World Financial Watch

Like many other precious metals, there is a huge demand for silver, and not a whole lot of supply.  The stockpile of silver that was built in the 1950s is nearly gone, forcing miners to search longer and harder for new places to find it.  This, of course, is one factor driving the price up.  It has been estimated that silver could be hitting $20 per ounce soon if trends continue.

With the US economy spiraling and the dollar weakening, investors watch precious metals with a keen eye.  The price of silver, like gold, goes up when the dollar declines.

Gasoline and grocery prices are forcing US consumers to spend less money on products that aren’t absolutely necessary.  However, the growing economies of China and India are taking over where the US is lacking in the precious metals market.

The Federal Reserve is lowering interest rates to combat the problems the real estate market is having.  While this is helping homeowners, it makes investing in US markets less appealing to foreign investors.

Some analysts believe the current decline in the price of silver is the lowest it will go.  While the recent shortage is making some investors nervous, it is though that most likely silver prices will jump back up, and fairly soon.

The foreign exchange market is the largest financial market in the world, with an average of $3 trillion traded daily.  Most financial trading is done in American dollars, so the current depreciation of the American currency is somewhat unsettling for some full time investors.

With the US dollar currently weakening, the exchange rate is going up.  This means that it costs you (an American trader) more US dollars to buy foreign money.
Rising gas prices, expensive groceries and a failing real estate market are all contributors of the dollar’s demise.

Gas prices are causing American consumers to spend less money on products than normal.  The US government has recently created an economic stimulus package to combat some of this.  Giving out $600 to each taxpayer, $1200 to couples and $300 to each dependent child hopefully will send taxpayers on a spending spree, thereby jumpstarting the economy.

The Federal Reserve has been reducing interest rates to help stabilize the real estate market and slow down the mass foreclosures of homes.  Although this does help homeowners, it also deters foreign investors from putting their money into the US.  Also, citizens who would invest domestically could place their money in foreign investments because of their higher interest rates.