Investing in 2008 proved to be difficult. Stocks, commodities, real estate and other investments took a beating. The real estate bubble was to blame for most of the declines. What is the next big surprise in 2009? What can you do to protect your money? What many people did in the past; buy gold and silver.
There is a short supply of retail silver and gold. Coin stores and bullion suppliers are not able to keep up with demand. Online metals dealers are running out of product as soon as they post their inventories. Many coin shops have no inventory or very little to speak of. A flight to quality is taking place.
Why are people buying gold? The answer is quite simple; gold is worth more than paper. If an economy’s money becomes worthless or there is out of control inflation, gold will hold its value. Gold can’t be printed or digitized into existence. As the government creates money out of thin air it becomes less valuable. Every time there is a new bailout and the government creates money, your money becomes more inflated. The $100 dollars in your bank account becomes $75. The same $100 in gold becomes $125. You retain your purchasing power by owning gold.
The paper market price for gold and the physical price for gold is very different. You will pay 10 per cent or more for real gold. Remember paper can be inflated. Real physical gold can’t be inflated. Keep this in mind when buying gold. Many dealers will try to sell pool account gold. A pool account is when the dealer holds the gold for you and sends you a statement. Is the gold really there or is the dealer selling you paper? Do the research before you buy.
Sunday, December 21, 2008
Sunday, December 7, 2008
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