Silver Coins Bullion, Should You Buy Now?
Anthony Bennett Silver Marketer
There will never be a better time.
When the financial going gets tough investors buy silver. Silver coins, silver bullion coins, and coin silver all have their roles as investment, as hedge against inflation or even for survival in extreme circumstances. Are circumstances that extreme? Some pundits believe they are.
Many believe the dollar will soon collapse.
That might be an extreme view but many notable financial figures are telling us that the outlook is grim indeed. Take the outgoing Senetor for New Hampshire, Judd Gregg, for instance – he is forecasting a dollar doomsday. He says the US is heading for “financial meltdown” no more than five to seven years from now and he sees the start of that process as already having happened.
In a full and very frank interview for the Financial Times, Mr Gregg commented that China was in a state of alarm about the US’s mounting levels of public debt. Their actions speak louder than their words as they ditch their reliance on the dollar for their reserves and build their stocks of Gold and Silver. (FT Judd Greg Interview here)
It has proved itself time after time, investors who want to protect against inflation buy silver and gold.
Just a few decades ago silver and gold prices escalated in response to the price inflation of 13% the 1970′s. Then silver and gold investments of any kind – silver bullion, silver rounds, pre-1965 U.S. Silver Coins and silver bars competed with Krugerrand gold coins as the investment of choice.
Inflation came under control in the following decade and then took a dip as stocks and property enjoyed their time at the top.
Now we know that Bank misjudgements and downright fraud fuelled that bubble and left us in a terrible state when the bubble burst because there were no real assets backing up the currency.
Things are quieter right now but is it the eye of the storm?
Silver and gold are bought by investors who fear the worst and those fears include what is happening right now in the second decade of the 21st Century – to get out of a fix the Federal Reserve are creating money out of thin air. It used to be that they literally printed more paper dollars but today there are much more devious ways of creating money. Quantitative Easing they call it but it means the same, money not backed up by assets.
To keep the economy working so much ‘virtual money’ has been pumped into circulation as loans by the Fed to the troubled banks that the dollar is at risk of becoming ‘virtually’ worthless. That is what happens to what are called ‘fiat’ currencies – that is a paper currency not redeemable in gold or silver. It happened in Argentina and Paraguay as recently as 2002 and like it or not the Dollar is a ‘fiat’ currency now.
Forward looking Argentinean and Paraguayan investors who had the savvy to convert their assets to Silver or Gold were show to be wise investors. Argentinean Peso’s and Paraguayan Guarani’s plummeted and shortly after the Brazilian Real followed suit.
In a general collapse of paper currency Gold and Silver Bars are of course hugely valuable but not really that practical and that is why coin silver and small gold coins are so sought after. They are in small practical weights that can be used as legal tender and of a value that can be exchanged for goods and services.
In a crisis small is beautiful
For day to day use 1-oz silver rounds pre-1965 and U.S. 90% silver coinsare the most useful forms of silver but of course gold is so much heavier. The tiny gold coins, like 1/10-oz Gold Eagles, 1/10-oz Krugerrands, ¼-oz Gold Eagles and the ¼-oz Krugerrands are far more practical. Not all coins are created equal though and some are simply wrong for tender or barter.
Surely it can’t be that bad?
Well some analysts think it could. They wonder how long the United States can remain the world’s largest economy while also being the world’s largest debtor.
“Not indefinitely,” is the opinion of Federal Reserve Chairman Alan Greenspan. “History tells us that great powers when they’ve gotten into very significant fiscal problems have ceased to be great powers.” (article in the Daily Jef here) It has happened so often before, Spain was the fiscal power of the 16th century, France in the 17th century and the UK for most of the 18th and 19th before the American Dollar reigned supreme in the 20th century.
If financial meltdown comes you will want silver coins and small gold coins with their gold or silver contents stamped on them. That means modern bullion coins.
It may never happen
But have you ever seen so many ads offering to buy your old gold jewellery as there are now? ‘Send us your old gold’ they plead. China Russia, Brazil and the Arab States are already planning to ditch the dollar – they will need gold but to protect our day to day liquidity people like you and I will need Silver Bullion Coin.
Silver and Gold have many attributes.
Silver and Gold are money, legal tender, and represent the value of the prescious metals they contain. They are “Currencies of last resort” as Greenspan has often stated and so long as you buy bullion coin cannot be worth less. Precious metals can’t be debased or manufacture at the will of a company or government and they hold their purchasing power.
It seems some people in the know are expecting trouble ahead and I for one am sitting up and taking notice
Silver Coins Bullion, Gold or Silver all have a large place in my portfolio right now and just like China I am going to buy as much as I can afford.
