Is silver bullion really a good idea?

Hi

After the last recession 2008 I have been storing and saving what I can afford. While looking for safer ways to retain the value of my money I decided to look for advice on precious metals. Everywhere I have looked it seems that everyone thinks silver is a good idea to store wealth. However im a bit confused as to why that is?

Due to silvers massive amounts of usage in industry it is said that it will always keep its value. However is it not clear that during recession or an entire economic collapse that the use of silver will decrease with production. It's use in cars and photography etc are declining and the solar industry is finding ways to use less and less silver.
Therefore in the event of an economic collapse will we not see the price of silver collapse too?

Initially I always thought silver would be safer given that one would get a lot more for their money than gold. However recently I read an article linking the price of gold to the confidence the public have in their government. If this is an accurate observation then it seems that the world is on the cusp of a perfect storm for civil unrest.
Already around the world we are seeing more and more governments losing the support of their people. We are seeing more protesting riots and mass immigration. With muscle flexing between the US CHINA and Russia it appears that more instability is on the horizon.
When people lose faith in their government they lose faith in their ability to maintain the country. Therefore they look to ways to preserve their wealth and in this situation I see gold as the safer bet.

Am I totally off with this uneducated assessment or will the silver hoarders make a fortune?

a reply to: InMyShell


Silver and gold is always a good idea. Especially now, I have read that the price is being kept artificially low, so it is the time to buy. The price of silver will eventually go up and will always have more value over paper money

a reply to: InMyShell

Thanks for your post - I'm passionate about this subject!

Hard assets like precious metals are a good long-term prospect. Also, collectors/investors seem to be most successful when they buy in smaller increments, slowly adding to their physical holdings (as opposed to making fewer, substantial purchases all at once)

Here's a nice article that might help you decide if your current approach is a good one (I think it is) www.cheatsheet.com...

a reply to: reldra

Yes I understand. But with production from almost every country slowing would the use of silver not also slow. Would this make silver more of a long term investment?

Gold isn't as connected to industry and will maintain its value if not increase with demand.

a reply to: reldra
I agree you cant go wrong with silver.

As long as you don't go extreme and convert all your assets to it.

I have a modest amount, maybe $10,000 dollars worth at current prices. I add to it when I have some extra resources.

I just keep it in a very secure place that no one knows about except a select few, and tend to forget about it.

It is my shtf stash. I pray I will never need it and can pass it to my son. But if need ever arises it is available.

ETA: OT, beautiful day in WNY is it not, and better as the week goes on.

originally posted by: InMyShell
a reply to: reldra

Yes I understand. But with production from almost every country slowing would the use of silver not also slow. Would this make silver more of a long term investment?

Gold isn't as connected to industry and will maintain its value if not increase with demand.

It might be in greater demand if not used in production, electronics won't be useful for scrap money the silver components inside. It will always have a value for trade. It is a long term investment, as others say should be added to little by little.

a reply to: InMyShell

Silver's relatively low value compared to gold is actually a benefit when viewed as a currency. Think of how small the shavings off of a gold bar would need to be to exchange gold for an apple, for example. It's easier to "spend" because it breaks down to smaller value than gold per gram/oz. Also, the industrial uses of silver are still continuing to expand.

There's a great infographic which details many (but nowhere near all) of the industrial and other uses of silver and their growth trends from Visual Capitalist Website I was going to post the picture, but it's really long (like scroll-thru long.)

originally posted by: InMyShell
a reply to: reldra

Yes I understand. But with production from almost every country slowing would the use of silver not also slow. Would this make silver more of a long term investment?

Gold isn't as connected to industry and will maintain its value if not increase with demand.

Overall production slow-downs will of course, reduce demand, but it would have to be an extreme slow-down to result in a year over year decrease in the use of silver. In other words, the slow-down rate would have to outpace the increased-uses rate, which is highly unlikely.

a reply to: InMyShell

Everywhere I have looked it seems that everyone thinks silver is a good idea to store wealth. However I'm a bit confused as to why that is?

Its a hedge against inflation, currency collapse, a tangible asset, one that can be held in the hand. As far as how much ten percent of your wealth, as far as what form or denomination?

Invest in whats called junk silver coins. Why is because not everyone will recognize silver bullion (bars or rounds) but most will be familiar with the look and feel of Pre 64 US silver coins. Their silver content is known and the coins themselves are readily identifiable.

