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Silver and Gold

During the holiday season, you cannot help but sneak a peek at the old Christmas classics. One of my all time favorites is Rudolf the Red Nosed Reindeer. I cannot help but picture Yukon Cornelius licking his pick ax to taste for the hot commodity, silver and gold. Imagine if I bought that back in the days. Where would I be today?

Here is a quick recap for 2010:

  • Gold is up 26.9% – YTD
  • Silver is up 70.6% – YTD
  • Copper is up 23.6% – YTD

Unfortunately, several things are affecting these hot commodities today. I believe a book would be off-putting to my readers. Therefore, I will pick one major issue that leads me to believe these precious metals may see a little more growth—the persistent debt issues our country is facing. We offer top commodities investments services in Oregon, United States and if you wish to know more how we can help with these hot commodities, contact us.

According to a recent article by Jordan Roy-Byrne, “The government paid $414 billion in interest expenses, which equates to 17% of tax revenue. When you account for $14 trillion in total debt, that works out to be 2.96% in interest. In fiscal year 2007, total debt was $8.95 trillion, but the interest expense was $430 billion and 17% of revenue. That accounts for an interest rate of 4.80%.”

These last few weeks, long-term bonds have dropped, thus creating a huge rise in interest rates. If this continues, then there will be a huge push on the government to act in accordance to its current bleed in deficit. Ostensibly, the government could do several things.

  • Increase taxes to keep up with the high interest rates to pay off the interest expense;
  • Collaborate with the Feds to debase the dollar a bit more to keep the interest rates lower;
  • Incur more debt

It seems any of these options would only push for inflation. That can only lead to higher precious metals values. Understanding the scenario we offer top commodities investments services in Lake Oswego, USA, to help our clients.

For those who want to hear a bit more on precious metals, I am going to host an informational breakfast in early 2011. I will provide details on the current market trends around this sector and how to create a sub-strategy to account for the potential obstacles that we may face in 2011. To RSVP, please call Kimberly Deegan at (503) 747-6534. Please note I am limiting the attendance to 15 people, so please reserve your spot immediately if you are interested in attending.

Jason Gong is an investment advisor representative offering securities and advisory services through Cetera Advisors LLC, member FINRA, SIPC. Lifelong College Savings is not affiliated with Cetera. The views are those of Lifelong College Savings Group and should not be construed as investment advice nor that of Cetera Advisors LLC.

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