Today silver entered the 18th century, ever so briefly poking its nose up above $17.00, before dropping back a few pennies. Needless to say, the broad market hasn't been doing as well in 2008. Despite another 50-basis point rate cut (for a total of 1.25% in January) all of the major market averages are down.
Some of the mining shares are underperforming the metals, but that won't last forever. Soon enough, the juniors will revert to their normal performance of providing leverage to the metals prices. And when they do, look out. The exploration companies that have real assets are screaming buys right now. Even larger companies like Silver Standard aren't just cheap, they are stupid cheap.
It is clear than Ben Bernanke has thrown in the towel on fighting inflation, and the ECB won't be far behind. Were it not for the Germans and their long memories of the Weimar Republic hyperinflation, the Mediterranean countries would already be cutting interest rates. And when the euro goes through $1.50 I doubt even the Germans will be able to hold the line, or the euro could break up into national currencies again.
Like a couple of punch-drunk boxers leaning on each other, the euro and the dollar are trying to hold each other up, but gold (and silver) will appreciate against ALL currencies. If you're conservative, buy CEF. If you can afford to take risks, buy juniors. And then buy more juniors.
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