Few people that have analyzed the current level of federal spending and the entailing deficits that are projected for the foreseeable future, would argue that inflation is a necessary consequence of the ballooning national debt that is being accumulated. Whether this inflationary trend might repeat the gloomy days of the 1970’s is unclear or whether it might even exceed them is unknown. What is certain is that individuals that do not adequately prepare for this could see their savings lose even more value.
While there is no sure fire way to escape every economic scenario, investors have traditionally turned to gold as the primary hedge against inflation. During the last several years in the midst of the stock market unpredictability stemming from the tech bust of the late of 2000, followed by the terrorists’ attacks of 2001, and finally the banking and real estate crisis, stocks have declined astronomically. In turn, gold has rise in value from approximately 300 dollars an ounce to over 1000 dollars at present. Whether this simply reflects inflationary pressure or simply the security that gold represents, the results are impressive.
The problem of course is that spending a $1000 for an ounce of gold is not the most realistic course for most families. There is little doubt that even if gold were to fall in value, it will never fall to zero. The same cannot be said for stocks or bonds. Nevertheless the investment cost is still considerable. This brings us to silver.
Silver might be thought as a poor’s man gold, but its value should not be underestimated. At $15-$20 an ounce silver coins are affordable for almost anyone and the lower price while limiting the huge upsurge seen in gold, can likewise guard against the probability that its price will similarly swing in value. Different formulas have mapped the relationship between gold and silver, and it seems at present that silver is undervalued to some extent. This may provide an opportunity to invest. If the 1970’s are any indication, inflationary trends do raise the price of silver. At its peak, silver was valued at $50 an ounce.
The other benefit to silver as well as other precious metals is the simple fact that you have something tangible in your possession. Silver is easily liquidated and easily purchased. The variability of stocks and makes having some silver in your portfolio something to consider especially in an era when paper stocks are increasingly worth less than the paper and ink to print them.
Source by Jacob Lumbroso
Collecting Silver Coins - Investing in Today"s Economy
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