Gold and Silver Bugs Complain a Lot, and Rightly, but They're Winning

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...Yes, says Chris Powell, Secretary/Treasurer Gold Anti-Trust Action Committe Inc., without central bank intervention against the precious metals, gold and silver would be much higher. Even so, where since 1999 could ordinary investors have found better returns with as little risk as there is in taking delivery of precious metals?

...When GATA was founded in 1999, gold was $250 per ounce. Now it's above $680. In 1999 silver was $5 an ounce. Now it's near $14.

Yes, without central bank intervention against the precious metals, gold and silver would be much higher. Even so, where since 1999 could ordinary investors have found better returns with as little risk as there is in taking delivery of precious metals?Meanwhile shares in gold and silver mining companies on average have far outperformed other stocks. Compare the returns on the Dow Jones Industrial Average and the American Stock Exchange's index of unhedged mining stocks (HUI) for the last five years: The Dow is up maybe 15 percent, the HUI about 215 percent.

Futures, options, and other derivatives in the precious metals -- financial instruments essentially underwritten by the central banks, insofar as they are sold in the belief that here too the central banks will be the lenders of last resort -- CAN and DO divert much demand from real metal into mere promises of metal. These promises will more or less default on the day of reckoning, the comprehensive currency and precious metals revaluations that lie ahead.

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