With the Federal Reserve waging war against the dollar and inflation beckoning, investors are interested in precious metals. Oil is pushing $100 per barrel again and food price inflation is already a global concern. The Washington Post wrote last week, “The state of emergency in Tunisia has economists worried that we may be seeing the beginnings of a second wave of global food riots.”
What’s good to own in an inflationary environment? Real assets that don’t lose value when fiat currency vaporizes. Land, businesses that sell real goods, and precious metals are all good examples. When a currency goes bust, the price of a mountain or a timber mill or a chunk of gold retains its relative value. That’s why grandparents remember the cost of land being a few hundred dollars per acre. What happened as the Fed eroded 95 percent of the dollar’s purchasing power since its founding in 1913? The price of real assets went up — and the value of bank accounts went to almost zero. Destroying the value of savings is a great way to keep the populace showing up at a job and paying taxes.
The government and Fed are at it again, you’ve undoubtedly noticed, and gold bulls are calling for the metal to top $2,000 per ounce — with some calling for prices thousands of dollars higher than that.
The situation led co-authors Mo Dawoud and Chris Marchese to write Treasure Hunting for Precious Metals Stock, a 32-page report focused on which companies will most benefit from the upward trajectory of the metals market. From their introduction:
The phenomenal potential of the gold and silver markets, which derives from a function of inflationary pressures, supply deficits, and increased demand, is why we have decided to write this report, which should serve to educate Main Street investors, maximizing your returns while minimizing your risks in the pursuit of profit from the precious metals and the companies thereof.
They point out that while gold has reached a nominal high over $1,300 per ounce, both it and silver “need to more than quintuple to meet their true highs.”
They explain the supply and demand deficit of silver, and discuss its “usefulness in an array of industrial and chemical applications” that are outstripping record global silver production to the tune of 1.4 billion ounces over a recent five-year period.
They explore the risk of inflation as the United States attempts to “spend [its] way into prosperity,” according to President Obama. They present evidence of rising prices in America, mention that they steal from discretionary spending power, and consider the risk of the dollar losing its world reserve currency status. What are other nations demanding instead of paper dollars? Precious metals.
Finally, they present the risk of a short squeeze in silver that they found by analyzing data in the Commitment of Traders report. They see a parabolic spike in prices on the way because “banks have such a concentrated short position in silver, that if all the long positions took delivery of physical metal, they would be unable to find an adequate supply, resulting in default.”
Following that introduction to the market, they present profiles of what they consider to be the top 13 undervalued precious metals companies. They hope that their research “serves as a starting point for you, highlighting attractive companies that may be of interest.” As part of that effort, they include a spreadsheet presenting stocks in the sector in light of the “valuation keys that we used, which alongside your own research should give you the information required to properly assess each of these 13 featured companies, along with other mining companies on the watch list [at the end of the report], which are all attractive companies in their own right.”
They’re selling the report for $32.
I’m not paid a commission if you buy it, nor do I necessarily endorse the stocks that are presented in it. I’m simply passing along this resource for those interested in the sector. Judging by my inbox recently, that’s a good percentage of readers.
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