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Silver Prices Set to Explode

February 18, 2011

    by Jerry Robinson

    Good morning friends! In the news this morning: Silver prices explode to the upside, U.S. austerity measures enflame the unions, U.S. foreclosures up, and much more…

    Silver Price Set to Explode… Silver is shining brightly as investment demand for the metal shot up this week, driving the price to a new 31 year high. Returns for the week should be about 8%…

    During trading on Thursday, silver reached as high as $31.97 — the highest price since March 7, 1980. Silver is also benefiting from the rising price of gold. As gold becomes more expensive, silver becomes more attractive to newcomers in the precious metals markets.

    Notice this chart of the previous five days of trading. Momentum is building…

    I expect the price of silver to go much higher this year. This is just the beginning of silver’s second leg up in its long-term bull market…

    Silver was not the only precious metal driven higher by fresh demand this week. Palladium soared to a new ten year high of $848.88 per ounce on Thursday. Gold, too, continues to climb ever higher, nearing the $1400 mark once again.

    Wisconsin Unions Fight New “Austerity” Measures… Dramatic protests have broken out in the state of Wisconsin over new budget cuts that would jeopardize thousands of jobs in the public sector. Over 25,000 public workers marched on the state capitol demanding that the budget measures be ended.

    The state is currently facing a $3.6 billion deficit…

    The new budget package, proposed by Republicans, seeks to cut spending in a number of areas, including a plan for workers in the public sector to contribute more for their pensions and their healthcare… State Democrats have fled in order to delay the vote…

    More states on the chopping block: IL, MN, CA, NJ… Coming soon to a state near you….

    This is the first of many such protests as the new motto in America becomes: “Cut government spending… just not my government benefits…”

    Oil Rising on Mideast Turmoil… As protests continue exploding across the Middle East, oil prices have edged up on the week with a nice increase on Friday. Outbreaks of violence in Bahrain and Libya, coupled with continued uncertainty about Egypt’s future, have investors on edge. Oil prices are usually the key beneficiary of tensions in the region. We expect higher energy prices both in the near term and, especially, the long term.

    Also in the news…

    1) In an effort to put the skids on inflation, the People’s Bank of China has increased its reserve-requirement ratio — for the second time this year — by 0.5%… now at 19.5%.

    2) The SEC is investigating mutual funds that it believes overstated the value of risky municipal bonds.

    3) Mortgage delinquencies decreased in the fourth quarter to the lowest level in two years — while foreclosures hit a near record high.

    4) Live streaming video… Get the latest breaking news from the Middle East here.

    5) The so-called “Flash Crash” committee has proposed new regulations to prevent similar problems in the future…

    Finally… Believe it or not: Zimbabwe — whose inflation rate was recently 112 million percent — now has a lower inflation rate than the UK, India, and China…

    Why So Serious?… It’s time to laugh a little.

    “Borders Books has filed for bankruptcy and will close all 200 of its superstores. When Sarah Palin heard that she went, ‘Finally, we’re closing the borders.'” –Jimmy Fallon

    “The military is now running Egypt. Well, that never goes wrong, does it?” –David Letterman

    “President Obama was in San Francisco today, meeting with a group of technology executives, including Facebook founder Mark Zuckerberg. Their goal is to figure out how to create new jobs, to replace jobs that have been lost as a result of everyone spending all their time at work on Facebook.” –Jimmy Kimmel

    Until tomorrow,

    Jerry Robinson –


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    Jerry Robinson is an economist, published author, columnist, international conference speaker, and the editor of the financial website, In addition, Robinson hosts a weekly radio program entitled Follow the Money Weekly, an hour long radio show dedicated to deciphering the week’s economic news.

    Why Higher Oil Prices Are Good for Silver

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