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Gold and Silver Investments

November 02, 2010 – Now that the elections will soon be history, can we expect the scorching growth in gold and silver prices to start cooling down? If anything, they are likely to heat up even more.

Contrary to popular opinion, major changes in the economy have little to do with who is in power. Overall fiscal policy changes at a glacial pace and is driven more by academics than by politicians. There are no signs that the Government intends to change its policy of using asset buyouts to regulate the economy, and the consensus of expert opinion is that will create a strong possibility of inflation and sustain the dollar’s decline.

The prospects remain excellent for strong returns on gold and silver investments. In the short term, however, we can expect to see more movement in stocks and currency that appear to defy logic. The reason is a rare tight connection between the dollar and stock values, an inverse relationship like that which gold and silver prices have historically maintained. Although one might think that should be the natural state of things, the last time stock movement and the dollar were synchronized was when the US switched from the gold standard to fiat money in 1971.

The significance of the correlation is highly debatable, but its occurrence looks to be a product of economic uncertainty as the stock market tries to adapt to a new economic model. Of greater interest to investors, however, is that both instances marked a period of astronomical growth in gold and silver bullion prices.

Although we can reasonably expect some degree of uncertainty in the coming months, there is little doubt that instabilities in the global market coupled with persistent economic woes here at home will continue driving the price of gold and silver towards unprecedented levels.

Shannon King

Senior Staff Writer – GoldSilver.org

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