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Precious Metals

Precious Metals

During this very highly inflationary era that we are currently in many people ask themselves questions about investing in precious metals. Precious metals consist of gold, silver, platinum and rhodium as the main metals. There are others, but for the purpose of this article, we’re going to focus on these.

You can hardly watch television without seeing an ad for investing in gold or silver. The Morgan silver dollar has just been put on the market as a new release offered to the public at a flashpoint of 175,000 units. Many people don’t know this, but Franklin Delano Roosevelt made it illegal in the last century to physically hold or own gold. Any American owning gold was hit with a federal felony prosecution and face a penalty of up to five to ten years in jail along with a $10,000 fine. Roosevelt’s decree, which was memorialized as Executive Order 6102, still stands as one of the most remarkable, shocking tyrannical events in US history that was an outgrowth of the great depression. Fortunately, we can now own and possess gold now.

The questions are, what’s the purpose of buying it and number two, how do we hold it? The obvious should be true but we don’t recommend talking to people about the amount of gold and silver that you own, especially if you have it stored at your house. If you do, you should probably get a safe that is mounted either in the floor or to the concrete in your house. Other places to store precious metals would be the obvious safety deposit box at a bank and there are now companies that offer safekeeping storage in a commercial setting with a high degree of security. You can also own it in your self-directed retirement program or companies will store it for you for an annual fee.

The bottom-line is, precious metals, which are primarily gold and silver, are purchased as a hedge against inflation. If you go back over 2000 years, an ounce of gold would buy a beautiful custom-made suit. Today an ounce of gold will still buy a beautiful custom-made suit. Anytime a country experiences a lot of chaos as we saw in World War II, people revert to holding precious metal as a safety mechanism. There are many schools of thought on this and many say 5% of your net worth should be in precious metals. Some people believe that number should be more like 25%. With inflation in the United States hitting 9%, it’s a good time to ask yourself the question, “Is this a good time for me to hold gold and silver?”

Silver is used in industrially made products, the computer industry, and in cell phones there’s many applications. Silver is a necessity. This fact alone will maintain a good commercial value for owning silver since it is relatively inexpensive. So where are you going to store it at? How safe is it going to be?

When you get to the point that you want to sell your silver and gold the liquidity factor of selling is realistically a quick and fast transaction. When you look at bank rates, what they will pay you in a savings account or a certificate of deposit known as a CD, with inflation, you’re going backwards; you’re losing money. With precious metals Their biggest attribute is a hedge to inflation, so we fully expect to see the prices of gold and silver continue to climb in the near future. There’s a good case for why everybody should have some quantity of precious metals and their future investment plans no matter if they’ve been investing in stocks and bonds or real estate or Forex. Owning gold and silver is really an important consideration.

There are countries on our planet right now that are looking to back their currency with gold. This solidifies their currency and minimizes the fluctuation on the world market. Certain cultures like the Eastern Indians have and possess a lot of gold. Even their jewelry is 22 karats. Gold will go down as one of the most important commodities you can own on the planet. Even on cable television there are tv shows that show people pact mining for gold and at the end of one season, they walk away with millions of dollars of profit. People that invest in stocks often look at mining companies that mine silver and gold and other precious metals as a way to invest.

Areas of Review

Big picture takeaway points

Big picture takeaway points

  1. Precious metals are a hedge against inflation.
  2. It is quite simple to liquidate your assets of precious metals.

Reflection

Self-reflection questions to think more about the content

  1. Where do I get gold and/or silver and where do I keep it?
  2. Do I currently own any precious metals?

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