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Gold and Silver Investment today will protect portfolios whenever inflation arrives

November 16, 2010 – Gold and silver investments keep going strong in seeming contradiction to economic conditions. To a great extent that reflects the general uncertainty created by the emergence of the global economy, but it also suggests a deep running skepticism among financial experts regarding the intent of our government’s economic policy and the ability of our financial leaders to bring about any meaningful change.

Every day we receive conflicting messages. On one hand we woo Asia by taking an active role in the Asia-Pacific Economic Cooperation meeting, the ultimate goal of which is to establish the Free Trade Area of the Asia-Pacific. On the other hand, the Fed responds to concerns that our stimulus policy threatens the stability of the global economy by saying it is concerned only with our economy, and not with that of other countries.

That attitude calls the officially stated policy into question. Holding down interest rates and flooding the economy with cash are unlike to produce the results the electorate has strongly demanded. Inflation, however, could have an immediate effect, lowering unemployment and reducing the apparent national debt. Letting interest rates rise, it would seem, makes political sense.

The falling price of rate futures – a derivative of interest bearing assets – signals a growing belief that interest rates will soon respond to upward pressure. But even if inflation is not imminent, it is inevitable.

Investing in hard commodities, especially gold and silver, has experienced strong growth because the prospects for returns are far better than with traditional assets bogged down by near zero interest rates. More important, gold and silver investment today will protect portfolios whenever inflation arrives.

Shannon King

Senior Staff Writer – GoldSilver.org

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