One day you might need ten thousand paper dollars to buy a head of lettuce, or one US silver quarter. Silver dollars, half dollars, quarters and dimes… get a spread. Make sure the dates are readable and the ridges around the edge are still visible.

Junk Silver coins

a reply to: InMyShell

Silver has too many industrial applications. Gold is the best bet for a hedge against inflation or a SHTF scenario. When I buy gold I usually stick with 1/10 oz Eagles. The units are more affordable, are rarely if ever counterfeited (due to the relatively small size) and perfect for trading as opposed to 1 oz coins.

Take a look at 2011 gold prices and compare them to today's prices. Timing is everything.

Then compare the dow Jones for the same time period.

Realy more than a few Silver Bugs here eh.....
Stands to reason I guess....
Silver is undervalued at present....
The ratio of silver to gold is skewed way off....
That's why silver stacking is popular these days...

The price of silver will jump up better than gold when she does go according to dudes like
Peter Schiff
Jim Willie
Gerald Celente
and many other you can watch on you tube...
They are all saying its a good investment even if it doesn't rise in stellar proportins....
The idea of bank haircuts for depositors, as well as negative interest rates....(this is just simple highway robbery)

If you put a hundred bucks in savings acct, and get back 98 next year when you need it....whats the sense of that....
With precious metal (physically held- not certificates)
No matter what happens to the dollars value or the stock market or anything else....You still have the value of your hunk of metal....which can be used to start over....
Your bank funds may be disappeared (annnnd its gone....) your bonds may be worthless
But your shiny metal will retain its luster and value if you can hold on to it through the tumult of collapse or whatever.....

Golds for the rich, silvers for the poor. If things go bad, what you need to trade for will be easier with silver, if you try and use gold, you might end up paying a lot more for food stuffs or whatever if you pull out gold and expect someone to just want shavings off of it.

a reply to: InMyShell

Some is ok, but put no more than 5% of your total investments into bullion, there's a few reasons for that:

1. It's tough to value. If you're holding stocks, bonds, etc you know what they're worth, company performance, and so on. There are metrics other that give them worth, the only metric there is to a commodity is demand and that's a very subjective thing which makes it very difficult to exchange when you need to.

2. It generates no income. Owning bullion doesn't give you interest or dividends. The only possible way it can provide income is if it appreciates enough when you sell it (remember, you're buying above market price, selling below market price, and there's inflation each year, so you need a good bit of appreciation to profit). That's only going to happen if there's a collapse, and if there's sufficient demand which is unlikely given how easy it is to set up a basic banking system.

3. You're paying to store it. Unless you keep it at home which is way more risky than a collapse is, you're paying each year to keep it secure.

4. It's worthless if there's a confiscation. It has happened before when the government took everyones gold. If they needed to (such as say in a banking collapse) they could nationalize gold/silver holdings and simply taking them, maybe paying you or maybe not. Even if you kept your gold/silver at home and didn't hand it over, it wouldn't do you any good because you wouldn't be able to spend it anywhere.

5. Precious metals have small markets, most of the supply of these metals is bought up in investments right now which inflates their value. If there were ever a sell off such as a predicted collapse or hyper inflation the prices on them would bottom out leaving you with very few sellable assets as the major dealers cashed out. You would also be last to market because you're just an individual and not a major dealer further amplifying your losses.

You're going to call me crazy on this, but do you want to know what investment isn't over priced and would be the absolute best thing to have lots of on hand in a collapse? Spices, in particular salt and pepper. If trade were disrupted and society collapsed, the most valuable thing in your home right now is your box of salt, followed by pepper. It's necessary for food production/storage and it's a major luxury item spicing up (no pun intended) bland stored food like basic rice or corn dishes.

I buy tin, with lots of different kinds of food in it, and use it when the use by date gets near, with new tin with a long use by date bought to replace it, I don't like the taste on bar tin, or bar gold, plus $1,000 worth of silver to buy a tin of beans does not make economic sense to me, $1,000 worth of tinned food does.

a reply to: Aazadan

Thanks for the reply.

To be honest I was also looking towards food as potential investment.

The freeze dried tins of mountain house food are expensive but hold a 25 year shelf life. Would buying these preserve some of your wealth and allow you to protect yourself in food shortage. After 10 years when the shelf life is ticking down you can sell them on.

Would it be a safer investment to add to your self sufficiency such as purchasing solar panels (or making them diy style), setting up food growing system and storing high quality food with long shelf life that can be sold on if needed.

