Silver is a Shiny Option

Posted: July 22, 2012 in Investment, Metals

If you are living somewhere in what is considered Western World, you may think that we are approaching a radical systemic change. You may also thinking it won’t be for the better. In that case, what you should do (if you are not already doing) is to start converting paper currency into material wealth. Here I am talking about acquiring capital and commodities. Focus a large part of your monthly income into this – as much as possible!

Personally, I thinks precious metals should be an obligatory part of your portfolio. I started buying gold and silver back in 2007 and as you can see it paid back big time. Now due to the high price of gold (currently it is around 1 582 $/Oz), that precious metal is already too far from the monthly income of a lot of people. So, I would suggest to concentrate on silver instead.

This graph above shows the price of silver in the last 2 years. You can see how we are below the peak price around April 2011. One prediction is that in the sort term the prices will still drop a little, mostly due to the current low oil prices on the world market and the drop in the industrial production. Taking advantage of this relative low prices, you should start buying large amounts of silver, mostly bars. You can also expect higher yield for the silver investment with respect to gold. Here is why…

Traditionally, gold and silver were used as a safeguard against inflation. With most of the governments refusing to be fiscally responsible and continuing a record lever borrowing, you can expect devaluing of the currencies as people lose trust in the state. This is by no means exclusive to the US. Just an example: 20% of the money for the bailout of Spain will come from Italy. Under this deal,  it will be lent to the Spanish government at 3%, but to get that money they will have to borrow it on the markets at 7%. Brilliant, isn’t it? So, when you currency dies, don’t let your wealth die with it. The second reason is that unlike gold, silver has a much higher industrial application potential. There was a report by the Silver Institute in 2011, that we can exact strong industrial silver demand from developing China and India markets. This will also contribute to a silver increase.


As a investor, you have a choice between bars and coins. The prices typically track the spot price of silver, plus a premium of 10% to 25%, depending in which country you buy it. I would suggest buying larger amount at once (more than 10-ounce) because by that you can reduce the premiums to as little as 4%. Another option is going directly to a pawnshop. A pawnshop dealer normally doesn’t look at the market price, he is just interested into making a profit. With luck you can get some great deals out of it.

However you choose to buy physical silver, gold or other precious metals, the most important rule is to deal only with reputable dealers who have proven experience in the business and clearly stated policies and warranties – especially if you’re purchasing by phone or online. Do your research first!

If you live in Germany, these are some personally trusted online dealers with good prices:


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