Silver

by Wes Bridel on December 31, 2009

in Stewardship

Could it be time to diversify your savings by buying silver?

Do you feel led to diversify your savings by buying silver?

Silver is much more volatile than gold.  As compared to Dollars, you can increase or lose the value of your capital much more quickly with silver and so it should not make up a large part  of your Savings and should really be the last portion that you add in order to diversify your savings.  Because it’s currently undervalued, we believe it might salvage the value of your wealth better than any other form of money in the case of a currency crises, but in the meantime, it’s a roller-coaster ride.  Also, we could be wrong, so don’t put too much of your cash reserve in Silver.  The value was pegged at 15 to 1 for hundreds of years before it began floating again.  Since then it will often be worth far less than 1/15th of gold.  However, in the crises of the past, it has usually climbed much closer to this historic value because people again began to hold is as money (because in good times, it is not usually held as money by most people).  Once this demand is reawakened, it can be substantial.  But again, it can move quickly the other direction as well in the meantime.

That being said, you can own it in much the same ways that you own gold.

Bullion
Silver Bullion premiums are usually higher than gold’s premiums.  $2.50/coin is common.  However, they will often pay you a premium back (though not as high) when you sell the dealer these coins back, so it’s not quite as bad as it appears.  Again, make sure you’re paying for the quantity of silver that you’re buying and not the “collectible” value (at least as Savings are concerned).  The market premium seems to be 10-20% above spot, but this changes over time.

Junk Silver

One great way to buy and hold silver for “worst case scenario protection” is to buy “junk silver”.  These are US coins minted before 1965 which were made of 90% silver by the Federal Government.  After this, the government began diluting the amount of sliver in the coins before eliminating it altogether.  These coins have absolutely no “collectible” value because they have lived in people’s pockets and traded hands as real money for years.  They can be bought more cheaply than “recognized” silver coins but would also be bought back cheaper if you were to sell them to a dealer.  However, it seems to us that if silver becomes much more coveted, this difference could shrink.  Also, the fact that each coin has a smaller amount of silver in them they are highly divisible to conduct trade with.

Again, a huge advantage of holding silver coins at your home is that they could easily be tradable for goods and services due to their smaller value per coin.

This post is Part 14  in the series A Few Ways to Prepare. To continue with this series, click on Pt 15. To use this as a growth tool to better understand your own calling, you might start by reading Pt 1, Pt 2, Pt 3, Pt 4, Pt 5, Pt 6Pt 7, Pt 8, Pt 9, Pt 10, Pt 11, Pt 12 and Pt 13.

Photo credit: xxmachonexx

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