Inflation–Deflation: Gold and Silver Win

By Greg Hunter’s

There is plenty of talk about inflation and deflation scenarios. Gold and silver do well in the extremes. I think it is safe to say the financial environment today is extreme. Look at the thud the Facebook IPO made since it was issued.  Look at the price suppression of gold and silver through naked shorts that the government regulators turn a blind eye to. Look at the interest rate suppression the Federal Reserve is masterminding with 30-year mortgage rates in record territory well below 4%.  Look at the trading loss from derivatives announced by JP Morgan.  The original $2 billion loss is reportedly growing much bigger.  Look at the secret central bank deals that prop up Greek banks. (Click here for that story.)  The powers that be appear to be struggling to keep the game going for a little longer.  How long will it last before some sort of conclusion or crash?  Who knows, but gold and silver in either an inflation or deflation scenario will prove to be a very good insurance policy to protect wealth and buying power.  Chris Duanne from has put together a short video to make this very point.  Please enjoy:

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  1. M SMITH

    Greg, this is rated G rated compared for what is coming in short order! I would rate the future XXX!

    • Greg

      M Smith,
      I can’t argue with your assessment of the situation we face. Thank you for the comment.

  2. mike gunther

    Greg, with the debt ceiling problem at the end of the year, the Bush Tax cuts ending and the Automatic Budget cuts hitting all at the end of 2012 beginning 2013, will this be a perfect storm of sorts that will throw us into a greater recession? An then factor in the EU crisis, Israel/Iran crisis, and QE 3 or 4 at what point does the economy sputter and die? I am old enough to remember the 20+% interest rates of the 70’s and gas rationing. I dont think the culture or the country is strong enough to weather the storm that is coming this time.

    • Greg

      Mike Gunther,
      The country will survive but many of the citizens will not. Only the prepared have a fighting chance. Thank you for your comment and participation in this site.

  3. freedom

    Every day seems to be a clock ticking to maybe 3:02 am. Only to say i pity them who sleep.

  4. Jeff C

    Great points, Greg. Thanks. (I believe you meant to say 2 Billion rather than 2 Trillion as it pertains to the JPM prop desk trading losses .. Although if the you-know-what really hits the fan, it just might be closer to Trillion.)

    • Greg

      Jeff C,
      I don’t see where I made that mistake. I said it was a “”$2 billion” loss in the first sentence. Never hesitate to point out a mistake. (I do make them although I try not to.) Thank you for having my back and for your comment.

      • joe

        I see “2 trillion” too.

        • Greg

          Is that in the fist line of the post because I see it as “$2 billion.” Not trying to be a wise guy, but just want to get the problem fixed. This might be a mistake on the server you are getting this article through. If there is a mistake I want to fix it, but I can’t find it or can’t see it. Thank you for your help.

          • Jeff C

            It’s in this sentence, Greg .. “The original $2 trillion loss is reportedly growing much bigger.”

            • Greg

              Jett C,
              Thank you, Thank you, Thank you!! I was looking in today’s post and not in yesterday’s post. Yes, you are correct, I nmeant “billion” instead of “trillion.” Fixing it thank you too Joe.

  5. AndyB

    The biggest concern I have is the de facto suspension of the Bill of Rights, with a majority of Americans clueless. The elites know what’s coming and they are preparing for some sort of totalitarian control. The timing all depends on the continued global can-kicking ability which, IMO, could end with Greece and Spain as the tipping points.

    The most interesting observation about the ongoing PM suppression is that it is now so blatant that there is even an admission of it by some in the captured financial media. This could be another sign that
    the end game is approaching more rapidly than most think.

    • Greg

      Andy B,
      Big concern for me and I think our financial problems and freedom problems are related. Thank you for your comment.

  6. TJ Jackson

    Hard times? That’s silly. We can just vote ourselves good times like the Greeks did. Didn’t Bo-rock just agree with the Europeans that they should have no austerity, just more good times. We do not need to prepare, they will take care of us.

  7. Mark

    Hello Greg. I love your site. However, I do think you pump gold and silver way too much. I agree that they are valuable and are worth holding, but I invested a large sum of my savings last year in it and am now at a loss! I started buying in 2010 and will continue to do so as I believe in them long term. And yes, I do get it is a paper loss and having real assets is always great. However, we still live in a fiat system where you NEED dollars to pay your bills…agreed? With that said, I have been told numerous times by my dealer that I should have started years ago and my returns would have been through the roof compared to the loss I am in from buying at the silver high last year. I imagine you are probably in the same mindset. Someone tells you they are at a loss after buying silver last year and you probably say the same thing based on some of your comments I’ve read. And if that is true, then you are just at a loss for a REAL answer and that Mr. Hunter is NOT COOL. The bottom line is that NO ONE should be buying silver and gold unless they can; 1) afford to take a loss, 2) have reserve DOLLARS on hand and 3) have ALL of their other areas covered first (water, food, etc)! It is a disservice on your part to pump gold and silver as the savior to America when in fact, silver is way down from last year at this time and those that did go all in now can NOT go all out if we had to without a huge loss…$20 an ounce loss – which is gigantic when talking about silver. You should ensure you state that metals are NOT the end all be all. This is my 2 cents and wouldn’t be surprised if you edited or deleted my comment, as it goes against what you are preaching. Peace out!

