Junk Silver – 3 Reasons Why It Is the Best Metal to Buy When Preparing for an Economic Crisis

Despite its name, junk silver is not junk. The term junk silver refers to coins minted in the United States prior to 1965. These are coins that contain 90% silver and 10% copper. The US government stopped minting 90% silver coins in 1964 but it continued minting 40% silver half dollars from 1965 to 1970.

The first reason that this is the best precious metal to buy is its affordability.

You don’t have to have a lot of money to be able to buy it. In fact, you can buy it in as small of a quantity as a single dime on eBay. As with anything, the premium you pay will be higher when you buy it in smaller quantities. It is bought and sold in increments of $1.00 of face value. 10 dimes sell for the same as 4 quarters or 1 half-dollar and 5 dimes. Any combination of coins that total $1.00 face value weighs the same when they were minted and have the same silver content.

The second reason is because it’s easily recognizable.

The majority of people around the world have seen a US quarter, dime or half-dollar. This is very useful when it comes time for authenticating on the go. This is what makes it so valuable in times of economic crisis. You can use it to make every day transactions without the fear of having the coins being rejected because the seller does know if it is authentic or not.

The third reason is because it comes in quantities small enough to use for every day purchases when bartering.

The last thing you want in an economic crisis is to have bullion that is worth $1000+ per coin when you need to buy a loaf of bread. Today, 90% silver dimes are worth $2.95 if you buy one and $1.50 if you buy 10. Similarly, you can buy a single quarter for $5.75 and $3.75 if you buy 10. For this reason alone, you should buy junk silver first and only when you have a stockpile that will last you 1 year (at a minimum) should you start to buy less recognizable gold and silver bullion.

In summary, junk silver is the best precious metal to buy because it’s affordable, easily recognizable and comes in small enough quantities to be able to be used for every day transactions.

Gold And Unrealistic Expectations – Gold Is Not An Investment

Gold has been characterized as insurance, a hedge against inflation/social unrest/instability, or, more simply, just a commodity. But it is treated most of the time, by most people, as an investment.

This is true even by those who are more negative in their attitude towards gold. “Stocks are a better investment.” In most cases, the logic used and the performance results justify the statement. But the premise is wrong. Gold is not an investment.

When gold is analyzed as an investment, it gets compared to all kinds of other investments. And then the technicians start looking for correlations. Some say that an ‘investment’ in gold is correlated inversely to stocks. But there have been periods of time when both stocks and gold went up or down simultaneously.

One of the commonly voiced ‘negative’ characteristics about gold is that it does not pay dividends. This is often cited by financial advisors and investors as a reason not to own gold. But then…

Growth stocks don’t pay dividends. When was the last time your broker advised you to stay away from any stock because it didn’t pay a dividend. A dividend is NOT extra income. It is a fractional liquidation and payout of a portion of the value of your stock based on the specific price at the time. The price of your stock is then adjusted downwards by the exact amount of your dividend. If you need income, you can sell some of your gold periodically, or your stock shares. In either case, the procedure is called ‘systematic withdrawals’.

The (il)logic continues… “Since gold doesn’t pay interest or dividends, it struggles to compete with other investments that do.” In essence, higher interest rates lead to lower gold prices. And inversely, lower interest rates correlate to higher gold prices.

The above statement, or some variation of it, shows up daily (almost) in the financial press. This includes respected publications like the Wall Street Journal. Since the US elections last November, it has appeared in some context or other multiple times.

The statement – and any variation of it that implies a correlation between gold and interest rates – is false. There is no correlation (inversely or otherwise) between gold and interest rates.

We know that if interest rates are rising, then bond prices are declining. So another way of saying that gold will suffer as interest rates rise is that as bond prices decline, so will gold. In other words, gold and bond prices are positively correlated; gold and interest rates are inversely correlated.

Except that all during the 1970’s – when interest rates were rising rapidly and bond prices were declining – gold went from $42 per ounce to $850 per ounce in 1980. This is exactly the opposite of what we might expect according to the correlation theory cited earlier and written about often by those who are supposed to know.

During 2000-11 gold increased from $260 per ounce to a high of $1900 per ounce while interest rates declined from historically low levels to even lower levels.

Two separate decades of considerably higher gold prices which contradict each other when viewed according to interest rate correlation theory.

And the conflictions continue when we see what happened after gold peaked in each case. Interest rates continued upwards for several years after gold peaked in 1980. And interest rates have continued their long-term decline, and have even breached negative integers recently, six years after gold peaked in 2011.

