Special Report

Trust In Gold

We as Americans are experiencing one of the toughest economic periods in our history. We have been told that the recession is over and America is on the road to economic recovery. I certainly hope the Government is right. However, there is no quick fix and unfortunately there will many bumps in that road. Many Investors have lost confidence in Wall Street after watching their life savings slip away and turning their disposable income into priority income.

We are witnessing the highest unemployment rate (10.2%) since 1983 and our U.S.Dollar is the worlds punching bag. The preference globally for years was the U.S Dollar however, sentiment is no longer in vogue. From all corners of the world there is strong criticism toward the Dollar and a move to the EURO. Many countries are moving out of their U.S Dollar reserves and into a precious metals “safe havens”, to protect their assets against possible global inflation.

What is Inflation?

Definition: Inflation is an increase in the price of a basket of goods and services that is representative of the economy as a whole.

We can have inflation by changing the amount of money in our system and as we know it, the U.S treasury has been printing dollars to curb the recession. Inflation is caused by several factors such as money supply goes up, Supply of goods goes down. Demand for money goes down, and demand for goods goes up. Gold is viable instrument to help protect your wealth. Since I view Gold and Silver as the “anti” Dollar; “flight to safety” I need to track. the U.S. Dollar. If the Dollar remains under siege the answer is “transfer to hard assets” certainly Gold and Silver are preferred. Also with the FOMC’s recent decision not to increase rates and keep the “status quo”, the U. S. Dollar in my opinion will continue to lose value versus the major currencies of the world. We need to protect our assets. Take a page from the worlds largest Gold consumers (1) The Central Bank of India recently purchased 200 metric tons of Bullion from the IMF at a cost of $6.7 Billion (USD) while Gold prices are trading at all-time highs!! (2) The Chinese Government is running television promotions encouraging their citizens to purchase Gold and Silver in all denominations to help them protect their new found wealth. China’s economy is ever growing and producing a middle class with an insatiable appetite for the precious metals. This tells me they have no confidence in our U.S Dollar and fear an inflationary future. Hard and tangible assets work as a hedge in times of crisis. Typically they retain their value better than most commodities during inflation. At the end of the day you have Gold & Silver. Unlike many Stocks, Gold and Silver will always have some value!

Mike Daly / Gold Specialist
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