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Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

Where Silver Trumps Government Central Planning

Commodities / Gold and Silver 2012 Jun 11, 2012 - 08:21 AM GMT

By: Dr_Jeff_Lewis

Commodities

The current worldwide political landscape is full of examples where the politics and economy connect. 

In fact, economic policy is largely driven by politics in most countries around the globe.


The European Union Replaces Democratic Leaders With Technocrats

In the European Union, technocratic leaders are gradually replacing those who have been democratically elected.

This sets up a “Which came first, the chicken or the egg?” situation in terms of EU monetary union versus a considerably more challenging objective of an integrated European cultural union.

One step toward a more unified Europe would be the imposition of centralized monetary policy on the currently economic union of culturally diverse nation states. Once again, altering nature proves challenging, if not futile.

Election Year in the United States Drives Monetary Policy

A major factor in the economic landscape of the United States this year is the upcoming U.S. presidential election in November.  The election year mentality is often considered a driving force behind monetary policy as the key election date approaches.

Interestingly, the vast majority of energy and resources at the Federal Reserve’s FOMC monetary policy meetings seem to be directed toward an essentially political message.

Politics has a remarkable tendency to morph into a situation that ultimately serves the politicos and their puppet masters who work behind the scenes. Political objectives are usually facilitated and politicians influenced via substantial campaign contributions. This provides wealthy people and large corporations with the means of corrupting a political candidate to serve their purposes.

This political connection helps explain how monetary policy and planning have become so utterly disconnected from common sense.

Quantitative Easing Debases Paper Currencies and Makes Silver Attractive

The people of the developed countries — such as the United States, Japan and Britain — that have engaged in huge quantitative easing programs in the wake of the post-2008 global recession are now simply awaiting more money printing in the hopes that it will improve their respective economies.

Yet more and more QE is needed since each round of easing has a diminishing return in terms of the economic stimulus it provides. Of course, this policy also leads to the debasement of the domestic paper currency relative to hard currencies.

Investors are therefore forced to seek alternatives to paper currency to store their wealth for the future. Unfortunately, most of the alternatives are bets, rather than sound investments.

In this challenging investment environment, silver has become, in the words that Kyle Bass made famous, every man's bet against the stupidity of central planning.

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 www.silver-coin-investor.com

By Dr. Jeff Lewis

    Dr. Jeffrey Lewis, in addition to running a busy medical practice, is the editor of Silver-Coin-Investor.com and Hard-Money-Newsletter-Review.com

    Copyright © 2012 Dr. Jeff Lewis- All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


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