Quote (TaoTeChing @ Aug 18 2019 02:56am)
Recently instead of saving money I have been investing it into silver. The reason I’ve been investing 10% of my income into precious metals rather than saving it in the bank is because of inflation. Pre 1964 all us dimes and quarters were minted onto a 90% silver planchette, meaning not only did they have their face value, but they held intrinsic value as their precious metals content equaled it’s face value (a quarter contained 25 cents worth of silver, a dime contained 10 cents worth of silver etc) at that time 25 cents could buy you a gallon of gas, fast forward to today and our money (us fed money) has lost 98% of its purchasing power, meaning a gallon of gas today would cost you around $2.50, however till this day a pre 1964 quarter can buy you a gallon of gas not because of its face value of 25 cents but because of the intrinsic value of the 90% silver content. Therefore I’ve been investing 10% of my income into precious metals because I do not know how I am going to invest it for capital gain at the moment and the longer I wait the more my money loses value if I’m saving via paper currency due to inflation. Now I choose silver of all the precious metals for two reasons, 1. It’s affordable 2. Unlike gold, silver is an industrial metal, specifically in renewable energy (all solar panels contain silver) which is were our world is heading to, so in my opinion, silver will be used at such a high rate that it in time will no longer be affordable or available. What are your guys thoughts am I crazy for not having faith in Uncle Sam? Do you think small junk silver is the better investment for liquidity purposes or kg’s for the lower premiums?
Gold cannot by definition be an investment. An investment has to produce interest or dividends or growth unto of itself in some way. Gold sits there and does nothing. Gold
CAN be a speculation or trade. If you have a thesis for the demand for gold increasing you could do well.
Golds best function is as a store if value. It is an anti-investment. It has the lowest risk of any financial instrument we know of, including government bonds. Gold has an impeccable history of maintaining its purchasing power over the long run.
Golds second best function is as an insurance policy. Having redundant gold spread around the world is one of the best ways to protect against economic calamity and war. People will mock this and say no one wants gold in a crisis. But this is only a partial truth. The whole truth is no one knows what the next crisis will look like and you want as much redundancy as possible to get through. This means having gold, silver, bitcoin, monero, cash, food, etc etc... anything that might have value.
Everyone should have %10 of their portfolio in physical gold imo. A case can be made for %5 physical and %5 gold mining stocks to protect against government confiscation. In the 1930's it was illegal to own gold but it was legal to own gold mining stocks. So they were an outlet for people to gain exposure to golds price.