The Dow was nearly flat this week while my three recommended stocks GLD, GDX and SLV all rose. I recommended these stocks on February 24, 2011. Click on the attached chart to see the performance of my Long-term recommended stocks as compared to the Dow Jones for this week. As I have stated before, I will continue to accumulate and hold my three recommended stocks until the world's central banks quit inflating their money supplies, with emphasis on the central bank which provides the world's reserve currency: the United States central bank.
What some people may find interesting about today's (fairly substantial) positive move in precious metals is it coincides with a raise in the interest rate of Europe's central bank. A raise in interest rates from Europe, by conventional wisdom, would cause the price of physical metals to decrease as compared to paper money. However the complete opposite happened. Why did this happen? The European central bank raised the interest rate by 1/4 of a percent. The reality is this hike is much less than what is needed, and the market it seems ignored this interest rate hike and reacted by not moving towards fiat currency but to physical metals.
It is tough not to notice silver's move as compared to gold's move in the past few months. Silver has outperformed gold starkly. The ratio of gold to silver (equal to [one ounce of gold / one ounce of silver]) has gone from greater than 80 in 2008 to around 36 today. It is to be seen how low this ratio goes. I would not be surprised to see the gold to silver ratio to decrease as low as 20, which would occur by silver continuing to increase at a faster rate than gold. I anticipate at some point for this trend to "turn around" with gold increasing at a faster rate than silver. When this occurs is to be seen.
Recommendations: Accumulate GLD, accumulate GDX, accumulate SLV
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