Silver In The Long Term…Is It Time To Buy?

- February 16, 2016 -

The most frequent question asked of us here at JHCB by the public goes something like this… “What’s a better buy, silver or gold?” Our simplistic answer is a polite “We don’t really know”, or a similar non-committal response usually followed up with our question for you… “Why are you buying precious metals?” We’ve found over the years that our precious metals customers can be separated into two categories. The first group are those looking to make a long term profit buying low and hopefully selling high several years down the road. Our second category of buyers want tangible metals to act as an ‘insurance policy’ against weakening paper based assets.

This article will focus on why many believe silver is the most attractive precious metal to our clients from the first group I mentioned, those whose focus is solely on profit.

There are several reasons why many believe silver has more profit potential than gold:

1. Silver has dropped in value by nearly 300% since its recent high in 2011, gold has dropped ‘only’ 35% in the same time frame.

2. The US and most global stock markets appear to be entering into a bear market. In this scenario some paper wealth always moves into tangible wealth with silver being far more affordable to the masses.

3. Numerous charts show silver to be in a technical position similar to 2008. Silver at $9.00 per ounce in 2008 became $40.00 silver in less than three years.

4. Recent history shows that physical silver isn’t always readily available during noteworthy price dips. Physical silver shortages show up in higher premiums above the ‘paper’ COMEX prices. It is important for the buying public to note: There is no shortage of paper contracts for silver. They can be created in an instant with digital currencies backed by nothing except a compliant central bank. Physical silver cannot be so easily created and consequently can experience shortages. Buy the tangible metal!

5. Most western governments including our own are hopelessly insolvent. Since it would take a rational approach by politicians, and a lifestyle change for those ‘entitled’ to resolve our debt, it’s safe to assume our financial system won’t be corrected anytime soon. Debt based fiat currencies simply do not stand the test of time.

To those who want to own precious metals, regardless if the motivation is profit or peace of mind, silver offers an affordable option in the realm of liquid precious metals.