November 21, 2011
We all deserve a break to focus on something positive. The world’s financial problems and catastrophes will continue, whether or not I cover them. I will get back to some of them next week. This week, however, I think it is worth giving thanks for the blessings that physical gold and silver bring to the lives of those who own it.
Once humans outgrow infancy, change becomes somewhat uncomfortable. We are fearful about change in a world where the value of just about all paper currencies is declining and there are major defaults and unexpected bankruptcies. Physical gold and silver have a track record of stable value going back thousands of years. An ounce of physical gold or silver from a thousand years ago is still worth an ounce of gold or silver from a century past, or an ounce of gold or silver today. They will continue to be worth an ounce of gold or silver in the future.
Some critics knock owning physical gold and silver because it does not pay dividends or interest. But, if you look at the track record over the past decade, both metals have a consistent record of appreciation far higher than almost every paper currency, stock, or bond. Like other assets, there are times when gold and silver underperform the market. We are not at that stage of the market now. I don’t expect precious metals to peak for at least a few years.
The basic blessing of owning physical gold and silver is that it provides insurance against the calamities that might affect paper assets that you own. When the financial crisis hit the Far East in 1997, Indonesians who only owned paper currency were virtually wiped out. Citizens of Indonesia who happened to own gold saw their standard of living barely affected.
Beyond the financial protection, let me share three stories that demonstrate other blessings of owing physical precious metals.
The first story goes back to 1940, as the German army overran The Netherlands. A Jewish family took flight, using the gold coins stored in a cookie jar in the kitchen. The hoard was large enough that it was able to secure the freedom of a large number of members of the extended family, who gained refuge in Great Britain, South America, Mexico and the United States. A few years ago, I bought the residual of this hoard from one of the descendants who lived in Mexico City. Even then, the remaining collection was so large that the seller was able to receive a six-figure payment... finish reading @Numismaster
