Raging Bull Series: Riding the Gold and Silver Wave

We are in the midst of the greatest bull market the world will ever know, and it all started five years ago. I will give you three guesses. No, not the real estate market. No, not the dot.com boom. If you said the commodities sector, then, you have won the prize. The commodities sector is slowly waking up after five years of modest' gains (gold 200% and silver 300%). And the funny thing is, you haven't seen nothing yet. The HUI index has averaged gains of five times that of the rise in gold, and yet nothing in the news. This just means one thing you must get on the boat now. Otherwise, the ship is sailing very fast and far from the dock of deficit. If the aforementioned facts haven't as yet moved you to act, here are a few more simple reasons you must dump those dollars...

The dollar index

I just checked the dollar index today (May 1st) and the dollar dropped from 81.75 to 81.49 in one day. If this doesn't scare you, it really should. The general curve, this year, has been a steady trajectory downward from a high of about 85 in April. If the dollar breaks 80, it will have reached a historic low and many analysts are predicting a very quick drop past 78 and into the abyss of 50s and 40s. For the mathematically challenged, this simply means that the dollar will have lost about fifty percent of its value. Time to cash out.

The deficit

We have, in the last five years or so, accumulated the greatest amount of debt this country has ever seen. It is in fact so large that the rest of the world is dumping dollar assets, and gradually moving away from what was once the world's reserve currency. This has been the case with many countries including China, Iran, and most of Europe. Coincidentally, many central banks are diversifying their accounts with gold.

The Housing Market Domino Effect

The recent sub-prime debacle was simply a taste of what is to come. For all of the housing sector will be affected and will go down, just like manufacturing. First was the sub prime market, next is the Alt A market, and then the standard loan market will begin to falter. Lending standards and interest rates are sure to increase to the point where only those with impeccable credit will be able to actually borrow for a home. Many of the sophistical ARMs loans have already readjusted to double the payments, forcing many into foreclosure. But really, the entire housing market will go down including mortgaging and construction. Housing sales have already slumped since the sub primes began to fall apart. This will affect the rest of the economy as it was propped up in large part to people using their homes as banks fueling both consumer spending and the stock market.

The Next Crash

The stock market is flooded with credit and funny money. It has been bolstered by risky hedge funds and equity. The recent highs do nothing to indicate a favorable outlook. In fact, it is more like the last dot com bubble ready to burst. Moreover, the recent breakthrough of the 13,000 DJ IA mark is deceptive since the dollar has lost about four points since then.

Survivors

Those who survive and impending crash are the ones who are invested in commodities, either silver or gold coins. Remember that silver and gold is money. If nothing else, this should be the main argument persuading you to buy silver or gold. The rest, well let's just say, that it's paper.