Why Should You Buy Silver and Gold

The Case For Gold

Gold is and always has for thousands of years been money. The is something very mystical about gold for people all over the world. Thousands of years ago countries as far apart and as Mexico and China both took on gold as their unit of ultimate value and you have to ask why is this. Gold has always been a safe haven during times of immense upheaval, and it is the ultimate insurance because it always keeps its value. One ounce of gold today buys what it bought 5000 years ago. It is important to remember that gold's essential quality is as insurance  and not as an investment. You may make money from buying gold but ultimately over time it never loses or gains its purchasing power.

The Case For Silver

Silver is known as poor man's gold and some people doubt that it has the same role as gold as a monetary metal. Luckily however China has always had the opinion of the importance of silver and has at times  been seen there as being more important that gold. Given China's support it will always be in demand. 

Silver has always tracked the price of gold within a certain range. This is known as the gold to silver ratio. It shows the number of ounces of silver you can buy with one ounce of gold. It has been as high as 80 and as low as 15 and for much of history as been around the 17 level. If for example the gold to silver ratio is currently around 60 then this means there is more potential on the upside for silver than there is for gold.

Silver has a number advantages over gold. You can get it in very small denominations - for example a 1964 silver dime can cost you as little as $2 where as the smallest gold coin will cost you at least $60 and are very hard to come by. In the back of many gold and silver enthusiasts minds is that their gold and silver may one day be needed to barter in the event of a complete financial crash. Silver is therefore the best option because yes you can always barter with your gold coin for a loaf of bread but it will be a very expensive loaf of bread. Silver coins will give you a lot more flexibility.

The Gold and Silver Bubble

If you watch the mainstream media you will hear a lot of talk about how gold ( and therefore silver ) is in a bubble. The first question you need to ask yourself is when has any mainstream media channel been able to time and call a bull market in anything. Was MSNBC warning us in July 2007 about the imminent property market crash or were they espousing the famous words "this time it is different" and house prices simply cant go down. 

When you understand this then you can take what the mainstream say at best with great objectivity at worst with great disdain. Gold is in a bull market and like all bull markets will come to an end some day. We are not there yet. Bull markets end with mass public euphoria and panic to get in so they dont miss out on the deal of a century ( real estate and the dot come bubble to name but two examples). The caution and pessimism show we are really not there yet and have a long way to go. When there is a bubble no one can see it - they are convinced that things can only go up, they are swept along by the mood of the masses and without exception this ends in tears for the majority. We are not there yet in gold or silver.

The Case for Financial Collapse

Are we heading towards currency collapse, a stock market crash, systemic failure? Once again the mainstream media would like us to believe that everything is fine. While no one can predict accurately future events, least still time them , there are so many factors gathering now that present a high probability of seriously bad times ahead. It is October 2010 and the problems of sovereign debt is rearing its head again in Europe. We have another crisis brewing in the mortgage market in the USA and the Fed is about to launch another round of trillions of money printing. There is huge public discontent throughout Europe and the USA which will manifest in the coming elections. People historically run to gold and silver for certainty in shakey times - with all this in mind how confident do you feel about the current status quo and how it will develop in the future.