We should follow the Germans’ lead.

December 16, 2010 – “You can’t even rent a safety deposit box in Germany because they are all full of gold and silver,” says Eric Sprott, CEO of Sprott Asset Management, as cited by Dave Brown in the International Business Times. That’s very interesting because Germany has the strongest economy by far in Europe.

While many analysts warn of precious metal prices representing “unrestrained exposure to unsustainable growth,” Sprott has a different take: gold “is under-owned as only 1 per cent of people’s money is in it” and therefore has virtually unlimited capacity for future exposure. As for incentive to invest in gold, Sprott notes that gold has appreciated by at least 300% against every currency in the world and “has beaten every stock market.”

If the Germans are moved to protect their wealth with gold and silver, we should be doubly so. The already dismal projections for our economy released in the August update from the Congressional Budget Office (CBO) have taken a turn for the worse. It was assumed for the report that the tax cuts would be allowed to expire and that stimulus spending would not increase, but the CBO also provided estimates in case those two specific conditions were not met.

As things are working out publicly held debt will equal the real GDP by 2020. That’s pretty bad, but the cost of servicing that debt is horrendous. The report’s current-law projections have interest on our debt reaching $778 billion in the next 10 years. Add in interest on deficits created by tax cuts, expanded stimulus, and the inexcusable waste included in the Omnibus bill and that figure could easily climb to $1 trillion.

That serious threat of inflation added to the CBO’s prediction of “slow income growth as well as lost wealth” should have us all taking cover in gold and silver.

Shannon King

Senior Staff Writer –

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