10 April 2008
Investment Suggestions
Posted by Joy Bischoff under: World Economy .
Peter Anderson noticed that some of our bloggers mentioned an interest in investing in gold or silver so he sent me an article by a respected economist discussing the subject.
Gold and Silver, Preparing for the Next Launch- to Greater Heights
by Peter Degraaf | April 9, 2008
According to the World Gold Council, demand for gold is running 30% above last year. It’s no wonder! While the gold supply is decreasing, the amount of paper and digital money is increasing. It’s like going to an auction, where the number of artifacts is limited, and upon entering the auction hall, the auctioneer hands out hundred dollar bills. Guess what is going to happen? Prices will rise!
The article outlines reasons both Russia and China are poised to buy more gold. Also, the EU has mandated that the electronics industry stop using certain materials and has forced manufacturers to switch to silver and gold.
Graphs comparing other commodities like copper, lead, uranium etc. show gold and silver lagging behind and experts expect them to rise to a more comparable level.
It is fairly common knowledge that when interest rates fall, gold and silver rise. We are following Japan’s pattern for dealing with a sluggish economy by continually lowering interest rates.
The bullish case for gold, that has been made in this article, is even more powerful for silver. Whereas most of the gold that is used, eventually gets recycled, most of the silver that is used, ends up in landfill. Small amounts are used in every cell phone, computer, refrigerator, TV set, laptop, satellite, electrical switches, medical wound coverings, water filters etc.
The 2.5 billion ounces that existed in US government stockpiles when I first became interested in silver in the early 1960’s are gone! Used up! Finished!
During the recent drop in silver a few weeks ago, the number of ounces in the SLV, silver ETF actually increased! A very bullish development!
http://www.financialsense.com/fsu/editorials/degraaf/2008/0409.html
6 Comments so far...
Sharon Anderson Says:
10 April 2008 at 10:14 am.
Gold and silver–if you can find it. In the most recent issue of the International Forecaster a reader in Toronto reported going to the 6 largest coin shops in the city plus 2 big banks and said he could get only 195 troy ounces of silver. Although silver was 17.74 US that day he had to pay $22.17. The dealer said if this buyer didn’t want to pay that much he could easily sell it to someone else since it was so hard to get.
A couple of weeks ago when gold and silver were at their highest prices to date we talked to a coin store owner in Utah who said he had sold almost his entire inventory and that most of his expected shipments were sold before they arrived. The rest was out the door in a few hours. Other coin stores may have had a more inventory, but it does indicate that gold and silver may be increasingly difficult to purchase even if you have the means to do so.
Shortages give us much to thing about, which is why many believe food should be top priority when it comes to investing. Thankfully, we can still buy food here in the US.
Bryon Says:
10 April 2008 at 10:15 am.
Wow I think I should start a gold mine. I wonder if there are any near by?
Angela Rogin Says:
10 April 2008 at 11:10 am.
I would think food first then for those people who have a lot to invest and don’t want to keep it in stocks then they should think about gold and silver.
Nalvy Says:
10 April 2008 at 12:18 pm.
I agree with you Angela. My great grandparents grew up in the depression era and they have taught my family the value of food and having plenty of it around. It often came down to the choice between food and medicine and they always chose food. Not one member of my family was lost during that time.
I know it is probably wise to invest in gold or silver but I woudl first make sure I have invested in enough food.
T. Fan Says:
10 April 2008 at 1:13 pm.
What I like about investments in metal is that it is solid. With no backing except consumer confidence for money that is often just numbers on the books, I would rather have something in hand that can’t disappear if things crumble.
Ghost Says:
10 April 2008 at 9:42 pm.
I’ll have to stick with solid food because we are still in college and we have nothing for investments. I have told my parents they should think about silver though so maybe they will do that. My inlaws already have gold coins put away.
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