Vito Fossella, a former Republican congressman from New York who served as a member of the House Financial Services Committee, says gold and silver have more room to rise in 2011.

He has been right before on gold. In February 2010, Fossella told Newsmax.TV that the metal would rise from just over $1,050 then to between $1,400 and $1,500, a prediction he nailed.

Gold ended the year at $1,421 an ounce, up more than 30 percent. It has fallen nearly 4 percent in the first week of 2011 on profit-taking and after disappointing U.S. jobs data failed to revive safe-haven demand. Silver rushed from around $18 an ounce in September to more than $31 before taking a similar hit in the past week.

Gold and silver still have room to run, says Fossella, now managing director at public policy and business development firm Park Strategies.

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“I don’t think things are going to change all that much, and the reason is simple,” Fossella tells Newsmax.TV. “Until the U.S. government and governments around the world demonstrate to the markets that they have total control over their finances, that debts that will not continue to grow indefinitely, that deficits will not continue to grow indefinitely ... the place people will continue to go toward is gold and silver.”

Nothing about the actions during the last several months indicates that governments are serious about those issues, Fossella said.

“I do think gold and silver, as a result, will continue to climb,” said Fossella.

“Maybe there’ll be blips ... but over time I still believe that gold and silver and other precious metals are a good investment, particularly for those who want to have a small sliver as a hedge against inflation, which I think is coming.”

As for a potential second recession, Fossella said he hopes not, but that weak housing numbers — which triggered the original recession and credit crisis — is likely to tamp down growth if not addressed.

“I think it’s a serious issue for the government, not just at the local but at the federal level, not to underestimate the possibility that the housing market will not rebound as it should,” Fossella said.

That’s because so much of the U.S. economy and its growth revolves around the construction industry. Until jobs come back in a serious way, a second recession remains a real risk, Fossella said.

Jobs, not cheap money from the Fed and increased government spending, are the answer, Fossella said.

“One of the reasons why the Federal Reserve is keeping rates is low is that they want to reinvigorate and stimulate the housing market,” he said. “The fact of the matter is that it hasn’t been enough.”

Meanwhile, inflation “is a serious risk,” according to Fossella. He sees prices rising in the months ahead, not the deflation that the Fed seems so caught up in preventing.

“The basic premise of the Fed has done is print more money. Whenever a central bank prints more money, in an unlimited way, you devalue the currency,” Fossella said.

It’s a double-edge sword, since a recovery could actually exacerbate inflation already on the way, he said.

“If things rebound, in the way they predict it will, you may see inflation more quickly than if things don’t stabilize,” Fossella said. “When it boomerangs, it’s going to be big.”

In the end, government has a credibility problem, the former congressman said.

“There’s this belief that somebody can control it, that’s there somebody who can control the economy,” Fossella said. “Nobody can truly control a recession or a depression.”

If and when things turn bad again and inflation starts, it will happen quickly, Fossella said.

“People run for the exits, people lose a lot of money, people lose their job, they lose their nest eggs, they lose their retirement savings,” he warned.