty and streaming deals. With streaming deals, you provide capital to the entity, they increase their output, and you get a stream of their new production rate for the life of the mine. Royalty deals are where you get a set return on a capital every time they produce. You can also check out his Morgan Report website which offers exclusive analysis of markets, investing insights, and a free newsletter among other resources.
Talking points from this week's interview:
• Economic breakdown could lift gold to $10,000 per ounce!
• Contraction in silver supply is driving prices up
• Precious metals and mining stocks are safe investments
• Silver at $26 and gold at $1,550 will accelerate prices up
• Gold and silver have probably already hit bottom
A precious metals aficionado armed with degrees in finance and economics as well as engineering, David Morgan created TheMorganReport.com website and originated The Morgan Report Newsletter, a monthly that covers economic news, overall financial health of the global economy, currency problems, and the key reasons for investing in precious metals. David considers himself a big-picture macroeconomist whose main job is education- educating people about honest money and the benefits of a sound financial system.