The past week's destruction of all precious metals was a quarter end margin call, a need to take profits and raise capital, and the Euro Central bank selling gold to raise capital. Silver is used in industry so an economic slow down will dry up some demand for the metal. Big funds were also taking profits in precious metals deflating part of gold and silver's run-up in the past 1 to 5 years. The same happened in 2008 and it will happen again. Silver at about $30 and Gold at less than $1650 will double from here in the coming 3-5 years, due to bankrupted monetary and fiscal policy. Silver lost $10 or some 25% in just 3 days. Gold was down $150. Silver is still up year over year by 45%, and Gold by 28 %. Over the past 5 years silver has risen a mere 170%, and gold a similar amount. See a trend?

Gold and silver will continue their ascent. The financial situation across the world is acute. State and bank defaults are a surety. The Euro will cease to exist in its current form or probably not at all. Inflation is guaranteed – and it might be hyper-inflation. Governments only have 3 policies – loose monetary policy; spend lots of money; raise taxes. That is all. It does not matter who is elected, between the caring politicians and the permanent civil service, there is no difference in policy outcome.

The best way to play the precious metals is through ETFs and physically owning gold and silver coins purchased in $10.000 tranches through banks.

Metals might even go lower, but this has happened before. What has not occurred before is the mass default of states, general bankruptcy, European bank failures en masse, and real price inflation, all at the same time. Houdini would not be able to escape our fiscal and monetary folly. Gold and silver should benefit from our collective madness.