Interesting article on Zerohedge today concerning Silver that I'll link here: Silver Market Manipulation . There's also another article on Gold as well, anyways there's been a running conspiracy theory that the price of Silver has been artificially kept down. Now this article doesn't actually say the price has been kept down as per say, just that Deutsche Bank has agreed to settle a case against them in which they were accused of illegally manipulating the price with other banks.

I'd like to think this might cause the price of silver(and gold) to jump up(if the manipulation stops), as they both did a couple years ago but I should know better hehe.

Simply put, if you're planning for a shtf scenario, no, silver is not the greatest. Better than some things, but like another poster earlier stated, food and above all, spices will be priceless once everyone uses up what they had in their cabinet.

This is why so many merchants hundreds of years ago risked their lives at sea to trade spices from different countries. We as a species LOVE flavor. If the world falls into oblivion, our main focus will be food. Food isn't just nourishment... It's morale. You and your group of survivalists will be much happier if you have well seasoned food. And when in dire times, your mental well being is certainly near the top of the list.

Shiny things are nice, but until society gets going again after collapse, pretty metals will have no logical use.

If you're planning on having something to pass onto your children, silver is a wonderful idea. I'm building up my pile of plunder slowly but surely because I believe the S will HTF later rather than sooner. Hey, I could be wrong... But that's the fun of speculating!!

I have however, bought up some frankincense and myrrh resin. Back in the day, frankincense was worth its weight in gold... Literally!! So I've got both angles tackled

originally posted by: InMyShell
a reply to: Aazadan

Thanks for the reply.

To be honest I was also looking towards food as potential investment.

The freeze dried tins of mountain house food are expensive but hold a 25 year shelf life. Would buying these preserve some of your wealth and allow you to protect yourself in food shortage. After 10 years when the shelf life is ticking down you can sell them on.

Would it be a safer investment to add to your self sufficiency such as purchasing solar panels (or making them diy style), setting up food growing system and storing high quality food with long shelf life that can be sold on if needed.

Food can be ok, but you also have to consider a few things. Freeze dried food generally makes for a pretty poor diet so the plan of eating it in 10-15 years if you don't need it isn't a very good plan. There's also a bit of a hard cap on how much you need before trade is reestablished and food is available again. Remember that there is a lot of localized food production in the US (though not so for spices, we don't have the climate for it). So you're really only looking at needing enough for say a year. Beyond that, anything would be purely for trading purposes. Remember that in such a scenario, with each passing day the likelyhood that you will need additional food storage declines, so each meal you purchase is worth less than the previous one. Assuming you have some medical supplies, a couple entertainment items, and food... what else would you really need? Once you've met those requirements, in my opinion it's better to invest assuming the world isn't going to collapse.

Personally, I have about a months worth of food and that's it. Any other investment (and I don't have many since I'm a poor student) I have or plan to make is based more on buying into the system, if we ever ended up in a Mad Max scenario I would kill myself without any hesitation as I have no desire to live in that sort of world. Diversification is key though. Have assets around the world, in multiple currencies, of multiple types. Make it so that if something collapses you're not wiped out, and even if a government starts a bail in, most of your assets are outside that scope.

Looking at that Mountain Food brand though I can't say I agree. If I were going to buy some more food storage beyond my rice, pasta, and spices I would probably go with surplus MRE's. One, it helps the country get rid of unneeded items, two they're designed for field use where all you may have is a limited supply of water and a basic heat source (if any, many use chemical heaters), three they last just as long and are way less expensive, and four you can even go for things like the 3600 calorie protein bars which are very space efficient which is a huge consideration if you're in a scenario where you have to pack up and move but you don't have the ability to devote much car/backpack space to food.

a reply to: InMyShell

When I think metal investment, my primary focus is on industrial utility.

Silver is nice, it's undervalued, but since digital photography it just doesn't have the utility it once had. Still the fact that Silver Eagles are legal tender is something to consider.

I like gold better. It is also undervalued, and still nearly irreplaceable in many applications.

What I really like these days from an investment standpoint are rhodium and platinum. Both are severely undervalued at present. No where to go but up.

Aesthetically, I love the look of polished copper. If you are thinking in terms of trading for small quantities, you might want to consider some copper bullion. And don't overlook nickel. It's hardness and corrosion resistance will insure that nickel always in demand in industry. Remember, during WW2, they started making nickles out of silver because they needed the nickel for the war effort.