Is It Time To Buy Silver? Why? How?
Updated: Aug 19, 2020
Silver. What do you know about it? If you are like most Americans, not very much.
For many Americans, this thing we call money is a mystery. At its core, silver is just another form of money. Our understanding of money overall is straightforward, and on an elementary level at best. Over 70% of Americans are living paycheck to paycheck. It's because they don't understand money or how money works. Once you understand money, life gets a lot easier.
Brief History of Money
I could spend weeks covering the history of money, but let's just do a high-level overview for now.
Gold and silver have been part of the world's money system for over 3,000 years. Gold and silver have had value as a trading mechanism across hundreds of countries, multiple kingdoms, empires, and dynasties and have crossed cultural boundaries. You could say that gold and silver are the highest and most stable form of money that has existed.
Before gold and silver, there were other forms of money. Past civilizations used anything from tally sticks to beads and animal teeth to trade goods. We won't explore all of these different types of early money in detail today, but here are a few videos if you want to learn more.
Once gold and silver came on the scene, they became standard forms of money all across the globe from China to Europe and eventually America.
As paper money, otherwise known as a fiat currency, came on the scene, gold and silver began to take a back seat as a medium of exchange for everyday consumers. The trust people had in gold and silver was replaced by faith in the government's backing of the fiat currency. Fiat money is a government-issued currency that is not backed by a physical commodity, such as gold or silver, but rather by the government that issued it.*
Some people call fiat currency fake money because our belief in its value is all that backs it. Interesting to note that the average lifespan of a fiat currency backed by a government is roughly 75 years. Our United States dollar is now around 200 years old.
In the early 1970s, the United States moved from a gold and silver-backed dollar to what is called the petrodollar. The change came about from a deal that the United States made with Saudi Arabia and the OPEC nations. OPEC began to price oil in US Dollars, and as such, the dollar became universal money across the world. If a country wanted to buy oil, they had to conduct transactions in US dollars. In almost any country, you could buy and trade goods in US dollars, and many countries stockpiled US Dollars as a means of stabilizing their country's finances and savings. The US Dollar became the universal money around the world.
However, nothing lasts forever. Around 2010, China began acquiring gold to stabilize its currency. According to Jim Rickards, noted economist, and former CIA financial analyst, China amassed vast amounts of gold with the end goal of making its currency into a global standard to challenge the US Dollar. In his book Death of Money, Jim explains how China has quietly amassed the third-largest gold horde in the world just behind the European Union and the United States. In 2018-2020, China opened oil trading futures to begin raising the Chinese Yuan (money) to the standard of the US Dollar (money).
Why is all of this important to know? Fiat currencies like the US dollar come and go. Governments rise, and governments have fallen throughout history. With each rise and fall of a government or its economy, the currency rises and falls. However, gold and silver have stood the test of time as a lasting form of money.
Around 2010, JP Morgan Chase bank began acquiring silver, and it wasn't just a little. Estimates show that JP Morgan Chase has amassed over 500,000,000 ounces of silver. That's 15,600 tons of silver. They now hold the largest silver horde in the history of the world. When JP Morgan Chase began their silver acquisitions, the silver price was near $48 per ounce. Over the last ten years, the amount of silver has been driven down as low as $12.61 per ounce. In 2020, silver has made a rebound to $27.67 and climbing. Although silver is higher than earlier this year by 120%, it is still down 40% from its high in 2011. There is some speculation that growth in the silver prices exceeds that of gold.
With the US Dollar currently losing to inflation, massive US debt now exceeding twenty trillion dollars (the US Government is essentially bankrupt on paper), silver represents a way for the common person to protect their money, finances, set up, and future.
Banks and The Banking System
I'll save the bulk of this conversation for another day. Still, I wanted to include some banking information since it's virtually impossible to separate the banking system from the discussion of money.
Everyone needs to understand that there is a very dark side to the banking industry. I'm not talking about your local bankers; I'm talking about the big guys, the international bankers. International bankers are more like a criminal cartel. What do I mean? Let me explain.
