Your silver investment and the bailout
If you are one of the lucky people to have a silver investment instead of stocks or some other paper investment, you may want to hold onto it for a few more months.
Hopefully, your investment consists of cold, hard silver locked away in a vault or buried in the woods somewhere. Real, live silver and gold may be one of the most precious possessions in the coming months.
It might sound extreme, but the government just put $700 billion into play that was not being circulated a week ago.
To put this into perspective, the Federal Reserve stated that in 2004, the total amount of U.S. money in circulation was only $667 billion worldwide. Yikes.
This leads me to think that my taxes are about to go way up to pay for this, or the money in my pocket is going to be worth half as much very soon.
The silver investment market is taking off right now as a result. There is a demand for physical silver that is way outpacing supply. According to GoldPrice:
“The Silver Price closed at $11.27, down 20.5 cents, but to buy US 90% silver coin and wait 2-8 weeks to get it I would have to pay $15.18 per ounce, a 36% premium over the paper price. And silver American Eagles? Well, forget them. They cost $16.81, a 50% premium, and heaven only knows when I’ll get delivery.”
Traditionally, silver dealers might sell $.50-$1.00 over the spot price per ounce of silver, but right now, that’s way higher, immediately cutting into your return on investment (ROI).
But two things will probably happen to help the savvy investor add to their silver investment.
1) Silver mints will produce more coins and bars to help meet this demand. The lag time for them to produce the investment silver will be a few weeks to a few months.
2) The market hysteria will die down somewhat in the next few weeks, and many investors will part with some of the silver they just bought, pouring back into Wall Street. This silver will find its way to coin shops and silver dealers.
Either way, silver dealers will find themselves with a sudden abundance of physical silver and the price should come way down.
Exception: the market hysteria may only be the tip of the iceburg. It is possible that when the smoke clears, everyone will suddenly notice how absolutely devastated the economy is, in which case, all bets are off. If you have any physical silver, this would be a good time to load the station wagon and take a “vacation” to Niagara Falls…like on the Canadian side.
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