Should I Buy Silver?
Because in my business we sell so many 10 ounce silver bars every day, one of my workers thought that perhaps she too should buy silver and asked me if that would be a good idea.
Here's the deal: buying silver (or gold) should not be thought of as an investment but rather as insurance. Investments are stocks, bonds, and real estate purchased with the hope of gaining a profit. Such purchases come with the risk that one may lose all of one's 'investment.'
Silver and gold, on the other hand, will never be worth nothing. They will always have some value. I know of many stocks, bonds and even real estate properties that owners cannot sell even for one dollar. But gold and silver always have buyers and sellers. Because they will always be worth something, they are a hedge against worthlessness.
In 1923 Germany, paper money became worthless. Or actually, the paper itself was worth more than the monetary value printed on it. In 1929 America, billions in stocks and bonds became absolutely worthless. The only thing that held their value in Germany in 1923 and in America in 1929 was silver and gold.
When times are good, when the economy is purring along, when people have jobs, when there is peace in the land, silver and gold do not earn any returns for those who hold them while investment in stocks and bonds will bring great returns. But the purpose of precious metals ownership is not to earn profits.
The purpose of silver and gold is for the day when every single stock you own is in the crapper; when every bond you own is in default, when no one wants to buy US Treasuries.
If everything goes in the crapper, the stock markets of the world will close; you will not be able to sell your stocks or bonds at your neighborhood grocery store. But certainly you will be able to do so with silver and gold. Hell, look in your newspapers today, fish markets and candy stores are already buying gold and silver today. There are gold-buying parties where neighbors bring in dealers to buy gold and silver. In dire times, everyone will demand only silver and gold for payment, not the worthless hundred dollar bills that we print in such abundant quantities.
If our government keeps printing money for the express purpose of redistributing the wealth of the country, then those who have that wealth today will move it into silver and gold to prevent all their other investments denominated in dollars from becoming worthless.
When you buy car insurance, you do not do so to make a profit but to come out of a horrible situation without needing to sell your home or to clean out your bank account. That is why one should buy silver and gold.
If you have the urge to buy precious metals strictly to make a profit, you may lose your shirt. Let me explain. I know someone who bought a few ounces of gold when it hit $750 an ounce thirty one years ago. Then it dropped in price and when it hit $400 an ounce a few years later he sold all of it for a terrific loss and put the money in the bank.
I kept the gold I bought in 1980 because I wanted a store of value in case of chaos. I still have that gold (and silver) plus I have added much more over the years. I could have sold the gold when it hit $900 an ounce, or the silver when it hit $15 an ounce and made a healthy profit. But then I wouldn't have had insurance.
Now gold is over $1500 and silver is almost $46 an ounce, but I still won't sell because then I won't have insurance. I will know when the time is right to sell. When I can buy a car for a small ingot of silver or someone's house for a gold bar. When I can buy groceries for a whole year with a shiny coin while people with wheelbarrows filled with American paper money are barely able to purchase a can of tuna.
Yes, buy silver and if you can afford it, buy gold. Do not sell it to make a quick profit. Wait for the right time.
The silver 10 ounce bars you see at the top right of this article are 10 ounce NTR silver bars in a 10 pack (100 ounces of silver altogether). These are very popular with the Chinese in downtown New York; in my business I sell them as fast as I can get them. If someone wants to sell me 100 ounces of silver I pay one dollar under the silver price. If someone wants to buy 100 ounces of silver I sell at two dollars over the silver price. Here's how it looks at the current silver price of $45.77 an ounce.
If you want to sell me a 10 pack of ten ounce bars I will pay you 100 X $44.77/oz = $4,477.
If you want to buy a 10 pack of ten ounce bars you must pay me 100 X $47.77/oz = $4,777.
That is, I will lay out $4,477 in order to make a $300 profit.
I also sell to dealers, but the markup is smaller - $1.25/oz over the silver price.
So in my business I buy and sell silver and gold. However in my personal life, I do not sell - I only buy.
Disclaimer: except for me, all other companies that buy and sell coins and bullion publish a caveat that such purchases are highly speculative and involve substantial risk; that prices can be extremely volatile and will rise and fall depending upon market conditions and that before you purchase coins or bullion, you should first have adequate cash reserves and other assets to absorb a potentially significant loss.
I make no such disclaimer because I do not suggest that buying such items should be done for profit.
Since I suggest that such purchases are insurance and not for profit, as long as you hold silver and gold until the time is right, you will never lose money because when the time is right you will have the only acceptable medium of exchange.
