Silver As A Hedge Against Catastrophic Inflation

September 7th, 2011

Watch this before you read any more.

Now, this may seem alarmist. And maybe it is.

And while I like some things about some of the speakers - for instance, I like some of Ron Paul's stands, but not all of them - and I really dislike some of them, like Robert Kiyosaki (who basically got rich off fabricated books telling people how to get rich, and carefully omitted certain things from his past)...

...I've got to say this documentary, even if it's 1/4th true, scares the heck out of me.

The events of August 2011, when the markets were roiled and gold reached $1900 an ounce, seem to support what's being said here.

I have no idea if silver will actually vault up to one half of gold or anything like that, but the speaker makes a lot of cogent arguments about how silver is used industrially more than gold, and has always been pooh-poohed as the poor man's precious metal, so there isn't a realistic accounting of its worth in relation to gold.

But the main thing is this: if the United States undergoes a period of hyperinflation similar to Weimar Germany after WWI, and the US dollar basically loses 50% to 95% of its worth...you're not going to be able to do small transactions in gold. No, you'll be buying houses with a single gold coin.

For smaller transactions - and if things go to hell, there will have to be an alternate form of transaction other than the dollar - people will need to use silver. I think its utility as a lower-priced piece of wealth is what makes it so attractive for my purposes:

A piece of insurance against catastrophic inflation.

In many respects, we should be hoping that silver doesn't shoot up to unbelievably high levels, because that means all your dead presidents in your wallet will be dropping to the real-world value of newsprint.

But, if something like that is going to happen, I believe in being prepared.

Part of me fears that this documentary is pushing a Y2K bubble fear mentality, that it's pushing something that will never materialize.

A bigger part of me fears that they're merely making a rational case for what has happened in various societies over the last 100, 400, even 2000 years.

It would be a grievous error on our parts to assume that just because we've lived through an unprecedented period of peace and prosperity, that our financial destinies are somehow immune to the bad decisions that brought down previous world powers.

The basics stay the same. And it's always the little guy who's way too trusting who gets hurt.

So make up your own mind, and buy accordingly. Me...I'm putting my faith in metal rather than paper.

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