I'm not BUYING Silver. I'm not INVESTING in Silver. I'm EXCHANGING for Silver
Not too long ago, my adult kids and I were talking about finances. Now I feel that I've done a pretty good job educating my kids on the "Value of a dollar". In the parental sense. Meaning, how not to live beyond your means. How to save and invest properly. Both kids are college graduates. My daughter has her Bachelor's degree and is working on her Master's. My son has his Bachelor's degree, his Master's degree, AND his PhD degree. While the degrees are impressive; the most impressive part is that both kids have gotten all of this education taken care of and behind them, and they have NO, ZERO, NADA, etc. student loans or debt. That's right. 3 degrees for my son, and almost 2 degrees for my daughter, and they aren't in debt. So, what does this have to do with silver and gold. My point of this prelude, is that my kids are quite well educated, and extremely financially responsible. YET..... they asked me a very serious question.
"Dad; why do you BUY Silver"? My response was:
I said: "I DON'T buy ANY SILVER".
hmmmm??? "Ok", my son said. You're talking semantics. "Alright; why do you INVEST in Silver"?
I said: "I DON'T INVEST in Silver"
hmmmmmm???? Now my kids are a getting a little confused. They asked: "You do HAVE a bunch of Silver and Gold, don't you"?
I said: "Yes, I HAVE a bit of Silver and Gold".
They said: "Well, unless someone GAVE it all to you, you must have BOUGHT it, or INVESTED in it".
This is when I realized that THEY, just like MOST PEOPLE, are looking at Silver and Gold totally from the wrong position. When you INVEST in something, you are basically gambling. Not a big deal. Sometimes you need to risk some in order to "Make A Profit". On the other hand, when you BUY something, you are basically TRADING your Labor, "or if you're on public assistance and don't work, you're trading OTHER PEOPLE's labor (taxes); for some sort of goods or services which is FINITE. Whether you buy food, clothes, car, tv, vacation, cable, internet, etc. you are BUYING goods or services can either deteriorate, or stop being usable after the value you paid for it expires. Example: When you buy cable or internet services, you pay for 1 month's worth of service. When the month is over, the service stops, unless you BUY MORE. If you BUY food, it expires once you've eaten it. Clothes wear out. Cars wear out. Even houses eventually wear out, or you have to BUY MORE of it, or repair of it.
The point is, BUYING and INVESTING is basically TRADING your LABOR for something that is finite and expires in time.
My kids said: "OK, I can understand that. Not a problem. Are you saying because silver and gold don't expire, or wear out, etc. you aren't buying it"?
I said: "Sort of; but not exactly". I asked them; "when you went overseas to travel, and they didn't use the American Dollar there, what did you do for money"?
They said; "We exchanged the dollars for British Pounds, or Euros, etc".
I said: "EXACTLY..... You EXACHANGED onr currency/money for another. And that is what I am doing. I am EXCHANGING American Dollars for SILVER. I am EXCHANGING one currency/money, for ANOTHER".
This is where some people get really confused. They don't see Silver and Gold as CURRENCY or MONEY. Yet, it's the OLDEST Currency and Money on the planet. It's been currency and money for approximately 6,000 years. That's a hell of a long time. Why would I trust a piece of paper, MORE than a solid metal that has been universally excepted in just about every country in the world? Now; MOST GOVERNMENTS, before they've gotten greedy and turned socialist, trying to spend MORE MONEY than they take in through taxes, had their paper currency BACKED by Gold and Silver. When greed sets in, and they want to spend MORE than they take in, and live beyond their means, they have to remove themselves from the silver and gold standard. Once they do this, their currency becomes useless. BUT, the silver and gold maintain value. Albeit manipulated at times.
So, I'm NOT Buying Silver..... I'm NOT Investing in Silver...... I'm simply EXCHANGING American Dollars (One Currency) for Silver (Another Currency).
So of course, my kid's NEXT most logical question, "WHY"????????
Simple: "Silver and Gold (Currency/Money) will maintain and retain it's value and it's purchasing power when other currencies can't".
Yes, there will be ups and downs with silver and gold. (Due to manipulation). But generally, they both will maintain their value. Here are some examples over the last 50 years.
1. In 1964, a new car cost $3500 on average. Let’s say you had 3500, silver dollars from back then. Today, a new car with an average cost of over $30,000 will only require you to give up around 1500 of those silver dollars! (@ $20 an ounce for silver)
2. The average cost for a home in 1964 was $19,000, which required 15,000 ounces of silver ($1.30/oz price in 1964) to purchase. Today, you would only have to give up 13,000 ounces of your stash – and that’s even after you factor in the average cost of a home now being $260,000. The remaining 2,000 ounces of silver, would still leave you a value of about $40,000. Almost a year's pay.
