In Part I, readers were again reminded of two of the primary reasons we should all be converting our decaying paper currencies to gold and silver. Currency dilution and price-suppression are realities which don’t merely suggest that bullion prices might rise in the future, but rather indicate why they must rise substantially.

However, precious metals investors don’t have to limit themselves to just those two reasons why bullion prices must rise dramatically over the longer term. There is a “third leg” to this argument which is an equally powerful dynamic, and also unequivocally certain to lead to much higher gold and silver prices.

Demographics:

I refer to the third leg of the precious metals bull as “demographics”, but in actuality this is just a reference to some of the extremely potent supply/demand fundamentals which are certain to drive bullion prices much higher.

In the global economy, it is common knowledge that there is a relentless transfer of wealth (and economic power) from West to East, as the thriving economies of Asia have real economic growth and real income growth amongst their populations.

In China, per capita income was only around $1,000/year (USD) in 2003. By 2011, that figure had exploded to nearly $3,500 (USD) per person, and China’s government is expecting a further doubling of that total by 2020. Given the explicit recommendation by official (i.e. government) media for the Chinese people to invest those rising incomes in bullion, we don’t simply suspect that Chinese bullion demand will continue to increase; we can be certain of it...

 

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The Three Legs of the Precious Metals Bull: Part II