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Rather than the usual selloff this time of year we are seeing a substantial increase in new positions that has kept gold and silver prices moving upward.

December 29, 2010 – Rather than the usual selloff this time of year we are seeing a substantial increase in new positions that has kept gold and silver prices moving upward. One likely reason for that is that many people are finally taking a realistic look at a very dismal economic outlook.

For decades we forged ahead living on borrowed money, oblivious to the developing crisis. We have come to the point of no return. “It’s over,” says NJ governor Chris Christie. “We are now left with no alternatives.”

Draconian austerity measures might prevent debt from catalyzing economic collapse, but they would compound an even greater problem – our rapidly decaying infrastructure. Growing numbers of dams threaten populated areas every day. Bridges by the thousands that are approaching the end of their useable life pose an incalculable risk to commerce. And potentially the most catastrophic of all, the grid that delivers power across the nation is rapidly deteriorating.

Most likely state and local governments will be expected to keep putting Band Aids on the infrastructure, but since the recession the states have spent $500 billion more than they have taken in so they are drastically cutting funding to their counties and cities. As local governments are squeezed ever harder those that can will be forced to borrow more while many others will be driven to default.

Meredith Whitney, a highly respected Wall Street analyst, says it would take only 50 to 100 sizeable defaults to wreak havoc on the $3 trillion municipal bond market. And after $160 billion in stimulus funds dries up in the spring it will take very little to set off a chain reaction.

Investors moving into the market know that, and they are seizing the opportunity to invest in gold and silver before the rest of America catches on.

Shannon King

Senior Staff Writer – GoldSilver.org

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