The place to be is equities, specifically commodity and precious metal based equities. There are many imbalances in the economy, especially in the US which still has artificially low interest rates. This is continuing to fuel public debt, expand personal credit and devalue our currency.

For example, the advance estimate of Q3's GDP came in at 2%, better than Q2's 1.7%, but still lagging the 3% 'deemed necessary' for healthy job growth. This came at the behest of the largest increase in consumer spending in 4 years. Although consumer confidence and consumer spending can be signs that employment and salaries are rising, and the economy is in fact growing, our job market does not suggest this. Let's be clear about one thing, consumption isn't real growth.

The US is a nation of consumers. Consumer spending accounts for 70% of its total GDP. An increase in consumer spending can spur a movement in the GDP numbers and act as a great head fake. So with that stated, let's keep our feet on the ground.

The Fed will surely attempt to manipulate growth in the economy by once again implementing another round of quantitative easing on Tuesday and Wednesday of this coming week. This will undoubtedly put more pressure on the US dollar which will in turn drive commodity and precious metal prices higher.

It's a simple game.

The Fed and the US government refuse to go down. We've seen this game before. This is what we said last year, six months ago, two weeks ago and what we will continue to say. The more money the Fed prints, the more it devalues the US dollar (the world's reserve currency). It's a predictable attempt to increase economic output but only seems to make commodities trade higher. We are seeing it week in and week out and our team believes it is only going to accelerate. It's just that simple. Until we see a reverse or change in monetary policies, we will remain bullish on commodities.

Silver was among the best performing commodities in the month of October and ended the trading session on Friday with a bang. Silver futures for December rose 68.9 cents, almost 3% on Friday to close at $24.56 an ounce. This came after news from Sprott Asset Management reporting it plans to raise $500 million in the initial public offering of the Sprott Physical Silver Trust. Just as the name implies, the Sprott Physical Silver Trust will be backed solely by physical silver bullion. It's a trust created to invest and hold almost all of its assets in physical silver bullion. Sprott has agreed to issue in its initial public offering of 50 million transferable, redeemable units of the Trust at US$10.00 per Unit, for gross proceeds of US$500 million.

Naturally, this is expected to put an increased demand on silver in the coming months. It is very indicative of a growing culture within institutions to hold physical precious metals. Can you blame them? World currencies are just play money in the end. Physical commodities and precious metals are what will count.

Sprott has been here before. In March it raised $400 million for an IPO of the Sprott Physical Gold Trust. The value of the Trust exceeded $1 billion dollars by the end of September. It's even higher now as gold continues to hit new record highs weekly. This is an amazing story of wealth creation in very little time. Don't be surprised if gold breaks through $1400 an ounce soon after the Fed's announcement this week.

Silver almost hit $25 mid month, reaching $24.95, the highest level in 30 years. The metal is up 46 percent in 2010. Implied net silver investment increased by a staggering 184% to 136.9 Moz in 2009, recording its highest level in the past 20 years. We'd be willing to bet just about anything that this number will be easily eclipsed in 2010. Remember, that unlike gold, industrial applications account for more than 50% of all silver demand. Add the furious accumulation of institutions, world banks and wealthy citizens attempting to hedge themselves, and we have the perfect storm for record high silver prices.

Read our prediction from the beginning of the year on silver:

Of course not.

What 99% of the motivated population will do is buy companies which have proven resources, production or stock piles of commodities and precious metals. Last month's rise in commodities was just a warm up to what is coming.

The bull market in commodities has arrived.

All the best with your investments,