The Falling Dollar and the Appeal of Hard Assets like Gold and Silver

Safeguarding Wealth: The Falling Dollar and the Appeal of Hard Assets like Gold and Silver

Link to YouTube video https://youtu.be/o9Dj36JVNFY

Introduction

The United States dollar, previously regarded as the cornerstone of the economy of the entire world, has encountered a great deal of difficulty in terms of keeping its value in recent years. Investors are becoming increasingly anxious due to the dollar’s falling value, which has pushed them to seek safety in hard assets such as gold and silver. This piece investigates the factors that have contributed to the decline in the dollar’s value, investigates the advantages of investing in precious metals, and discusses how these assets can be used as a hedge against the value of other currencies.

The Falling Dollar Value: Causes and Consequences

Several factors contribute to the depreciation of the dollar:

Monetary Policy

Central bank decisions, particularly those made by the Federal Reserve, significantly impact the dollar’s value. Low-interest rates and expansive monetary policies, such as quantitative easing, can lead to an oversupply of dollars in the market, diluting its value. Unlike hard assets, whose value is determined by intrinsic qualities, currency’s value is subject to human decisions and agreements.

Inflation

Persistent inflation erodes the purchasing power of a currency. When inflation surpasses interest rates, real interest rates turn negative, making holding dollars less attractive. In contrast, hard assets like gold and silver have a standard for value not subject to government control, making them a reliable store of wealth during inflationary periods.

Trade Imbalances

The United States has experienced chronic trade deficits for many years. Continuously importing more than exporting leads to an increased supply of dollars in foreign hands, putting downward pressure on its value. In contrast, hard assets have a global appeal, and their value remains relatively stable across borders, making them attractive for investors looking to diversify their holdings.

Geopolitical Uncertainty

Political and geopolitical tensions can erode confidence in the dollar as a safe-haven asset, leading investors to seek alternative stores of value. Gold and silver have a long history of being perceived as safe-haven assets during times of uncertainty, providing a tangible alternative for investors seeking stability and security.

The Appeal of Hard Assets: Gold and Silver

Hard assets like gold and silver have long been recognized as safe-haven investments, especially during economic uncertainty and currency devaluation. Here’s why investors favor them:

Intrinsic Value

Precious metals have inherent value and have been used as a medium of exchange for centuries. Unlike fiat currencies, gold and silver cannot be created or manipulated by governments or central banks, making them resilient to inflationary pressures. Their value is determined by their rarity, utility, and beauty, which gives them the stability that fiat currencies lack.

Store of Value

Gold and silver act as a store of value, preserving wealth over the long term. Their scarcity and enduring demand make them a hedge against currency devaluation and economic downturns. Investors often turn to these precious metals during economic instability to protect their wealth from the erosion caused by inflation.

Diversification Benefits

Adding gold and silver to an investment portfolio can enhance diversification, as these assets often move independently of traditional financial instruments like stocks and bonds. This diversification reduces overall portfolio risk and provides a potential buffer against losses incurred in other asset classes.

Historical Performance

Throughout history, gold and silver have demonstrated their ability to retain value and even appreciate during economic turmoil, making them a reliable option for wealth preservation. Their consistent performance over centuries adds to their appeal as a long-term investment option.

How to Invest in Gold and Silver

Investing in precious metals can be accomplished through various means:

Physical Bullion

Acquiring physical gold and silver coins or bars is a direct ownership approach. Investors can purchase these assets from reputable dealers and store them securely in a safe deposit box or a private vault. Owning physical bullion assures investors of holding tangible assets with intrinsic value.

Exchange-Traded Funds (ETFs)

Gold and silver ETFs are investment funds that hold physical bullion or track the price of these metals. They offer a convenient way to gain exposure to precious metals without needing physical storage. ETFs provide a liquid and accessible investment option for investors who prefer a more flexible and easily tradable form of precious metal ownership.

Mining Stocks

Investing in mining companies that extract and produce gold and silver can be a way to participate indirectly in the precious metals market. However, mining stocks may be influenced by factors beyond metal prices, such as operational risks and company performance. Therefore, investing in mining stocks requires careful consideration and research.

Futures and Options

Advanced investors can participate in the precious metals market through futures contracts or options, but these strategies carry higher risks and require expertise. Futures and options trading can be complex and speculative, and they are typically not recommended for inexperienced investors.

Conclusion

As the dollar’s value continues to face challenges, investors seek avenues to safeguard their wealth against currency depreciation and economic uncertainty. Hard assets like gold and silver have emerged as compelling options due to their intrinsic value, historical stability, and ability to hedge against inflation and geopolitical risks. Whether acquired physically or through investment products like ETFs, these precious metals offer diversification benefits that can fortify investment portfolios and provide security in an ever-changing global financial landscape.

However, as with any investment decision, investors must conduct thorough research and seek professional advice to ensure their investment choices align with their financial goals and risk tolerance. While hard assets have a standard for value, investors must carefully consider their circumstances and investment objectives before committing to precious metals as part of their portfolio strategy. With prudent planning and a diversified approach, investors can navigate the complexities of the global economy and preserve their wealth for the long term.

So you have decided to buy silver online.

Great choice. Let’s talk about silver.

