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Why Buy Silver Today

silver-bullion-bars-coins

If you wonder why buy silver today than look no further. This article gives you a brief overview of the reasons for buying silver today.

The reasons for owning silver are much the same as the reasons for why you should own gold. There are historical reasons, such as wealth preservation and protecting purchasing power, and there are more current reasons such as heavy central bank stimulus and currency debasement.

Silver does offer some different characteristics to gold though. More specifically, silver is an industrial metal, it’s historically trading at a “cheap” ratio relative to gold and silver offers more potential for price movement (ie volatility). The latter can work both to your advantage and disadvantage.

Let’s start with some of the general reasons for owning silver today and then look closer at the differences between gold and silver.

Similarly to gold, silver offers you a way of protecting yourself from the consequences of the significant increase in money supply launched by central banks – the monetary carelessness. The consequences of this excess liquidity are increased asset prices and debasement of the purchasing power of your fiat currency. The annual increase of silver production is far less than the fourfold increase in the monetary base we’ve seen in the U.S. in just the last 10 years. Silver is therefore naturally going to be more scarce and preserve it’s value better.

Real interest rates are negative in many countries. This is positive because it lowers the opportunity cost of holding physical silver.

Silver is a crisis hedge. If we see additional turmoil in the markets it’s safe to assume that silver will perform strongly, similar to what it has in the past, such as during the 2008 financial crisis.

End of the debt era. Silver offers a way of preserving wealth and purchasing power at a time when most countries have debt-to-GDP ratios above 90%. A level which usually is seen as a point of no return. For most countries, the only way out of this situation is by means that eventually drives up inflation. Silver works well as a hedge against high inflation.

Apart from the above-mentioned reasons, silver offers some very interesting potential today.

The so-called “gold silver ratio” is part of the explanation. The ratio is defined as the price of gold divided by the price of silver.  Since 1687 the ratio has been between 14.4 and 99.76. Over this period the average gold to silver ratio was 27.28. Today the ratio is 61. Given the general fundamentals for precious metals let’s assume that gold isn’t overvalued. That means that silver still have room to rise in relation to the historical gold silver ratio average of 27.28.

Silver is also used for industrial purposes. It has unique properties including strength, malleability and ductility, electrical and thermal conductivity, sensitivity to and high reflectance of light and the ability to endure extreme temperature ranges. Silver is for example used in solar panels, cell phones, water purification, cars etc.

Silver offers more potential than gold. Silver is generally considered as being more volatile than gold. This can be both negative and positive depending on how prices move. In today’s environment, with strong fundamentals for all precious metals, silver is especially interesting.

So should you choose to buy silver or to buy gold? Just like with any sensible investment portfolio you need to ensure that you have proper diversification, so make sure you own a bit of both. For silver specifically, finding the cheapest silver bullion prices has to do with which location you purchase your silver bullion from – Estonia and Singapore being two VAT/tax free locations.

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Please click below to access the best bullion distributors

BullionStar.com Singapore – cheapest bullion

BullionStar.com Singapore

Singapore cheapest bullion: https://www.bullionstar.com/ and BullionStar review

Liberty Silver Estonia – cheapest bullion

Liberty Silver Estonia

Estonia cheapest bullion: https://www.libertysilver.ee/en/ and Liberty Silver Estonia review

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Top 12 Reasons For Buying Silver Bullion – part 2

Here is the second part in a two part article on the reasons for buying silver bullion.

We continue with our list of the top 12 reasons for buying silver bullion today.

Here are the final 6 reasons.

7. Industrial metal

Silver is an industrial metal which ensures an additional demand component to gold. Silver has hundreds of industrial and medical applications – as the best conductor of electricity it’s used in switches, medicine, batteries, plastics solar cells, water purification, computers, cars etc. There is furthermore a continuous growth in the applications for silver.

8. Silver is cheaper than gold – the “common man’s” gold

Silver is cheaper than gold and is often referred to as the common man’s gold. Even if the price of gold recently has fallen just below $1400, it’s still considered as being too expensive for many. Silver on the other hand currently has a price in the $22.30’s area, which makes it much more affordable.

9. Silver is still not well known as an investment

Silver, similar to gold, is still not a mainstream investment. For most people, owning silver in paper form is uncommon, not to mentioned actually buying physical silver bullion. Securities such as bonds and stocks are the dominating asset classes for the majority of investors. When it comes to physical gold and silver we are instead flooded with advertisements to sell them at cheap prices. Once this trend is reversed it will add a strong catalyst for rising silver prices.

10. Silver has more price potential than gold

Silver prices are more volatile than gold prices in general, which can work to both your advantage and disadvantage in the short term. The silver price has increased with approximately 19% per annum since 2002 – gold by 15% per annum. If you buy silver bullion today, with the drivers for all precious metals being so strong, silver can offer you a very attractive potential, and “pick-up” to gold, over the coming years.

11. Silver is undervalued compared to gold

One ounce of gold currently buys 61 ounces of silver. Over the years this ratio has varied a lot. Since 1687 it’s been between 14.4 and 99.76. During this period the average gold to silver ratio was 27.28. In 2011, when silver peaked just below 50 the ratio was at its lowest since 1983, at a level of 32. This means that silver in relation to gold was at its priciest point for 30 years.

Since the beginning of the 1990s silver has been on a rise versus gold, thereby decreasing the ratio, so the overall trend is that silver is appreciating versus gold. If silver was to return to it’s historical average, with a ratio of between 17:1 and 27.28:1, the silver price would be between $50-$81 (given a gold price per ounce of $1379). That leaves room for a significant price increase from the current level.

12. Significant risk in silver paper market

The explosion of silver (and gold) ETF’s over the recent years have made precious metals much more accessible for investors. The characteristics of these instruments should not be confused with the characteristics that define physical silver bullion though. The “paper instruments” have an inherent risk as they rarely have actual ownership of all the metals in their exposure. They don’t provide full allocation and would thus, in a real time of crisis, not provide the same level of security and insurance as physical bullion would. “Paper silver” is more suited for speculation. Buying silver bullion on the other hand provides one of the best crisis hedges that one can own.

If you are looking at buying silver bullion then choosing a location where silver bullion can be purchased free of VAT will ensure that you get the cheapest silver bullion. Two premier locations and distributors are outlined below.

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Please click below to access the best bullion distributors

BullionStar.com Singapore – cheapest bullion

BullionStar.com Singapore

Singapore cheapest bullion: https://www.bullionstar.com/ and BullionStar review

Liberty Silver Estonia – cheapest bullion

Liberty Silver Estonia

Estonia cheapest bullion: https://www.libertysilver.ee/en/ and Liberty Silver Estonia review

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Top 12 Reasons For Buying Silver Bullion – part 1

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.

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Please click below to access the best bullion distributors

BullionStar.com Singapore – cheapest bullion

BullionStar.com Singapore

Singapore cheapest bullion: https://www.bullionstar.com/ and BullionStar review

Liberty Silver Estonia – cheapest bullion

Liberty Silver Estonia

Estonia cheapest bullion: https://www.libertysilver.ee/en/ and Liberty Silver Estonia review

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