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Compared to any fiat currency you care to name, gold and silver represent the best way to store your wealth and hedge the future.

December 21, 2011 – Compared to any fiat currency you care to name, gold and silver represent the best way to store your wealth and hedge the future. Fiscal intervention has become the name of the game and bailouts are here to stay. Effectively, this means the cost of real materials, tangible commodities, will increase in kind. The more dollars Ben Bernanke prints, the more dollars it will cost to buy an ounce of gold or an ounce of silver.

Occasionally, there is a correction in the market. This is constituted of a shift downward in price that is considerable. In the past decade, there have been three 20 percent downward corrections in gold. Each time a correction occurs, investors scream about the sky falling, run in the wrong direction, and lose their positions because they weren’t paying attention to the fundamentals. Three times in the past ten years gold has corrected downward on the order of 20 percent. Each time it not only rebounded, it performed better than ever, making it the best performing asset of the past decade.

The fundamentals are key indicators as to what will be happening in the market in the future. Right now, because gold has lost about 15 percent in a month, many advisers are calling the top of the market and, though none dare use the word, effectively a bear market, which is ludicrous. However, looking at the pervasive low interest rates, one must admit we’re still in a gold bull market. The interest rates are pervasive because they are here to stay. The Federal Reserve cannot currently raise rates without endangering the fragile economy. This makes owning dollars a losing game as they literally depreciate in the account.

With dollars depreciating in savings accounts due to interest rates that literally can’t be moved and an economy that has come to function only with the aid of fiscal stimulus makes for a logical trust in gold and silver. Forget the correction; keep sight of the fundamentals. However this all works out, gold and silver are set to be much more valuable than dollars.

Shannon King

Senior Staff Writer – GoldSilver.org

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