Investing in Gold and Silver in a Paper Market

If any investor still has questions about the wisdom of investing in gold and silver in the current markets, the recent Federal Reserve Quantitative Easing debacle should resolve those concerns. It would be more difficult to sway the markets purposefully one way, then another, if you tried. In short, it seems the Fed itself doesn’t have a clue as to its official stance on its own policy.

Perhaps part of the trouble is the over-exuberance for news in the determination of how markets will sway. The best example is last week’s supposed “announcement” of Quantitative Easing 3, after which all markets surged in prices. The trouble is that the “announcement” was never actually made, but interpreted from Ben Bernanke’s words.

It would be difficult to pin this squarely on the thoughts and dispositions of bankers and traders. Though they do hang on every word that falls from the Fed Chairman’s lips, it does seem as though there is an implicit intention on the part of the central bank to deliberately confuse the markets by implying rather than specifically making announcements regarding its own policy.

Investing in silver and gold bypasses the kind of political sidestepping that will doubtlessly be coming from Washington for some time. Eventually, of course, there must be a further round of Quantitative Easing, but why wait until it is actually announced? Further, why wait to have to decipher what Ben Bernanke may or may not have said or alluded to in a nondescript tele-appearance before a business committee in West Virginia? The fact remains that silver and gold will be the biggest beneficiaries of the monetary stimulus, whenever it inevitably comes, and that makes today’s prices very affordable for all investors.

The Fed will continue to imply this and motion towards that as their only official policy these days seems to be never give a straight answer. It is an opinion that the central bank should employ bankers and not politicians, providing American markets with accurate data, timely forecasts, and clear policy. However, that will not be happening any time soon. Perhaps that is one of the best reasons we have right now for investing in gold and silver.

Shannon King

Senior Staff Writer –

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