World Economic Outlook

The presidential election is coming up this Tuesday and the world is fixed on the results of the election. Whether it be Obama/Biden or Romney/Ryan doesn't matter... because there's a lot of work to be done and no one man will be able to change the economic outlook for the US or the global economy. The International Monetary Fund (IMF) just released its assessment of the global economy and identified two critical issues that could effect the recovery of the global economy. The euro-zone crisis and the "fiscal cliff" threat faced by Europe and United States, respectively.

Europe needs to contain its money woes and increase stability for its currency. The country is experiencing "capital flight" where the money is leaving the country in search of a safe haven. Normally, the United States would be a sure safe haven but we also are experiencing our own woes in the form of pending tax increases, raising the debt ceiling (for about the 11th time in 8yrs), and automatic spending cuts. The United States has raised its debt ceiling for over 140 times since 1940 - Office of Management and Budget.

The World Economic Outlook report can be found here: http://www.imf.org/external/pubs/ft/weo/2012/02/index.htm

The IMF expects advanced economies to grow at least 2% - which the US has done, but unfortunately most of America's growth is due to government spending on mostly military goods/services. Which is somewhat interesting since the spending has been done right before an election year. Nevertheless, unemployment remains high and companies continue to hoard cash due to uncertainty running amok in the marketplace.

A Solution for You: There is a way for you to take advantage of this situation for your own benefit. Invest in commodities such as oil and agriculture products. Investing in commodities is how you can make some money no matter who's elected or if the economy turns up for the better or turns down for the worse.

If the economy gets worse, central banks will print even more money trying to stabilize the global economy... the result of their printing will devalue the currency and cause prices to increase. When prices increase your investments increase. If the economy gets better, then the increase in demand for commodities will increase as people will have more money to spend and corporations will need to use more resources for expansion.

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How Gold and Silver Provide a Safe Haven in Today's Troubled World

The reasons for holding precious metals as a relatively safe haven for one's personal wealth are numerous.

One common investing thesis for buying precious metals is that these intrinsically valuable commodities can hold their value in times of rising price levels. This characteristic can help American savers keep pace with credit expansion and paper currency debasement.

Diversify Out of the Dollar

For example, precious metals can provide a safe haven in terms of the diversification they offer relative to holding U.S. Dollars in cash or Dollar-denominated assets.

Physical gold and silver investments can take up a core position in an investment portfolio since they offer an easy way to have some wealth stashed out of Dollar-denominated assets. These hard assets also provide a viable alternative to holding foreign currencies or foreign equities.

Basically, precious metals allow investors to engage in a new way of thinking, where investment priorities are anchored to real value and permit advance planning for troubled times.

When the Dollar Bubble Bursts

In much the same way that market bubbles have been blown in various asset classes over the last 40 years, largely via Fed sanctioned interest rate manipulation, the overvalued U.S. Dollar seems like yet another bubble waiting to burst.

Basically, the value of silver has been artificially deflated in U.S. Dollar terms via price control implemented using contracts traded at global futures exchanges.The symbolic investigation of this so-called conspiracy by the CFTC just passed its fourth year.

Under priced assets like silver will eventually lead the way back to what will very likely be the largest bubble the world has ever seen. The U.S. Dollar and the U.S. bond market appear destined for a long overdue crash.

Various factors point to this outcome. They include such things as: intrinsically worthless paper wealth, high frequency trading, a world where MF Globals can exist, the threat of taxation, and rampant money printing - otherwise known as Quantitative Easing.

Competing With the Banks for Credit

Major international banks have benefited disproportionately compared to the individual investor from credit expansion in recent years. Banks enjoy better profits from cheap money and can buy future cash flows very inexpensively.

Meanwhile, consumer credit has contracted leaving consumers holding the bag in many cases. People are also unable to consume as much because of a rise in general price levels and the failure of the troubled financial system to purge itself of bad debt.

If at any point the American consumer and banks are equalized with additional credit infusions, the tide will then begin to turn. Consumers can then free up more discretionary income as America goes back to work.

Nevertheless, until the two groups are made equal, credit will neither expand nor contract. Instead, credit supplies will stay constant, although prices will continue to rise relative to consumer incomes.

Precious metals provide a safe haven investment that can often help compensate an investor for such price rises. Furthermore, if at any point the system balances and allows for credit expansion to extend to Main Street, then precious metals investors will typically benefit.

For more articles like this, and to stay updated on the most important economic, financial, political and market events related to silver and precious metals, visit http://www.silver-coin-investor.com