For a short week this sure was an interesting one for gold and silver investing.

April 25, 2011 – Despite very thin trading gold at last broke the $1500 mark and silver put an exclamation point on its stellar run, hitting a 31-year high.

“Investors also didn’t want to spend a three-day weekend without some sort of protection,” said the Wall Street Journal’s Tatyana Shumsky. Think about that statement a minute. It takes a heap of worry for one extra day to make a difference. So what happened?

There’s the S&P report, of course, but why would they “need a ratings agency to tell them something that should be as plain as the nose on their face?” said Brett Arends in MarketWatch. Then there was more bad news about the unemployment picture, but that is old hat. Even mainstream media has taken up the cause to belie the fed’s doctored statistics. And the pathetic Philadelphia Fed Index on manufacturing released yesterday really shouldn’t have surprised anyone.

What did happen was all of those things occurring in one short span lifted the curtain on the wizard. Already greatly maligned for its reckless monetary policy, the Fed is losing what little credibility it had left as its claims about the state of our economy get exposed for the con they are.

When you add in debts to the Social Security Administration – which are on that agency’s books as assets – the gross federal debt is closer to 100% of the GDP than the 70% figure Bernanke likes to use, says Arends. And the real national debt – the total indebtedness of the non-financial sector – is more like 200% of GDP.

In short, the Fed has understated the debt and overstated the results of its policies. Now it will soon be faced with mopping up the liquidity from QE2, and only the permanently deluded expect that to go well.

“The dollar landscape looks ugly, with the greenback vulnerable to further setbacks,” said the Wall Street Journal’s Andrew J. Johnson. The ICE Dollar Index plunged to its lowest mark since the beginning of the financial crisis this week and it is unlikely that confidence in the greenback will ever be fully restored.

With gold and silver next in line to take the dollar’s place as global safe haven, this week was just a preview of things to come..

Shannon King

Senior Staff Writer –

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