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Gold and Silver are not an investment! Let me repeat that. Gold and silver
are not an investment! Gold and silver are (excuse the pun) the most “solid” form of money you can possess. Yes, these two precious metals are money!…Don’t fear owning gold my friends. Fear not owning gold and silver, especially if you are a saver. [Let me explain.] Words: 812
So says H. Pelham (http://retirefund.blogspot.ca) in edited excerpts from his original article*.
Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!), has edited the article below for length and clarity – see Editor’s Note at the bottom of the page. This, and the preceding paragraph, must be included in any article re-posting to avoid copyright infringement.
Pelham goes on to say, in part:
Gold & Silver Hold Their Purchasing Power Over Time
[Gold and silver] have been money for about 4,000 years. Right up until 1964, silver was used in U.S. denominated coins. That is why in 1964 a U.S. quarter would buy you a gallon of gas. That is why today, the exact same U.S. quarter (dated 1964 or before) will still buy you a gallon of gas. It is because of that silver content.During the Roman Empire circa 2,000 years ago, an ounce [troy] of gold would buy you approximately the same value of goods as it will buy you today. ( I know that “goods” are interpreted in different ways, but “food” and “clothing” are goods and that comparison can still be made.) This is money that has kept it’s value for thousands of years, and continues to keep it’s value.
At least 2 or 3 times per year, there is a hue and cry from the so-called investment community that gold has lost it’s “sheen” and subsequently drops, only to return to it’s steady climb in the month following. Usually only the “drop” in prices is reported by the headline seeking general media. They often don’t report the steady rise as it usually takes the entire year to shake out higher, as it has for the past 11 years in a row….Most people are not aware of that, because it did not rate a “one day” headline, but it is fact. [Read: Does Gold’s “purchasing-power-protection” Price History Suggest Gold is Over-priced? and Why, Pray Tell, Would I Want to Own Gold??]
Fiat Currencies are Being Aggressively Devalued
How will the U.S. pay down its $15 trillion debt? Well, you make the 15T worth a lot less, that is the only way. You “inflate” it away. [Read: Michael Pento Doubts U.S. Can Inflate Its Way Out of Debt – Here’s Why] You print money, and you print money and you print money – and it works, “until it doesn’t work anymore”! Just ask the blue collar savers who have been squirreling cash away for a rainy day. Against gold, they have lost over 500% in the past 10 years.
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Yes, I know, the famous Oracle of Omaha once said that “gold has no value”… but, if Warren Buffett could have sold all of his shares in Berkshire 10 years ago, and just bought physical gold, he would be 500% richer today (give or take a percentage point). How is that for maintaining value?
There is now a race to devalue currency, by almost every major central bank in the world. The only “currency” they cannot devalue, is gold and silver, though they try and try, by using the fear factor. Don’t fear owning gold my friends. Fear not owning gold and silver, especially if you are a saver.
Over the past 12 months, more than 61% of “all” U.S. Treasuries were actually bought by the Federal Reserve Bank. Yes, that is right. The United States of America is buying its own debt. That is because foreign banks are only buying less than 2% of that debt! Sound like a problem to you? Sure does to me. Sounds like money printing to me, on a massive scale! [Read: If You Don’t Think Gold IS a ‘Safe Haven’ Then You Don’t Know the Meaning of the Term!]
Both Gold and Silver Have Major Upside Price Potential
Now here is another fact to consider. As the money printing continues over the next decade, or as hyper-inflation begins to rear its ugly head from the money printing of the last 4 years, [Read: High Inflation is Coming but Hyperinflation is Highly Unlikely – Why is That?] and we can draw any conclusions from the previous decade, then gold will reach (in U.S. dollar terms) approx. $8,300 per [troy] oz. by 2022 (or before). Now, does today’s gold purchase price of usd $1650 sound like a bargain to you? It certainly does to me! [Read: Update: 51 Analysts Now Maintain that Gold is Going to $5,500 – $6,500/ozt. in 2015!] Also,……the Silver/Gold ratio is historically 16:1 so at today’s gold rate…silver [should be] over $100 per oz…. [and at a future price for gold of $8,300 price, silver would rise into the neighbourhood of $500/ozt.] [Read: History Says Silver Could Become the Next 10-Bagger Investment! Here’s Why]
Savers should be buying physical silver and gold right now if they haven’t already been accumulating. Your savings depend on it. [Read: The Outlook for Gold Remains VERY Positive – Here’s Why]
Where to Invest in Precious Metals
Personally, I have invested in both physical silver and gold and I am investing in mid-tier gold miners that have been beaten down over the past year. [Read: Don’t Laugh – Invest At Least 65% of Your Portfolio In Precious Metals!] Do your own homework, but look for mid-tier miners (ones that could be attractive to the senior miners, who can only increase production by scooping up smaller names) who have solid management, producing mines, increasing production, increasing reserves and where production costs do not exceed $800 per oz. (the lower the better). [Read: Gold/Silver & Mining Stocks Going From Their Cycle Bottoms to Parabolic Peaks by 2015]
Conclusion
You don’t need good luck with your savings. You only need good currency…[and that means owning gold and silver,] the most “solid” form of money you can possess!
