Silver Investing And The Coming Gold Frenzy

Long term, both gold and silver will do very well as investments as the imminent disaster in the world economy continues to unfold. The prices of both gold and silver will appreciate faster than inflation eats away at the value of other asset classes; much faster. As the middle classes in the developed nations realize what is happening to their buying power and retirement savings, there will be a mad rush into gold. There will be a buying frenzy; people will be going after gold like passengers on the Titanic went after a seat on a lifeboat. And just as there were not enough lifeboats to go around on the "unsinkable" Titanic, there is not enough gold to go around.

Once the Titanic hit the iceberg, there was no way to save it. In the 2011 budget debate, the United States congress did not resolve to reduce, or even cap, the increase in public debt. The U.S. economy is doomed to sink. And it will take the rest of the world economies down with it.

The United States' Gross domestic Product (GDP) is 23% of world GDP, even though the population of the U.S. is about 5% of world population. When interest payments on the public debt spiral beyond hope of repayment, U.S. Treasuries will no longer be the safe haven they have been for decades. That is when gold buying will quickly reach frenzy levels, and the price bubble of gold will begin to inflate. It will continue to inflate for years. Don't believe those who tell you that the price of gold is already in a bubble, or that each new high is the peak, never to again be reached in your lifetime. Consider how long the dotcom bubble lasted, or the real estate bubble.

The big money will react more quickly than the public. And the big money will go for gold, not silver, because at current prices, there is only about $9 trillion of physical gold above ground. There is not near enough to go around-to protect the scores of trillions that will be seeking safe haven from inflation and falling markets. There is only about $40 billion of physical silver though. That is less than