xyZ5kLjZdsUTiutQDf2hLcgrU1xEWJa: Silver

Showing posts with label Silver. Show all posts

Friday, December 7, 2012

What Would Silver Buyers Accept and Purchase in Addition to Silver

When you seek out silver buyers, you have a lot of different types of people you may run into during your trades. While it goes without saying most of the time that most of the people who like to buy silver enjoy a lot of kinds of investments, there are some things that do not meld well together in even the most liberal investor's portfolio. If you phrase it correctly, you can call almost anything an investment. But that does not mean that anyone will want to buy it under most normal circumstances. The types of assets listed and discussed here might be worth considering.

One type of asset that the average silver buyer might enjoy is gold, along with other types of precious and semi-precious metals. Gold, palladium, platinum, copper and some other, lesser known metals may be valuable for traits including their color, their collectability, their potential use as trade items and their functional uses in industry. Any kind of metal that keeps well without tarnishing easily can work in the same way that silver can, albeit without silver's best and most unique properties. If you can sell silver to such individuals, you can also most likely sell them other things of the same basic nature.

In the same way, gems and some types of stones can also work well. While most stones are not as functional as metals are, they can be just as rare and even more beautiful. Painite is an exceptionally rare type of mineral that is only found a few places in the world. Diamonds and Rubies are useful in a number of different industrial processes, and thus could have tremendous trade value if the world ever came to that. If you have never seen a properly iridescent opal before, you are missing out on an object of exceptional beauty that would catch any trader's eye.

In some cases, an individual who wants to buy silver might want to also purchase fine works of art. There are some caveats to this, however. One of the most major issues that plague any deal that involves artwork is that it has to be an original by a person that most people who are not art historians would recognize. You also have to consider that liquidity is not going to be substantial for such a recognizable work, as only millionaires can afford this caliber of asset price. This does not even take into account the additional security you need to keep in place to protect such a work of art from both damage and potential theft. While a buyer of silver might also be a buyer of art, choose your market carefully.

Perhaps one of the best types of assets for a buyer of silver is coinage. While coins are technically made out of metal, they are rarely pure. In some cases, a rare alloy of two or more metals can actually result in a higher level of value due to its rarity. Nonetheless, the metal value of coinage tends to be overshadowed by the coin's value because of its beauty, rarity and collector desire.

How to Ensure You Purchase Authentic Antique Silverware Precious Metals Price Discovery - At and Despite the Margins Gold Bullions - An Investment Option Counterfeit Coin Detection - 4 Ways to Initially Spot a Counterfeit Coin (and Avoid Being Taken) Purchase of Gold And Silver - Find The Best Deals How to Know Where to Buy Gold

How to Sell and Buy Silver Coins

The number of people who buy silver bullions and coins continue to increase but only a handful of people know how to get the best value for their collection. There is more to being a coin collector or a precious metal investor.

Silver coins appraise differently compared to when you buy silver bullions. Their value does not fluctuate depending on the current price of pure silver. The price depends on the age, rarity, and condition of the item.

Having a good coin dealer can help especially for someone just starting out. Make sure the coin dealer is someone you can trust. You do not want to buy silver coins only to realize too late you have been tricked into buying fake ones. Learn the tools of the trade to avoid scheming dealers.

Take extra care when you buy silver coins online. Make sure the online dealer is accredited or has the permits to make such transactions. Research for reviews. If you feel there is something off with the online trades, move on and look somewhere else. Deal only with websites you recognize.

Training yourself to spot counterfeit coins can be valuable. Luckily, even the most well-made counterfeits have noticeable errors if you look hard enough. If you buy a silver coin and you are not sure of its authenticity, check for superficial differences compared to authenticated coins. Coins with misshapen dates and dents are fakes.

If you do not see any irregularities, get a feel of the coin. Counterfeits tend to be more slick and slippery. Also, check the edges of the coins. Genuine coins are made with thin, even edges around the circumference. Fake coins either have thick edges or do not come with any at all.

If you have built a decent collection, keep them in prime condition to keep their value high. It is easy enough to clean silver coins if you take good care of it regularly. For extensive cleaning, soak the coin in lemon acid with iron nails for half an hour. If they still have dirty spots, you can use vinegar or sour milk on tissue paper and rub gently. Another alternative is to use a raw potato, rubbing the insides against the coin.

Always check the current value of silver especially if you have invested in bullions. For major investments, find an adviser who can suggest the right time to buy and sell precious metals to avoid losing a lot of money. As for coins, they are better left undisturbed for as long as possible. They can be an added source of income when you retire.

