Argent,
I agree that silver has great potential, but I would hesitate to agree with the numbers you put forth. Count the number of times silver has been over even $8 ( about 30% higher than present prices ) , and the length of time it remained that high. Now count the number of times that platinum has risen over $520 ( again, about 30% ) and stayed there.
At 6.35, silver is OVER its average high of the last dozen years, while platinum is $90 BELOW its average high. Further, average yearly price moves for platinum are uniformly higher than silver. These charts have a somewhat different focus, as most of my silver trades are very short term. Platinum trades tend to be held longer, so I did not include average monthly moves.
Please, lets not bring 1979 - 1980 into the picture as that was an aberration and unlikely to happen again, besides, you don't trade the market looking for the jackpot, you trade the range - wherever the range may be.
That platinum is so volatile and has spent so much time above $500 is a surprise to many. Platinum is the quiet metal. No headlines were made when platinum spiked $120 last June, but let gold rise 20 bucks and the WSJ will put it on the front page. People tend not to trade platinum, because they don't know enough about it. Platinum is a more purely supply/demand driven metal, and far less susceptible to daily manipulations - quite apart from gold and silver, which only a true innocent would argue are not massively manipulated.
It looks as though the numbers support platinum over silver, although I trade both quite heavily, silver, at these levels has a ton of down to it, while platinum has substantially less downside.
I'm buying platinum.
OK
It is obvious from history that gold does best in a deflationary environment. So why in the heck am I writing?
Well, it has to do with timing.
As the chaos expert dryly noted, it's fairly easy to predict the temperature of that hot cup of coffee an hour from now. It's a minute, two minutes from now, when extremely complex systems need to be simulated in order to predict it's temperature.
My question to you is, what kinds of analysis are you using to project your deflation projection, and what kinds of time-frames are you comfortable with? I really don't know whether we're looking weeks, months, or years ahead before deflation becomes an issue here ( USA ) . The closest model I can find is Great Britain during the great depression, when their GDP rose steadily throughout, albeit at a slow pace. They actually did quite well.