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With the global markets staggering blindly back into the ring for a little more punishment, one has to wonder what is holding down the price of gold and silver.

October 07, 2011 – With the global markets staggering blindly back into the ring for a little more punishment, one has to wonder what is holding down the price of gold and silver. Has there been some shift in the market fundamentals? In a sense, there has, just not with gold and silver.

The need for international monetary reform is urgent, but it is also highly unlikely. The memory of Nixon single-handedly pulling the rug out from under the last great experiment is still too fresh on peoples’ minds. But while western central banks struggle to keep the charade alive, our wealth is being systematically siphoned off to the oil producers and emerging economies.

China in particular is making its move to unseat the dollar. The Pan Asia Gold Exchange, which opens next year, will trade only in physical gold and the medium of exchange will be the renminbi. Closely tying their currency to gold in that manner will give the Chinese an advantage no developed country can match.

The markets have had a rude awakening to the fact that a major restructuring is just over the horizon. The immediate effect has been a self-made liquidity crisis that has left investors holding nothing but cash. The second phase, when they are struck with the realization that the value of all that cash is rapidly evaporating, will not be a long time coming.

When that happens, personal prejudices against gold and silver will be swept aside. We are very close to the point when even a minor shock can potentially set off an unstoppable chain reaction. And there will be little, if any, warning when it does. Gold and silver offer the only shelter, and only to those who have the wisdom to seek it before disaster strikes.

Perhaps the world can somehow still avert a major economic catastrophe. I hope it can. But the threat is very real and the potential harm so extreme that it would be foolish not to take the precautionary measure of securing wealth with gold and silver.

Shannon King

Senior Staff Writer – GoldSilver.org

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