The Politics Of Gold And Silver

The politics of gold and silver are changing and, in the long run, the odds favor silver for a greater percentage gain.  Time is running out and things are changing  rapidly that will affect your ability to survive the economic train wreck that is approaching.  The politics of gold and silver are tilting towards silver.

Where We Are Currently

We are very near the point where the scales are going to tip in one direction or the other.  America will recover and go on to bigger and better times, or the big government looters will steal the dream away.  We may see it all begin to unfold this coming Wednesday if the “progressives” decide to ram health care down our throats through the “reconciliation” process.

The political theater that was the health care  summit on Thursday did not go well for the “progressive” party and The Community Organizer In Chief..  They looked and acted like exactly what they are:  a one note Marxist/Socialist gang of revolutionary zealots.

Where We Are Headed

If we are very fortunate, and I seriously doubt that we will be, there is a very minute chance that this government takeover of 1/6th of the U.S. economy will be stopped.  Government brings waste and corruption to everything that it is involved in so why anyone would think that government could “fix” health care is beyond me!

If any part of  the bills produced by the House or Senate is passed into law the U.S. will have submitted to the “enemy within” and venture, head long, down the Marxist/Socialist path to ruin.  The days of slouching towards Gomorrah will be turned into a full on sprint!

Why Gold and Especially Silver, Now?

I have focused on gold for so long that it would appear that I have neglected silver. That was never  my intention.  If gold equates to the large bills of a currency, then silver has always been the smaller bills and change.  Each has it role in the monetary system and as things get steadily worse for the dollar, silver will see a greater percentage gain going forward than will gold.

Gold is holding it value against the rise in the dollar because it is slowly being recognized as the “currency” of last resort.  Soon, silver will be regarded as currency as well.  When that sea change is accepted, silver will have risen dramatically and  it will be off to the races with the average person scrambling on board in order to protect his purchasing power.

The Three Pillars Supporting Gold & Silver

1.  Progressive Economics:

If you read history, you know that Socialist states always inflate their fiat currencies. Make no mistake about it, the progressives that are  currently in control of the U.S. government are Marxist/Socialists.  The Community Organizer In Chief and those that surround him are ideological zealots that truly want to fundamentally “change” America.  Whether you are conservative or liberal, this should concern you because the dollar that you spend is going to become worth less, if not worthless.

Protection of wealth is non partisan, or it should be, unless you are so brain dead that you can’t see the forest for the trees.  The purchasing power of the dollar,  its value, is being diminished at an alarming rate.  The current dollar expansion through deficit spending, makes the Carter deficit spending look like the “good old days’” when compared.  Those of you that lived through that period saw those policies lead to precious metals bull market of the late 70s.

The current gang of looters running the U.S. government have presided over the largest expansion of dollars in the history of the U.S. since its founding, and they have done it in just one year.  As soon as the American people wake up, and it appears that they are currently in the beginnings of that process, the precious metals will go through the roof!

2. This Move Is Just Beginning:

Gold and silver are in the beginning stages of this bull market. If the bull market in precious metals of 1973-80 era is used as a yard stick,  then the gains that are to come will be far greater in the current bull because the dollar creation currently dwarfs that of the last bull market in precious metals.  This bull market in gold and silver will see the total destruction of the U.S. dollar and most fiat currencies as well.

This is the stuff that the current move for “change” is all about and it will produce a revolution in how the public views money and everything about it.  We found out that a house is not a reliable store of value, and we are about to find out the the dollar isn’t either!

3. Gold and Silver are, and Have Always Been,  A Reliable Store Of  Wealth:

History has recorded that every time a fiat currency is inflated, gold and silver have become  hugely profitable investments, and in the extreme cases, the only surviving currency.

There is no doubt that we are headed into a period of hyper-inflation, the likes of which Americans have never before experienced.  The progressives in both political parties and the Community Organizer In Chief, have all but guaranteed this outcome.  Now it is up to us to navigate our way out of the coming financial tsunami.  Gold and silver are the tools that will enable us to survive what is headed our way.

Santayana said it best in The Life Of Reason, Volume 1, in 1905:

Those who cannot remember the past are condemned to repeat it.

Here are a couple of news items that point to the theory that the next world super power, China is growing weary of supporting our debt.  Currently these are rumors, but soon we will learn the facts of the latest IMF gold sale.

China To Purchase Half of IMF’s Gold

Source: Pravda.RU

China has confirmed the intention to purchase 191.3 tons of gold from the International Monetary Fund at an open auction, Finmarket news agency said.

World central banks started to increase their gold reserves after prices on gold began to climb in 2001. The IMF sells gold within the scope of a program to diversify sources of income and achieve an increase in lending.

The IMF announced an intention to sell 403.3 tons of gold in accordance with the adequate decision made by the board of directors of the fund in September of 2009. India, Mauritius and Sri Lanka purchased about 212 tons of the amount at the end of 2009. India purchased almost  200 tons.

China’s interest in international trade is connected with the development of the nation’s economy, as well as with the growing consumer demand in the country.

Chinese officials have confirmed previous announcements from IMF experts and said that the purchasing of 191 tons of gold would not exert negative influence on the world market. China is interested in the development of the domestic consumer market, the agency reports.

Most of Chinese citizens believe that investing in gold jewelry is a good way to avoid inflation, Rough & Polished agency said.

The IMF has received the profit of $7.2 billion from gold sales. A part of the funds is to be used for crediting poor countries.

Reuters is on the trail with this piece published Friday, Feb. 26.

China must be long-term gold buyer – govt researcher

By: Reuters & Edited by Reuters

26th February 2010

BEIJING – China has to keep buying gold over a long period and any price fall will present a good buying opportunity, Xia Bin, head of the financial institute of the Development Research Centre, a think-tank under the Cabinet, said on Friday.

“The long-term strategy should be very clear, that is, China has to keep buying gold; but the detailed timing should be decided by the price curve,” Xia told reporters.

China had to increase its gold reserves to underpin the yuan’s international role, he said.

But he declined to give details on when China should buy.

“It is not my job to judge whether the price is low or high,” he said. “But price is a relative thing – the price is high now compared with before, but for the future, who knows? It may rise to $2 000, who knows?”

He had no idea if China would buy the 191 t of gold being offered for sale by the International Monetary Fund, but said China should be open to both buying in the international market and investing in overseas gold mines.

His call for investment in foreign mining projects echoes comments by an official from the China Gold Association, who was quoted by the China Daily on Wednesday.

The politics of gold and silver are rapidly changing and the potential for profiting from this sea change are immense, but the most important factor now will be surviving what is coming at us rather than profiting from it.  Silver offers the best chance for both preservation of wealth and for profit going forward.  The reason for my position is quite simple.  More people can afford silver than can afford gold!

When the public finally becomes aware of the reality of the politics of gold and silver they will flock to both, but do to the higher cost of gold, more will move into silver which will dramatically increase silver’s percentage gain over gold.

Till next time, good luck and good trading!

More Gold Market Analysis:

• Gold And Silver Are The Answer!
• Silver Versus Gold
• Silver Lining!
• The Silver Christmas Present
• Silver: Poised To Move!

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