How much longer is it going to take before the debt factor inside the euro crisis has reached its limit? Is this whole house of cards about to burn down? Will it be the Germans who ultimately have to pay for the fiscal mistakes that other euro nations made before the fires begin?
The Spanish bonds most surely will hit levels that could exceed seven percent very soon. Greece could possibly still keep the euro, knowing all well that the austerity measures will not be able to last into the foreseeable future. While Cyprus keeps getting dragged down under enormous amounts of debt, now equal to that of Iceland which is another foreseen hot spot.
Global Economies In Dire Straits
Furthermore the corruption that has been coming out of the eurozone over the sovereign debt crisis is unmistakably obvious to the world’s economies already. Job data within the United States is terrible it’s inexcusable. Inside China you’re seeing lots of stalling tactics and nonsense when it comes to official data that comes out. Don’t forget Japan, UK and several other countries within Europe that are also in recessions.
One important thing to remember is the underlying factors that started the global crisis in the first place. These factors amounted to excessive amounts of money and debt within the global economy. Simply put, excessive money will force up asset prices. On the other hand the destruction of debt or deleveraging will force money out of the monetary system all the while taking asset prices down with it. The bailouts over the past three years are coming apart because they were supported by artificial prices to begin with.
The matter for investors now is to choose where their money should go. It can be a tricky decision when certain asset classes such as stocks or real estate keep losing value. Bonds appear to be in more favor to investors lately. But with all that has been happening within Greece and Spain, bonds truly are one of the worst investment classes now to get into for future asset protection.
Now many investors seem to be channeling themselves into smaller asset classes notably gold and silver. The best part of this investment is that this is true money. These precious metals offer no counter – party risk. No central bank that can print these metals for monetary manipulation to devalue their true worth. They also double as an insurance policy. Offering protection to the investor from monetary inflation continuously being created by the central bankers the world over.
To time the market moves within the gold and silver markets is difficult. For those wishing to invest in precious metals it is advisable to invest in physical metals only. Stay away from any and all precious metal paper assets. Next you must plan to hold these investments for the long term. Buy on price dips and at timely intervals such as monthly, if possible. This allows you to dollar cost average the price over the entire investment period.
Many experts do agree with analysts who have a keen sense for detecting precious metal market bottoms. When bottoms do occur, you can bet the bottoms inside stocks will be much lower. In an upturn market silver most always performs better than gold. However it performs worse when the market reverses itself. This could possibly be due higher price manipulation within a smaller market. For whatever reason, it is safe to say one can have confidence that when gold prices rise silver will still outperform.
Tom Genot -