Silver and Gold Do Nothing
August 29th, 2008 by Terence Gillespie
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People are now referring to precious metals as the best investments. Why would merely parking your money in silver or gold be considered the best investment for your money when all you’ve done, by definition, is store it? This implies that you could make more money just by storing it than by any other means?!
Calling precious metals an investment is an unfortunate word game that we all have to play now because the US has handled our currency so badly. All that’s happening is the value of the paper fiat that we refer to as money is plummeting back to its intrinsic value of zero. Since we’re used to pricing everything in Dollars it appears to us that prices are ‘getting out of control’, oil has ‘gone through the roof’, Gold and Silver are soaring and even that the downturn in the US Securities market is not that bad.
What nobody tells you is that while your Gold or Silver may buy you more dollars the dollars themselves will be worth that much less. That’s a great return on your investment if all you wanted to do is stand still. Its only viewed as investment because all of the alternatives are losing value more than the metals.
In an economic climate like this its a remarkable achievement just to preserve value!
Gold is money. The Precious metals of silver and gold are where money is best stored. In an ideal economic climate it would not be accurate to describe your holding of them as an investment. Their nature is to hold objective value. They perform this function perfectly. One of the aspects of this perfection is that they remain unchanged despite most exterior circumstances. Although the metals and their intrinsic value do not change due to external circumstances the way we view and describe them does.
When our descriptions and views about Gold and Silver change we are really describing the change in the exterior environment and not a change in the metals themselves. All of this would seem as obvious for silver and gold as it is for paper or corn or a light bulb. I am forced into being this explicit about the function and values of precious metals because of the current swirling chaos that surrounds them. And that chaos does, indeed, merely surround them. It does not change them or their use.
When silver and gold start to be viewed as an investment, and not merely money, then it is a warning sign that the economic conditions that surround them are not good. This is certainly the case in the US, and most of the developed economies of the world, right now. What has changed is that the bad economic policies of the past are now having their inevitable bad effect. We are reaping what we’ve sown, more than we’ve sown and later than we’ve sown.
When a means of exchange is not stable then all things that depend on that stability get unpredictable. Since the US Dollar is the reserve currency of the world then that instability affects the entire world.
Under the current circumstances we should all adjust our expectations to only preserving the buying power of our assets. That can be accomplished with any commodity that will hold its value such as, sugar, coffee, corn, tobacco. The most obvious are Gold and Silver, but, you have to be careful with them because the large above ground supply of monetary metals in relation to the amount mined per year make them ripe for speculation.
However, in addition to being one of the two best ways to store money I believe Silver has additional qualities that give it a temporary edge over Gold. Silver’s above ground supply is historically low due to its industrial consumption after WWII. It is also the best form of money to conduct everyday transactions with because Gold for everyday transactions is too small. Assuming we don’t go immediately to digital Gold or Silver then you’re better off storing your money in silver, right now. You will be purchasing a commodity, money and also a metal that is historically rare in its above ground form.
I believe silver is the Optimal place to park your money, right now. Here’s Why.
If you want to get started parking your money in silver then, here’s how.
I wouldn’t so much call it an investment as I’d refer to it as preservation and survival.
Tags: dollar, economy, fiat, gold, investment, money, silver, value
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