Do you ever ask why we can’t accurately predict growth of say gold, stocks, or real estate?  After all, shouldn’t the economy be a simple prediction since by definition economy is consumption of money, material, and resources.  But the last few years have been nutty and making a once solid commitment could lead a guy to the poor house.  You and I both know this shouldn’t be the case.  Supply, demand, and stability should dictate where we invest and how much.

I’m sure most readers realize by now I’m bullish on gold and silver.  What you may not know is gold and silver is not my first investment choice, heck it’s not even my second.  Today we look at why we can’t predict the economy and why this instability only helps gold and silver holders.

MANIPULATION:

I looked for a weaker word, really I did, but nothing seems to describe it as well as manipulation.  Never in modern times has so much government involvement found its way into economies around the world.  Quantitative easing, bailouts, cash for clunkers, monetizing debt, TARP, and the list goes on.  A major reason why you and I can’t judge a good or bad investment is because so many unnatural influences find their way into our capitalist system.  It is no longer enough to judge a market or business on its own merit we now must see how artificial stimulation will affect value.

Why did real estate appreciate so high only to drop like a rock?  Is now a good time to buy real estate?  Artificially low rates pushed values beyond reality causing millions to pay far beyond true market value.  Now these same folks pay on a home worth less than half the price purchased.  These buyers took the risk and failed but what about others that took no risk at all yet now see their store of wealth, their home, becoming more worthless everyday because of an endless supply of bank owned property?

Not a day goes by without someone predicting gold and silver are in a bubble and will fall, not a chance. The three things manipulation causes is uncertainty, fear, and greed.  I have news for the naysayers, this blend of uncertainty is what pushes real money to the surface and to misjudge the value of precious metals is costly.  Experts do expect huge dips and swings but a bubble, no way.  I mentioned earlier gold and silver are not my first choice(s) but they are my source of savings and here is why.  Physical metal is nearly impossible to manipulate.  They cannot be reproduced, printed, or counterfeited.  Their value is derived without government bailouts, tax payer help, or any other crafty form of manipulation.  Now we are talking physical metal here not paper, just want to be clear.  Can you name another investment that can say the same?  Thanks for reading The Prospector Site.

NEWS WORTHY:

WEEKLY STANDARD:  Obama’s Economists: ‘Stimulus’ Has Cost $278,000 per Job

In other words, over the past six months, the economy would have added or saved more jobs without the “stimulus” than it has with it. In comparison to how things would otherwise have been, the “stimulus” has been working in reverse over the past six months, causing the economy to shed jobs.  Read it here.

NEWS WORTHY:

NASDAQ:  Gold Could See $1,800/oz on Seasonal Strength and Deepening Eurozone and U.S. Debt Crisis

In the U.S. political squabbling over raising the $14.3 trillion debt ceiling continues. However, it is likely to be resolved as the massive liabilities incurred (not including unfunded liabilities of over $60 trillion) simply cannot be paid back. It is therefore likely that more debt monetization (creating money to buy government bonds) will occur leading to further currency debasement and the risk of stagflation and severe inflation.  Read it here.

Tags: bad investment, gold, physical metal, real estate, real money, silver, stocks