The Saudi Royal household must be smelling the end of the oil age and staying away from currency like the plague, because they have just doubled their gold reserves. With the price of gold rising in inverse proportion to economic stability, the Saudis are surely counting on a rocky economic future for the globe. The question is, will it be the same for silver?
As gold has simply become unaffordable as an investment, silver may be the next metal to surge. In fact, it has already gone from $5 to nearly $18 a troy ounce. At a mere 65th of the price of gold, and with people scrambling for something solid over governmentally ensured paper, silver may take some strides up.
If gold ever becomes overinflated, its price may seem artificial, and with a real global economic catastrophe, gold may begin to plummet. This is why it is likely that along with gold reserves, the Saudis have also likely begun increasing their silver portfolios as well.
Gold and silver are not the only metals going up. Palladium has gone up over $200 a troy ounce this past year, and platinum has gone up over $450 a troy ounce in the same time period.
Whoever filled up his safety deposit box with bullion bars of these metals right after the 2008 crash is now a very happy camper. We should have seen it coming when the Dow was over 14,000 in 2007. It shed over half of that in the real estate crisis of August, 2008, having recovered half of that amount back in the past two years.
Those who have faith in the global economy will continue to invest in stocks and currencies. Those who don’t will hoard precious metals, and we’ll see who comes out on top in the end.
And as much as Saudi Arabia hoard gold, as nice as gold is, if they have nothing the world actually needs, they’ll be in trouble no matter what is in their treasury.
