Written By Basilio Chen

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Gold and Silver have been correcting since the parabolic move in August 2011.
The main concept to keep in mind without following the daily moves up and down of Gold and Silver is that last week end Spain announced that it will seek a US$125 Billion bail out package from the European Union. The EU will provide that bail out in the form of issuing new Euro currency.
From time immemorial, when paper money becomes too abundant, as now, it loses it value and people turns back to precious metals: Gold and Silver.
Using 1913 as the base reference year, the US Dollar today is worth $0.046 (4.6 cents) in 2010 terms (latest data). That means the US Dollar has already lost 95.4% of it’s the creation of the Federal Reserve who was tasked with the job o f currency watch in 1913. And if we base the value of today’s US Dollar as compared to 2001, it is worth $0.813 (in 2010 latest statistics). That’s a 18.7% devaluation since 2001. Today in 2012 is likely less because the US government alone has printed an addition Trillion dollars. Extrapolating for 2012, we have that a US Dollar is worth now 78.9% of what it used to be in 2001. That’s a 21% devaluation. Consider it also a 21% inflation (by reduction in purchasing power).

is chart.

A from 1970 to now, see th
At this exact moment, most people are not totally aware but as the knowledge becomes gradually known, the masses will come rushing back in to purchase gold and silver and a new valuation will take place increasing gold and silver exponentially.

As of now, volume purchases has been slowing down. From a contrarian perspective (early adopter),, the stage is set for the next big move.