Thursday, November 15th, 2018 MST

Reasons to buy silver

As silver continues to touch new lows, bearish reports abound.  One called it the worst investment ever.  Really?

The reasons to buy silver lie neither in the metal itself nor its many industrial and medical applications.  Silver should be bought because it — along with gold – has for millennia been proven to be safe a haven from the sort of financial problems facing the US and, frankly, the rest of the world.

Additionally, the developing trade war between the US and China could tank the world’s economy.  And, tariff wars have often turned to shooting wars.

Further, Trump is imposing tariffs on our long-time trading partners in Europe, plus Mexico and Canada.  Last week, stocks rallied big on news that Mexico had basically acquiesced to Trump’s demands.  However, resolving the issues with China and Europe will be a more difficult matter.

At the current gold/silver price ratio (GSR) of 84, silver should be bought before gold.  Such high GSRs do not normally last long as the price silver rises relative to gold’s price.  However, you need to keep in mind that with silver you get 80 times the bulk and weight that you would get with gold, making silver more burdensome.

Consider just a few reasons for owning silver (and gold):

** A national debt of $21 trillion that is projected to reach $40 trillion in ten years;

** deficit spending now running at more than $1 trillion annually and forecast to hit $1.3 trillion in 2022;

** unfunded liabilities well in excess of $100 trillion;

** Medicare, Medicaid and Social Security facing insolvency (Since January 2011, 10,000 Baby Boomers have been turning 65 daily; by 2029, 18% of the US population will be at least age 65; by 2030, there will be 81 million beneficiaries relying on Medicare and Medicaid.);

** the military-industrial complex (the primary component of the Deep State) is in complete control of military spending, with next to no military spending requests denied;

** the Federal Reserve raising interest rates;

** household debt at $15.2 trillion;  if the Fed raises interest rates 1.7%, that will add $250 billion to the cost of servicing  household debt;

** student loan debt now stands at $1.52 trillion with default rates climbing.

While it is true that the price of silver is languishing at three-year lows, it is also true that the best time to buy anything of value is when no one else wants it.  An analogy: a piece of property comes available in your neighborhood, and fourteen potential buyers are interested.  The buyer is going to pay a high price.  However, if you are the only interested party, you will get it cheap.

That’s where silver stands today.  It’s cheap, by many measures, especially its price ratio to gold.  In fact, swapping gold for silver is not a bad idea.

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