in this article by david morgan, he says silver will do well even in a deflationary environment, and may outperform gold.

Precious metals have a long-standing reputation as hedges against inflation. Jastram writes, “This is not valid based on evidence of a century and a half in the United States and more than three centuries in England. The truth is, in most cases, the two metals, yes, both silver and gold, gained operational wealth in deflations.” From a long-term perspective, gold has held its purchasing power very well in the United States.

His report went on to say just how silver fared in relation to gold, and the findings are quite significant to those in the silver community. As stated previously, silver has a history of being much more volatile than gold and remains so to this day. There were periods where silver actually outperformed gold and periods when it underperformed. This is historic fact and yet might give a serious student pause to reflect upon the presumptions and beliefs held about silver.

If only one metal had to be chosen to protect your wealth, the answer from history would be the gold market. However, the most recent timeframe studied by Jastram, which was inflationary, revealed a significant out-performance of silver over any other commodity, including gold. But I must emphasize that the timeframe covered a long period when the price of gold was still fixed by government edict.

Regardless, the facts from the past cannot be refuted. The average price for silver in 1978 was $5.40 and the average price in 1979 was $11.09. But between 1978 and January 21, 1980, silver increased nearly tenfold.

As I have stated many times, the easy money has been made in the precious metals but the BIG money lies ahead, because if you think like I think, once this “disinflation” turns into a dollar collapse people will be looking for anything that will hold value, and that certainly includes both the precious metals.

Remember there is no fever like gold fever, and that will ignite the silver market, as those looking to gold might be priced out of the market and, thus, willing to buy silver!

http://news.silverseek.com/SilverInv...