Apr 27 2011 8:54AM

Advantages of Silver Over Gold

The average person can’t afford to buy gold, so it is most suitable for wealthy people for investment and central banks.

With silver being so much cheaper, the average person can go to his local coin dealer and buy some.

The advantages of silver over gold as an inflation hedge are numerous and need to be considered:

  1. The silver market is much smaller, and it doesn’t take as much money moving into silver as an investment to move the market up. Silver has outperformed gold dramatically over the last few years, going from $3 an ounce to over $40 an ounce.
  2. Silver is also a very important industrial metal with over 3,000 industrial uses.
  3. The government has never seized silver, although they have seized gold. If that worries you (it doesn’t worry me much), you would feel safer with silver rather than gold.
  4. The government actually has no stockpile of silver to unload. There is now more gold above ground than silver because of the silver industrial usage.
  5. I look upon silver as money. Throughout history more silver has been used more for money than gold. Historically, silver coins became the common denominator for money in more places and more times than gold.

If you are wealthy and can afford to buy some gold, be my guest. I think you will do just fine. However, silver will outperform gold about three to one. When I receive income from my business, I set aside enough cash to take care of my normal business affairs because paper money is still a means of exchange, although it is no longer a store of value. As a means of exchange, you can conduct your normal affairs. If I have any left over, I go to my local coin dealer and buy silver.

What kind of silver should you buy?

There are American silver eagles, junk silver, and foreign silver coins that can be bought from any coin dealer, and they are also easy to sell. The price fluctuates not only daily, but hourly. So there is always a place you could sell it.

But why would you want to sell it if the government is still inflating the currency? Hang on to your silver.

How far will silver go? Darned if I know; that’s above my pay grade. All I know is that we are in a bull market, and we ain’t seen nothin yet.
I don’t expect it to retreat. When I buy silver, I am just buying another form of money that I believe will prevail over paper.

Where will you keep it? Any place that thieves won’t be able to find it or get to it. Concealment is probably the best strategy. I wouldn’t keep it in my bank safe-deposit box, just in case the government decided to change its position on silver. Right now, silver is just treated as another commodity.

The government is even manufacturing and selling silver coins. But they have no stockpile, so they have to buy on the open market just like you do.

There are more people in the world who can afford to buy some silver than can afford to buy gold; thus, smaller volume will move the market up and up, and up.

Who cares about that? I don’t care if it goes up. I won’t sell it any time soon. This bull market will not end until the world changes its attitudes towards paper money. There is no sign of that.

Some day you might want to give it to your children or build your estate for them to inherit it. They will thank you and call your name blessed.

By Howard Ruff
The Ruff Times


Howard J. Ruff, the legendary author and financial advisor, is the author of the 1978 mega best seller, How to Prosper During the Coming Bad Years, which still the biggest-selling financial book in history, with 2.6 million copies in print. He is founder and editor of The Ruff Times financial newsletter. The newsletter is much more comprehensive and deals with a broad spectrum of middle-class financial issues and includes an Investment Menu from which you can build your portfolio. (You can learn about it here). The Ruff Times has served more than 600,000 subscribers – more than any financial-advisory newsletter in the world. You can get Howard’s current book, How to Prosper In the Age of Obamanomics free when you subscribe to The Ruff Times (www.rufftimes.com), or if you buy the book at your favorite bookstore, you can deduct $10 from the subscription price.


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