10 Reasons Why Gold Is The Gut Reaction And Why Silver Is The Smart Decision

We are at the beginning of a major shift out of paper assets into real assets. Those that are starting to come to this revelation have no real understanding what they are doing when they are buying gold. Sure they might get that it is rare and might remember their grandfather saying buy to gold, but they have not gone through the educational process necessary to truly grasp what they are doing.  When I wanted to get out of paper assets, I bought gold as a gut reaction. The more I learned about silver, the more I realized that silver was the smart decision.

When I first started my awakening process in March of 2005, I studied credit cycles and finally understood that the Federal Reserve is a privately and foreign owned bank. I wanted to get my wealth out of their casino. In fact, I recently warned paper investors that it is insanity to be betting in the paper casino, because the entire system is coming down. (Who Cares About Your Bet,  If The Casino Is Demolished?!) Now that people are starting to see this insanity, they want out. So where do people who have trusted the paper market first go when they have their awakening? Gold. Gold is the largest precious metals market in the world and has the most advertising behind it. People have seen it in movies as pirate treasure and maybe heard it was confiscated may years ago. I think gold so impressive to hold and feel, it is hard not to make it your first purchase. In short, gold is the gut reaction for most paper investors who want out of the casino. I think this is the reason why we see so much activity in gold versus silver right now.

The more I learned about silver, the more I saw that it was the only investment for me and my family. I am more bullish now in 2011, than I was when I bet the house on silver in 2005. When you truly understand the fundamentals behind silver, you will see that it is simply the best investment out there. I challenge anyone to find me a better investment. I love a challenge.

First and foremost the reason for investment into silver is that it is a physical tangible asset. When I say invest in silver, I DO NOT mean anything else but the real stuff in your hand. If you don’t hold it, you don’t own it. Stay away from SLV, unallocated bullion accounts, mining shares, etc. stick to the physical. I would hate for you to be right on silver and wrong on the form of silver.

We are entering a generational shift out of paper assets into real tangible assets. As I have stated many times in the past, the dollar is going to collapse and it basis for the entire world economy. It is a mathematical certainty. This dollar collapse will be the single largest event in human history and will dramatically touch every human being on earth and will leave a scar on generations to come. Yes, it is going to be that big.

When the mathematically inevitable collapse of the dollar happens, all paper assets will be destroyed. This goes for Dollars, Yen, Euro, CDs, Munis, T-Bills, Money Markets, Insurance Policies, Pensions, Privately Owned Businesses, Structured Settlements, Social Security, Dividends, 401ks, IRAs, Stocks, Options, Bonds and even Real Estate. Without a functioning currency and the uncertainty it brings, credit grinds to a halt. Payments grind to a halt. Markets grind to a halt. The world economy grinds to a halt. People panic. This ALWAYS leads to war.

This naturally leads investors to tangible assets like commodities. Commodities are real things we use in our everyday life like pork, cotton, corn, oil and steel. The problem with most commodities is storage. I know for a fact that the two best assets to be in in terms of real inflation adjusted returns will be food and fuel. They are the most essential to humanity and the hardest to live without. I strongly recommend people stocking up on preparations before they buy silver. You will need at the very least 3 months supply of food per person as a buffer for the massive social upheaval we are going to go through with the collapse of the dollar. The problem with investing in most food and fuel is storage issues. Most food and fuel deteriorates and becomes worthless. Also storage can be prohibitive especially if we are talking about some big dollars. I don’t know about you, but I don’t have a grain silo or storage tanks.

In extreme conditions those that invest in food and fuel, put their life at risk. People’s violent response to those moneyed interests that tried to speculate with people’s food during times of crisis is something to consider. In 1565 one of Antwerp’s richest men, Pauwels van Dale, bought large amounts of grain with hopes of driving up the prices. When the starving people found out about the stash, they rioted all over the city. Speculators and the rich were targeted with violence for their arrogance and greed.

Unless you are a farmer or oil baron this usually rules out many commodities for the average investor. This brings us to metals because they don’t deteriorate. For most metals, storage again is a big issue. $8,000 will buy you a ton of copper but just over 4 ounces of gold. This is why precious metals are so sought after, because of their rarity and the ability to store so much wealth in a small space.

One of the biggest reasons why people invest in precious metals is that there is no counter party risk. Its value is derived from its intrinsic value of rarity and potential uses. With precious metals you do not have to worry about someone paying a dividend or earnings in a depression or a currency collapse. In fact the worse things get in the economy, the more people will escape to precious metals and drive up its price.

Once you see that precious metals are the place to be, then you need to choose between the big 4 precious metals; Gold, Silver, Platinum and Palladium. Platinum and Palladium have rarity and industrial use going for them, but they have not ever been used as money in history. With a currency collapse, I want something that will have the most demand to drive up the price the most. I want my metal to have industrial, investment and monetary demand. (Read the 3 Demands of Silver.)

This leaves us with gold and silver as the only two rational choices for investment in the face of a mathematically inevitable world-wide currency collapse. So let us go through the competitive advantages of silver over gold .

