By Lorimer Wilson and Goldrunner

Holding physical Silver and Gold is the safe play with a big potential leverage - no doubt - but to hold some percentage of Gold and Silver Stocks for even higher leverage seems logical and no doubt that this time around, the leverage in price will be increased due to the massive number of USDs that have been printed.

With that said, the real leverage will be in the Silver Explorers instead of the producers. Producers in the 70’s were the safe plays up to this juncture since explorers, with no income from production, could be shorted heavily. Is the same true this time around? Our expectation is “you betcha.”

The reason Silver Explorers will likely carry much more leverage going forward is a simple one. Smart money knows that a higher premium will be given to decent explorers going forward due to rapidly rising prices of reserves (Silver in the ground). The same will be true for the Gold sector.

Why now? Well, the Street has a rule for the PM sector that is unheard of in other sectors- “All old tops must be re-tested!” yet, with the coming upside break-out in Gold and Silver versus the 70’s charts, this “rule” will be abandoned. Rising prices for good reserves in the ground will go parabolic as a result.

The explorers moved late in the 70's as a result of rapidly rising premiums on “reserves in the ground” that were held back until Gold/ Silver made their final parabolic run thus, one could have held out during this part of the cycle in the 70’s and still enjoyed practically “the whole PM Bull Market.” We believe the same is true, today, since the charts are mere twins of the 70’s for all things PM.

Here’s a sampling of gold producer stock prices from the late 70's. {Source: Check It Out: Gold Stock Manias in 79/80, 82/83 & 95/96 Saw 2,000 – 4,000% Returns – and It Could Happen Again)

It should be noted here that gold stocks did not peak until nine months after gold.

Here’s a sampling of how some successful junior gold stocks performed.

If you had bought a reasonably diversified portfolio of top-performing gold juniors prior to 1979, your initial investment could have grown 23 times in just two years. If you had managed to grab 80% of that move, your gains would still have been over 1,850%.

Here’s what returns of this magnitude could mean to you. Let’s say your portfolio includes $10,000 in gold juniors that yield spectacular gains such as the above. If the next boom cycle matches the 1979-1980 pattern, your portfolio could be worth $241,370 at its peak… or about $195,000 if you exit at 80% of the top prices.

Many analysts refer to the 1970's bull market as the granddaddy of them all—and to a certain extent it was—but you’ll notice below that the average return of these stocks during the late ’90s bull exceeds what the juniors did in the 1979-1980 boom.

Here’s how some of the juniors performed.

If one has a few extra bucks, one might want to spread them around a few PM explorer stocks. It is only our opinion, so by all means, study up and DO YOUR OWN DUE DILIGENCE in terms of the above.

The massive number of Dollars printed suggest huge inflation to come in the USA. The number one hedge for inflation - one that historically also pays you a premium early on - is Gold and Silver and, historically, Silver carries the highest premium for reasons we wrote above.

If history repeats, so many will look back at this day and say, “Why, oh why, did I not listen to Goldrunner & Wilson? Silver at $14.98 is about as good a time as it gets. It's last call at the bar...the silver bar..