The writing on the wall is clear: silver is bullish for the long term; resource nationalisation is the proof.
The Malku Khota silver-indium project of South American Silver (TSX: SAC) recently nationalized by Bolivia is the latest news in resource nationalisation.
Peru recently nationalized Bear Creek (TSX-V: BCM) which is still trying to recover from its fall from grace in public markets.
So, why is this happening?
The death of paper money by virtue of the erosion of its value is not something worth writing about. Web pages already galore with content pertaining to the topic.
Now, what happens when paper money actually kicks the bucket? When governments taking into account the sorry state of global economic affairs inject unprecedented liquidity into the markets thereby creating hyperinflation?
When currency loses its value, it is always ideal to invest in precious metals. When people around the globe do that why should governments too refrain?
Take a look at this:
“Over the last 13 months, South Korea’s central bank increased its gold bullion reserves by five times, bringing its total gold bullion holdings to 70.4 tonnes, or $3.0 billion,” says Lombardi in an article.
According to Lombardi, this has continued the trend of emerging market central bank buying of gold bullion of the last few years.
According to Lombardi, this has continued the trend of emerging market central bank buying of gold bullion of the last few years.
“Kazakhstan’s central bank has made it publicly known that it plans to increase its gold bullion foreign reserves from 12% to 15%,” says Lombardi.
“As long as central banks continue to buy gold bullion, you can set aside the argument that gold bullion is in a bubble, because it is not exhibiting any of the characteristics of a bubble,” concludes Lombardi.
If this be the case, then there is yet another easier way by which one can source precious metals: Confiscation aka nationalisation of mines.
“Of the total 788 million ounces of annual world silver production projected for 2012, the part that is accessible without much hassle to you and I, the unsophisticated investor buying in public markets, is largely limited to Mexico, USA, Canada, Australia and Europe.
...the rest of the world offers few easy ways to invest in silver. This list of other producers includes China, Russia, Kazakhstan, Chile, Turkey, Morocco, Indonesia and India.” according to Rick Ackerman.
Clearly precious metals are ultimately what they are: precious! And governments around the world know that well.
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