Silver or Gold

A short video about how investors use the fluctuating Gold to Silver ratio to evaluate the relative value of silver, which determines if it's an optimal time to purchase gold or silver. It also helps investors diversify their precious-metal holdings.

Gold Videocast: Gold's 2014 Half-Time Report

Published on Jul 9, 2014
In the first edition of the new Gold Videocast, Peter delivers his verdict on the gold market for the first half of 2014, analyzes Janet Yellen's performance so far as Fed Chair, and makes some contrarian forecasts for the rest of the year.

1:00 -- Gold's rise has confounded Wall Street banks that advised their clients to sell in expectation of a big correction.

1:40 -- Even though the financial media has focused on the Dow breaking 17,000, gold has actually outperformed the Dow this year.

2:10 -- Mainstream forecasters have bought into the narrative of a genuine US economic recovery and the ability of the Fed to effectively withdraw its monetary stimulus. In fact, the economy is not recovering and will relapse into recession, perhaps beginning in the second half of 2014.

3:17 -- The price of gold is putting in a bottom, supported by the mining stocks. They led the market down in 2013, and are now leading it up.

4:15 -- There is going to be a short squeeze as gold sellers try to buy back their positions when they realize the economy is not recovering.

5:30 -- Even though the Fed's own inflation measure has passed its target of 2%, Janet Yellen continues to claim inflation is under control.

"The Death of Money": Q&A with James Rickards

"Everything that was 'too big to fail' in 2008 is bigger and more dangerous today," says New York Times bestselling author James Rickards. Rickards predicts the crash of the global currency market and insolvency of the U.S. dollar in his latest book, The Death of Money: The Coming Collapse of the International Monetary System. "We're waiting for the catalyst that will cause this catastrophe to come tumbling down." 

PMs Performance at the moment

I just wanted to share this clip of Marc Faber explaining why PMs are such a great way of preserving wealth. Enjoy!

KEEP YOUR EYES ON THE PRIZE (PRICE)!!!

So there's a lot going on in the world, tensions building with Russia, energy and climate concerns...

Perhaps you're seeing the trees, and not the forest. I'd like to remind you about why silver is an investment you should be making if you haven't already.

Let's start with Purchasing Power.
In order to show the decrease in Purchasing Power, let's take the CPI (Consumer Price Index) and invert it. If you take the amount of money (USD) in circulation and draw the chart it would look like this.




There is an inverse relationship between the two. Here we see that price inflation is a direct consequence of monetary inflation. The money supply has increased by 16.8 times and the purchasing power dropped by 81.8%. So 16.8 times as much cash led to a drop of nearly five times.

This could be any western currency by the way except Swiss Francs since even though the CHF isn't officially attached to gold, the Swiss National Banks has taken gold into consideration when conducting its monetary policy.

Now let's look at GOLD.

The amount of gold mined for the same period, increased from about 95,000 metric tonnes to 165,948, so about a 80% increase in supply.
The price of gold has gone up from 38USD to 822USD, which is 22 times.
The CPI is up from 40 to 210, or about 5 times.
So the purchasing power of gold grew about 4 times.

Silver (silver has an even longer history of being used as money than gold does) and gold perform two jobs that fiat currencies, or any other financial innovation, cannot do; they act as a safe haven in times of turmoil - to escape Nazi Germany, or buy food and water in a crisis. Perhaps even more important, silver and gold, for the last couple of thousand years have acted to preserve your purchasing power. In 1913 (the year the US Federal Reserve was born) the US dollar was well a dollar, silver was 58 cents an ounce and gold was US$20 an ounce. Today, at the 100 year anniversary of the Fed, the dollar has lost 95 percent of its purchasing power, silver is $27 an ounce gold is $1600 an ounce.

See an earlier post about why I prefer silver to gold..
http://silverinvestornews.blogspot.ch/2013/09/this-is-why-you-should-invest-in-silver.html

A dirty secret about silver coins that I'm willing to share with everyone who has access to this post....

Silver is a tricky investment since the buying price and selling price are often so far apart that even if the spot price rose 2 or 3 dollars, the profit margin would be slim...

So the idea is to buy cheap. BUY CHEAP!!!!

One way to buy cheap is to go to a pawn shop or any other outlet who buys silver and ask them for what ever coins they have. Tell them that you would like to buy the coins at spot price but you are willing to pay the VAT.

Ok... so why wouldn't you just buy a bar of silver?? Well, anyone who is in this market can answer that, but for those who are lost let me explain.

Coins sell at a premium, someone has to pay for the cost of minting the coin. Supply and demand determines that...

Most pawn shops don't care about the value of the coin, they just buy them to be melted and thats how they cash in. They'll give you a shit rate and thats how they make their money.

I'm not a fan of numismatic coins etc, but if you can get coins for the same price as bars it will set you up to gain more as the price of silver rises.

There is NO difference between a new coin or an old coin. Silver tarnishes. I have coins from 1985 that look better than coins from 2013. I keep all my coins well. Besides, some collectors even like a tarnished coin, because it's an additional security feature and looks like "real" silver.

Silver Fakes - How To Avoid Them - Mike Maloney & James Anderson