Posted on 07/28/2009 8:46:50 AM PDT by Kaslin
If you've ever considered buying silver, I recommend you do it soon. I just urged my readers to buy the metal with a unique U.S government-backed vehicle the average investor has never considered. More on this later. First, I want to tell you why I believe it's a great idea to buy silver right now... Man has used silver as money for thousands of years. It's easily divisible. It's easy to carry around. It has intrinsic value in jewelry and industrial applications. Heck, the British "pound" gets its name from the weight of silver used for trade in the early ninth century (a so-called troy pound). Silver as money is even mentioned in the Bible (it's how Judas was paid off for turning in Jesus). However, in the early 20th century, governments around the globe abandoned silver as money. They decided it was easier to expand a nation's credit with fiat paper money than to mine more silver. Over time, governments sold off their silver stockpiles to industry and investors. At first, much of this silver was used up in industrial manufacturing and processes like photography. That silver is gone forever. Then, starting around 1997, silver quietly started flowing into private hands. Individual folks concerned with wars, investment bubbles, and mismanaged economies were buying it up. They turned to silver as a safe form of savings that can't be debased by a gang of spend-happy politicians. Buying silver back then was a smart move. The metal is up 150 percent over the last 12 years... while stocks and real estate have struggled to do anything... while paper currencies have depreciated in value. More people are catching onto this move. Have a look at the chart below. It shows how silver keeps moving into private hands: Known Bullion Supplies
Now here's another one. It shows the sales volume of the U.S. Mint's popular Silver Eagle coins. Note the huge volume spike on the right-hand side:
Primary Sales of Silver Eagle Bullion Coins As you can see, there's a modern-day "silver rush" happening right now.
Many people in the advisory business would take this opportunity to tell you silver is going to soar in the next few months... Inflation is set to destroy the value of the U.S. dollar. Place your bets on gold and silver. I'm not going to do that. I don't think inflation will be a problem for years. There's simply too much excess debt, unused industrial capacity and bloated asset prices that need to be worked through before inflation becomes a problem.
What I can tell you is something much more important: Governments around the world are behaving absolutely stupidly right now. Our vice president recently said with a straight face that the government has to spend more money in order to save the nation from bankruptcy. That's crazy... but it passes for conventional wisdom these days. In my 30 years of investing, I've never seen so many risks in the financial system. That kind of "patriarchal thinking" is producing those risks. That's why it's a good idea to keep a portion of your assets in "chaos hedges" like gold and silver. Think of it as insurance against calamity. I can't recommend owning silver as a bet on inflation, because the facts don't support it. But I do recommend owning it as a safe store of wealth. And as I've just showed you, many people are catching onto this line of thinking. Buy your silver before this new interest becomes front-page headlines. Here's to our health, wealth, and a great retirement, |
Since the main industrial use for silver, photography, has vanished, what will send the price up? Strictly monetary demand?
If the dollar continues to fall almost any commodity or long-lived asset will do well. I can’t think of any good reason for silver to do better than average.
Actually I’ve looked into silver and there are many reasons why it might skyrocket into the future.
http://www.silverbearcafe.com/private/silverheist.html
This forum talks about gold and silver and why they think it will skyrocket as well.
http://goldismoney.info/forums/
There is more silver being used now than when most of it was used in photography. Electronics has grown since then. Also, the above ground supply is not much relative to recent years. Less than gold, I’m told. Notice that the U.S. mint often can’t get enough to keep the walking liberty in production. The premiums have thus expanded on these coins.
Also, silver use in photography has not vanished. It is still used in xrays.
On a far lesser scale, kinda nickel-diming (no pun intended), start dumping your nickels in a jar. All metals have been inching up, methinks thanks to the Chinese, and the lowly 5c piece now has an intrinsic value of a tad over 4c. Granted there are laws (cough) against melting, but for a "poor man's silver" approach, it is something to consider as just another arrow in the quiver of self-protection, and you don't have to pay 16 times face for them. Bookmark THIS SITE and keep tabs. If the SHTF, a nickel might buy something where a silver dime (or a .22 rimfire cartridge) would be too much.
Crazy, right now, but we are living in the "interesting times" the Chinese spoke of. When small change starts to disappear, you know you're on the right track, for even the lowly 95% zinc cent is at 44% it's intrinsic value. (Forget the larger stuff, for now as they're at 4-15%).On the other hand, if "Hope and Change" (no pun redux) works out and things turn out well (double cough), you'll just have a TON of small change that's still spendable.
” It is still used in xrays.”
Well, with zer0’s healthcare, there will be far fewer xrays in the near future!
we own some silver bullion....100 troy ounces plus some old money bought at stinking high prices back in the Howard Ruff/Hunt brothers escapade.....so I wouldn't buy anymore....
it will never probably amount to anything...
yet, I feel better having it.....if nothing else, my great grandchildren, God willing, will have it...
It is a fair question ... one use I would point out is that since gold is even more expensive, silver is used in many electronics.
The new environmental standards for motherboards prohibit the use of lead-based solder, so instead a silver-based solder is used, which is about 2-3% pure silver. Admittedly, a small amount per-motherboard or per-cell phone, but over millions of units per year the usage does add up.
so I am interested in your melting down technique....do you do it at home?...will they take metal like that that has been melted down no questions asked?
For many, many years, the recovery rate for silver that has been used in photography has been well over 90%. So photography actually used only a small amount of silver.
I like silver and I own a fair amount. I’m not buying any more at the moment, nor do I plan to. I don’t think there’s anything but an equivocal case to be made as to whether it will prove a good investment.
Before 1982, pennies were 95% copper and 5% zinc. Then after 1982, the compostion was 97.6% zinc, and 2.4% copper. You need to check the dates.
Are we going back to the days when thieves roam up-scale neighborhoods with a portable smelter in the back of their truck melting down sterling silver that they’d liberated from poorly secured houses?
That was really happening when I lived in the Houston area in the 1970s.
I keep mine in my husband’s gun safe, but that also means that I never use it!
I would recommend the book “Guide to Investing in Gold & Silver” by Michael Maloney (forword by Robert Kiyosaki). He does a great job examining the historical context of fiat currencies vs. gold and silver, as well as current trends. I recently purchased 4300 troy ounces of silver and 30 ounces of gold. It’s a good insurance policy against the fiscal insanity of the current administration and congress.
No, I don't do that. I was thinking that if metal prices escalate, markets will pop up that will buy/sell these coins. They may not even end of getting melted, just traded about. Eventually, under the above scenario, somebody will be offering to buy the coins at X amount times face or sell them on eBay, like they do silver coins. That's the angle I was playing.
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