    • Greg

      I have repeatedly said gold and silver are for insurance. I have advised some people not to buy gold and silver for the above reasons you stated. “1) afford to take a loss, 2) have reserve DOLLARS on hand and 3) have ALL of their other areas covered first (water, food, etc)!” I have also repeatedly said this should be looked at as a core long term position and not a trading position. When you say, ” . . . silver is way down from last year at this time and those that did go all in now can NOT go all out if we had to without a huge loss…$20 an ounce loss – which is gigantic when talking about silver.” This is not a long term horizon and if you went “all in” and not cannot “go all out . . . without a huge loss” Are describing a trade not a core investment. Maybe you do not have the mindset or the capital to be in investing in this market. I have also said repeatedly this market (silver and gold) is “volatile,” especially silver. When I was investing in the stock market, I would take as much as a year to decide if I would commit capital to a certain stock. I did lots of research, and never over extended myself. That is investing 101–understanding your risk tolerance. If you got that wrong, it is your short coming and not mine. Also please keep in mind, I DO NOT SELL SILVER OR GOLD. Given the current financial scenario, I would hold tight and consider my investment in silver as a core position. I am sorry for your short term loss, but investments do not go always go straight up. That is my “REAL” answer. Thank you for your comment.

    • Jfeet28

      I don’t buy gold and silver as a hedge against the dollar, I buy it as the inevitable replacement for paper money that is coming. It doesn’t matter how much it costs, in terms of the coming crisis, you are buying real worth with worthless paper. A bargain at any price. Thus if you buy gold and silver for use post fiat currency, you cannot then turn around and assign a fiat currency value to it. 1 bar of silver is worth $210 worthless paper dollars? Really?

      A more viable approach is to recognize historic value such as a denarus (the most prolific silver coin in the history of mankind. At it’s full metal content, a denarius was worth 1/10 of an ounce of pure silver and was equal to one day’s wage. (matt 20). At minimum wage, silver is currently devalued 94% against a daily wage today. As time progressed, from the time of Nero to the 3rd century, Rome continually devalued the denarius by removing more and more silver content until it was just a bronze coin in a silver wash.

      Look at what we are doing to the dollar. In our parent’s time it was a united states treasury note allowing the bearer to exchange if for one silver dollar upon demand. Today’s dollar is issued by a private organization that declares it “legal tender” and worth a dollar. Based on what? This organization, the Federal Reserve, is printing dollars to the tune of $85 Billion a month.

      It’s been awhile, but we will come back to the denarius (whatever we call it this time around) silver coin of the realm that maintains and contains its own intrinsic value. Not a reserve note declaring itself “legal tender”

      That is why I buy silver, in this real context, you cannot compare a denarius to a piece of paper.

      Yes, it is that simple.

  8. Dominic


    I have been following your site for roughly a year now, and do so on a regular basis. I’m 28 and am probably in a smaller group age bracket than most of your viewers. I have never commented on any topic or article that you have posted but they all reflect similar thoughts and “preparing tips” for what is coming that I hear on a daily basis from older family members.

    In terms of investing in silver and gold, I’ve been doing so for 12-months and am still at a plus (to Mark’s post). The market shows trends and if someone just researched all the material that you post they would not be getting “hammered” right now. I think it’s more sad that I work 65 hours a week to bring home my monthly salary, but in reality I am only taking home 79 cents on every dollar (without inflation incorporated into that equation or the dollars true value). Losing money in gold and silver short term is far less painful than bringing home 25% less than what I’m supposed to on paper every month.

    Keep the reports coming and your continued good work!

    • Greg

      Thank you Dominic. By the way about half of the readers on this site are 34 or younger. I know, that surprised me too.

  9. Russdc

    What good is gold and silver if they will either confiscate it or come up with some insanely high tax? please explain


    • Greg

      Not so sure they are going to confiscate it. Remember lots of rich people have it too. But I digress, what will happen if you hold dollars? Isn’t a massive devaluation confiscating the buying power of your currency? YES it is. You are better off with a core position in Au and Ag coins than without it.

    • FamilyForce6

      Check out the website link for Jason Homel’s report on confiscation. It will NOT happen. There is no way that the government is going to go door to door and ask people at gunpoint to give them their gold and silver, and even if they tried they would be met by many citizens who take their 2nd amendment rights seriously.

      The easiest way to have your silver and gold stolen is to be invested in paper precious metals (PM) ETFs. ETFs are the primary vehicle by which the PM will be confiscated- only buy PHYSICAL.

      I see a day coming shortly when currencies will once again be linked to gold and silver. The Chinese, Russians and many other countries are exchanging their worthless US dollars for gold. Silver and gold have been money for thousands of years and will continue to be so in the future- our own US constitution requires it, but our Congress has been bought and paid for by TBTF banks and other big business.

      As for everyone complaining about the decline over the last year- I highly recommend allocating a percentage of your monthly savings to purchase PM and buy with average cost. You will not be sorry in 5 years. I purchased some of mine when silver was around $10 in 07/08.

  10. Russdc

    thank you. I feel the same way. Just wanted to get your take on it again.

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