Whether you plan to collect rare coins or just buy silver bullions, doing a bit of research will go a long way. This will not just benefit you when the time has come to sell it, you might even discover you already have a collection you can be proud of.

Collectible Certified Rare Gold and Silver Coins and Bullion: Precious Metals As an Investment

Investors, concerned about the economy and preservation of wealth, are discovering the 21st century gold rush. This is partly because since 2001 the dollar has fallen over 40% and 95% since the 1950's. As the dollar declines, gold becomes a much more trusted investment because the value of gold has never been zero.

Every year, around 2,500 tons of gold is mined from the Earth but the global demand for gold far outweighs the supply, driving up your investment even more. You could own gold in the form of ETF's, commodity options or mining shares, but possession of gold coins is unique.

When you invest in certified, rare gold or silver coins, you are not just putting your faith in the value of gold itself. Part of your portfolio should be in investment grade, collectible gold coins that are in good condition and relatively scarce. That adds tremendously to the value of your gold investment - almost like having a built-in insurance policy.

These coins are certified by either the Numismatic Guaranty Corporation (NGC) or the Professional Coin Grading Service (PCGS). This means you can have greater confidence in your investment and know that it is easily liquidated when you are ready to close your position at any of the thousands of gold dealers across the country. And of course, we will buy back what we sell to you, as well.

Gold can also be used in a self-directed IRA or 401K plan. After 2008, imagine how your retirement plan might have looked if you had a percentage of it invested in gold. Diversifying your portfolio by investing in gold decreases your potential risk and could even dilute your potential rewards but if you are interested in at least preserving your wealth, you need to have a position in gold which is still yet expected to go much higher.

With gold, you have personal and private control over your investment. While "private wealth" seems a thing of the past, gold gives you that privacy. In other words, neither an IRS 1099 nor a social security number are required to own investment grade rare gold coins. No other tangible asset offers 100% privacy and portability except gems or diamonds which are not nearly as liquid as US rare gold coins.

And although there is nothing like holding a gold coin in your hand, you can't ignore the wealth preservation and growth aspects of gold as a solid and wise investment. You don't have to be among the super wealthy or extremely knowledgeable about investing in gold. It's much simpler than might think.

How to Ensure You Purchase Authentic Antique Silverware Precious Metals Price Discovery - At and Despite the Margins Gold Bullions - An Investment Option Purchase of Gold And Silver - Find The Best Deals Counterfeit Coin Detection - 4 Ways to Initially Spot a Counterfeit Coin (and Avoid Being Taken) How to Know Where to Buy Gold

The Gold to Silver Price Ratio and the Surge in Silver Jewelry Buying

Some would say that the gold to silver price ratio is meaningless.

Others debate whether it will revert back to historic values maintained at a level mandated by law or policy, or if it will be based on actual above and below ground supply. Above ground investment grade silver is reversed, with five times more gold, while estimates indicate that nine times more silver than gold remains to be mined.

Yet where does the actual gold/silver ratio matter the most? Perhaps a look at price discovery at the margin in the jewelry markets would be illuminating since price and perception of value are always at play.

Another Look at Price and the Sticker Shock Effect

In the mind of the mainstream media, gold is expensive, even though it may be a relative bargain on an inflation adjusted basis or given the questionable value of paper money.

Few people would think twice before placing a $5 item in their shopping cart, but almost everyone would question their buying habits at a $10,000 price point.

As prices rise higher, consumers and investors tend to seek out alternatives, even if the higher priced item is still a relative bargain. From the perspective of consumption, but not investment, the price of an ounce of gold seems high to most people.

Furthermore, as gold prices head higher, jewelers have been moving towards selling lighter pieces with less gold and more silver content in an effort to reduce the "sticker shock" effect on their customers.

Gold's Price Relative to Silver's

Based solely on changes in metals prices, a $100 bracelet bought in the year 2000 would cost more than $600 today. At prices in between those two price points of $100 and $600, plenty of jewelry buyers have had second thoughts about their prospective purchases.

To continue to attract shoppers and keep demand at acceptable levels, jewelers typically lower the karat weight of gold and increase the amount of silver in the pieces they offer.

For example, a 22k gold band made of gold and silver is just as yellow but is nearly 10% less expensive than a 24k band. To a shopper, the difference between a 22k and 24k ring is typically insignificant, but to silver investors, this difference is huge.

