Platinum futures rocketed up today by $42.20 to $1,234.30. Yikes!
Could this be the next big push for metals all around? being bullish on silver means we take a lot of verbal lumps on the head as we try and bestow a semi-impartial view of the silver investing market upon our readers.
The reason as reported by Yahoo! Finance was that industrial demand for platinum in car parts and electronics has given the platinum market a much need boost. The demand is increasing without supply following. The biggest player in this news reporting was the famous Johnson Matthey that said the platinum market would have a 20K ounce supply deficit in ’06. That’s a lot of platinum needed!
Now it would make sense that where one metal goes the rest follow. A lot of investors out there don’t read the reasons why a certain commodity is increasing or decreasing and therefor just buy or sell on what news sources say the price is doing.
Platinum surges, but gold. Silver tanks, sell it all. Why? human instinct or gullability. Whatever it is we hope that trend continues and that we see that market of silver feel a little love from the Platinum shortage (or useage).
technorati tags:Silver, Platinum, Gold, Commodities, Investing, Money, Finance
Gold will go way up, maybe to $1,500 an ounce or higher because the dollar will fall for years. The dollar will keep falling and here is why:
The U.S. cannot sustain 800 bilion a year trade deficits. We cannot export our way out of this mess. The only answer is a sharply lower dollar to drive manufactruing home and to lower the trade deficit. The dollar has much farther to fall. What you are seeing is a long term effort (it will take 20 years) to get the trade deficit back under 1% of GDP. We are currently running a trade imbalance of nearly 6% of GDP. No nation can do this. The IMF would be stepping in to help any nation if its trade imbalance went to 6% of GDP becuase its currency would collapse! The U.S. is different, but still, we cannot sustain a trade deficit of this magnitude. People must understand that when we buy an item from say China, we pay in dollars. The Chinese company we just bought from them goes to an Exchange Bank in China and converts those dollars to Yuan. The Chinese banking system (Chinese Government) is now sitting on those dollars. They can either 1, buy oil, 2, buy Treasuries, 3. buy U.S goods, 4. buy U.S. Corporations, 5. other. Over time if we (the U.S. ) continue to run a trade deficit we could simply be completely bought and controlled by foreigners. Warren Buffet has explained the situation as being like a rich Texas farmer who loses a small piece of his land year after year and never notices for a while. When he then notices, tragedy sets in because he no longer controls his land. So in sum, we need to get the trade deficit way down. This is why the Fed has abandoned the dollar. It wil be going down for the next 20 years. That is how long it is going to take to correct this imbalance mess. Bottom line: Lower, much lower dollar will equal higher inflation and higher GOLD prices. Much higher!