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March 13, 2007

Silver vs. Gold
by Gary Tanashian

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Coincidentally, two new articles appear on Biiwii.com's Analysis page this morning. The first is Steve Saville's Silver versus Gold which concludes that the more monetary metal (gold) will outperform in times of falling confidence but silver may well outperform over the long haul. The other article is The Need for Speed by Captain Hook, in which the good Captain forecasts continued short term outperformance in silver vs. gold, implying continued inflationary (liquidity) policy in this 3rd year of the presidential cycle.

I am sitting in the contraction camp or put a better way, the illusion of contraction camp. Despite all the usual suspects crying "da boyz is on da job!!", "PPT won't allow even a 2% correction!!" and "the markets are rigged!!" I believe the various central banks would like nothing better than a little shot of the fear of god put into casino patrons world wide. Overall, silver looks bullish vs. gold, but a drop down to the dotted green line would likely come in concert with another one of those "rut rhoh!!!" moments. The kind of moment when the public would perceive the Huey commander as its best friend. And that states the case for gold and silver's next leg up. This is a long term chart so try to avoid micro-managing this dynamic on a daily basis. It is wise to keep a general framework in mind as you go about the daily and weekly twists and turns of the financial market obstacle course.

Gary Tanashian
http://www.biiwii.com/

Disclaimer: biiwii.com does not recommend that any trading or investment positions be taken based on views expressed on this site. If you speculate or invest it is suggested that you consult a financial advisor qualified in your area of interest.

Copyright © 2005-2009 Gary Tanashian

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