Buy Silver Instead of Gold! Here’s Why.
We are at the beginning of a major shift out of paper assets into real assets and the more I studied the merits of owning gold and silver the more I realized that silver was the smart decision. Let me explain.
So says Silver Shield (dont-tread-on.me) in edited excerpts from an article* entitled 10 Reasons Why Gold Is The Gut Reaction And Why Silver Is The Smart Decision.
[The following article is presented by Lorimer Wilson, editor of www.munKNEE.com and the FREE Market Intelligence Report newsletter and may have been edited ([ ]), abridged (…) and/or reformatted (some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. This paragraph must be included in any article re-posting to avoid copyright infringement.]
Silver Shield goes on to say in further edited excerpts:
People who have trusted the paper market first go to gold when they have their awakening [because it] is the largest precious metals market in the world and has the most advertising behind it. They have seen it in movies as pirate treasure and maybe heard it was confiscated many years ago… In short, gold is the gut reaction for most paper investors who want out of the casino. I think this is the reason why we see so much activity in gold versus silver right now.
Why Own Silver and Why Now?
Silver… is simply the best investment out there…[because,] first and foremost… it is a physical tangible asset. When I say invest in silver, I DO NOT mean anything else but the real stuff in your hand. If you don’t hold it, you don’t own it. Stay away from SLV, unallocated bullion accounts, mining shares, etc. – stick to the physical. I would hate for you to be right on silver and wrong on the form of silver.
We are entering a generational shift out of paper assets into real tangible assets…The U.S. dollar is going to collapse…It is a mathematical certainty. This dollar collapse will be the single largest event in human history and will dramatically touch every human being on earth and will leave a scar on generations to come. Yes, it is going to be that big.
When the mathematically inevitable collapse of the dollar happens, all paper assets will be destroyed. This goes for Dollars, Yen, Euro, CDs, Munis, T-Bills, Money Markets, Insurance Policies, Pensions, Privately Owned Businesses, Structured Settlements, Social Security, Dividends, 401ks, IRAs, Stocks, Options, Bonds and even Real Estate. Without a functioning currency and the uncertainty it brings, credit grinds to a halt, payments grind to a halt, markets grind to a halt, the world economy grinds to a halt, people panic – and this ALWAYS leads to war.
Why are Precious Metals the Preferred Choice?
[Such inevitability,] naturally, leads investors to tangible assets like commodities. Commodities are real things we use in our everyday life like pork, cotton, corn, oil and steel. The problem with most commodities, [however,] is storage. I know for a fact that the two best assets to be in, in terms of real inflation adjusted returns, will be food and fuel. They are the most essential to humanity and the hardest to live without…[but] unless you are a farmer or oil baron this usually rules out many commodities for the average investor. This brings us to metals because they don’t deteriorate. For most metals, storage again is a big issue. $8,000 will buy you a ton of copper but just over 4 ounces of gold. This is why precious metals are so sought after, because of their rarity and the ability to store so much wealth in a small space.
One of the biggest reasons why people invest in precious metals is that there is no counter party risk. Its value is derived from its intrinsic value of rarity and potential uses. With precious metals you do not have to worry about someone paying a dividend or earnings in a depression or a currency collapse. In fact the worse things get in the economy, the more people will escape to precious metals and drive up their prices.
Why are Gold and Silver the Specific Choice?
Once you see that precious metals are the place to be, then you need to choose between the big 4 precious metals; gold, silver, platinum and palladium. Platinum and palladium have rarity and industrial use going for them but they have never been used as money in history. With a currency collapse, I want something that will have the most demand to drive up the price the most. I want my metal to have industrial, investment and monetary demand…
What are the Competitive Advantages of Silver vs. Gold?
This leaves us with gold and silver as the only two rational choices for investment in the face of a mathematically inevitable world-wide currency collapse.
[Below are some of] the competitive advantages of silver over gold.
- Silver is the second most versatile commodity, second only to oil.
- With its growing technological and medical uses, its demand is vital to any recovery we will see. Silver’s unique anti-microbial, reflective and conductive qualities make it a vital element in many high ticket projects.
- Since it is so vital and used in such small quantities, its price is inelastic. If silver goes to a $500 a troy ounce and Apple Computer needs a 1/10 of an ounce to make their $1,000 computer work at the highest quality, they will simply raise the price $50 to make up the difference.
- Silver is cheap enough for the common man to buy.
- With gold at…[almost $1300 a troy ounce] it is not really conceivable the average American, much less most people in the world, will ever have enough money to buy one ounce of gold. People are struggling to make mortgage payments, much less buy an ounce of gold.
- With silver at…[$20 dollars a troy ounce more or less], a husband could buy a couple of coins without consulting the wife. If he blew $1,300 [more or less] on one troy ounce of gold, he might have some explaining to do.
- Since silver is relatively cheap, the higher the price of gold goes, the more demand will naturally flow into silver.
- Gold is treasured, silver is thrown away.
- Since the dawn of man, gold has been treasured [while,] in more recent times, silver has been trashed as an industrial commodity and not valued as a precious metal. With the rise of technology, silver has been literally thrown away in such small quantities that is may never be recovered. In fact, the USGS said that if this current trend continues, silver will be the first element to become extinct on the periodic table.
- There are no large stock piles of silver left.
- Over the past decades we have been consuming more silver every year than we mine. This is only possible because we used up all of humanity’s previously mined silver. In 1950, it was estimated that there were 10 billion ounces in major stockpiles, today there are none left so, even though gold is 10 times more rare than silver when mined out of the earth, the fact that gold has been treasured and silver has been trashed makes the silver that is left much more rare than the 10 to 1 ratio that naturally occurs.
- The gold to silver ratio is at 1:66.
- It takes approximately 66 ounces of silver to buy one ounce of gold so
- if throughout all of history silver has been mined at a gold to silver ratio 1:10, how much longer can a 1:66 ratio exist?
- if silver has been trashed for decades and gold treasured, how much longer can the 1:66 ratio exist? …
- At some point the market is going to recognize the incredible opportunity and, when it does, it will most likely overshoot and could make silver more valuable than gold.
- if you really want gold, buy silver. You can buy 66 ounces of silver now and if the ratio falls to a 1:1 ratio you can trade 66 ounces of silver for 66 ounces of gold...
- The silver market is so small…
- Since the gold market is so large, I think that is why we see central banks and major institutions are buying gold. If they dumped a billion into silver, they would explode the market. A billion into gold would hardly make a ripple…
- If you see that quadrillions in paper assets are going to fail and that most commodities are not suitable for investment and how small the silver market is, it does not take a very large stretch of the imagination to think what will happen when people try to get into this market.
- The majority of gold owners are the banksters.
- If you look at the largest stockpiles of gold owners it falls mostly on the central banks of the world. The very guys that are destroying the paper markets, are the largest owners of gold. There is no central bank that I know of that even owns even an ounce of silver.
- Since silver has been used more times as money throughout history as money than gold, logic would dictate that at some point banks are going to want to own silver...
[Editor’s Note: The author’s views and conclusions in the above article are unaltered and no personal comments have been included to maintain the integrity of the original post. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.]
* http://dont-tread-on.me - The Ultimate Silver Investor
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