Richard Russell: Get Back into the Silver Pool

Beacon Equity, Dominique de Kevelioc de Bailleul

Hi-ho silver! The coast is clear; it's everyone back into the silver pool for more profit fun in the sun, Dow Theory Letters Publisher Richard Russell recently stated.

Last week, Richard wrote in his newsletter that the silver market will benefit from the currency crisis playing out in Europe. Investors are now looking past the hopeless situation in the smaller European nations to some much-bigger EU member states, which will overwhelm the ECB's and IMF's efforts.

". . .first it was Portugal, Ireland, Greece that were in trouble, and now you can add Italy, Belgium and Spain," Russell wrote. "Wait Spain? Spain is the fourth biggest economy in Europe. Thus, the USD and euro are perched on a seesaw. . .first one is up and the other is down. . ."

When the crisis in the three weakest, or PIIGS (Portugal, Italy, Ireland, Greece and Spain) nations, surfaced in March 2010, PMs, instead of softening on a strong dollar began [their] remarkable rise of a near triple in one year—from $17–$50 (late April 2011).

Some silver investors wonder if a 2008 replay is imminent, given threats of another GDP collapse around the globe, sending all assets into freefall—especially silver.

Russell expects the euro crisis will favor gold, taking silver up with it. As the euro weakens, the USD's prospects now look bleaker than ever because of the globally interconnectedness between European and American banks.

"Remember," says Russell, "I said that during recessions, silver is treated as an industrial metal but during. . .inflation, silver is treated as a monetary metal," explains Russell. “With inflation built into America's future, I see silver following gold to higher levels. And I see the public once more rushing in to buy silver as a safe-haven currency against a shaky dollar."