Buy Gold and Silver While it’s Affordable

The best time to buy any asset is while it is relatively inexpensive and that’s why gold and silver are a buy right now. About four weeks ago, the Chairman of the Federal Reserve Ben Bernanke went before a committee of small business owners and tacitly delayed the next round of Quantitative Easing. This is nothing particularly new for financial markets, as the next round of Quantitative Easing was expected as early as last summer. It was put off at that time, too, but the fallout in the markets was not nearly as severe.

Four weeks ago, when Bernanke tacitly announced the official delay, all markets were down. The fiscal stimulus of Quantitative Easing is a short-term injection of money into the markets that boosts all prices and nominal values over the immediate term. Therefore, investors really like Quantitative Easing. It makes thing look very good.

However, the long-term effects of Quantitative Easing are malicious to say the least. We are still witnessing the effects of prior rounds of the fiscal stimulus in the markets and we will be for years. One of the worst is an inflationary effect that devalues the dollars on the market. Essentially Quantitative Easing is a money-printing program, but increasing the money supply makes dollars less scarce and therefore worth less.

Gold and silver, on the other hand, skyrocket in value with the devaluation of the dollar through money-printing, making the precious metals some of the best investments to buy in a inflationary market. They are real items with tangible value and therefore they are the immune from that particular market fluctuation.

The backlash from the denial of Quantitative Easing was so severe the Federal Reserve announced a policy of “sterilized” Quantitative Easing the following week. This is, in effect, a concession to the bankers and investors who benefit most from Quantitative Easing.

Now that the news of the stimulus has reached the market, the prices of gold and silver have been performing very well over the past week. It is difficult to project exactly how much, but we know that gold and silver will be the biggest beneficiary of the stimulus when it is actually released into the markets, making now the best time to buy gold and silver.

Shannon King

Senior Staff Writer –

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