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Silver vs. Gold

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  • Silver vs. Gold

    Hi Guys

    Here is a link to an essay on Silver vs Gold by Jason Hommel:
    First and last paragraphs are qoted below.

    Which should you buy, and why? Which will prove to be the better investment in the long term? Let's compare and contrast.


    Silver vs. Gold

    Jason Hommel

    Which should you buy, and why? Which will prove to be the better investment in the long term? Let's compare and contrast.

    Why is gold useful, and why is it particularly useful as money? Gold is valuable & portable because it's rare & not easily counterfeited. Gold is fungible & exchangeable because every bit of .999 fine gold is similar enough to be like another. Gold does not rust as it's imperishable. These properties make gold a good store of value, a medium of exchange, and a unit of account. Therefore, gold is easily tradable with a narrow spread, meaning it has a small price between the bid and ask-the prices to buy and sell. Gold is therefore the ultimate liquid asset, a luxury, and is why gold is money.

    But silver has nearly all the same properties, with a few minor exceptions. Silver is less valuable than gold, as seen by the ratio between them. The ratio is simply the number of ounces of silver that it takes to buy one ounce of gold. As I write this Sunday, August 01, 2004, this number stands at 59.63, with silver at $6.55/oz., and gold at $391/oz. This means that an equivalent value of silver is heavier than gold, and thus, less portable. Why carry around 60 ounces of silver when you can carry one ounce of gold? But it's not as if you cannot transport silver, and it's not as if you cannot ship it. A bag of 90% silver coins, that weighs 55 pounds, and is worth about $4500, can be taken to the post office and shipped via registered mail, for about $56, which is slightly over 1% of the silver value............................................. ....................................

    This price action may provide an occasion for many trend investors to realize what the value investors have realized all along: that silver will outperform gold, and that now is the time to buy silver, in preference to gold, if you have not done so already. Hopefully this article, in addition to the price action, will help to convince a few more people that silver is the better investment. I have nearly my entire portfolio in silver and silver stocks, and I try to keep about a month's supply of money or less in the form of paper money in the banks.
    Happy reading/investing.

    Regards
    "There's one way to find out if a man is honest-ask him. If he says 'yes,' you know he is a crook." Groucho Marx

  • #2
    Hi Muppet

    did you venture into the market and buy some of the solid stuff ?

    regards westan
    Invest in the USA for 20% returns. Contact me at [email protected] for details.

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