After the fall of bimetallism and the disappearance of commodity backed paper currencies, the gold and silver ratio lost some of its former stability. Largely due to the world-wide depletion of government silver stockpiles, the ratio that was previously constrained by law became considerably more volatile,.

Recently, the gold/silver ratio has once again approached record highs since the price of silver has been depressed much further than the price of gold since April 2011.

Confirming the Gold to Silver Ratio

The retail jewelry marketplace demonstrates that the gold to silver ratio still has some fundamental backing outside of its former legally-defined levels.

Basically, when gold gets too expensive relative to silver, jewelers simply add more silver to reduce the per-item price and mitigate the resulting sticker shock to consumers. As the market for gold jewelry has cooled off since 2005, silver is quickly taking gold's place as a jewelry metal.

Should the economy rebound fully to its 2007 boom levels, an accompanying surge in consumer jewelry purchases will increase demand for silver to fill the gap in affordability left by the sky-high price of gold.

Furthermore, with silver production routinely running under the level of gold production, any change in consumer preference from gold to silver will be multiplied by the differences in available metal stock and production supplies.

With the tide turning in the jewelry market, silver investors can expect not just higher silver prices, but higher gold prices as well.

Silver Metal Now and a Golden Traveler's Check

One of the main advantages of buying silver versus more costly precious metals like gold and platinum is that silver's relative cheapness allows you to buy more metal for the money.

Furthermore, inflation is a reality that eats away at the value of all paper currencies, while boosting the value of hard currencies like silver.

Given the likelihood of ongoing paper currency devaluation and debasement, despite short term perceptual fluctuations in the basket of floating currencies, the U.S. Dollar you are holding today is more valuable in terms of its purchasing power today than it will be tomorrow or a year from now.

Putting Things Into Perspective

If you are skeptical about holding silver or need a way to determine what time frame you should be holding silver for, you can consider the following question:

Given the at least 95% loss of purchasing power in the U.S. Dollar seen since 1913, with the vast majority of that loss of value occurring over the last 40 years, what would you rather be holding one year from now: An ounce of silver or the amount of U.S. Dollars that can currently purchase an ounce of silver?

Now ask the same question over a three, five and ten year time horizon. If your answer is consistently silver, then you really should be stocking up now that its price has retraced substantially from its recently made long-term highs.

This type of analysis allows you to put things into perspective and tolerate the short-term noise as the silver market fluctuates with less anxiety.

Why Choose Silver Over Gold?

Silver is currently preferable to gold for a variety of reasons. One of the most compelling is the price to supply ratio. The current supply of investment grade silver is 1 billion ounces versus 5 billion ounces for gold, while the ratio of metal in the ground is below 20 to 1.

Furthermore, both metals are well below their inflation-adjusted highs, especially when you calculate inflation based on an older, simpler methodology. In fact, silver is even more attractive than gold from this perspective.

Another factor is that silver is actually a more strategic and necessary commodity than ever. Its growing use in electronics, health applications and solar power production assure strong industrial demand for years to come.

Traveling With Silver's Bulk in Emergencies

Some investors who like to hold precious metals as an emergency get-out-of-town card are concerned about silver's extra bulk compared to gold when traveling. Basically, a given dollar amount of silver is much heavier and bulkier than the equivalent dollar amount of gold - so silver is just not as portable as gold.

Nevertheless, silver is not really that bulky relative to its value since a bowling ball made of pure silver would be worth well over $20,000 at $30 per ounce. What else can the average person readily accumulate and store in their house with the equivalent size and value?

Still, if you really need to 'get out of dodge' in a hurry or on foot, it would admittedly be a lot easier to carry only 15 ounces of gold - until you can switch back to silver of course!

Fortunately, investment grade silver and gold share enough properties to make them easily convertible into each other in emergencies. Silver is also easier to spend in small quantities to pay for the necessities of life while traveling.

Why Gold and Silver Are Still A Major Bargain

Obtaining physical gold and silver and keeping it outside of the banking systems, becomes the greatest form of wealth protection for your assets. Assuring you against either a deflationary collapse or the hyperinflationary destruction of paper currency. These precious metals are absolutely vital to your financial survival. Below are several facts necessary to understand first, so you will know why precious metals are still very much undervalued.

