Coins · Precious Metals

Fear and The Average Investor

Anyone who has ever been short on cash flow understands fear. With a federal deficit of 1.1 trillion dollars, the federal funds rate is not projected to go up before 2015. This is because the interest on the debt that our government has to pay also rises. That can’t happen until employment comes back and those who are unemployed are able to go back to work. Given the projected estimates of the inflation rate of 5% coming this year people are living in fear. Why?  China.

For 4 years now 220 million Chinese people have risen up from poverty. Anyone who has ever worked knows that young people want two things as a measure of prosperity – protein and transportation.  Both of these things require corn as a commodity for animal feed and ethanol. Oil prices are already rising worldwide due to an unprecedented rise in demand. In the U.S. less than 5% of the investors have silver on their radar. However, the Chinese buy silver like religious people tithe. On some days 1.2 billion ounces of ETFs of silver trade in a day (with only 220 million ounces of physical silver available for good delivery at the Chicago Mercantile Exchange).

The prices of metals, particularly silver, have been rising because nothing else represents a safe risk. Investors were also hurt badly by the 2008 real estate bubble and it is still fresh in their minds. People are also not quick to trust at that level again and are trying to take back control. Consider investing in silver and take advantage of the opportunity to retire comfortably without fear that your portfolio is being eroded by fees and financial advisors that may not advise you well.

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