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Now that gold has broken out – its steady march since February shows no sign of slowing down.

May 02, 2011 – Now that gold has broken out – its steady march since February shows no sign of slowing down – and silver has experienced a slight downturn, the debate over the relative prices of gold and silver has resurfaced.

The price of silver is becoming problematic to commercial consumers, so it is only natural for them to wage an all out war to keep prices in check. But efforts to compare the current trend to the great Hunt brothers fiasco three decades ago has no merit.

The current bull trend in silver has been steady and strong, driven by the fundamentals and fortified by broad investor demand for safe haven. Limited production and growing awareness of the frailty of the US economy are long-term drivers that can only intensify in the months and years to come.

Weiss Ratings Service, a highly respected independent agency that covers 19,000 U.S. banks, credit unions and insurance companies, accurately assessed the condition of huge financial institutions in the 1990s while the major services refused to lower their AAA/Aaa ratings. Those who paid attention were spared the most devastating effects of the collapse.

Now Weiss has introduced the Weiss Sovereign Debt Ratings of 47 governments. Using the same unbiased techniques as their commercial service, Weiss places the US government 33rd – fourth last in debt burden, 32nd in international stability, and 27th for economic health. If we hadn’t ranked sixth for our ability to borrow globally we would have fallen much lower on the chart. As it is we were soundly beaten by Russia and even Mexico fared better than we did.

A group at MIT took up the challenge of pinning a real figure on inflation. Their Billion Prices Project uses the internet to continually gather actual current price information from around the globe and uses that massive database to calculate inflation. Over the past few months their figures put inflation in the USA at an annualized 7.4%. Factoring in population growth, our economy is shrinking at more than 5% annually, based on the government’s own figures.

Even the labor market’s reported growth by some 200,000 jobs a month is barely enough to compensate for the growth in the labor pool due to population expansion.

Both gold and silver prices are on very solid footing, and neither is even close to the end of its run.

Shannon King

Senior Staff Writer – GoldSilver.org

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