There’s a reason they call silver the “Devil’s Metal” — following its whipsaw price fluctuations can make you feel possessed by some awful demon.

Since silver is a constantly shifting monetary asset, an investment vehicle, and an industrial metal, the price cycles can leave your head spinning like Linda Blair in The Exorcist.

And by the way it’s been going — I have a significant investment in physical silver myself — I’m not above channeling some dark magic to turn this thing around.

Perhaps I could learn a thing or two from Bolivian silver miners, who have their own unique approach to dealing with the dangers of silver…

The Cerra Rico in Bolivia is known as the «mountain that eats men» since over 8 million miners have met their fate inside the mine since the 16th century. Before entering, miners at Cerra Rico sacrifice a goat and splash the blood over the mine entrance for good luck.

It’s starting to sound like a reasonable idea, since silver has turned into the metal that eats investors… I may do the same to my computer screen after writing this article.

It has been an absolute bloodbath in the silver market. Since cresting at close to $50 in 2011, silver has been beaten back to 2009 levels. Here’s the bloodcurdling chart:

It’s not a pretty picture. Silver has shed all of those great gains from 2011, and this can leave precious metals investors scrambling for answers. But take a deep breath…

There are two questions you should be asking yourself: how long can it go, and when should I buy more?

Well, if we look at official data, there are some obvious reasons for silver’s slaughter.

The dollar is reaching new highs…

The stock market seems to break a new record every single month…

Official inflation is practically non-existent…

Did I just write that? Am I living in a crazy delusion of some kind?

I am seriously questioning my sanity and reality when I see numbers like this. How can this be? If you simply take a look at what is happening in the world right now, it boggles the mind as to how we’re churning out such impressive numbers.

So, let me get this straight…

The dollar is hitting highs.

Yet we’ve debased it enough through quantitative easing that it should have been simply crushed over the past few years.

This is a case of the prettiest cow in the slaughterhouse. The dollar has hit a four-year high against the Japanese yen and a nine-month high against the UK pound.

The ironic part is that these currencies — and especially emerging market currencies — are taking a hit in part because America is set to ease off of its bond buying next month. So we print upwards of $4 trillion to quell our markets, all of that extra money does nothing to debase our currency, yet when we stop doing it, other countries’ currencies get crushed and the dollar rises to the top?

Talk about a global scam of epic proportions….

Speaking of scams, how about the record-setting stock performance?

The stock market has run up to record highs and seems to hit a new one every week. All the while, the smart money is slowly backing out, CEOs are selling off their own personal stock in record numbers, and billionaires are betting on a crash.

As Adam told you this month, 7,181 insiders bought their own stock this year while 23,323 sold off their shares. You hear that? It’s the sound of rich people taking their money off the table.

George Soros, one of the world’s most successful investors, has put in a $2.2 billion bet that the crash is coming this year. He’s confident enough that he almost doubled his short position on the S&P 500 ETF (NYSE: SPY).

And while inflation hasn’t shown up on those fancy government reports, when you go to the grocery store, you are feeling it every day. It’s true, the Core Consumer Price Index (CPI) hasn’t moved all summer — but that doesn’t account for either food or energy. And that’s where we’re feeling the sting.

The price for a gallon of milk is the highest it’s been since 2011 and up a whopping 21% from last year alone. God help you if you like a splash of milk in your morning coffee, because coffee is up over 50% since last year!

You won’t find any bargains in the meat aisle, either. Meat prices are up 8.8% this year and show no signs of getting any cheaper.

Overall, food is up 2.9%, well above the «official» inflation figures.

Energy has followed suit, as our electricity bills are up over 4% and gas has risen 5.8%. So we’re feeling inflation, whether the government wants to admit it or not.

You see, each and every reason for precious metals tanking is a bunch of hot air. All of the signs are there, so when the Fed chickens finally come home to roost and they «taper» the grand QE experiment, the market will finally be forced to stand on its own wobbly legs.

And just like a bandy-legged goat calf, it will topple right over.

When the Fed is forced to admit that we simply can’t succeed without massive government intervention, things will change very quickly for the stock market — and precious metals in particular.

The long and short of it is that silver could still take another dive. As long as these charades keep playing out, there is no reason to see a big recovery in the precious metals market. But our time will come, and buying at seriously depressed prices is exactly how I like to build my positions.

That’s right, we’re buying silver all the way down. But since I know my psychic limitations, I don’t dare try to predict the bottom. That’s to say, I never back up the truck at any one time.

Your best bet is to dollar-cost average your position — that’s scheduling to buy a bit at a time regardless of the cost — when it dips and hang on tight for the long term. By dollar-cost averaging, you can help bring down the average cost of the silver you currently hold and reduce some of the pain of that position.

It’s not going to be pretty, and it sure won’t be fun — but eventually, we’ll have the last laugh.

Since the 1930s, only one bull market has lasted longer than this one… and its time is about up. When it finally comes crumbling down, we’ll see the rise of precious metals once again. And it’ll be a sharp, quick rise.

In the meantime, please excuse me… I’m heading out to find a goat.

Godspeed,

P.S. Meet Me at The World MoneyShow Toronto — October 16-18, 2014!