Here is the first part in a two part article on the reasons for buying silver bullion.
Buying gold bullion is usually the first step for many people when they venture outside of the “paper” market, or the exchange traded market, for precious metals. There are, however, very compelling reasons for buying silver bullion apart from gold bullion. Silver offers the same characteristics as gold but there are additional drivers for silver, which makes it especially interesting to buy and hold today.
In the coming two blog posts we’ll take a look at the top 12 reasons for buying silver bullion. Here are the first 6.
1. Real money and store of wealth
Silver has been used as money throughout history. Even though other assets have been used for shorter periods silver, together with gold, have stood the test of time and proven to be the best forms of money. Silver protects wealth and purchasing power over the long run.
2. Crisis hedge and insurance policy
Silver offers a way for you to insulate yourself against the recklessness of central bankers, politicians and unknown future events. As the saying goes, history may not repeat itself but it sure rhymes. Calm periods in history have often been followed by turmoil. You should view your silver bullion holdings as an insurance policy. Even though some events may be improbable you will benefit greatly, not only in terms of wealth protection but also wealth accumulation, if a crisis such as, or worse, than the 2008 financial crisis should hit.
3. Debt and deficits
We are in the later stages of a 40+ year debt era where we’ve been able to spend, what’s felt like, freely through the accumulation of both private and national debt. Most western and developed countries now have debt-to-GDP ratios that by far exceed levels that ever have been repaid historically. The U.S. has for example in a relatively short period of time gone from a net lender to the largest debtor in the history of the world. The only way out of this will be through debt monetization which causes inflation – which in turn translating into invisible wealth destruction for most individuals. Silver will holds its value better than any fiat currency.
4. Money printing – fiscal stimulus
The central banks of the world are on a printing spree of historic proportions. In the U.S. QE3, which follows over $2 trillion of previous stimulus programs, adds another $85 billion per month in stimulus efforts, through bond purchases. Japan has recently launched an unprecedented $1.4 trillion 2-year stimulus package and very recently the Bank of Japan affirmed their plan to double the monetary base. The U.S. and Japan aren’t the only ones. They’re happily joined by the ECB in Europe, China, South Korea and a host of other countries. So how is this positive for silver bullion? As fiat currencies become increasingly “diluted” and debased silver, which can’t be manufactured out of thin air, will rise in value.
5. Growing demand for silver
There is an increasing demand for silver from many countries, typically those that have a strong cultural relation to precious metals, like India, or in countries where ownership of silver is actively encouraged, like in China. As the demand for silver becomes more mainstream, supply will quickly dwindle.
6. Limited current supply and uncertain future supply
There is a limited amount of new silver produced, which is evident in the current market conditions where supplies of silver bullion often are sold out. In addition, over 50% of annual silver production is used for industrial purposes and an increasing amount of the total above ground supply is diminishing as applications in a broad range of fields continue to grow.
The future supply of silver is uncertain as mining often is done in politically and environmentally fragile locations with less developed infrastructure.
To buy the cheapest silver bullion you should look at the two bullion dealers linked to below.
Please click below to access the best bullion distributors
BullionStar.com Singapore – cheapest bullion
Liberty Silver Estonia – cheapest bullion