People also talk about gold the way they talk about stocks and other investments… “Are you bullish or bearish?” “Gold will explode higher if/when… ” “Gold collapsed today as… ” “If things are so bad, why isn’t gold reacting?” “Gold is marking time, consolidating its recent gains… ” “We are fully invested in gold.”

When gold is characterized as an investment, the incorrect assumption leads to unexpected results regardless of the logic. If the basic premise is incorrect, even the best, most technically perfect logic will not lead to results that are consistent.

And, invariably, the expectations (unrealistic though they may be) associated with gold, as with everything else today, are incessantly short-term. “Don’t confuse me with the facts, man. Just tell me how soon I can double my money.”

People want to own things because they expect/want the price of those things to go up. That is reasonable. But the higher prices for stocks that we expect, or have seen in the past, represent valuations of an increased amount of goods and services and productive contributions to quality of life in general. And that takes time.

Time is of the essence for most of us. And it seems to overshadow everything else to an ever greater degree. We don’t take the time to understand basic fundamentals. Just cut to the chase.

Time is just as important in understanding gold. In addition to understanding the basic fundamentals of gold, we need know how time affects gold. More specifically, and to be technically correct, we need to understand what has happened to the US dollar over time (the past one hundred years).

Lots of things have been used as money during five thousand years of recorded history. Only one has stood the test of time – GOLD. And its role as money was brought about by its practical and convenient use over time.

Gold is original money. Paper currencies are substitutes for real money. The US dollar has lost 98 percent of its value (purchasing power) over the past century. That decline in value coincides time wise with the existence of the US Federal Reserve Bank (est. 1913) and is the direct result of Federal Reserve policy.

Gold’s price in US dollars is a direct reflection of the deterioration of the US dollar. Nothing more. Nothing less.

Gold is stable. It is constant. And it is real money. Since gold is priced in US dollars and since the US dollar is in a state of perpetual decline, the US dollar price of gold will continue to rise over time.

There are ongoing subjective, changing valuations of the US dollar from time-to-time and these changing valuations show up in the constantly fluctuating value of gold in US dollars. But in the end, what really matters is what you can buy with your dollars which, over time, is less and less. What you can buy with an ounce of gold remains stable, or better.

When gold is characterized as an investment, people buy it (‘invest’ in it) with expectations that it will “do something”. But they are likely to be disappointed.

In late 1990, there was a good deal of speculation regarding the potential effects on gold of the impending Gulf War. There were some spurts upward in price and the anxiety increased as the target date for ‘action’ grew near. Almost simultaneously with the onset of bombing by US forces, gold backed off sharply, giving up its formerly accumulated price gains and actually moving lower.

Most observers describe this turnabout as somewhat of a surprise. They attribute it to the quick and decisive action of our forces and the results achieved. That is a convenient explanation but not necessarily an accurate one.

What mattered most for gold was the war’s impact on the value of the US dollar. Even a prolonged involvement would not necessarily have undermined the relative strength of the US dollar.

Why Invest In Gold

Why should gold be the product that has this unique property? Most likely it is because of its history as the first form of money, and later as the basis of the gold standard that sets the value of all money. Because of this, gold confers familiarity. Create a sense of security as a source of money that always has value, no matter what.

The properties of gold also explain why it does not correlate with other assets. These include stocks, bonds and oil.

The gold price does not rise when other asset classes do. It does not even have an inverse relationship because stocks and bonds are mutually exclusive.

REASONS TO OWN GOLD

1. History of Holding Its Value

Unlike paper money, coins or other assets, gold has maintained its value over the centuries. People see gold as a means to transmit and maintain their wealth from one generation to another.

2. Inflation
Historically, gold has been an excellent protection against inflation, because its price tends to increase when the cost of living increases. Over the past 50 years, investors have seen gold prices soar and the stock market plummet during the years of high inflation.

3. Deflation
Deflation is the period during which prices fall, economic activity slows down and the economy is overwhelmed by an excess of debt and has not been seen worldwide. During the Great Depression of the 1930s, the relative purchasing power of gold increased while other prices fell sharply.

4. Geopolitical Fears/Factors
Gold retains its value not only in times of financial uncertainty but also in times of geopolitical uncertainty. It is also often referred to as “crisis commodity” because people flee to their relative safety as global tensions increase. During these times gold outperforms any other investment.

