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Why Own Gold (And Silver)?

25 March 2011 9 Comments

Fewer investments get the emotions going on either side of the argument like precious metals, specifically gold and silver.  The bulls and the bears have been arguing about this metal for thousands of years I’m sure, and I admit I’ve argued plenty with people I know recently.  This post aims to put some objective insight into the bullish case of owning gold and silver.

Here’s what I believe:

  • There are very sound fundamental arguments for owning gold and silver right now
  • Precious metals are not the same type of asset as stocks, therefore comparing a company like Microsoft to gold is sort of stupid.  Yes, I’m fully aware that gold doesn’t produce cash flows and finding a valutions based on future cash flows is impossible.  This has no bearing on whether or not gold is worth owning.
  • Gold and silver are forms of money more than anything else.  You don’t diversify stocks with gold, you diversify your cash with gold.  And, when we’re printing billions of US dollars every day, you can easily make the case for owning gold.

People often think I argue for owning gold just because I like gold for some strange reason. Maybe because it’s so pretty or something.  That’s stupid.

Here’s why I own gold…. drum roll please…

Because I think my gold will be worth more in the future and buy me more assets than if that money were in cash.

Boom.  There it is.  My ultimate aim isn’t to own gold.  My ultimate aim is to own as much productive assets as possible in the future.

I think productive assets will get less expensive in terms of gold as time goes on for the foreseeable future.  To a larger degree than US dollars.  Those assets might be stocks, businesses, whatever.

Do you get it?

Now you know why I own gold/silver.

9 Comments »

  • Arthur Garcia said:

    From all the research I've done it looks like there is a very real shortage of silver (more paper than physical silver). I think if someone is going to buy the precious metals they really need to take posession over the physical asset and not the paper – just a side note.

  • @piratecents said:

    What percentage of your assets do you hold in gold/silver? After I had to cash out of my silver position in 2006 for economic reasons, I haven't been able to choke down the price of silver that I was holding previously at $6/ounce.

    Also, where do you recommend buy/selling gold/silver with the least margin going to the dealers/brokers? (i prefer gold/silver i can hold. Old fashioned like that)

  • Mike said:

    I would go with online ordering from Apmex.com (American Precious Metals Exchange). It is the only online service I have used to attain physical metal. They also do not have sales reps calling you like Monex and goldline.com. Don't listen to ANY radio talk show hosts as to where they get their coins (Beck, etc.). Nowdays expect $40-70 above spot price for one ounce gold coins and $5-7 dollars above spot for 1 ounce silver coins. This would be normal. Also with Apmex.com, they will buy your coins back in the future. Good luck.

  • Bowmanave said:

    Own Silver and still collecting. Why did your friends roll there eyes? I rolled my eyes when people were preaching about Gold in 2005, now look where it is at!

  • Goldboy said:

    You need to own I believe up to 25% of your assets in gold / silver bullion. I also am transferring cash into stocks. We are not in a gold silver bubble by any means. Perhaps only 1-2% of the American public owns hard assets so a bubble is very far down the road. No one (friends / family) besides myself owns physical bullion. They thought I was a little off when I was buying gold at $700 dollars an ounce and still think so. All I have to say is too bad for them. I believe we will see $2000 an ounce in the near future – no problem. How do you think the government just averted a shutdown? QE must take place to finance the government. There is no end of this in sight.

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  • Anonymous said:

    “The single most important thing any human being can do, anywhere in the world, right now, today – is BUY SILVER. EVEN IF ONLY ONE OUNCE, OR TWO. BUY AS MUCH AS YOU CAN AFFORD. IF 100 Million human beings buy one ounce of silver – the central banker parasites are FINISHED. And, humanity can go back to living as God intended them to live – in FREEDOM.

    The Silver Bullet and the Silver Shield http://dont-tread-on.me/the-silver-bullet-and-the….

    Crash JP Morgan – Buy Silver (Episode 96, Keiser Report) http://www.youtube.com/watch?v=wN0rcNJXFfI

    I’m a Crazy Silver-Bug…Why Aren’t You?
    (or, 33 reasons to buy silver, instead of gold…) http://www.roadtoroota.com/public/597.cfm

    ‘LET’S GET THIS GLOBAL PARTY STARTED’ – Max Keiser, 2010

    source: http://www.thelibertyunderground.net/2011/05/ron-

    Watch ‘The Best Documentary of 2010′ – “The Secret of OZ”, to understand how the European Central Bankers took over the United States, in 1913, and realize, that by buying SILVER, we may be able to take our country back…

    The Secret of Oz http://www.youtube.com/watch?v=swkq2E8mswI

  • Pat said:

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  • WPC Flooring said:

    This is exactly what I was already doing. But when I came across the realization that it isn't set correctly on boot I thought I would ask about a different way.