Q&A With The Doc: Silver Keeps Going Down, Have I Made A Mistake?

Bruce writes:

I used to be worth millions. After the crash I am at about a half million. Silver has caught my eye and have invested about a third of my money in it at about an average rate of about $30. It seems to keep going down. Have I made another mistake? I am not in great health and in my sixties. Should I go all in or run like hell? I know you cant give advice but I’m interested in your opinion .

Bruce, do you mean physical silver in your own possession? If so, you will be fine as long as you are able to convince yourself you are right, and sit tight. Do you understand the reasons why silver has gone from under $4 an ounce to $50 an ounce over the last 11 years?
Yes, silver has been ‘going down’ for over a year now. We are nearing the end game and the cartel is waging a massive psychological sentiment war on investors.

A quick look at a long term chart over the duration of the bull market however will reveal that nothing unusual has occurred during this correction. Silver completed a mini-parabolic move in early 2011, and has been consolidating since.

A base in the $26-$35 range sets up the next leg of the bull market to target $75-$90.

Not a single one silver’s fundamentals have changed over the past year. REAL interest rates are still massively negative. The 10 year is trading practically at 1.5% when real inflation is nearly 10%. That means -8.5% real interest rates!
The Fed purchased (monetized) 68% of all treasuries sold over the past year. The US gov’t is running $1.5 Trillion deficits into perpetuity.
US pension funds are $4 Trillion unfunded. Medicare/Medicaid are $60 Trillion unfunded. Europe is nearing contagion, and once the Euopean crisis ends the focus will shift to the UK and the US. Do you want to be in Apple, Treasuries, or Muni’s when the debt crisis reaches this side of the pond?

Massive secular bull markets do not simply fade away, they end in a mania.
I personally do not expect the current gold and silver bull markets to end prior to gold reaching a valuation of $5,000/oz, and silver $350/oz.
These numbers are conservative of where the metals could go, and I personally believe silver will vastly exceed that number. QE will go to Infinity to prevent a complete deflationary contagion collapse.

Speaking for myself, I am all in (PHYSICAL gold and especially silver).

Assuming you are speaking of physical silver, begin counting your wealth in ounces and in terms of purchasing power vs. other tangible assets, rather than in fiat dollars. You will sleep much better at night.