Precious metals are valuable due to their rarity, industrial and technological demand, and consistent liquidity, divisibility, and durability as real money.
Gold and silver have been used as a means of exchange and a store of wealth for thousands of years.
If you currently invest in precious metals, you understand the value in diversification. Precious metals are used to hedge and help stabilize a portfolio when inflation and geo-economic uncertainty are present. Physical precious metals are a way to diversify away from debt encumbered investment vehicles.
The purchasing power of precious metals:
How do precious metals protect your purchasing power?
Paper currency values can be manipulated by government policy. As a government continues to print paper currency, the paper’s purchasing power weakens, and the costs of goods, services, and commodities rise. Gold and silver are commodities that must be tangibly produced as opposed to printed. The cost to produce gold and silver rises with inflation. Paper currencies lose value due to excessive government deficit spending. As a government goes further in debt, precious metals will offset the loss of purchasing power over time.
Inflation is another form of taxation. An “inflation tax” is regressive. The definition of regressive is to return to a previous and less advanced state. Gold and silver are considered by many as the best way to protect against the regressive effects of inflation.
Why are physical precious metals considered a conservative investment?
Unlike many paper investment vehicles, physical precious metals are void of counterparty risk. When you own physical precious metals, no one is borrowing or loaning against your holdings. When debt is attached to an investment, a higher level of risk is present.
Debt encumbered investment vehicles are considered speculative and can become worthless when adverse market conditions are present. Physical precious metals carry no debt and are considered a hedge. Gold and silver have never gone to zero in value.
When you own physical gold and silver, no one is borrowing or loaning against your financial future.
How can I maximize my purchasing power when acquiring precious metals?
Choosing the right precious metal dealer is paramount.
A legitimate precious metal company will:
To help ensure that you receive more metal for your money at purchase, and more money for your metal at liquidation, utilize this simple checklist to help you choose the right precious metal company.
FAQ: Your Key to Understanding!