THE HISTORY OF GOLD AND CURRENCIES

All world currencies are backed up by precious metals. One of these being gold playing the major role is support the value of all the currencies of the world. The bottom line is Gold is money and currencies are just papers that can wake up valueless because governments have the overruling power to decide on the value of any country’s currency.

The Future Of Currencies We Are At The Tipping Point

WHY SMART INVESTORS ARE INVESTING IN GOLD?

1. The markets are now much more volatile after the Brexit and Trump elections. Defying all odds, the United States chose Donald Trump as its new president and no one can predict what the next four years will be. As commander-in-chief, Trump now has the power to declare a nuclear war and no one can legally stop him. Britain has left the EU and other European countries want to do the same. Wherever you are in the Western world, uncertainty is in the air like never before.

2. The government of the United States is monitoring the provision of retirement. In 2010, Portugal confiscated assets from the retirement account to cover public deficits and debts. Ireland and France acted in the same way in 2011 as Poland did in 2013. The US government. He has observed. Since 2011, the Ministry of Finance has taken four times money from the pension funds of government employees to compensate for budget deficits. The legend of multimillionaire investor Jim Rogers believes that private accounts will continue as government attacks.

3. The top 5 US banks are now larger than before the crisis. They have heard about the five largest banks in the United States and their systemic importance since the current financial crisis threatens to break them. Lawmakers and regulators promised that they would solve this problem as soon as the crisis was contained. More than five years after the end of the crisis, the five largest banks are even more important and critical to the system than before the crisis. The government has aggravated the problem by forcing some of these so-called “oversized banks to fail” to absorb the breaches. Any of these sponsors would fail now, it would be absolutely catastrophic.

4. The danger of derivatives now threatens banks more than in 2007/2008. The derivatives that collapsed the banks in 2008 did not disappear as promised by the regulators. Today, the derivatives exposure of the five largest US banks is 45% higher than before the economic collapse of 2008. The inferred bubble exceeded $ 273 billion, compared to $ 187 billion in 2008.

5. US interest rates are already at an abnormal level, leaving the Fed with little room to cut interest rates. Even after an annual increase in the interest rate, the key interest rate remains between ¼ and ½ percent. Keep in mind that before the crisis that broke out in August 2007, interest rates on federal funds were 5.25%. In the next crisis, the Fed will have less than half a percentage point, can cut interest rates to boost the economy.

6. US banks are not the safest place for your money. Global Finance magazine publishes an annual list of the world’s 50 safest banks. Only 5 of them are based in the United States. UU The first position of a US bank order is only # 39.

7. The Fed’s overall balance sheet deficit is still rising relative to the 2008 financial crisis: the US Federal Reserve still has about $ 1.8 trillion worth of mortgage-backed securities in its 2008 financial crisis, more than double the $ 1 trillion US dollar. I had before the crisis started. When mortgage-backed securities become bad again, the Federal Reserve has much less leeway to absorb the bad assets than before.

8. The FDIC recognizes that it has no reserves to cover another banking crisis. The most recent annual report of the FDIC shows that they will not have enough reserves to adequately insure the country’s bank deposits for at least another five years. This amazing revelation admits that they can cover only 1.01% of bank deposits in the United States, or from $ 1 to $ 100 of their bank deposits.

9. Long-term unemployment is even higher than before the Great Recession. The unemployment rate was 4.4% in early 2007 before the start of the last crisis. Finally, while the unemployment rate reached the level of 4.7% observed when the financial crisis began to destroy the US economy, long-term unemployment remains high and participation in the labor market is significantly reduced five years after its end. the previous crisis. Unemployment could be much higher as a result of the coming crisis.

10. US companies fail at a record pace. At the beginning of 2016, Jim Clifton, CEO of Gallup, announced that the commercial failures of the United States are larger than the start-ups that began for the first time in more than three decades. The shortage of medium and small companies has a great impact on an economy that for a long time has been driven by the private sector. The larger companies are not immune to the problems either. Even heavyweights in the US economy such as Microsoft (which has reduced 18,000 jobs) and McDonald’s (which shut down 700 stores during the year) are suffering this terrible trend.

Why smart investors add physical gold to their retirement accounts?

Ensuring inflation and deflation.
Limited delivery Demand up
A safe haven in times of geopolitical, economic and financial turbulence.
Diversification and portfolio protection.
Stock value.
Cover against the decline of the printing policy of dollars and money.