Gold and Silver Prices - Climbing Higher Every Year

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Another strong month for gold and silver prices, with gold sticking around the nine hundred dollar range and silver piercing fourteen dollars an ounce.

Now more than ever, it's simply a good idea to hold some gold and silver investments. Gold and silver prices are high right now, and all evidence points to the probability that they have yet to peak.

The gold and silver investors who chose to begin investing in the metals a few years ago, before the recession was made "official" are experiencing quite a nice profit on their investments, but even those who were a little late to catch the gold rush are patting themselves on the back all the same.

Of course, these boosts in gold and silver prices come as no surprise to anyone who knows a little bit about economics. Ever since we were taken off the gold standard, the value of a dollar has been in a constant state of up and down, while the value of gold and silver remains essentially the same in a basic sense.

Of course, the dollar value, the actual gold and silver prices go up and down at the same rate as the dollar, only inverted, so to justify the above statement... there's only so much precious metal in the world. Therefore, the actual, literal value of an ounce of gold is always going to be an ounce of gold. Just as a loaf of bread is only ever worth as much as a loaf of bread is worth, an ounce of metal is only ever worth an ounce of metal.

The dollar, on the other hand, who knows what it's really worth? The actual value of a dollar is, well, the paper it's printed on, and that's it. The only practical purpose a dollar can ever have is that you could bleach it and use it to take notes on. That sounds crazy, but think about it: A penny contains more than a penny's worth of copper.

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Now... ten years ago, you could buy a hundred page notebook for fifty cents. Now, it's a couple dollars. At this rate, in ten more years, a notebook will be in the area of eight dollars. If the rate of inflation keeps quadrupling the price of a notebook every ten years, then eventually, it'll be cheaper to just write on money!

So with that in mind, here's something to remember about gold and silver prices: They have almost nothing to do with actual gold and silver value.

Gold and silver prices may be a rough approximation of their actual value, but the actual value of an ounce of silver is, again, an ounce of silver.

As such, it would be wrong to look at the gold and silver prices and say "gold is up". Gold isn't up, gold never becomes somehow significantly more or less rare than it currently is. So when gold and silver prices go up, their actual value is not going up at all, but rather, the value of a dollar is going down.

In other words, the dollar, initially intended to be nothing more than a certificate used as a placeholder and tied to the value of gold, has become an entity all its own. Since we took it off the gold standard, it simply has not been reliable.





Unfortunately, the dollar is what makes the world go 'round. You can say "I don't like cash, since it's unreliable", but how are you going to pay bills? We don't really have a choice but to go along with the same crazy notion that everyone else has to buy into; that paper money actually has any value whatsoever.

It's almost an existential question of doubt. We hand someone a dollar believing that it's worth something, and hoping that they believe that it's worth something, when in fact, we're all entertaining a fiction and we know in our hearts... it's just paper.

So... that's where gold and silver investing comes in. You can rely on the paper dollar to hold some abstract "value" when you buy a bottle of Coca Cola or put some gas in your car, but you can't rely on that value to be the same ten years from now.

So... silver isn't worth about fourteen dollars an ounce right now. Silver is worth its weight in silver, and it always will be. That's how you measure real money.

Learn how to track gold and silver prices with http://GoldSilver.org and receive your free "2009 Insider's Guide To Precious Metal Investing."

Article Source: http://EzineArticles.com/?expert=Arthur_McGuire



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Buy Gold and Silver Now - 7 Valid Reasons to Be Investing in Silver and Gold Bullion

One would think, from the recent action in the financial markets, that all is well in the world once again. Let's see - the price crude oil has now plunged 20% from its recent record high of $145 a barrel. Stocks are rallying. The dollar has firmed.

Experts are now saying that the real estate market has bottomed. The commodity bubble has burst. Oil is on it's way down to $100 a barrel. And the year-long credit crisis, housing slump and economic slowdown will soon be a thing of the past. The future is so bright you gotta wear shades, right?

Not so fast.

Before you rush out and trade your precious gold and silver for depreciating paper dollars, take off those rose-colored glasses and examine the real facts behind the hype. Here are seven valid reasons to be investing in silver and gold bullion:

1. The Weak Economy Is NOT Improving

Retail sales for the month of July were disappointing.

