American Satisfaction At All-Time Low: Buy Gold and Silver (USO, SLV, GLD, XHB, FXI, EPI)

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January 17, 2012 12:30pm NYSE:GLD NYSE:SLV

Jonathan Yates: In a recent Gallup poll, the great majority of Americans were reported as being displeased with the direction of the country.  While this is certainly not good news for incumbents in The White House, both houses of Congress and across the country at the state and local level, it is bullish for

gold (NYSEARCA:GLD) and silver (NYSEARCA:SLV).

There are many reasons for the bearish American view.

Oil (NYSEARCA:USO) prices are up, which translates into more of a household’s budget having to go towards heating oil and motor fuel.

This cuts into the disposable income that can be used for eating out, going to the movies and other things that make life enjoyable.

Unemployment is still very high.  With fewer working, many are losing homes (NYSEARCA:XHB) to foreclosure.  Others cannot sell their houses.

As a result of this disenchantment, there is a loss of confidence in the future.  When this happens, safe-haven assets such as gold (GLD) and silver (SLV) become more attractive as investments.  Oil (NYSEARCA:USO) rises in price, too, due to speculation.  This has been detailed in many previous articles on

Since November 2008, immediately after the collapse of Lehman Brothers, the exchange-traded fund for gold (GLD) has spiked from around $70 to about $160 a share.  The exchange-traded fund for silver (SLV) has risen from about $9 a share to around $30.

In this regard, consumers in the United States are just like those in India (NYSEARCA:EPI), China  (NYSEARCA:FXI) and other parts of Asia, Latin America and Africa in losing confidence in incumbents and the fiat currency — although in those regions, confidence was sometimes never there at all.

In the mid-term elections in the United States in November 2010, incumbents lost heavily due to overall American dissatisfaction with the direction of the country. In times of change, gold is king.

Written By Jonathan Yates From Emerging Money

Emerging Money provides insightful and timely information about the increasingly important world of Emerging Market investments. CNBC Emerging Markets Contributor Tim Seymour leads the team of Emerging Money to bring you cutting edge global news and analysis.

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