Real Silver Highs 4

http://www.silverseek.com/commentary/real-silver-highs-4-8781

Silver bearishness has naturally mushroomed following this metal’s rough December. A growing chorus is declaring silver’s secular bull finished, implying it must have peaked after silver’s dazzling April 2011 surge. But secular bulls climax in popular speculative manias, which dwarf the silver action of a couple springs ago. Looking at silver in real inflation-adjusted terms drives home the point its bull is far from over.

For any multi-decade price comparison, adjusting for inflation is essential. A dollar today is worth a lot less than a dollar in the past. The Federal Reserve keeps conjuring up new fiat dollars out of thin air, inflating the money supply. As it grows faster than the underlying economy, relatively more dollars compete for relatively less goods and services. This monetary inflation bids up the prices of everything.