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Economic downslide not to end soon

Economic downslide not to end soon.

November 29, 2010 – Contrary to the recent performance of the dollar there is no reason to believe that recovery is around the corner and every reason to believe that gold and silver will have another spectacular year. The optimism expressed by investors moving from precious metals to the dollar is certain to be short lived as the reality of economic conditions comes to light.

One need look no further than the Fed’s own predictions to see the true state of our economic recovery. According to them we can expect at best five more years of glacial improvement, barring any unforeseen shocks to the economy. The Fed’s previous estimate for a 3% to 3.5% growth of the economy in 2010 has been lowered to 2.5% and its prediction for 3.5% to 4.2% growth next year has fallen to somewhere between 3% and 3.6%. Adding to that grim outlook is the expectation that unemployment will improve only marginally over each of the next three years.

Many members of the Fed are now on record expressing fears that continuing current policy will cause devaluation of the dollar and spark inflation. That possibility was serious enough to cause the discussion of placing a cap on long-term interest rates, an action last taken in the years following WW II.

The bleak prospects for economic recovery by itself is just cause to hedge with gold and silver investments. The expressed condition of those prospects – the lack of any economic shocks – makes it imperative.

The implications of the North Korean crisis cannot be dismissed. Allied with China, a nation openly committed to achieving global economic dominance, North Korea has the potential to wreak havoc on economic stability around the globe. Investing in gold and silver is our best protection against the unpredictable actions of that rogue nation.

Shannon King

Senior Staff Writer – GoldSilver.org

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