With the stimulus package, the Federal Reserve has injected the currency of the US into a recessionary economic situation, as its dollar and gold prices plummet. However, if the economic recovery continues, the precious metals will once again soar in value. In addition to that, the current US economy will also see further gains from the stimulus package, which will eventually pay off in its full impact.
So why do gold and silver prices are so vulnerable? Well, in the past two years, both the US Dollar and the Euro have experienced a sharp depreciation in value, and many investors have begun to worry that the dollar may soon lose its reserve status. This will mean that gold and silver can no longer be used to back up the value of the dollar or any other international financial currency. Instead, investors would have to rely on the other valuable commodities in order to secure their assets and secure their monetary base.
In the end, when the market sees that the US is able to keep its currency status intact, it will naturally see that the stimulus package and the overall economic outlook are not going to hurt the economy too badly. However, for those who have taken out massive debts through credit cards or loans, this means that they might be looking forward to having their money repaid to them, which might prompt the government to step in and take a hard line on spending.
The best way to avoid this situation from occurring is to buy gold and silver when there are still an appreciating economy and the stimulus package still holds some hope of being implemented. When the global economy is still growing, investing in gold and silver will allow investors to make some good profits without worrying about the future of the US dollar.
On the contrary, the US will continue to lose its place as a major player in the economic recovery process, as the debt problems persist. Furthermore, the Federal Reserve has already said that they will not be in a position to continue printing the currency required for the US economy in the future. As a result, there will be some inflation, which will in turn cause the value of the dollar to depreciate and the purchasing power of the dollar will start to decrease. When the dollar begins to devalue, then gold and silver can start to rise in value.
Therefore, investors need to make sure that the economic recovery continues to continue, otherwise they are better off to invest in gold and silver than risk losing everything that they have worked so hard for. They can also make a lot of money by buying up gold and silver during these troubled times.
However, the package is a one-time deal, which means that once the package has been implemented, the US will have the ability to print more money to finance its deficit and the economic recovery will never slow down. In fact, the current economic recovery will only improve, so the price of gold and silver will only rise, because the value of the dollar will increase.
This means that it will become more attractive to investors, especially as the Federal Reserve is not going to make such a big deal to reduce their holdings of the currency, which is a way to prevent the dollar from falling too far. Instead, the US will continue to keep its position as a world leader in the mining and metals industry. At the same time, the gold and silver that the US pays for its dollar will rise in value and become more valuable as the economic recovery improves, thus ensuring that investors can make a fair profit as long as the package continues.