Gold and Silver Stay Strong as Fiat Currency Puffery Continues

AmericanMonetaryAssociation.orgAs the calendar turns from 2010 to 2011, gold and silver show no sign of relenting in their charge up the price charts, and who could blame them? With the United States stalwart determination to continue printing fiat currency, investors, and even average citizens, have felt the urge to stock up on something that has retained value through the worst humankind has seen fit to throw its way – wars, pestilence, daytime television.

While most experts say gold will trade in the $1,500 to $1,800 range over the next five years, some predict it will go to $2,000 and beyond, dragging the much lower priced, though still soaring in value, silver, along for the ride. Judging from the fact that gold has averaged an 18% return over the past decade, while silver has clocked in at an even more impressive 24% over the same time span, it appears that the people are choosing with their pocketbocks what they consider to be good investments, and it’s not fiat currency.

It actually is quite a good time to be investing in assets with real value, like gold, silver, and real estate, considering that you can use an “asset” that has little to no intrinsic value (the United States dollar) and purchase assets with real lasting value (precious metals and property). From our perspective, it makes sense to get in while the getting is good because, considering the continued economic plan of attack intended to be undertaken by the Federal Reserve and Treasury Department, the dollar isn’t going to do anything but continue to devalue. We might eventually reach the day, as they did in the Weimar Republic and Zimbabwe, when hyperinflation plunged the national currency to the same approximate value as toilet paper.

Our suggestion? While you might as well continue to transact you daily business in currency, since gold nuggets haven’t returned to mass acceptance, it would be a good idea to begin stocking your private “bank” with gold, silver, and property reserves while Uncle Sam’s fiat currency still has any value at all. Some day, we’re all going to wake up to a nasty surprise, except that it should come as a surprise to no one. To those who refuse to learn the lessons of history, get ready for a stark repetition.

The American Monetary Association Team

Flickr / mae.noelle

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