1) Silver the second most versatile commodity, second only to oil. With its growing technological and medical uses, its demand is vital to any recovery we will see. Silver’s unique anti-microbial, reflective and conductive qualities make it a vital element in many high ticket projects. Since it is so vital and used in such small quantities, its price is inelastic. If silver goes to a $1,000 an ounce and Apple Computer needs a 1/10 of an ounce to make their $2,000 computer work at the highest quality, they will simply raise the price $100 to make up the difference.

2) Silver is cheap enough for the common man to buy. With gold at $1755 an ounce it is not really conceivable the average American, much less most people in the world, will ever have enough money to buy one ounce of gold. People are struggling to make mortgage payments, much less buy an ounce of gold. With silver at $38 dollars an ounce, a husband could buy a couple of coins without consulting the wife. If he blew $1,755 on one ounce of gold, he might have some explaining to do. Since silver is relatively cheap, the higher the price of gold goes, the more demand will naturally flow into silver.

3) Gold is treasured, silver is thrown away. Since the dawn of man, gold has been treasured. In more recent times, silver has been trashed as an industrial commodity and not valued as a precious metal. With the rise of technology, silver has been literally thrown away in such small quantities that is may never be recovered. In fact, the USGS said that if this current trend continues, silver will be the first element to become extinct on the periodic table.

4) There are no large stock piles of silver left. Over the past decades we have been consuming more silver every year than we mine. This is only possible because we used up all of humanity’s previously mined silver. In 1950, it was estimated that there was 10 billion ounces in major stockpiles, today there are none left. So even though gold is 10 times more rare than silver when mined out of the earth, the fact that gold has been treasured and silver has been trashed, makes the silver that is left much more rare than the 10 to 1 ratio that naturally occurs.

5) The gold to silver ratio is at 1:45. It takes approximately 45 ounces of silver to buy one ounce of gold. If throughout all of history silver has been mined a gold to silver ratio 1:10, how much longer can a 1:45 ratio exist? If silver has been trashed for decades and gold treasured, how much longer can the 1:45 ratio exist? If the amount of dollars invested in gold and silver at Sprott Asset management and GoldMoney is 1:1, how much longer can the 1:45 ratio exist? At some point the market is going to recognize the incredible opportunity. When it does, it will most likely overshoot and could make silver more valuable than gold. So if you really want gold, buy silver. You can buy 45 ounces of silver now and if the ratio falls to a 1:1 ratio you can trade 45 ounces of silver for 45 ounces of gold. (Read the 3 Big Charts I Watch for Silver.)

6) Silver has the largest and most persistent short position in any commodity, ever. The only reason why the 1:45 ration exists is because the banksters sell paper silver into the paper markets to suppress the price of silver to give strength to the dollar and the quadrillion dollar paper empire they rule. Last May, when they crashed the silver market, they sold something like 8 billion ounces of paper silver into the market in 5 days. There is only about 1 billion ounces of silver mined a year globally. This massive naked short will unwind the day that they cannot deliver on the silver they promised. Crash JP Morgan; Buy Silver. (Read Blythe Master’s Rides The Silver Rocket.)

7) The banksters are running out of silver and time. The COMEX registered inventory now stands at 27 million ounces. I knew when the May smack down came that it was all BS. Logic would dictate that if the price of silver dropped that significantly there must be more physical silver in their vaults. When the inventory numbers came out, there was actually less silver. Not only was more silver delivered to buyers, sellers cancelled their warrants and shrunk the inventory from the supply side like OPEC does. (Read the 11 Mentality Shifts of Silver Investors.) When this massive fraud is discovered, there will be panic buying as the sharks smell blood in the water.

8) The silver market is so small. With only 27 million ounces in the COMEX, a little over a billion dollars would completely empty that largest stock pile of silver. Last Wednesday the Treasury added $240 billion dollars to our debt in just one day. If you see that quadrillions in paper assets are going to fail and that most commodities are not suitable for investment and how small the silver market is, it does not take a very large stretch of the imagination to think what will happen when people try to get into this market. Since the gold market is so large, I think that is why we see central banks and major institutions are buying gold. If they dumped a billion into silver, they would explode the market. A billion into gold would hardly make a ripple. I believe this is why we have seen gold react, while silver sits.

9) The majority of gold owners are the banksters. If you look at the largest stockpiles of gold owners it falls mostly on the central banks of the world. The very guys that are destroying the paper markets, are the largest owners of gold. There is no central bank that I know of that even owns an even an ounce of silver. Since silver has been used more times as money throughout history as money than gold, logic would dictate that at some point banks are going to want to own silver.

10) Gold bullion is more reported on than Silver bullion. Gold is reported on twice as much in the media as silver. I would bet if you only looked at major media reporting, Gold is probably reported 100 times more than silver, since silver is almost completely ignored. The only time I have seen silver reported is when we get a major smack down in price and the main stream propagandists strike fear in to their consumer slaves about how scary the silver market is.

