When recently interviewed for the article, “There’s Going to be a Bubble in Gold and Silver, and a Super-Bubble in the Miners, so Buy Them Now,” Doug Casey, a respected economist, financial author, and international investor, described gold and silver as the best asset class in which to invest. Casey points out that governments in the U.S., Europe, Japan, and China have printed up trillions of currency units that have inflated values of assets such as bonds, and that international investors will soon look to park their capital in something with intrinsic value, such as gold and silver. He believes that the ongoing financial crisis that began in 2008 will cause the bond and currency bubbles to implode. At that point, he says “Gold, silver, and mining shares may explode to historic proportions.”

In a separate interview with King World News, acclaimed money manager Stephen Leeb also discussed the potential escalation for gold, silver, and the mining stocks. In agreement with GATA (Gold Anti-Trust Action), Leeb indicates that a rising gold price poses a major threat to the U.S. dollar—the world’s reserve currency. Thus, he claims that the U.S. has attempted to suppress the gold price for years by leasing gold to the bullion banks, who then sell the metal into the market. This causes a problem when countries like Germany attempt to repatriate their 1,536 tons of gold stored at the U.S. Federal Reserve. Leeb and other gold advocates claim that Germany’s gold has already been loaned out by the U.S. and sold into the market, and that this occurrence is the reason the U.S. will only return the gold if the deliveries can be extended over a 6-7 year period. Rightfully, this raises the gold suppression conspiracy to a higher level.

Leeb points out that while the U.S. leases gold to be sold into the market, China is buying the precious metal as aggressively as possible without driving the price sharply higher. He believes that China’s long-term goal is to accumulate enough gold to back the Chinese currency in an effort to establish the Yuan as the world’s reserve currency.

He claims that China is also aggressively accumulating silver for future solar energy needs, driving the price “to levels in the future that investors can’t even fathom today.” He states further that, “silver, next to oil, is the single most important commodity and strategic resource on the planet.” Thus, like Casey, he says that “quality junior mining shares will eventually enter a mania that will be one for the history books.”

Golden Minerals (AUMN) reported their preliminary Q4 ’12 production numbers on January 18, 2013. Although the silver production increased 13% over Q3, the gold output fell 33% vs. the prior quarter due to ore metallurgical issues. This setback is similar to the one ECU faced in 2011 when the ore’s copper content was interfering with gold processing. Metallurgical problems are common in the mining industry; after speaking with Golden Mineral’s President Jeff Clevenger on Friday, I’m confident that the company will be able to quickly identify the metallurgical problem in their lab facility and make the necessary changes to the production line to improve gold recoveries.

Clevenger also stressed the importance of the company becoming cash flow positive and that objective remains on target for Q1 ’13. This is an important goal and will help the market psychology of AUMN when achieved. More details will be provided in the formal financial statement to be released around mid-Feb.

Collectively, precious metal mining stocks are extremely undervalued and trading near historically low valuations relative to the price of gold and silver. In 2013, as miners like Golden Minerals show consistent revenue growth, and gold and silver break out of their respective 16 and 22 month-long corrections, these joint developments may initiate the massive escalation of the mining sector anticipated by Doug Casey and Stephen Leeb.

Silverbull50