Silver & Gold: Why? How?

by Wes Bridel on October 24, 2011

in Stewardship

We’re continuing a series on silver and gold in which I’m including parts of a letter I drew up to document our rationale for the board of an associations decision to hold gold and silver for a portion of savings.  This association currently holds US Dollar cash as its only form of savings.  I’m going to scrub the verbiage about the particular type of gold and silver I advised the association to hold because the advice would not be the same to every individual reading this.  However, you might pick up some important things to think about as you read of some of the qualities mentioned here.  You can read the important first few posts of this series starting here.

The reason it is advisable for the Association to hold gold and silver is because we currently have 100% of our money very aggressively stored in US Dollars.  The US Dollar is no longer backed by gold or anything else as constitutionally required and thus invites politicians to borrow and print to infinity.  In fact, they are doing precisely this and the US is currently the largest debtor nation in the history of the world with one of the largest current account deficits and no plans to change this predicament.

It is reckless to store all of our savings in a vehicle with such little reason to recommend it.  However, since the US Dollar is the unit of currency which we spend, we plan to keep most of our money in it.  To hedge against this risk, as decided at the annual Association meeting by a vote of 8-1, we authorized the management company to open an account at a discount broker to place 15% of our cash holdings into a fund determined to safely hold gold and silver in vaults in an international location which are regularly audited by third party auditors.  This fund has no other encumbrances such as the leading vehicles so often used today so often do.

We discussed this originally in March 2010, but unfortunately, did not act due to misunderstandings of correct protocol for such changes within the association.  I say unfortunately because our savings has depreciated by 82% against real money as measured by the fund we are now purchasing.

This is the 4th post in a series on silver and gold.  You can find all posts from this series at:  1) Gold & Silver on Sale, 2) Reasons to Buy Gold & Silver,  3) Gold & Silver: About to Take Off?,  4)  Why & How to Buy Silver & Gold?,  5) Gold Bubble?,   6) Gold Speculators or Savers?,   7) Gold Article Rebuttal, &  8)  Gold Rebuttal Pt 2.  Watch the previous economic update video series we did at: 1)  Europe Economic Update 1, 2) Europe Economic Update 2, 3) Europe Crises Explained, 4) World Economic Update, 5) US Economic Update,  6)  US Economic Update 2,  7)  US Economic Update 3,  8)  Hyperinflation Signs,  9)  Hyperinflation, Inflation, or Deflation?,  10)  Gold Update,  &  11)  Gold & Silver Update.

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