Friday, January 23, 2009

Gold and Silver

This post follows my Banking post. I think the 2 are linked as the following will happen if/when the Government grabs banks. So, here is my precious metal OPINION...

I have read so much about this that my head spins. FIRST - I am NOT a financial advisor, nor do I play one on TV. I do like Gold - in fact I wear it frequently ;)

Ron Paul thinks the dollar is going to tank....and not just lose a little value, but BE WORTHLESS. If you hold to that thinking, Gold would be a good choice to put dollars in order for them to AT LEAST not go to ZERO and possibly keep their entire value and even make some.

Gold is nice - as I said, I am a big fan....HOWEVER....I think SILVER is where its at.

Gold is expensive - EXPENSIVE. If you look at things of large value - stocks - real estate - things that are EXPENSIVE to begin with, rarely go up in large amounts.

If people fear their dollars arent going to be worth much - they will start buying metals - they may buy some gold, but my bet is that most buy silver because its cheaper. The old "you get more for your money" mantra. This kind of thinking will drive the price of Silver UP FASTER AND HIGHER in relation to GOLD. IT WONT EVER be worth what Gold is worth, but its percentage of going up will be higher - that means that when you sell, you make more.

Now - with the coming difficulties, I have a hard time thinking about MAKING money - mostly I want to CONSERVE what I have - make sure that my dollar buys the most it can - counter act INFLATION, but I am also not opposed to making a few extra bucks.

So when you have used your dollars to buy tangibles - the ole bean, bullets and band aids - add some silver and maybe come out ahead when this thing goes South and manages to turn around....eventually.


theotherryan said...

I am not sure if silver will gain value more then gold. One big advantage of silver is that it is far easier to cash in (sell or trade) to get what you need. It is also affordable for all but the tiniest budgets. If you have a buck and a quarter you can get a silver dime. About 13 bucks will get you a one ounce round.

Silvers major downside is its bulk (for the relative value). You start spending thousands of dollars and silver gets big and heavy. I could walk out of state, across a border, etc with 20K in gold. I could not do that with 20K in silver.

It would be far easier to trade/ sell silver off in small increments as you need to instead of having a one shot sort of thing with a gold coin. A bit less then a grand will get you about a hundred dollars face in Pre' 64 coinage (71-77 ounces), a bunch of one ounce rounds, about 9 1/10th ounce gold coins or a single ounce of gold.

Here is what I have done (and by example suggest) If you less then 5k to spend in one shot or like me far smaller amounts on a monthly basis splitting it between gold and silver is a good way to go.

At some point I will stop buying silver. Probably at 200-300 ounces of the stuff. After that I will focus on gold.

Boomerator said...

Like theotherryan said, it is about how much you have to invest.

I want some silver laying around in case things really go pear shaped. I is the "small change" of precious metals.

If one has several thousand dollars of savings it would be very good to get most of it in gold as it is easy to transport and hide. Yes it will take longer to "cash" out when selling but it is also worth a lot so just like you long term savings account you should be planning ahead. And using your silver to hold you over.

To your point gold may not go up in value very much because there is less demand for it, but it will still hold its value which is what you are really looking for.