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Tuesday’s little jump in gold and silver prices should be incentive to start buying, but not for the apparent reason.

October 26, 2011 – Tuesday’s little jump in gold and silver prices should be incentive to start buying, but not for the apparent reason. The change was rather odd, a sudden step increase from prices that had barely moved for days that appear to have leveled out once again.

Such seemingly inexplicable behavior is a symptom of the disease permeating the markets today, just another case of synapses gone wild. It is not hard to understand why the markets can’t get their feet on the ground.

A healthy market has no difficulty fixing prices. Participants share a common reference to value and they can easily reach accord. When governments try to create wealth in the markets, however, they cloud that reference. And a debt-fueled economy obscures it beyond recognition.

Money, whether gold or silver or currency, can do but one thing and that is store wealth. Money cannot by itself create wealth. That can happen only through the exchange of money for something tangible.

The vast majority of wealth today is a fiction created by fiat money. The frantic efforts of central banks to revive debt-saturated economies by creating new money defines insanity. The glut of fiat money is fast approaching 10 times real global wealth, and governments everywhere are primed to print even more.

With true wealth removed from the equation it is not surprising that the markets can’t come to terms. Nobody really knows what anything is worth because nobody can fix a value on the medium of exchange. Money has to be directly linked to global wealth to have any meaning at all.

The fictional wealth of fiat money is doomed to be erased, but wealth stored in real money will survive. Throughout history gold and silver investments have proven that they are not luxuries but absolute necessities for the preservation of wealth.

Shannon King

Senior Staff Writer – GoldSilver.org

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