Hyperinflation in 2012?

A recent development at the Bank of England has caught my attention. The BOE announced that it will increase its emergency bond-purchase plan by a staggering 100 billion pounds ($ 160 billion) to aid the economy as the government cuts spending. The central bank will also keep its benchmark interest rate at a record low of 0.5% until at least late 2012. The UK is facing the largest public spending cuts since World War II. Its soaring record deficit is a major problem for the country.

With other economies following a similar path and reducing interest rates to record lows, to stilmulte economic growth, high inflation is going to be inevitable in the near future.

Since the introduction of the Euro in 2002 the European Union has seen an average inflation rate of 9%. A 100 EUROS received in 2002 are only worth 46 EUROS today! So any investment that hasn't yielded a min. of 9% p.a. has effectively lost you money!

The next years are going to continue to be difficult for people holding cash, life insurances or money market bonds. Silver will be one of the best hedges in the future for investors. Besides its monetary status, it also has an industrial purpose. Silver could hit the $ 100 mark in the near term, when investors look for an alternative hedging investment for Gold.

When Gold hit its last peak in the 1980s, the silver price rocketed and investors started to trigger a buying panic!