Inflation. Deflation. Inflation. Deflation. . . . Back and forth we go as the carousel of experts debate unendingly about whether or not the U.S.S. Armageddon is facing a northerly or southerly economic wind. Meanwhile, all hands on deck are getting sea sick.
Since GoldandSilverNow.com launched in early November, I’ve spent long hours on the telephone with people from across this nation. The truth is, ordinary folks aren’t talking about inflation or deflation. The words are: Desperation. Starvation. Migration. Depravation. Damnation . . . Obamanation. Chem Trail Nation. FEMA Concentration.
One gentleman this week asked me why I wasn’t selling the world’s most valuable commodity: food.
Another gentleman told me I needed to add a third precious metal to my website: lead.
One guy spent thirty minutes touting the importance of buying solar panels – NOW!
Read that again. Forget technical analyses and fundamentals. People are going long on the Second Coming. Why are the premiums on gold coins smaller, by percentage, than silver (7-8% compared to 30-50%)? Why are the premiums on 100 oz bars dwindling (down from 20% in October to around 10% or less)? One reason is that the folks who work fifty hours per week to scrape together a little savings are investing in one ounce silver rounds. Why? Because they want to barter in the bread line, obviously.
As crazy as it sounds, even to the people who find themselves trading in 401ks for Sunshine rounds, the fear of mass calamity is beginning to catch fire in Suburbia. These are genuine, honest, normal people – not big banks or billion dollar investors. They’re not conspiracy theorists either. They are grandmothers and small businessmen, teamsters and restaurant owners, academics and blue collars of every make, model, and variety. They are from Maine and California and everywhere in between. Conservatives and liberals alike. It is a growing group of Americans who fear it is Apocalypse Now. How do you spell panic? U-S-A. And it is just the very beginning.
Most buyers are first timers. They aren’t Kitco junkies or newsletter subscribers. They come from all directions, but mostly from the Thanksgiving table where their brothers- and fathers-in-law put the hard sell on gold, silver, and the Rapture. They make up the “popular” market, and they are being introduced to physical metal through bestselling books and word of mouth. This is no longer your father’s bullion marketplace. The word is hitting the street – Main Street.
The big guys are beginning to hit the bandwagon too – the millionaires who let overpaid wealth managers ride their net worth down The Flume. They are gold and silver novices, real estate developers and corporate honchos who are just beginning to understand that negotiating ten cents on a premium matters little when the spot price jumps fifty cents in a day. And they are beginning to buy in a big way, whether the COMEX price reflects that or not.
In light of the overriding fear, the most common question is: “why are investors selling?!” Why? Because people are losing their jobs and can’t pay the second mortgage. Because investors sniff Foreign Exchange Controls and they are getting their (ass)ets out of the country. Because of arbitrage opportunities. Lots of reasons . . . but no one I speak to is selling short on economic catastrophe. That much is almost a given. The only question is: how bad will it be?
Inflation, deflation, tribulation. Whatever the case, it all sounds pretty bleak. I’ll see you in the bread line, and I’ll be bringing silver.
Til next time, that’s my Saab Story.
Tarek Saab is the President of GoldandSilverNow and a former finalist on NBC’s “The Apprentice” with Donald Trump. He is an international speaker, syndicated author, and avid investor, and he was named Kipling’s “Who’s Who Among Executives and Business Professionals for 2008.”