Recently there has been a lot of speculation in the gold and silver markets, making prices relatively volatile.

April 18, 2011 – Recently there has been a lot of speculation in the gold and silver markets, making prices relatively volatile. But “the good news for gold and silver is the ‘mother’ of all bull markets has further to go,” Peter Grandich, editor of The Grandich Letter told Myra P. Saefong of MarketWatch.

While “the wiggly lines that make up the bigger uptrend will provide better times to buy and sell the metals,” said Brien Lundin, editor of Gold Newsletter, the overarching message is to stay in gold and silver because there is simply no other way out of the federal debt crisis than to inflate the debt down to manageable size. “You’re not in a late phase of inflation, you’re in an early phase,” Ira Epstein of the Linn Group said in the Wall Street Journal.

Lundin tells investors to buy “gold and silver bullion as financial ‘insurance’ — a core holding that they shouldn’t trade.” Robert Barone, portfolio manager for Ancora West Advisers, says “Stay completely in (or even add to your holdings) if you believe that the U.S. dollar will continue to get weaker due to inflationary economic policies.”

That’s the rub – a great many Americans have little concept of the enormity of the deficit problem, and therefore don’t understand that inflation is unavoidable. Yet according to Rasmussen Reports, “Congressman Paul Ryan’s Republican alternative puts a balanced budget at least 25 years away.” And that’s the biggest hammer our politicians have been able to come with.

According to a recent Rasmussen survey most Americans believe that a balanced budget is good for the economy, but most “dramatically underestimate how much is actually spent.” Less than half believe cuts to defense, Social Security, and Medicare are necessary, and 37% believe they are not – roughly the same number as those who didn’t think that the majority of federal spending goes to just those three things. A different survey showed that a great many Americans know it would take higher taxes to balance the budget but only 20% are willing to pay them.

None-the-less, “investors are frustrated with U.S. monetary policy. They’re saying the heck with the dollar, the heck with currencies, and they’re buying metals,” Epstein said.

The frustration will continue to spread, drawing more and more investors into long-term gold and silver holdings, and that will hold prices to their strong upward trend.

Shannon King

Senior Staff Writer –

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