roark183

Hi Mish, What do you see as the difference in risk between saving value with silver as opposed to gold? I ask because I always see you saying buy gold, but nothing said about silver.

Comments (13)
No. 1-6
Latkes
Latkes

You need a lot of silver to match the value of gold, which makes storage an issue, unless you are buying paper silver/gold.

Silver is also an industrial metal and its price may be negatively affected by a recession.

OTOH, silver sometimes behaves like leveraged gold for short-term price moves. But for that kind of speculation, physical silver is not the most practical vehicle anyway.

roark183
roark183

I suspect no one reading this blog would buy paper gold or silver.

For me, silver storage is not a problem. Moving it all at once from one place to another would be a minor concern, but can be handled.

In the event of a recession, while industrial demand may decrease, monetary demand would increase, which is likely the reason for most people on this blog buying gold or silver in the first place.

Mish
Mish

Editor

Good Question: I will address it in a post, perhaps tomorrow.

Sechel
Sechel

silver has industrial uses, gold not so much. gold is mostly used in jewelry. while there's some similarity that both are stores of value silver is more impacted by economic activity.

Stimpson
Stimpson

I hold (some) gold as 'insurance' in case a full fledged currency crisis occurs. I want some silver as more liquid form of payment in that case. Having it in the bank would beat that purpose for me: in a crisis there is no guarantee you'd get it back.

Captain Ahab
Captain Ahab

I keep hearing, 'if you don't physically hold it you don't own it,' and while logic and precedent are behind the statement, it ignores present day reality. Everyone remembers Executive Order 6102 issued on April 5th, 1933. The bank-safe-deposit hoax aside, you had to have your gold in YOUR possession--buried in the garden, under the basement floor, in the gun safe... The penalty for possession beyond the allowed amount, $10,000 and/or up to five to ten years imprisonment.

Here's today's problem: unless your gold is purchased without leaving a trace, or you have a way of preventing metal detectors from locating it, or you're wiling to see all your other assets confiscated, or you're willing to spend years in jail... you don't 'own it.'

It's clear that problems are on the horizon, perhaps closing rapidly. We see gold purchases by central banks, repatriation of gold, countries exploring digital currency alternatives, moves to exit the petrodollar...

Among the reasons to own gold, it's primary benefit is insurance against major economic crises. We're talking gloom and doom here, governments in disarray, currencies failing, global conflict, the realization that excessive debt has pushed other assets to unsustainable levels... If/when the SHTF, your government, and everybody else, will want your gold.


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