As world stock markets continue to fall, it is high time to consider precious metals, according to ArabianMoney.net's, Peter Cooper.
He believes that bond prices will soon peak as the stock market drops to a final low in the current bear cycle. "Rising government debt and heavy borrowing will then nudge up interest rates, world over. The result will be a downward spiral for bond prices."
Cooper said that as real estate, stocks and then bonds cease to be attractive investments, precious metals will truly come into their own.
"Silver is likely to dip over the summer months, alongside gold and other precious metals. This trend paves the way for major buying opportunities in the autumn."
He cited the last boom in precious metals, in the late 1970s, recalling that the price of gold rose eight-fold and silver by a factor of 25.
"Today, as world financial markets look to re-run the mid-70s, ArabianMoney.net predicts that silver will reach $150 an ounce, with gold peaking at around $5,000."
He recalled that then as now, a massive credit expansion produced a huge bust in property followed by stock prices and that governments re-inflated their economies to counter this deflation.
"It could be different this time but history shows that financial markets follow predictable patterns, again and again."
He went on to say that after an initial price deflation there will be a period of retail price inflation even though stock and real estate prices will stay low, and bond prices will tumble.
"If we look at the fall in house prices and stocks in the mid- to late-70s scenario, then things do look similar. Governments have again been taking desperate measures to counter a financial crash, and signs of inflation are already emerging in places as far flung as China and the UK.
"The next shoe to drop will surely be the bond market which does not respond well to increases in interest rates. This leaves gold and silver."
He observed that silver appears to be the only commodity not to have passed its previous all-time high of three decades ago.
"History could be set to repeat itself and this could be a golden era for precious metal investors," Cooper suggested.
Indeed, Cooper's latest book released last year, already pegged gold at these dizzy heights. 'Dubai Sabbatical: The Road to $5,000 Gold' is published exclusively on Amazon.com.
"My money is on silver, but a mixed portfolio is the sensible way to tread," he said, cautioning that silver too is volatile. He noted that silver fell by more than gold in the 2008 sell-off due to margin calls in a falling stock market.
"Today, silver is priced less than 30 years ago and could be considered the most undervalued asset around. This makes it a good investment, perhaps the best of all but wait for silver to bottom out in tandem with the stock market around October time; buy it then, not now," he concluded.
