Why gold and silver will ultimately prove to be the best safe haven assets in the coming financial storm

Monday, October 29, 2012
By Paul Martin

By: Peter Cooper
Monday, 29 October 2012

Suddenly the calm is over and the storm is upon us, at least in the North West USA if not yet in financial markets. That said the trouble brewing in those markets looks about to turn into a once-in-100-year storm too.

US political instability is a frightening prospect but that looms large with a very close race for the White House and uncertainty over the composition of the legislature after the elections on November 6th. The automatic austerity of the US ‘fiscal cliff’ on January 1st is far from being automatically avoided and markets loathe this sort of uncertainty.

Debtors prison

At the same time the crisis in the eurozone is about to blow up again with Greece once more facing default and Spain on a knife-edge. Each time the eurozone crisis intensifies it gets bigger in size and the solutions look less realistic. But then as the US experience shows that is what borrowing more to meet problems caused by over borrowing does to an economy.

Asia is also no safe haven with Japan and China both facing economic crises, not unconnected to the downturn in global demand particularly in the eurozone. Suddenly the whole house of cards looks very vulnerable with the winds blowing hard from all angles. Hurricane Sandy is something of a metaphor for economic reality.

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