I Give You $1,200, You Give Me $45. Deal?
Who would say "no" to the above deal? Nobody! Right?

Yet, that is what we do every day when we refuse to recognize value. This trade off reminds me of the Biblical story found in the book of Matthew.

Matt 13:45-46 Again, the kingdom of heaven is like unto a merchant man, seeking goodly pearls: Who, when he had found one pearl of great price, went and sold all that he had, and bought it.

Here we have a merchant who is involved in the exchange of one form of wealth for another. So the question needs to be asked, "why does he exchange everything he has just to get that one pearl?"

Obviously, he recognizes the fact that the pearl will soon be worth much more than his current portfolio. But what we overlook is the fact that when the trade was made, they were both worth the same thing. In fact, there was someone on the other side of this transaction who didn't recognize the value of this pearl and let it get away. So, this exchange, took a recognition of value on his part that the other party did not posess.

Today, we have the same exchange playing out in the gold and silver markets. Central banks, the front organizations for the world banking cartel are recognizing that the "value" of gold and silver are much greater than the value of their paper currencies. They are quicky "exchanging" paper for metal even though, on the surface, the two appear to be worth the same. In the process, the unsuspecting public, that's you, continues to store their wealth in paper-backed assets such as stocks, bonds, mutual funds, annuities, bank accounts and cash.

Ten years ago, one could exchange 250 paper dollars for one ounce of gold and it was considered an even trade. But was it?

Likewise, today, one can exchange 1900 paper dollars for an ounce of gold and it is considered an even trade. But is it?

Like the merchant who "recognized value" and made an "even trade" for the pearl of great price, our job as investors today is to recognize value ahead of the crowd. In spite of the fact that gold and silver have had tremendous run-ups in recent years, it is still possible to get in ahead of the crowd. It is STILL possible to "trade up" and participate in the great wealth transfer that is taking place in the world today. Consider the following from Eric Sprott, billionaire Chairman of the Sprott Asset Management Fund.

When asked about gold Sprott replied, “I think it’s explosive. As you know James Sinclair said, ‘When it goes through $1,764 it’s going to $12,000,’ and I for one am not ruling out that kind of development here. It could be very explosive as more and more people worry about one, fiat currencies, two, sovereign debt and three, bank deposits. It would take very little to spill into gold to make a dramatic difference in where the price will be.”

When asked where he sees the price of silver headed Sprott responded, “I think silver will outperform gold in the next decade. If silver should trade at a 16 to 1 ratio (to gold), it will probably trade at 10 to 1 because things tend to overshoot. Let’s use Jim Sinclair’s $12,000 target, that would suggest $1,200 silver, which is a thirty bagger from here...The biggest reason it (silver) should go there is people should fear bank deposits, that’s what I think they should fear.”

With silver hovering around $45 an ounce, now the question you need to be asking yourself is "would you trade $45 for $1,200?"

Those who answer "yes" will participate in the greatest wealth transfer the world has ever seen. Those who hang onto all they have and refuse to understand the rules of the game will continue to be blind to value and end up as the "have nots" in the new economy.