Silver is exceptionally popular today. Part of the reason for this is the belief that it’s potential for upside value increase is even greater than the same belief in gold. In fact, there is a very good book on this subject entitled: “ Why Silver Will Outperform Gold by 400% in the coming years”. It’s a very scholarly book and quite convincing. Give it a read if you have the time.

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Silver Bullion Prices

Mind you, one need not look as far as that book to find evidence of the common belief that silver has great potential for growth in the near future. All one has to do is go to the web or even Youtube and there are advocates of this thought at every turn.

At Durham Precious Metals we believe that silver is an easy choice because it gives a sense of substance due to its lower cost per ounce than gold.

Silver Bullion

Probably 90% of our business is silver sales so this sentiment is fairly unanimous throughout the public. 10oz bars seem to be the most popular. Generic rounds and Silver Maples seem to be the next most popular and 1oz bars a close 4th place. It is our opinion that 10 oz bars and 1oz rounds are your best value as their premium over spot is very reasonable. However, there is no wrong choice when it comes to our silver product line because we try to concentrate on product lines with low premiums anyway.

Silver has always been a form of money. There are those that will argue that silver has been demonetized but we beg to differ. All one has to do is refer to the (CCRA) definition for 999 bullion. It is deemed by Rev Can to be a “ financial instrument”. Enough said on that subject!

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From a utility standpoint, silver has somewhere in the neighbourhood of 60,000 industrial uses including painting the backs of mirrors to create the reflective surface to collecting radiation in solar panels. If nothing else, the lack of an above ground supply of silver ( which is relatively new historically) will keep the demand for this metal strong since for most applications there is no viable substitute.

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Can you imagine the mayhem that would ensue if all the major electronic manufacturers came grinding to a halt due to a silver shortage? It would be catastrophic to the economy. We believe that this fact alone will be a major driver of support for the silver price when the powers that be run out of tricks in their attempt to suppress the price of silver. And yes, we agree that this practice goes on in plain sight and that the regulators turn a blind eye. Let’s hope justice prevails and that the historic silver/gold ratio returns to its traditional level.

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In the meantime…keep stacking!

So you have decided to buy gold online.

Great choice! Let’s talk about gold then, shall we?

Gold is, and always has been, a favorite of collectors of precious metals. Its 6000-year history of sustaining wealth is unprecedented. The yellow metal has launched wars, bought fortunes and has been a form of money throughout that history. It is one of the densest metals and also one of the densest elements on the periodic table. It weighs in at a density of 19.32 grams per cubic centimeter. Water, by contrast, has a density of 1 gram per cubic centimeter.

Buying Gold

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Platinum is the densest of the common 4 precious metals at 21.45 grams per cubic centimeter.

People will often ask when gold is the right choice to buy as opposed to other metals such as silver. This is a very common question. There is no easy answer that anyone can give to someone so we always boil it down to practical applications.

Gold Bullion

Consider how much of an investment you are planning to make over-all throughout the course of your precious metals buying. If you are planning on purchasing, for example, $10,000 worth of metals and then cap your spending then it really doesn’t matter which metals you buy. The volume of the purchase will be relatively small in terms of weight and size. Our main concern and Durham Precious Metals comes down to simple things like , cost of storage, cost of shipping and bulk. We are always trying to help our customers have the best experience as metals collectors.

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For example, if you were to tell us that you are considering selling a piece of real estate and use the proceeds to buy metals then gold would be our suggestion. The reason comes down to volume and weight at this point. Several hundred thousand dollars of silver would be an incredible amount of bulk at this spend level. Hundreds of pounds of silver would be hard to store practically and would be more expensive to store as well. If you are the DIY type it would also be harder to hide than a comparable dollar amount of gold.

Keep in mind that at the time of this writing gold is about 75 times more expensive in dollar terms as the same weight of silver. That equates to 75 times less bulk per dollar spend. This will make it much easier to hide or store if you are looking at large purchase amounts.

Price of Gold?

If you are only considering a small total purchase amount either of the metals is perfectly fine. The one consideration we always emphasize for small purchase amounts really comes down to personal perception. Here is what we mean. Silver is 75 times more bulky per dollar spend. Obviously, it is going to feel a lot more substantial if you buy $5000 worth of silver and have several hundred ounces to admire than only about 3 ounces. It’s a perception thing at this point but perception matters to people since perception can make us feel a particular way about what we spend our money on.

In closing, gold and silver are both great choices and neither is wrong in terms of their value of utility. They have both had a long history as a store of wealth and that isn’t likely to change any time soon.

Buy both with confidence. Buy Gold Online

We often carry pieces that we don’t list on site so feel free to call us for an up-to-date list.

About DPM

When you consider silver value and gold value, the wise choice is to stock up today. At Durham Precious Metals we make it easy and convenient to buy silver and buy gold online.

For those who are serious about investing in gold and silver bullion, DPM is your one-stop store to buy gold and buy silver, whether it be through our website or our retail store.

Many people want to know where to buy gold and do not realize they can avoid the traffic hassle of driving into the city and visit us at DPM located in Oshawa, Ontario. See our Retail Store page for directions. Our customers are delighted with our competitive silver price. We carry mint direct silver bars, silver coins, gold bars and gold coins.

Make Durham Precious Metals your choice for gold and silver bullion.

Consider a Gold IRA as well