Gold and Silver Investing in Distressed Economies

Gold and silver investing has been the biggest trade of the past decade, but the reasons for it are only just coming to light. Of course, we’re all aware of the major financial calamities that have been hitting the major countries of the world since the major crisis of 2008, but now we’re getting a glimpse into the future as the government’s reaction to those crises are showing their results.

Whatever you would like to say or think about the bailout and stimulus programs, they are one of the primary economic drivers for the historical bull markets we have seen and continue to see in gold and silver markets. The bailouts may have kept the world from sailing off a calamitous financial cliff, but they come at a high cost.

With the creation of so many dollars for the programs, the purchasing power of all dollars in existence is being diluted by the minute. It is estimated, though perhaps significantly unverified, that US bailouts have totaled $29.616 trillion in the fourth quarter of last year.

This is a very significant amount of money. When you pump that much money into any system, the primary effect it has is heightening the value of real goods. The best and most prescient real goods we have in the case of money inflation are gold and silver. Because gold and silver are time-honored stores of money with an inherent value based on scarcity, investing in them has returned a great yield because they are relatively distanced from the central bank action.

Now we are seeing some of the first signs that the measures taken to avert this massive financial collapse are not and have not actually stimulated the economy. It is as though we have run off the cliff, but the measures have prevented us from falling. Growth has not resumed, jobs are not being created in any meaningful fashion, and developments in all sectors have been lagging at best.

The obvious antidote to the economic malaise with which we’re presented is precious metals. Gold and silver will sustain during this economic crisis because of the actions the federal government has taken to avert the economic crisis. During a period of complete non-growth, the best place to store your money may be one of the oldest places. Investing in gold and silver during this larger period of time is the best economic choice we have.

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