Let’s start by defining the purpose of money
Money has 2 primary purposes:
1) It is used as a medium of exchange
2) It is used as a store of wealth
Paper Money is not Real Money!
Any currency where the Government can print unlimited quantities to inflate away debts is ultimately worthless
Since 1971 when Nixon effectively took the world off the Gold Standard, this has been the case with every paper currency. These currencies, such as the US Dollar, The Euro, and the UK Pound have no intrinsic value, as they are based solely on faith in the government issuing the currency
How far would you trust a politician with your money?!!
So what is Real Money?
Generally an item that is used as a token in exchange for goods and services. It needs to be in limited supply whilst can be easily subdivided, but not too easily forged
This excludes paper currencies as they can be printed to infinity!
Over the centuries, the requirements have led to various commodities being used as money, such as cowrie shells, or copper, or even items such as feathers!
But the commodities that have stood the test of time, over many thousands of years, are Gold and Silver
Over 2000 years ago, Aristotle indicated “Gold is durable, not like wheat, divisible, not like diamonds, convenient, not like lead, constant, not like real estate, and best of all, as jewelry, it has intrinsic value”
I am sure that if paper currencies had been around at the time, he would have added something along the lines of ‘and cannot be printed to infinity by a handful of people’
Since 1971 we have all bought into the lie that is paper currencies. The system is now breaking down
Worldwide debts are now in the many tens, of TRILLIONS!! of Dollars
These debts represent tens of thousands of Dollars for every man, woman and child and are increasing at a rate per family, of hundreds of Dollars per month
They can never be repaid. So the only practical choice is to print more, effectively reducing their value and so decreasing the size of the outstanding debt
Any savings you have in paper currencies will eventually be wiped out along with the debt
So, what can you do?
At least put some of your savings into Real Money. Most good money managers recommend putting between 5 and 25% of your investments in to precious metals as a ‘hedge’, or an ‘insurance policy’ against the value of a currency collapsing:
old and Silver
There are many ways to do this, but only a few I would consider
Those that I would consider have one thing in common. You own the physical metal. NOT a paper representation of it
If you don’t understand the importance of this, click here to see an explanation by GoldMoney
One last thing to be considered before investing in precious metals is cost averaging:
Cost averaging
All markets are volatile, when comparing one item with another, so compared with the Pound, the Dollar or the Euro, or any other currency, Gold and Silver are always going up and down. Silver more than Gold
But, it could be looked at the other way round. Compared with Gold and Silver, the Pound, the Dollar and the Euro are always going up and down
However good a trader is, he never knows the direction the markets are heading. All his facts and logic could be 100% correct, and then one simple, totally unforseen event takes the market in the other direction
The solution is cost averaging, most often called ‘dollar cost averaging’
The idea is to work out how much you wish to spend on precious metals and put in a regular amount each month. As close as you can to the same date each month
Don’t worry if the price is going up or down. If the price goes down, it simply means you buy at a cheaper price!
If considering investing a lump sum in precious metals, I would recommend transferring this over a period of a few months. When complete, you will have the lump sum full invested, but you wouldn’t have bought is all at a peak
So where, and in what forms would I consider saving Gold and Silver?
Gold and Silver, Bullion and coins, directly in your own control
The Best Answer!!
Gold bullion has been recognised throughout the world as currency for thousands of years
Gold coins are relatively much newer, but they are widely recognised and accepted
Depending where you are in the world, the preferred coins are American Eagles, Canadian Maples, South African Krugerrands, Austrian Philharmonics, and British Britannias
Silver coins have the advantage that they are ‘cheaper’ to buy, so are more available to ‘everyone’. Not an advantage if you have large sums of money to invest!
I do not recommend numismatic coins. Coins that carry a premium due to age or rarity
Should you put all your precious metal savings into coins and bullion?
Possibly, but the problem is, where do you store them?
At home? What if you are burgled?
At a bank safety deposit? Do you really trust the banks? There are now a number of horror stories emerging
At a ‘secure storage’ facility? If the country falls into civil unrest, there is a high risk that these will be overrun
At a private vault? Ideal if you can afford it!
Buried underground – Only you and people you trust, know where? Metal detectors and someone with a little luck, and it is gone!!
So what do I believe are good alternatives?
A number of options including:
Effectively a ‘bank account’ directly backed by Gold or Silver, rather than paper currency
Follow this link for further info
What other ways would I consider?
Other ways I would consider owning Gold and Silver include GoldSilver.com, junk Silver, and Bullion Vault
Further details coming soon
Don’t forget to look at the ‘Gold and Silver’ under ‘All Posts…’, to the right
This is where you will find a number of useful articles and videos
I aim to add 2 or 3 new ones every week, to help show the situation as it matures
Disclaimer: