Investing in silver is one of the most fortunate investments you can make! Silver is a precious metal used as Official Coins (i.e., silver coins issued by a government mint), an industrial commodity and a hedge against inflation. Therefore, it has a three-fold benefit.
Silver has been in existence for hundreds of years to support the economy of trade. Governments, the world over, have issued official silver coins as legal tender. As a result, silver has historically been established as a form of currency for trade purposes only. In other words, silver was used to acquire desired items in the form of a barter system. More importantly, in current times, countries such as Mexico are trying advocate for silver as an actual currency! Look for more on this topic in future articles.
On the other hand, silver is also cited as an industrial commodity. When we speak of industrial commodity, this is implying that silver is used in the manufacture of goods which benefit the whole world. To illustrate, silver is used in the making of imaging technology, electronics, jewelery, coinage, superconductivity and water purification. For this reason, silver is no longer known as just a precious metal, a store of value, a work of art or an industrial commodity. It is all of these. Today silver is indispensable, working all around us to improve the quality of our lives. When economies are thriving, the demand for the above-mentioned products increases materially. When this happens, silver consumption grows, which in turn, bodes well for a higher silver price. Unfortunately, the economy is not thriving at the moment; however, this leads us into the next benefit of investing in silver.
It is well understood that silver is a hedge against inflation. We all know that the economy has been in a precarious situation since 2007. What this means is that inflation is a big threat to us all at the moment. One of the best ways to deal with this unfortunate situation is to invest in silver. Investing in precious metals, such as silver and gold, are universally known to be a great way of protecting your wealth in the face of a declining dollar (i.e., an inflationary environment). The purchasing power of the US dollar has steadily declined over time and experts agree that this trend is expected to continue in the immediate future. Precious metals often provide a “hedge against inflation” capability. For example, between 1971 and 1981, the US dollar lost more than half its value, while silver prices rose nearly five times. Economies fluctuate between inflation, recession and expansion. Therefore, investments in precious metals, such as silver and/or gold, help to diversify and lower overall risk.
Source by Amar Vaswani
Investing in Silver - A Good Idea
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