Gold and Silver – Where We Can All Get Along

Guest Post by Joe Paulson

I was talking to my older brother the other night. He still lives in Wisconsin, not too far from Madison. He’s about as blue collar as you can get. In fact, the HVAC company he works for has him wearing blue company shirts, so there you go. He’s also a part-time farmer and when he’s got a little free time, his wife provides plenty of work for him to do around the house. My brother and I have not always seen eye-to-eye as far as politics is concerned. He’s always been a Republican, but he’s recently a self-declared Libertarian/Tea Partier and though I dislike labeling myself, I’ve always leaned liberally left. Both my brother and I have always been delicate in our discussions regarding politics because we both respect and love each other and we’d rather enjoy each others’ company when we get a chance to talk or meet up. Over the last decade or so, though, our political perspectives have been lining up thanks to the policies of the last couple of presidencies. The bottom line is that we don’t like what we see happening and we both think there’s going to be some hell to pay sometime in the near future, and we’ve got a pretty good hunch that guys like him and me are going to be the ones expected to pay it.

As I mentioned in the opening, my brother and I were talking – it was a phone call – and at the end of a pleasant conversation, he mentioned that he thought he was finally going to take the plunge and purchase some gold. Well, I certainly perked up when I heard that! He knew that I have been a precious metals investor for a long, long time and we’ve talked about it a few times, but he was never really ready to take the plunge, so to speak. He was asking me how he should get started, what he should buy, where he could/should buy; you know, the usual fact-finding queries that any potential investor would present. Well, it just so happens that I started a couple of websites last month on this very subject – investing in silver and gold with a focus on individuals who are new to the precious metals. I’ll tell you pretty much what I told him…

This is an excellent time to purchase metals. If you’re not aware of the situation, silver and gold have been experiencing something of a painful, protracted correction in this current bull market. In spring of 2011, silver topped out close to $50 an ounce and gold hit around $1900. A couple of months ago, silver bottomed at around $18 and gold at $1200, give or take. Those are some serious drops, granted, and that’s what makes this a great time to purchase the metals. As the saying goes, “Buy low, sell high.” The price is low now. Could it go lower? Of course it could, that’s what makes investing an adventure, but the odds are that the bottom is in, or it’s pretty darn close. If you check a recent chart, silver’s popped up to $23 and gold to $1370. Those are some nice bounces. We have to see where we go from here.

So is that it? Is that why we should buy silver and gold? That’s one reason. Here are a few more for you:

  1. The US dollar has got his toes over the edge of the cliff, and he’s got more company by the second as the Fed continues to create $65 billion more of him every month (or is that $85B?). Every new dollar created lessens the value of the dollars in your wallet and bank accounts.
  2. World economies are unstable (can you say “bail in”?)
  3. World banking systems are unstable (can you say “bail out”?)
  4. Silver and Gold are viewed as real, stable money around the world.
  5. Consequently, nations around the world (China, India, Russia, and more!) are attempting to get as much gold and silver as they can.
  6. Physical demand of gold and silver is increasing heavily (up 53% during Q2 of this year) while investment of paper gold/silver is declining.

Number 6 there brings up a good point. In case you don’t know, paper gold/silver refers to ETFs (electronically traded funds) that track the price of the metals. You can purchase them like you would a stock from a broker, but as you can tell from that statistic, investors are frowning on paper and I suggest you do the same. If you haven’t made your metals purchase of yet, I strongly propose that you do and that you do it soon. Price is low, relatively speaking, but who knows how long it will be before the charade ends, before the music stops, or before the next children’s game metaphor appears? Get your hands on some real silver and gold in order to protect your savings. Stay away from the paper. Don’t agree to let anyone store it for you. Take delivery.

Right now, I recommend purchasing both silver and gold, but the gold/silver ratio is showing that silver is probably a better buy right now, so I’d go silver heavy. You can purchase from any number of reputable online dealers, or if you want to go strictly cash (for reasons of anonymity), you’ve probably got a local dealer in your town. Coins and bars are pretty much your two options when it comes to investment-grade bullion. You’ll probably want to go with 1 ounce gold bars or coins. For silver, 1 ounce silver coins and bars are good, but you may want to get some larger sized bars. As you can see, you’ve got some choices when it comes to your first purchase. Your first stop might want to be an online dealer to get an idea of price and selection.

Of course, there’s more to cover than we have room for here. Check out our websites listed below for specific information regarding where to buy, what to buy, and how to buy. If you have specific questions, you can reach me there. Thanks for reading! I’ll tell my brother you said “Hey!”

Joe

Joe is a father, husband, veteran, teacher, and precious metals investor for over 30 years. Learn more about the Silver and Gold stories at his websites. You can be one of his first followers @BuySellSilver