this is from timothy silvers:

It is hard to see a bearish picture for gold and silver right now. Even Switzerland, whose Franc has almost been considered as good as gold, recently devalued their currency over 7% in one day against the Euro. In the recessionary global economic environment in which we find ourselves, nations are competing against each other to devalue their currencies in order to make their exports cheaper. It is a sad game in which the citizens of those countries end up the losers as the purchasing power of their currency declines. Ironically, most countries want to devalue against the dollar, because the US is such a big importer. That has provided strength to the dollar even though grim economic news would make one think that the dollar should drop in value. The dollar may remain relatively strong for a while longer, but that will not hurt gold and silver. Investors are waking up to the game of competitive currency devaluation and other measures governments are using to decrease their currencies’ purchasing power.

Longer term outlook for the dollar is pretty poor, as the federal government is creating money out of thin air as if by magic. The projected budget deficits and implied increase in the public debt are astounding, and I think their budget numbers are wildly optimistic. Where on earth is the money going to come from to pay back the debt??? They are inventing new ways to increase the money supply in a vain (I think and hope) attempt to get people hooked back on debt addiction. It is not that I want to see more suffering in the US and world economy, but we are simply reaping the whirlwind of 30 years of debt and consumption based “growth”. That type of growth is unsustainable and the government would do better to refocus its efforts on figuring out how to keep the US competitive with the rest of the world, rather than trying to prop up housing prices and encouraging people to buy using money they don’t have. My hope is that people have learned their lesson and will chose savings over debt, and will find more meaningful things in life than materialistic consumption.

The competitive devaluation of major world currencies, the ballooning US public debt, and continuing economic uncertainty are three good reasons why you must own gold and silver. You can be sure that we have not seen the last of the bad economic news. Banks are still sitting on potentially large loses in consumer debt and commercial real estate. About a quarter of Americans owe more than their house is worth. Housing prices have not bottomed and the number could reach 50% of people upside down on their mortgage by the time it’s all said and done. It may be many years before prices have increased enough for owners to sell their house and break even, let alone make a profit. You have to wonder how those people are going to get out from that mess when they are eventually forced to sell. Most likely they’ll walk away, go into foreclosure, declare bankruptcy, and end up renting. If you have the capital, building a portfolio of good rental properties will probably be one of the best investments of the next five to ten years. I’m getting a little off the topic of gold and silver, but it is important to know that as long as banks are forced to take losses on bad debts, they are going to be tight with their lending capital and economic recovery will be slow. Some have said that gold and silver are insurance that you hope you don’t need but you are glad you have if you do need it. We are now at the time when you need to have gold and silver insurance for your financial well being.

http://www.silverbrothers.com/032209...