1. The US Federal Reserve Chief Ben Bernanke has steadily been increasing the US monetary base money supply. This is the actual paper dollars that are in circulation plus all the commercial bank deposits held at the Federal Reserve. From 1808 through 2008 the US monetary base currency supply reached 825 billion dollars. At this time, this was the total amount of dollars in existence. In 2008 the US financial crisis hit America, Ben Bernanke started bailing out banks. From that point through 2010, the US money supply increased from $ 825 billion to $ 2.8 trillion. So in just two years time the monetary base money expanded four times. Previously it took 200 years to acquire the first 825 billion dollars.

Another measure of the currency supply is called M3, which is a broad measure of the currency supply. M3 money directly stimulates the economy and comes into existence when someone takes out a loan to buy a big item such as a car or house. That house you purchased required employing people such as the agent to sell the house, the contractors to build it, the developers and so on. It takes a lot more time for base money to stimulate an economy than M3 money. Therefore base money cannot be heavily relied upon to stimulate the economy.

If you were to see a chart with the US base money supply and M3 money supply from present going back at least 20 years you would see a collapse, currently happening. When you deduct the base money that's been created by the Fed from the current M3 supply you will notice a 12% collapse. This is serious, a big red flag warning event. Yet the Fed does not heed this warning, as they keep inflating the base money. This is an emergency that will only compound and get worse as time goes on, until the whole house of cards finally collapses. This is only the second time in history that the currency supply has contracted like this. The first time this happened was at the on-set of the Great Depression.

The definitions of inflation and deflation are the expansion or contraction of the currency supply. The situation above presently clearly states, that the economy is in a serious deflation. Rising and falling prices are a sign of monetary inflation or deflation and were headed right into monetary deflation.

2. Another very interesting fact is that throughout recent history every 30 to 40 years a new monetary system has been created and then it fails.

• 1870's - 1913 we saw the Classical Gold Standard lasting between 30 and 40 years. • 1913 - 1943 we saw the Gold Exchange Standard lasting 30 years. • 1943 - 1971 we saw the Bretton Woods System lasting 28 years. • 1971 through present, the world has been on the Dollar Standard just about 41 years now.

The Dollar Standard if history repeats itself, it's already overdue for failure, like the other monetary systems of the past. Therefore the collapse of the dollar itself is overdue. For certain sometime in this decade if not sooner, a new monetary system will need to be developed. That new system is sure to include gold to back the new system. Finally, once again creating sound money. Currently the IMF and the World Bank are preparing and discussing these issues. At some point when the "house of cards" has either collapsed or is near collapsing you will see the finance ministers of the G20 countries come together to decide upon a new monetary system.

3. The new system that will at some point be adopted again, will have gold backing it, to hold it together. If a system again were created such as the Bretton Woods system where only central banks could exchange their dollars for gold, then it would require gold in excess of $5,000.00 per ounce to back up the new system just to sustain it. And if the new system were to back all dollars that are in existence with gold, it would have to be valued at $203,000.00 per ounce. Surly something will need to be done. A man-made monetary system cannot account for all free market forces and it will eventually be destroyed as seen above.

4. If you were to have invested $1.00 into the Dow Jones back in 1971 and held that investment until today you would have gained 13 times your investment or $13.00. Had you invested that same dollar into gold in 1971 and kept it until today you would have earned 47 times its value or $ 47.00. Not only did the yellow metal way out perform stocks, but it is a physical metal you can hold onto and keep physical control of, thus not let the banks control it. When you own stock it must be on a brokerage system, where in the end banks control it, not you.

5. The Gold/Dow ratio chart is actually the price of the Dow divided by gold, and priced in stocks. If you were to view it today going back to 1980 you would see the gold bubble peaked at $850.00 an ounce. (100 percent for the chart) And you would see today, that the value of the yellow metal priced in the Dow, is around 20 percent of the Dow. (Opposed to 100 percent at its 1980 peak) This means now, the yellow metal is 80 percent undervalued by the price of the Dow. Therefore the yellow metals current price is, undervalued and extremely cheap.

6. The Silver/Dow ratio chart is the same as above only the Dow is divided by silver and priced in stocks. If you were to view this chart again from present going back to 1980 you would see the peak for silver in 1980 at $50.00 per ounce. (100 percent for the chart) and today the value of silver priced by the Dow would be around 0.5 percent of its 1980 peak. This is extremely undervalued to stocks and at silver's current market price, it's an absolute steal.

Now that you understand some of the specific factors related why silver and gold have been so severely undervalued for so long, you can rest assured that these precious metals even at their current prices, are still a bargain hunters dream.

Tom Genot -