Wal-Mart's 3% same-store sales growth came in below expectations. Yes, Costco's results were the one bright spot - up 10%. However, when you dig into the details, you'll discover that the reason for the strong growth was the increase in gasoline sales. Back those figures out and sales were up only 6%, less than consensus estimates! Notably weak were the sales results of teen retailers. This doesn't bode well for back-to-school sales in August. Looks like a lot of kids will be returning to school, wearing last year's garb!

2. The Employment Picture Is BLEAK

Jobless Claims rose to 455,000

That's up from 448,000 the week before. Look for that figure to go up as job cuts by U.S. employers soared last month. Layoff announcements are up 141% from a year ago, according to private placement firm, Challenger, Gray, and Christmas, Inc. That's on top of the gloomy news unemployment figures reported by the Labor Department last week. The U.S. Economy has now lost jobs for seven straight months and the unemployment rates is at a four-year high.

3. Financial Markets Are STILL Unstable

Freddie and Fannie are seeing red.

Both Freddie Mac and mortgage giant Fannie Mae missed earnings estimates by a wide margin, reported huge losses, and slashed their dividends. If that wasn't bad enough, Freddie Mac now has a negative equity position. Translation: shareholder would get absolutely nothing if Freddie were to pay down all of its debt and sell its assets. Fannie Mae's CEO predicts 'significant' losses in 2009 and will no longer purchase Alt-A mortgages, by year's end. These horrendous results increase the likelihood of a big government bailout.

4. The Housing Market Has NOT Bottomed

Mortgage delinquencies are getting worse.

Mortgages that were issued during the 1st half of 2007 now have a delinquency rate of 0.91%. The delinquency rate for 2006 mortgages was 0.33%. These are prime mortgages, folks. It has been estimated that 65% of sub-prime loans originated in 2007 will end up in default. These figure suggests that housing foreclosures will remain at record highs.

5. Inflation Is WORSE Than It Appears

The inflation monster is alive and well.

The consumer price index (CPI) is up 5% through June. That is the biggest one-year increase since 1991. That figure is even worse than it appears. During the Reagan and Clinton terms, the way that rising inflation was measured was changed, in order to lower the official rate. If you calculate the CPI in the same manner that it was calculated in 1980, you would have to add 7% to whatever the published figure is. That would mean that the true rate of inflation is running 12%. No wonder the average guy in the street is hurting! Investors are betting that the drop in oil prices will tame the inflation monster. However, even with the recent correction oil prices are still up 61 percent from where they were a year ago.

6. The Fed Will NOT Raise Interest Rates To Combat Inflation

The Federal Reserve is stuck between a rock and a hard place.

As expected, the Federal Reserve held its fed funds target rate at 2%. The accompanying statement also reflected a rather dovish tone. The phrase 'diminished downside risks and increased inflation expectations' from the June 25th statement was nowhere to be found. Fed funds futures are now pricing in just a 52% chance of a rate hike during the next to FOMC meetings. That's a fall from a prediction that was as high as 80 percent last week! Pimco's Managing Director Bill Gross said that rate hike talks are 'comical:'

"We're in a recession. When has the Fed ever raised rates in a recession?" he said. "Unemployment is headed toward 6 percent, mortgage rates on home buyers are at 7 percent, and these guys want to raise rates?"

7. Global Tensions are HIGH

Georgia's Offensive Move Is Risky

War broke out on Thursday in the strategically important area of Georgia, over control of South Ossetia. The price of oil seemed to take the situation in stride, doing absolutely nothing at all. At risk, however, is an international pipeline that runsclose by, not to mention the possibility of the conflict setting off a wider war.

Gold and silver are now at their lowest level in six weeks, giving investors the perfect opportunity to buy. If you are still unconvinced that you should be investing in precious metals, just remember this: History has provided us with many examples of paper money whose value has been destroyed. But, gold and silver have survived war, inflation, deflation, recession and depression. Silver and gold bullion are truly a safe-haven for those smart enough to realize their true value.

There's no reason you should be losing sleep over the security of your money. You can protect your hard-earned savings from bank failures, financial catastrophes, and the devastating effects of high inflation with pure silver and gold bullion coins

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Article Source: http://EzineArticles.com/?expert=Christina_Goldman