Buying Gold-Silver as Investment

Discussion in 'Financial Cents' started by NOWHITEFLAG, Jun 2, 2011.


    NOWHITEFLAG Live Free or Die Trying

    I not rich enough to have extra money to buy gold/silver.
    Maybe I'm Lucky. The one thing that I have ask myself is if Gold/Silver is such a great thing to own and such a great hedge against inflation and economic collapse then why are the sellers, selling it and what are they buying with the devalued Dollars they are getting for it.Your thoughts please.
  2. UGRev

    UGRev Get on with it!

    You have to understand that there were sellers already established before this all happened. It's their business model. Additionally, manufacturing required these metals so there needed to be a seller at some point down the chain as well.

    I don't buy as an investment. I buy as an insurance policy against the destruction of the dollar.
    Falcon15, Georgia_Boy and cuad like this.
  3. Pax Mentis

    Pax Mentis Philosopher King |RIP 11-4-2017


    I think the large majority of folks on this site save it as insurance against a dollar collapse rather than as a normal investment.

    I bought most of my gold stash when the price was around 20% what it is now...I only buy now from local prospectors at appreciably under spot. I still buy silver, but the last time I did the math, the average price I have paid for it is about 50% of it's current value. In neither case am I tempted by profit taking...though I have given up a little silver at times in barter when it seemed the best way to go.
  4. cuad

    cuad Monkey+

    Curently there are two kinds of "sellers".

    There are coin and bullion dealers like those UGRev mentions, they buy at a discount from spot and likewise sell at a premium. Also, you have private sellers that are driven to sell by the current high prices. Those are trading the PMs for cash they are using to pay bills or simply spending it on consumer goods.
  5. shgrunewald

    shgrunewald Monkey+

    Silver is almost at par with gold. It is a hedge against inflation. Being one of the precious metals used in the computer hardware industry, it is better to invest in silver nowadays than gold.

    Sarah Grunewald
    New Mexico Gold Buyers
  6. melbo

    melbo Hunter Gatherer Administrator Founding Member

    Also important to note that most 'dealers' that I deal with put the profit from the sale right back into metals. If/when the USD collapses, they'll be holding a pretty amount of PMs.

    They buy low, sell high and then buy more low again.
  7. Incoming

    Incoming Monkey+++

    I've been buying and selling silver since 1978 after reading Howard Ruff's book Ruff Times. I remember buying 1000 oz bars in 1981 in the $3 range and using them as door stops. Sure wish I had a few of those around now. Silver has it's own value, even as a door stop however for us it has always been insurance as a hedge against the weakening FRN. Truth is, silver is still worth about the same as it was back in 1978, unfortunately the FRN isn't.
  8. Falcon15

    Falcon15 Falco Peregrinus

    The same goes for gold. I keep trying to explain to people this concept. The buying power of the FRN has dropped 52% in the past 11 years, and 17% in the last two. THAT, boys and girls, is the inflationary rate, the REAL one.
  9. ghrit

    ghrit Bad company Administrator Founding Member

    There is a lot to be learned by simply differentiating between value and price, yes? Beans have the same value and utility they always did, it just takes more to pay the price asked. Pick a commodity that doesn't follow that precept if you can find one.
    Falcon15 likes this.
  10. beast

    beast backwoodsman

    but i grow my own beans for almost nothing
    and get a very large return on each seed
    STANGF150 likes this.
  11. Incoming

    Incoming Monkey+++

    Send em to school and there they go eating the covers off the books.;)
  12. jacom4615

    jacom4615 Monkey+

    As mentioned earlier by others I have been buying PM's for many years as insurance. While I could usually afford to buy without hardship we did not go over board. I have had to liquidate some of them this past week to use as down payment on a new home we are buying. Due to the change in banking laws you can no longer borrow money on the equity of my paid off home to use as down payment on my new home. Luckily I had to do this during the week the market hit new highs in Gold so I came out OK. As soon as I liquidate the home I am selling and gold slumps a little I will buy more.
    While the original intent was not as an investment we did get an average of about 40% more than we purchased for the PM's.

    Again I do this more for insurance that I will have the ability to pay my taxes and meet emergencies when everything else is falling apart around us. That is why we have supplies and plans in place instead of going to the grocery store every day for our food.
    BTPost likes this.
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