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If you still aren’t convinced that gold and silver investments offer the only reliable store of value today, it would be wise to take a close look at the full market spectrum.

April 08, 2011 – If you still aren’t convinced that gold and silver investments offer the only reliable store of value today, it would be wise to take a close look at the full market spectrum.

A good deal of the confusion nowadays comes from the illusion that asset classes across the board are on the rise. But that is hardly likely. If the Fed has succeeded at anything it is creating that illusion by devaluing the underlying support of the markets – the dollar. As long as the value of the dollar drops faster than everything else, even declining assets appear to be gaining.

The stock market provides the perfect illustration of what is happening. In a healthy economy rising stock prices reflect a growing asset base – companies enter the market, increasing competition for investor money and attracting new investment. But today’s prices are due only to a flood of new money. With the economy stalled there is no growth in the asset base and new investors are hard to come by as inflation has eroded the average American’s disposable income to zilch.

In the 1990s the stock market was expanding with an average of over 500 initial public offerings (IPO) each year. But that number plummeted over the last decade to just 130 according to the Wall Street Journal. Rather than own up to the failure in its policies, the government is pulling another trick from its sleeve.

A new SEC study has recommended changing the rules for private equity entrance into the market, sidestepping all of the protections for individual investors. “At a time when investors are seeking more market transparency, it would [not only] lessen the amount of publicly available data about those companies,” says the Wall Street Journal, it would also “shut out many ordinary investors from one of the fastest-growing market sectors.”

Shares in companies that make no demonstrable contribution to the economy could also artificially expand the asset base, extending the illusion that the economy is improving. But no structure, no matter how clever the design, can stand for long without a real foundation.

Throughout history paper assets have had their brief heyday and then disappeared. But gold and silver investments have proven time and again to be the one reliable store of value that transcends every political, social, and economic reversal.

Shannon King

Senior Staff Writer – GoldSilver.org

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