In a previous article I spoke about my interest in precious metals, in particular gold; today I discuss some of the benefits of silver and why it might be for you. I love precious metals; some I’ve gotten on line, other from local antique stores that deal in coins. If you buy online, most well established businesses will take good care of you. If you can’t afford fancy silver dollars but decide to invest look into so called “junk” silver.
Some excerpts from the following ten reasons were drawn from goldsilver.com along with personal notes; and I picked them to share because they reflect my personal opinion. Precious metals are not for everyone; and if you go into it do not blow all your money and savings on it. To me these metals are a way of diversifying your portfolio, and I see them as more of a security policy than an investment. I am not worried about making money off my coins; and one day I’ll pass them on to my children; unless they’re punks, then I’m burying them pirate style with a map that no one will ever be able to decipher.
1. Moving into True Money
Would you convert your labor into Depreciating Fiat Paper or into an appreciating tangible asset with intrinsic value?
Silver offers the opportunity to move into true money, an actual store of value, with the potential for substantial gains in future years as its current cycle continues. Protect yourself and your family by acquiring silver with intrinsic value and insulate yourself from the wealth destructive policies of central bankers.
In Mike’s words: “Gold and silver have revalued themselves throughout the centuries and called on fiat paper to account for itself.” (Page 202 Of Guide To Investing In Gold And Silver)
Silver, like gold, also has the added benefit that it has been a standard of currency for over 5,000 years; I’d put my bet on it remaining a method of wealth transference for years to come.
2. The Common Man’s Gold
The acquisition of silver is much more attainable for global populations compared to gold. As silver prices continue to rise, investor’s will further shift away from real estate, stocks, and bonds.
The affordability of silver is poised to make it “common man’s gold” as it begins to make news and involvement becomes widespread.
3. The Ultimate Insurance Policy
Throughout the last thousand years of history, most episodes of printing have been followed by pronounced periods of inflation or even extreme cases of hyper-inflation, either severely destabilizing the nation’s political stability or culminating in warfare, dictatorships, or a political collapse.
A simple glance will quickly reveal that those who capitalized off these unique periods were holders of monetary metals such as silver. Even if you believe these possible outcomes are improbable, ownership of physical silver in the event will provide you the opportunity to not only protect your wealth but appreciate it significantly. Like an insurance policy, while the event probability is low, when fire strikes the benefits largely outweigh the cost.
At the current silver price level, the cost of insurance is tremendously cheap in relation to the wealth it would conserve if history does in fact repeat itself.
4. Silver: Much more than a Monetary Metal – Industrial & Medical Applications
Unlike gold, silver has hundreds of industrial and medical applications and its usage is on the rise. Silver’s molecular arrangement and chemical properties make distinctly unique among earth’s elements. In Mike’s words:
“Of all the elements, silver is the indispensable metal. It is the most electronically conducive, thermally conductive, and reflective. Modern life, as we know it, would not exist without silver.“ (Page 128 Of Guide To Investing In Gold And Silver)
In the last two decades alone, usage has increased substantially to include an array of electronic and digital products, medical appliances due to its anti-microbial properties, and even clothing. Product such as cellphones, cameras, laptops, mirrors, monitors, etc. all contain trace amounts of silver which is never replenished or returned to stockpiles. As our information age progresses and silver’s chemical uniqueness is more fully understood, demand for this irreplaceable metal will only continue to rise.
5. A Dwarfed Physical Market & Vanishing Inventories
While accessibility to silver may seem abundant in the flood of paper markets around today, physical markets are actually quite constrained and limited. Physical silver’s dollar value is 30 / 1600 or 1.5 – 2.0 % that of gold’s, while over 70% of this metal is consumed in practical applications.
The steady reduction in above ground inventories had been unique to silver amongst virtually all industrial and precious metals. Above ground supply is merely a fraction of what it was when silver hit its all-time high in 1980. Supply continues to be limited as applications in a broad range of fields continue to grow.
6. Uncertainties in Future Supply
The majority of the world’s silver comes from nations marked with political turmoil, labor unrest, and undeveloped economies. Mexico and Peru account for the largest share of production, both of which have fragile political systems and primitive infrastructures to accommodate significant improvements in production.
Several Southeast Asian nations are also included in this list, and present similar issues with regard to the consistency of supply. Geopolitical instability can quickly induce nationalizations (most recently in Bolivia), labor strikes, or poor infrastructures (accounts for high rates of flooding, fires, engineering mishaps, etc.) which can be have significant strains on supply.
7. Emerging World Demand
China and India represent two behemoth markets where populations have shown a tremendous appetite for gold and silver. Listen to the news and it is easy to learn which nations are buying up the worlds physical reserve of gold and silver. An awakening of emerging market investment demand will contribute to a new demand dynamic for physical silver bullion.
Supportive of the monetary aspects are some of the largest untapped markets for consumer electronic and industrial usages. Within the next decades, demand for appliances and technologies which require silver from developing nations is set to rise.
8. The Paper Funds Exposed
While futures pricing manipulation gives institutional banks a means for price suppression, the ETFs and other paper derivatives have now involved the public in these mechanisms. These instruments funnel demand away from what would be geared as deliverable silver and into non-redeemable paper in the form of a prospectus or stock certificate.
It is not coincidental that over the last decade, dozens of ETFs, pools, certificates, etc. which have emerged are now being marketed for their accessibility and convenience to the retail investor. Make no mistake, these funds are merely paper and the ETF campaign has been largely successful in placing millions of novice investors in funds they truly do not understand. Therefore, acquiring tangible metals and truly protecting yourself is never more than a few clicks away.
9. Gold to Silver Ratio
Historically, and to the present date, 15 to 16 ounces have been pulled out of the earth for every 1 ounce of gold. Strangely enough this is not reflected in the price of silver as an ounce of gold today is valued at roughly 1,800 dollars, and silver at a mere 30 dollars. This means gold is generally sitting at about 60 times the value of silver and not 15; especially considering that it is an industrially consumable metal. In theory silver should be worth four times what it is at present, and while t may not jump to its full value in our day; who knows.
10. ??? Leave a comment below; what do/don’t you like about investing in silver?
Just for kicks and giggles I pulled up my old silver dollars the other day to see if any of them were rare coins and would get me a fortune; sadly I’m still working my day to day job and will have to settle with standard value.