One of the primary reasons to invest in gold and silver is because of "Fiat" currency inflation. Since the inception of the Federal Reserve in 1913 our currency has not been backed by Gold or Silver reserves but instead by the full "Faith and Credit" of our Government. Looking at a $1 bill recently I tried to find this inscription on it... guess what... I couldn't. I did find "This note is legal tender for all debts public and private" and also "In God we Trust".
Basically as long as someone is willing to accept it, it is good. At what point in time though will individuals stop accepting the US Dollar?
Foreign banks and governments have already begun to diversify out of the U.S. Dollar.
Bloomberg.com: Gold Trades Near Record as Indian Central Bank Buys From IMF, By Claudia Carpenter
WSJ.com: India Buys 200 Tons of IMF's Gold Allotment - Move Seen as Effort to Diversify Reserves Away From the Dollar, BY ABHRAJIT GANGOPADHYAY AND ELISABETH BEHRMANN
Gold101.com: China Buys its Own Gold, By Dan Denning
You can do a Yahoo or Google search on the " {name of any foreign government} buying gold" and get some kind of hit. Alot of these governments are forgoing their "traditional" purchases of US Treasuries and buying precious metals instead.
1) With the 2009 bailout and now the passage of ObamaCARE, we will see the continued decline of the US Dollar as our national debts pile up and no one wants to buy it.
1a) The US Goverment will soon be paying more to borrow than many US Corporations.
2) Continued purchase of metals by foreign governments will continue upward pressure on the prices of precious metals.
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Mar 29, 2010 - Why invest in Gold and Silver?
10-01-2011