*http://retirefund.blogspot.ca/2012/04/why-savers-should-be-saving-gold-and.html (To access the above article please copy the URL and paste it into your browser.)
Editor’s Note: The above article may have been edited ([ ]), abridged (…), and reformatted (including the title, some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. The article’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article
Related Articles:
1. Does Gold’s “purchasing-power-protection” Price History Suggest Gold is Over-priced?
The spectacular rally in the gold price over recent years [has] many observers asking if the precious metal has not moved ahead of its fundamentals…[and if it] has not entered speculative bubble territory. [To address that concern] I have calculated the purchasing-power-protection price of gold for the 43 years from 1970 to 2012 and compared it to the average market price for gold in every year [along with some background of events unfolding over each decade during that time period which should prove] useful as a framework for how to think about the [current] dollar-price of gold. [I think you will find it most enlightening. Take a look.] Words: 3973
2. If You Don’t Think Gold IS a ‘Safe Haven’ Then You Don’t Know the Meaning of the Term!
It would seem that there is a considerable lack of understanding about what the term “safe haven” actually means when it comes to gold. Let me explain just what it means – and does not mean. Words: 740
3. The Outlook for Gold Remains VERY Positive – Here’s Why
There’s clearly a lot of fear in capital markets around the world and that’s usually represented by a rush to short-term government bonds, in particular US dollar government bonds. With this type of fear and the need for liquidity, just about all assets get sold and gold is one of those assets. If you have a longer-term view, however, and you believe these problems will be met with additional liquidity, then gold is something you should accumulate.
4. Why, Pray Tell, Would I Want to Own Gold??
Comments I have made that “when this [financial crisis] finally ends the big winners are apt to be the ones who have lost the least purchasing power. Keeping score in nominal dollars is likely to be meaningless. Gold tends to hold its purchasing power regardless of what happens to fiat currency.” have prompted questions about a) how to achieve such purchasing power with physical gold when this stage is reached, b) how to go about buying things with gold coins and c) how gold would be utilized under the assumption that a barter system would develop when dollars become worthless. [Let me explain.] Words: 700
5. Gold/Silver & Mining Stocks Going From Their Cycle Bottoms to Parabolic Peaks by 2015
Once every year gold and stocks form a major yearly cycle low while other commodities form a major cycle bottom every 2 1/2 to 3 years. Occasionally all three of these major cycles hit at the same time….That’s what’s happening right now and it should lead to a powerful rally over the next 2 years, culminating in 2014 when the dollar forms its next 3 year cycle low. Words: 622
6. Update: 51 Analysts Now Maintain that Gold is Going to $5,500 – $6,500/ozt. in 2015!
Lately analyst after analyst (161 at last count) has been climbing on board the golden wagon with prognostications as to what the parabolic peak price for gold will eventually be. That being said, however, only 51 have been bold enough to include the year in which they think their peak price estimate will occur and they are listed below. Take a look at who is projecting what, by when and why. Words: 644
7. Don’t Laugh – Invest At Least 65% of Your Portfolio In Precious Metals!
There is such a “fear of gold” amongst most people that it must be due to statist indoctrination and propaganda because it makes no rational sense to have such a fear of such a time tested and true store of wealth. After all, we are talking about time tested and true money – the only money that has lasted for thousands of years and is still fully accepted worldwide as a store of wealth….What would you rather hold “for eternity” gold [or] US dollars [which are nothing more than] a paper debt obligation of a bankrupt nation state? Words: 450
8. History Says Silver Could Become the Next 10-Bagger Investment! Here’s Why
If you concur with the 159 analysts (see below) that maintain that physical gold is going to go parabolic in price in the next few years to $3,000, $5,000 or even $10,000 or more then you should seriously consider buying physical silver. Why? Because the historical gold:silver ratio is so way out of wack that silver should appreciate much more than gold as it goes parabolic in the years to come. Indeed, silver could easily reach $100 – $200 per troy ounce, maybe even $300 and conceivably in excess of $400 depending on how high gold goes. The aforementioned may be hard to believe but an analysis below of the historical price relationship between silver and gold suggests that such will most likely occur if gold does, indeed, go parabolic. Take a look. Words: 1423
9. Michael Pento Doubts U.S. Can Inflate Its Way Out of Debt – Here’s Why
Michael Pento, president of Pento Portfolio Strategies, and Peter Tchir, founder of TF Market Advisors, talk about Nobel Prize winner Paul Krugman’s recommendation that policy makers should consider allowing slightly higher inflation as a way to spur the U.S. economy.
10. High Inflation is Coming but Hyperinflation is Highly Unlikely – Why is That?
People get confused about the nature of mass inflation, hyperinflation, and what causes both. [Let me clarify the nature and causes of each.] Words: 930