Apr 29 2009 8:32AM

Do you remember a few issues back when silver was around $9.40 an ounce? I told my subscribers this was a glorious time to buy as it would bounce back. A few issues later, I said that I hoped you would take advantage of these cheap opportunities because they would not last forever!

Well they didn’t last forever! Silver is now over $14 an ounce and gold is back over $970. They are both going a lot higher. Someday you will brag about having bought gold or silver at these prices. I don’t often say, “I told you so,” but this is too good, and I can’t resist.

The metals are reacting to the incipient inflation in six months to a year that will result from the monetary bail-out spawned by Obama and backed by Democrats and weak-kneed Republicans.

Someday the public will credit me as they did in the ‘70s when we made so much money in gold and silver.

We may not be just making money but protecting our assets from a total collapse of our monetary system and hyperinflation. Some day your only wealth will be your gold and silver.

The Stock Market

The stock market is not a monolithic entity. It consists of Industry Groups, most of which should be avoided like the plague. I wouldn’t touch Growth Stocks, Bank Stocks, Growth Mutual Funds, or the Dow Jones Industrial Average.

There is one way to benefit from the continuing collapse of the stock market.

The Dow should drop at least another 3,000 points, with the growth stocks leading the pack.

On the first page of the Investment Menu, Rydex Inverse S&P 500 Stratergy Inv (RYURX) is counter cyclical to the S & P 500 and is great for investing in a bear market. It will do badly during market rallies and well in poor stock performance.

Because I expect interest rates to rise sharply to try to keep the dollar from totally imploding, buy Rydex Inverse Government Long Bond Strategy Inv (RYJUX). It will rise when interest rates are rising and fall when interest rates are falling. Even though the fed has dropped interest rates to near zero, they will rise.

Also, I expect that when oil rises again to at least $80, the public will scream for more drilling. We will build and service more drilling rigs, so the Oil-Service companies should do very well. Schlumberger (SLB) and Halliburton (HAL) will lead the pack.

I also like Uranium Mining Stocks, as there are 35 nuclear power plants on the drawing board or under construction, and they have only half the uranium they need. The list is on my Investment Menu, ranging from the most conservative (Producing Companies) to the Development and Exploration companies.

The real stars of the show will continue to be gold and silver bullion and coins, and gold and silver mining stocks. The mining stocks are particularly interesting because they are only at the levels they reached when gold was only $400 to $500 an ounce, and it’s twice that now. There is a tremendous upside, ranging from Producers to Exploration companies. The Producers have moved substantially already, so it is better at the bottom of the pyramid.

Howard Ruff
 

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You can get more information from Ruff’s latest book Ruff’s Little Book of Big Fortunes in Gold and Silver or from his newsletter The Ruff Times. You can learn more about these on Ruff’s website, www.rufftimes.com.

Howard J. Ruff, the legendary author and financial advisor, has re-edited and re-issued his 1978 mega best seller, How to Prosper During the Coming Bad Years, still the biggest-selling financial book in history, with 2.6 million copies in print. He is founder and editor of The Ruff Times financial newsletter. This article is from a recent article in The Ruff Times. The newsletter is much more comprehensive and deals with a broad spectrum of middle-class financial issues and includes an Investment Menu from which you can build your portfolio. (You can learn about it here). The Ruff Times has served more than 600,000 subscribers – more than any financial-advisory newsletter in the world. His updated and revised book, How to Prosper During the Coming Bad Years in the 21st Century, is in book stores or at www.rufftimes.com. You can get it free when you subscribe to The Ruff Times, or if you buy the book at your favorite bookstore, you can deduct $10 from the subscription price.