Gold and Silver for the Long Term

AS THE YEN AND BRITISH POUND FALL IN PURCHASING POWER THE DOLLAR INCREASES IN THAT PURCHASING POWER WHICH MEANS FOR THE SHORT TERM PRECIOUS METALS WILL BE LESS EXPENSIVE BUT EVENTUALY THE DOLLAR WILL ERODE AS OTHER WORLD NATIONS PURCHASE LESS BONDS WHICH MEANS THE US GOVERNMENT HAS LESS ABILITY TO RUN THE PRINTING PRESSES AS THOSE COUNTRIES SUCH AS CHINA INVEST LESS INTO THE DALLAR AND MAKE ALLIANCES WITH COUNTRIES LIKE AUSTRALIA FOR TRADE WITH THEIR DIRECT CURRENICES MEANS FEWER PEOPLE WANT TO TRADE WITH DOLLARS. GNS-RESEARCH

http://www.mining.com/web/a-us-retreat-could-ignite-the-precious-metals-market/

The fiasco surrounding the Cypriot banking system hardly moved gold but it has put the spot light on the possibility of the implementation of similar ‘Bail In’ strategies as a solution, should other banks find themselves in difficulty. This is a Eurozone problem and it remains to be seen if the flight to safety will be to the precious metals sector or to alternative currencies, such as the US dollar.

It’s a difficult call, shaky banks, money printing, government spending and borrowing at record levels, gold and silver out of favor and the summer doldrums. If we then add to the mix political unrest from Korea to Italy, the Arab Spring, unrest in Africa, the outlook is none too bright.

As we see it the dollar could well have the upper hand in the short term, but it is a fiat currency and as such is destined to head south. Sooner or later gold and silver will be recognized as real money and become the investor’s safe haven of choice in this tumultuous environment.

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