Today I would like to talk about all the bankruptcy going on in the retail world and the affects it may have on precious metal prices. In 2008 the united states plunged into an economic recession, the worst since the great depression. Consumer spending decreased dramatically after the housing bubble burst at 8 trillion dollars. People were simply not going out and purchasing aimlessly. They were holding on to whatever of their wealth that they could. Decrease in consumerism directly affects the state of a nations economy. The state of a nations economy essentially goes hand in hand with consumerism. Following those cut backs on consumer spending, companies were forced to cut a lot of jobs. According to stateofworkingamerica.org "In 2008 and 2009, the U.S. labor market lost 8.4 million jobs, or 6.1% of all payroll employment". That is just an insane number of people that were at the time jobless solely because of the recession. Some companies were even forced into bankruptcy. A couple examples of such companies were Circuit City and Linens-n-Things. Now the recession was one of the main things affecting companies like these but other retailers like Walmart also played a factor in putting these companies out of business. Moving forward a few years to 2011, Silver had skyrocketed up to nearly $50 an ounce. Personally I don't see this as just a coincidence. The scary part is today we are seeing similar patterns in the state of our nation's economy. Companies are beginning to declare bankruptcy again. These aren't just small businesses either, these are some big names in the retail world. Companies like RadioShack and GanderMountain have both already declared bankruptcy and other big retailers like Abercrombie & Fitch, Macy's, Sears, Kmart, and JCPenny are all on their way to the same demise but are barely hanging on. Consumer spending has been steadily on the decline as well. Despite that decline, there has been a massive increase in silver eagle sales. Now make of it what you want, everyone has their own opinions and predictions. Personally I predict that within the next year, maybe two years tops the US economy will plunge into another recession. This would then in turn send precious metals in a similar pattern of price change as compared to the 2008 recession. I also believe within the next 3-5 years we will see silver reach $50-$100 an ounce. Call me crazy but that is my personal prediction. Tell me what you think below and what your predictions for the future of precious metal prices may be. Thank you for reading!
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