I have recently been asked by several people which metal I prefer and in what form should it be bought. First, as I have said for years, Silver should outperform Gold in the long run. Until Silver trades to at least a 20 to 1 ratio to Gold, I believe it is the better buy. The problem is that if you are talking about anything over $100,000, Silver is just not manageable. As a rule of thumb, I think that 10 or 20 ounces of Silver for every 1 ounce of Gold owned is a good ratio. I say this because your Gold will be “portable”, your Silver is just too heavy (for now). Were Silver to make it back to a 10 or 20 to 1 ratio which I fully believe it will, you will then be in a position where you are close to 50/50 in Dollar, Yen or whatever currency terms that then prevail.
I do want to say that if you have NO METAL at all, I would start with Silver. I say this because Silver will, in a time of financial collapse where your ATM and credit cards don’t work, “spend.” Don’t get me wrong, Gold will also spend but how do you get your “change” back from an ounce of Gold? One of the several reasons that I believe that Silver will outperform is that it always was and soon will be again “people’s money” or “poor man’s Gold.” Gold will trade out and above the realm of the average person, Silver will become the go to place for the average Joe.
That said, if you are buying Silver, I have always recommended “junk” (pre 1965 U.S. dimes and quarters) because they are already broken down to small denominations for you. Not only that, in today’s world, more importantly, they virtually cannot be counterfeited. Many have said “Silver coins” are not profitable to counterfeit. Yes and no. I can still remember the ignorant bonehead in my office coming in to work one day smiling like the Cheshire Cat. He told me that he bought some “1 ounce Gold coins” for $19.99 per coin. What he bought was Gold plated. I bring this up because with Silver at $35, a 1 ounce “plated coin” could probably be produced for $5 or less which leaves plenty of margin left over to rip off the unsuspecting.
Same thing… especially, goes for “1 ounce rounds”. These in my opinion will be more difficult to trade in the future, especially at higher Silver prices and after more scams and counterfeits become publicly known about. This is why I believe that “dirty old junk” coins offer you the best value of all. You can purchase these nearly at “spot” prices with no premium, they are “worn,” clearly identifiable and probably will avoid any confiscation attempts by governments.
Mind you, you won’t be able to store huge wealth in this manner unless you are very strong or have a wheelbarrow and some sort of vaulting ability. You should however have in my opinion, at least 1 bag ($1,000 face) of junk for each person in your household before you begin to seriously store your wealth in Gold or mining shares.
Think of it this way, if (when) the financial system comes down, Silver will be your “survival” money. It will get you from here… to there. “There” being a new monetary system. In a new monetary system, Gold (and Silver to a lesser extent) will be your seed corn capital to spread around into productive assets. At some point in time, you will want trade your “money” for something that actually produces for you like rental real estate, utilities, makers of widgets or whatever. I look at it this way, Silver will allow you to survive and make it to the point in time where you can safely exchange your real wealth (Gold) for newly “devalued” productive assets. These “devalued productive assets” may have even gone UP in Dollar terms, they will be lower in terms of real money and thus devalued relative to YOUR store of wealth.
The above said, if you have already bought a boatload of Gold in various forms, you are OK. I just think it will be appropriate, if not convenient to have some coins already denominated in amounts equal to a gallon of gas or a couple of loaves of bread. In my opinion, you will be buying cars, houses and even bakeries with your Gold!
You are an IDIOT. “Preservation” of purchasing power…is just that.
Freeze dried money. Whatever amount of ounces you have RIGHT NOW will buy, a new car.
Inflation sets in, you will only be able to buy ONE CAR!
That’s it, you f-ing dumb s#$@. WEALTH PRESERVATION!
And, any dumb sum b#$@% wants to talk about $60 silver in the next 24 months has his/her head up their @$$;
Thank you for the kind words! By the way, how many ounces of Gold did it take just 10 years ago to purchase the average house? …and now? In 1970 it took 100 ounces of Gold to purchase the average car of $3,500…today the average car cost’s what? $25,000? How many ounces of Gold? 15 you say? Yes, and I am the idiot? Thank you again.
Lowell, you are the “type” of individual who must surely stay in someones garage, eating out of a cold can of pork & beans and freely dispenses advise. I’m quite sure your “followers” have had just about enough of your advise to PUKE!!! You’re a FOOL and will die an old FOOL. Enjoy every minute of it. And the pork & beans———
Reply to Lowell…….Maybe to see a truly dumb person, Mr.Low Eel…you should review a silver coated mirror. I for one will continue to appreciate Mr. Holter’s thoughts. Thanks for your brilliant comment. I guess the relative values of various asset groups over time fails to impress you.
Dear Lowell,
It has always amazed me that there are people out there who are completely lacking in both common sense and imagination. It must be very lonely in there where you live.
Hey Lowell…what is with all the cursing in this reply column? Bill Holter told us of his opinion. You have your opinion also and that is just fine. You could just state it without all the expletives deleted. Oh sorry! I forgot that you are probably an Obama red diaper baby. As such, why are you reading Bill’s website? You don’t have to accumulate anything. The “RED DIAPER BABY” brigade will provide everything for you and maybe even a brain. Oh wait, they don’t require brains so I guess you will not get one.. J
Hey Lowell, if you’re ever in Fort Payne Alabama, give me a call @ 2566576281 and I’ll give you some English lessons. After I teach you some respect.
Hi Lowell, thanks for your kind comments. Bill’s explanation remind me that not only your calculation on financial return is suck but also with 100 oz of gold on 1970, now I can just use 15 oz gold to purchase one car. I’ve decided to accumulate and go long for more physical silver and gold.