Gold and Silver Stocks - Why Are They More Important Than Ever?
The answer to this lies with Gold itself, and it's relationship with the US Dollar.
As long as men and women have traded currency, money has always had firm, intrinsic value - meaning that it was always worth "something".
Just like a house - people will always need shelter, and therefore houses will always have built-in value.
If big-time inflation hits, the value of the house goes up with it, and the same is true of gold.
In 1971, United States President Richard Nixon took the United States off the Gold Standard - which meant that the US could print as much money as it wanted.
It no longer had to have an equivalent amount of Gold held in reserve.
This set the scene for the United States to print unprecedented amounts of money to pay for the Vietnam War, and - more recently in 2008 - to bail out automakers and mortgage companies.
In fact, more money has been printed in the Obama bailouts than the entire money supply of the United States before that.
Yes - that is correct - the money supply has more than doubled.
We've seen a spike in the price of gold because of it.
In 2007 the price of Gold was under $700/ounce; today - unsurprisingly - Gold is trading around $1400/ounce, which is almost double.
This makes sense seeing as the money supply was doubled by Barack Obama.
With the fast rising price of Gold, and news that more money is going to be printed by Barack Obama and Ben Bernanke of the Federal Reserve, the demand for precious metals is poised to climb further.
And Gold is not alone - Silver, Platinum, Palladium and other precious metals are also poised for great gains.
All of this only increases the demand for precious metals, and therefore makes it more and more profitable for the companies that explore, mine, refine, and retail these precious metals.
Hence why gold stocks, silver stocks, and other precious metal stocks are in a strong position to see gains in the coming months and years.
So what can you do to take better understand all of this? To begin with, understand the relationship of the U.
S.
Dollar vs.
Assets that have intrinsic value like real estate, gold, or silver.
You will see that even though it seems as though overall wealth has increased (looking at average household income), the reality is that it has actually decreased.
A home that your grandparents purchased for $20,000 eighty years ago might now be worth $350,000, while household income hasn't risen at the same pace.
The difference right now between gold/silver and real estate is that lenders are very shy to loan money for real estate purchases, and there is a vast oversupply of housing right now due to all of the foreclosures that have happened in the wake of the Fannie Mae and Freddie Mac disasters of 2007-2008.
Thus we turn our attention to Gold Bullion, and Silver Bullion, as well as the companies responsible for the exploration, mining, and refining of it.
Stocks in these companies are therefore very attractive for these reasons.
As long as men and women have traded currency, money has always had firm, intrinsic value - meaning that it was always worth "something".
Just like a house - people will always need shelter, and therefore houses will always have built-in value.
If big-time inflation hits, the value of the house goes up with it, and the same is true of gold.
In 1971, United States President Richard Nixon took the United States off the Gold Standard - which meant that the US could print as much money as it wanted.
It no longer had to have an equivalent amount of Gold held in reserve.
This set the scene for the United States to print unprecedented amounts of money to pay for the Vietnam War, and - more recently in 2008 - to bail out automakers and mortgage companies.
In fact, more money has been printed in the Obama bailouts than the entire money supply of the United States before that.
Yes - that is correct - the money supply has more than doubled.
We've seen a spike in the price of gold because of it.
In 2007 the price of Gold was under $700/ounce; today - unsurprisingly - Gold is trading around $1400/ounce, which is almost double.
This makes sense seeing as the money supply was doubled by Barack Obama.
With the fast rising price of Gold, and news that more money is going to be printed by Barack Obama and Ben Bernanke of the Federal Reserve, the demand for precious metals is poised to climb further.
And Gold is not alone - Silver, Platinum, Palladium and other precious metals are also poised for great gains.
All of this only increases the demand for precious metals, and therefore makes it more and more profitable for the companies that explore, mine, refine, and retail these precious metals.
Hence why gold stocks, silver stocks, and other precious metal stocks are in a strong position to see gains in the coming months and years.
So what can you do to take better understand all of this? To begin with, understand the relationship of the U.
S.
Dollar vs.
Assets that have intrinsic value like real estate, gold, or silver.
You will see that even though it seems as though overall wealth has increased (looking at average household income), the reality is that it has actually decreased.
A home that your grandparents purchased for $20,000 eighty years ago might now be worth $350,000, while household income hasn't risen at the same pace.
The difference right now between gold/silver and real estate is that lenders are very shy to loan money for real estate purchases, and there is a vast oversupply of housing right now due to all of the foreclosures that have happened in the wake of the Fannie Mae and Freddie Mac disasters of 2007-2008.
Thus we turn our attention to Gold Bullion, and Silver Bullion, as well as the companies responsible for the exploration, mining, and refining of it.
Stocks in these companies are therefore very attractive for these reasons.
Source...