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Many believe gold is the only asset that isn't someone else's
liability, but in our latest installation of the "Guide to Silver Investing,"
David Morgan argues that not only does physical silver serve the same
purpose, it is more liquid. Read on. . .
Why Should An Individual Own Physical Silver?
As stated in my publication, The Ten Rules of Silver Investing, the
number 1 rule is...
1. When All Else Fails, There Is Silver.
No one likes to be a prophet of doom, but the simple truth is that
silver is the world’s money of last resort. Should a severe economic
collapse occur, leaving paper assets worthless, silver will be primary
currency for purchase of goods and services. (Gold will be a store of major
wealth, but will be priced too high for day-to-day use.) Thus, every investor
should own some physical silver-and store a portion of it where it’s
accessible in an emergency.
So let me expand on this theme a bit. Many state
that gold is the only asset that is not someone else's liability, but this is
fiction—silver serves the same purpose and I would argue more liquid.
By better liquidity I mean silver can be used for a gallon of gas, or a meal
out, or many typical daily purchases where using a gold coin for such a
purpose might prove more difficult because in many cases the gold coin could
be worth more than the item wanted or needed.
Do The Reasons To Own Physical Change With Economic Times?
Yes, they can vary. In good times silver can
be a high technology investment that grows in demand along with an advancing
culture. In other words, the better the world economy, the better the demand
for silver.
What Are The High Level Themes In The Economy That Signal It Might Be
The Time To Buy Physical Or Sell Physical?
In the current economic conditions silver serves more like gold as a
store of value, crisis hedge, or money of last resort. This is not to say
that the high technology applications are important or go away, only that the
reason for physical silver investment can vary based upon economic
conditions.
What Are The Types Of Physical Silver One Can Own?
Coins or bars. There are several subcategories within these:
Coins:
- Junk bags—
This is 90% silver coinage that once circulated
as money in the world. The U.S. Mint stopped producing in 1965. These
are sold in $1000 face value and are dimes, quarters or halves. Other
"junk" coins exist from other nations such as Canada, but
generally the only coin bag market that exists now is U.S. coinage.
- Silver
rounds—These are
typically one troy ounce silver "coins." but are referred to
as rounds or medallions. The word "coin" is applied to a round
silver disk stamped by a government mint, whereas a silver round is the
same amount of silver stamped by a private mint. These usually sell for
less than silver coins minted by governments.
- Silver
coins (see above)—Usually one troy ounce
silver disks stamped by a government mint, such as the U.S. Canada,
Mexico, Austria, China, and others.
Note: there are some other coins from the old silver standard days
from most governments around the world and also private minted coins exist
that are not necessarily one troy ounce in weight.
What Is The Easiest Way To Purchase Physical Silver?
Find a good reputable dealer, make a phone call and mail in a check.
It is the easiest financial transaction you will ever make, but people that
have never done it think it must be complicated-- it is not. Anyone that
would like to know which dealers I use personally might consider getting on
our free email list as I do send offers from dealers that I know and trust
from time to time.
What Is The Safest Way To Store Physical Silver To Avoid The Risks Of
Theft And Confiscation?
This is controversial. I personally think having some (not all) at
home makes sense for many people. A safe deposit box at a bank can be sealed
during a divorce or by court order. There are some private vaulting
facilities available and I do speak about these from time to time either in
the Morgan Report and/or in the free email list. The best place to store is
basically different for an individual than an institutional client and of
course we deal with both. There are adequate places to store your metal worry
free.
How Does One Redeem Or Trade Physical Silver For Cash?
In most cases a simple phone call to the dealer you bought
from—everyone that I recommend makes a two-way market buying and
selling every day. Or you can sell to a different dealer, individual, go to
E-bay, or use on of several Internet-based precious
metals sites that make a two-way market. More and more of these are appearing
all the time, and I expect to see even more over the next few years. Finding
a buyer is not a problem.
Does One Insure Silver The Same Way As Any Other Possession?
If you own your home you can have it as a rider on your homeowners policy. Most legitimate storage facilities
carry insurance so that is built into the storage fee.
David Morgan
The Morgan Report
Mr.
Morgan has been published in The Herald Tribune, Futures magazine, The Gold
Newsletter, Resource Consultants, Resource World, Investment Rarities, The
Idaho Observer, Barron's, and The Wall Street Journal. Mr. Morgan does weekly
Money, Metals and Mining Review for Kitco. He is hosted monthly on Financial Sense with Jim Puplava.
Mr.
Morgan was published in the Global Investor regarding Ten Rules of Silver Investing, which you can receive for free. His book Get the Skinny on Silver
Investing is available on Amazon. You can subscribe to his private
Internet-only newsletter, The Morgan Report, by clicking here.
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