The international bankers have a system. They move into a country and take control of the money system. They work to set up a central bank, i.e., The Federal Reserve Bank, and then proceed to get authorization to print the countries money. The government then goes to the "Central Bank" to have all its money printed, loans, and the like. So when our government is in debt, we the people are in debt, and we are in debt to these bankers. It's fairly ridiculous when you consider it all.
Many of the banks work on a system called "fractional banking." Fractional banking means that we the people deposit money, say $1,000. In turn, the bank is allowed to loan out 9x times that amount and collect interest on that loaned out amount. Yes, you read that right. The bank takes your $1,000 then loans out $9,000 to your friends, family, neighbors, and community.
When you make a loan payment, the interest of that debt goes to your bank. They then pay a portion to the international bankers who've done nothing more than take the right to print your money away from you and your government. Also, all the interested paid on that US Government's national debt is paid up to the "Federal Reserve Bank" and the international bankers as well. It's quite the racket.
What are the international bankers doing with this free money we're paying them in interest? They're primarily doing two things: 1) Buying gold and silver (real money), 2) Gaining more power.
I'm sure you understand the concept of why they buy gold and silver. They're converting fiat currency (fake money) into gold and silver (real money). Robert Kiyosaki has called gold and silver, "God's money." He named it that because God created it.
So what about this "gaining power" comment that I've made. Simply, look at whom the large banks donate money to during elections? Follow the money, and you follow the power. International bankers use their money to buy power and influence. It's been this way for hundreds of years.
As they've continued expanding their power, they now have central banks in the majority of countries across the world, taking control of each country's money supply and putting each country and its people into debt. Debt is essentially a modern-day form of slavery, and it's a big reason we see poverty in America and abroad.
At its core, the design of debt is to move wealth from everyday people into the hands of the international bankers. That's not to say that some other people don't benefit from the use of debt and leverage, but the vast majority of people suffer under debt. Debt is also a big reason for inflation. The abundance of additional cash, through debt, inflates the amount of money in "the system," which causes prices to expand rapidly (inflation). We see this through housing price inflation and, more recently, the exorbitant cost escalation of a college education.
As student loans have become mainstream, the influx of cash has caused colleges to raise prices, and student loan debt has ballooned out of control. It's the basic premise of supply and demand. What's left is young people with student loan debt; they will continue to pay this well into their sixties and banks who benefit from the interest and profits. In my opinion, it's a very intentionally sinister design. I'm not the only one that believes this. Listen to what Robert Kiyosaki says about student loan debt.
For many, the idea of buying silver is probably weird. It shouldn't be. Silver is just another form of money. For the wealthy, purchasing and storing silver and gold is only another part of the financial game to protect their wealth. It shouldn't be that different for you.
Now buying silver isn't too tricky. Just find a local dealer. There should be a local dealer not too far from you who is willing to share a little of their wisdom with you, and there are quite a few resources available online. But if you can't find a local dealer, Texas Metals is a good provider, and there are others. Personally, I buy locally.
There are a few things to know when buying silver or gold.
You will pay a premium over the "spot" or listed price. This is the price to mint the coin and markup for the reseller. Right off the top, you're paying anywhere from 5-20% more than the actual value of the metal if you aren't careful. You want to find a provider that allows you to get a premium as low as possible. Buying in bulk will allow you to negotiate this premium a bit.
Some states charge sales tax on metals like silver and gold. Some states don't charge sales tax. This is important since it can save you 5-7% on your purchase. In some cases, you may want to plan your buying by visiting states that don't charge sales.
Don't convert all your cash into silver. You need some cash for your everyday living and emergencies. Silver should be considered your cash of last resort. Once you convert your cash (fiat money) into silver (real money), plan to hold it for a looooong time. It may be something you turn over as an inheritance to your children.
Some financial planners will tell you to hold about 5% of your total net worth in silver and gold.
Storing your part of your "long term savings" as silver is an option you should consider.
As always, it's important for you to Get Money Smart, Millionaire Key #3. Before taking the plunge, study a little more and take some more time to learn more about silver and how to buy it.