I have many, many more reasons why you should be buying silver right now. I recently compiled 11 of my best reports on silver called the Ultimate Silver Investor. One of the reports has been read 400,00 times and has been translated into 7 languages that I know of. It is all free by clicking here.

 

If you want to become aware and prepared for this collapse, please join the free Sons of Liberty Academy.

67 comments to 10 Reasons Why Gold Is The Gut Reaction And Why Silver Is The Smart Decision

  • Prudentis

    I have been reading nearly all of your blogs since march 2011 or so.
    I agree on silver AND gold being THE assets to hold when the crises hits.
    I have one problem with your comparison on gold/silver.
    You always state the industrial use of silver but when the dollar collapses with all remifications, what will be left of the high-tech industry? Can you still seriously consider the industrial use of silver in such a scenario? In my eyes you can’t. You either rely on one or the other, not on both.
    Care to elaborate on this?
    My current ration silver:gold in ounces is about 26:1 (I hold 26 ounces of silver for every ounce of gold I have) What is your ration and why?

  • Eric ROy

    Quick question regaridng this article on the 10 reasons to own silver, published on aug 9th 2011. You mentioned in your article the death of all paper based assets, including insurance policies. I am a financial planner and i think it’s important for me to understand what it means exactly for my clients. I personally own lots of physical gold and silver, and try to educate my clients on the subject. BUt when it comes to isurance policies(cash values, death benefit). I realize the dollar has a big chance of collapsing, but when it recovers in(5-10 years) those cash values and death benefit will still be there I asssume?? If they didn’t do any withdrawals, i guess once the economy has recovered, the dollars will be revalued?? Would that be a fair assumption?
    I would appreciate any feedback!

    Best regards

    Eric

    • Silver Shield

      There has never been a currency that has recovered from a collapse.

      Once faith is destroyed it cannot be brought back.

      The Dollar is a ponzi scheme that is mathematically going to fail.
      Our monetary system is one where the dollar is debt and that this debt MUST expand in excess of the debt AND interest accrued the year before.
      If debt is not created in excess we would face the largest margin call the world has ever seen.
      If debt is expanded we reach a compounding interest event where the interest due grows farther and faster requiring more money to be printed out of thin air.
      http://www.youtube.com/watch?v=gqUzQjXNliU

      When the dollar fails all other currencies and paper markets will collapse.

      There will be a world wide rush for anything of real tangible value.

      Quadrillions in paper assets will be rendered worthless.

      Insurance policies are ponzi schemes built upon a fictitious and manipulated stock market wrapped in another ponzi scheme of the dollar.

      Look at the cash benefits of people who paid premiums for 40 years their policies would barely pay for a mortgage payment.

      Inflation destroys the purchasing power of the dollars paid out a hyper inflation would make all policies worth less.

      It is all coming down and the only way to transport wealth into a new financial paradigm is to have all of your assets in real tangible assets.

  • Prudentis

    No comments to my question?

  • silver buyer since 7.00 an ounce

    The week after Bin Laden was killed and silver went from 50.00 to 30.00 an ounce I listened and read all the nuckle heads bash silver and poke fun at the people that have been investing in it, and say things like “ya real smart just keep buying it and when it is done crashing I’ll be buying it at 5.00 an ounce” WELL its rite back to over 40.00 an ounce most of the naysayers just dont get the fact that if one billion is spent all the unearthed silver will be gone and would make silver untouchable. I just hope all the guys that do no research and pretend they know what they are talking about to stay away so I can keep buying like I have. we will see who is laghing in the end.

  • silver buyer since 7.00 an ounce

    people dont forget, I hear alot of when the market crashes and doomsday talk and how important silver will be. I like to be an optomist and think there is still a chance to pull out of the mess we are in and if that happens just think how important silver will be to us as then. I do own some gold so I can cash it in when I think it hits its high and buy more silver. when the super eilite like Warren Buffet are buying millions in silver and getting capped on how much they can buy that just strenthens what you are saying. hear is a good test walk into one of thoes “jewelry stores” that really dont sell anything and look for the glass showcase that show you all kind of silver coins old and new and ask them if you can buy a piece, the answer is allways no we just buy. you can buy jewelry and srap items but nothing with its weight on it (ingot,bullion,) whatever hmmmm I wounder what they know? try to buy ingots for the actual price, never,, you allways have to pay more

  • silver buyer since 7.00 an ounce

    time to buy!!! here comes another shake the tree and see how many people are scared into selling so there is more bullion for the people that can afford a million at a time if there is one thing worse that the rich hate more then taxes is middle class and lower middle class getting in the way of them from making more. The bottom line is its just not availible, china has lowered the amount they are selling to the U.S. and when there are tousands of people that are not rich but still investing 30.00,50.00, even 10.00 dollars a week or even a month it adds up to the handfull of mega rich trying to buy mega ammounts DONT FALL FOR IT!!!!keep buying. PS uncut etheopion opals, I started buying them allmost two years ago at not much more then a dollar a carrot now I see ones cut selling for 30.00 to over 100.00 per carrot. just food for thought

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