MORE IMPORTANTLY. Let's pretend, that in 1964, the DAY BEFORE you were about to "EXCHANGE" your silver back to PAPER DOLLARS so you could buy that car or that house, you had an accident and went into a COMA. And let's say you stayed in that COMA for 50 years and woke up in 2014. You DIDN'T buy that new car or house back then. But you still have your 15,000 ounces of silver you were going to buy the house with. So, you "EXCHANGE" it today. You can STILL buy that same house. The 15,000 of silver will get you $300,000 in dollars today. If you still had the 3500 ounces of silver you were going to buy a new car with, you could STILL buy a $70,000 car today if you wanted.
BUT MORE IMPORTANT THAN THE PREVIOUS MORE IMPORTANT!!! What if you EXCHANGED the 3500 ounces of silver for the car for PAPER DOLLARS; or the 15,000 ounces of silver for the house for PAPER DOLLARS, and before getting to the car dealer or realtor, you had your accident and went into a COMA. Your money stayed in your wallet for those 50 years until you came out of the COMA. Do you think you could buy an average house for $19,000??? Could you buy a NEW CAR for $3500??? No, but you could have if you STILL HAD THE SAME SILVER before you EXCHANGED IT!!!
Do I really need to continue on? At this point, my kids "HAD AN EPIPHANY". It all started to make sense. A gallon of gasoline in 1964 cost $0.25. Currency was silver then. TODAY, that SAME 1964 quarter, can STILL BUY A GALLON OF GAS!!! Today, that quarter is worth about $3.00 .
But some will say; the cost of living was different then. Wages were much lower then. True. But once you do the math, you realize that it all works out. In 1964, silver was about $1,30 an ounce. Income today, is approximately 8X more. $54,000 today vs $6,500 in 1964. Gas is about 8x more. $2.40 today vs $0.30 in 1964. Car is about 9X more. $31,500 today vs $3,500 in 1964. So that means that silver should be around $11.70 an ounce today. That's 9x more than in 1964.
Obviously, this LAST PART about what silver should exchange at today doesn't sound good. Especially when silver is in the $17.50 - $18.00 range. Some would say that silver and gold is over-valued. DON'T FALL FOR THE MANIPULATOR'S TRAP!!! The reason Silver and gold should not only be where they're at, but actually much higher, is because in 1964, the GOVERNMENT and the CURRENCY was BACKED BY GOLD/SILVER. Remember; the coins WERE SILVER. Every paper dollar on the street was backed by an equal amount of gold. But the USA got off of the gold standard in 1971. Since then, the government has printed money out of control. They are $20 trillion in debt. There's $200 trillion in unfunded liabilities. Unfortunately, the debt is so great, the United States can't even go back to the gold standard. However, if manipulation stopped today, Silver would be closer to to $50-$60 an ounce and Gold would be closer to $2000-$2500 an ounce. Due to industrial uses, silver would eventually get back towards a 30-40 : 1 ratio with gold. And depending on the value of the paper currencies, silver (Without Manipulation) will eventually get into the $250-$300 an ounce range. Gold will be in the $10,000 an ounce range. The reason for manipulation is; if not, the DOLLAR would totally die and the US Economy would be a 3rd world country.
But that is a different story. What is important, and sorry for the long winded blog; is silver and gold maintains it's purchasing power. Silver and Gold ARE MONEY. They ARE CURRENCY. There will be ebbs and flows, but on average, what you can buy TODAY with your silver, you'll be able to buy with that same amount of silver 10, 20, 30, 50 years from now. You can't say that with your paper currency. Especially with banks paying basically 0% interest. So; don't look at it as BUYING Silver or Gold. And don't look at it as INVESTING in Silver and Gold. You are EXCHANGING one CURRENCY for another CURRENCY. Just so happens, that the currency you are exchanging your dollars for, is a currency (Silver/Gold) that will maintain it's purchasing power.
Take Care;
CYA: SE:
"Dad; why do you BUY Silver"? My response was:
I said: "I DON'T buy ANY SILVER".
hmmmm??? "Ok", my son said. You're talking semantics. "Alright; why do you INVEST in Silver"?
I said: "I DON'T INVEST in Silver"
hmmmmmm???? Now my kids are a getting a little confused. They asked: "You do HAVE a bunch of Silver and Gold, don't you"?
I said: "Yes, I HAVE a bit of Silver and Gold".
They said: "Well, unless someone GAVE it all to you, you must have BOUGHT it, or INVESTED in it".
This is when I realized that THEY, just like MOST PEOPLE, are looking at Silver and Gold totally from the wrong position. When you INVEST in something, you are basically gambling. Not a big deal. Sometimes you need to risk some in order to "Make A Profit". On the other hand, when you BUY something, you are basically TRADING your Labor, "or if you're on public assistance and don't work, you're trading OTHER PEOPLE's labor (taxes); for some sort of goods or services which is FINITE. Whether you buy food, clothes, car, tv, vacation, cable, internet, etc. you are BUYING goods or services can either deteriorate, or stop being usable after the value you paid for it expires. Example: When you buy cable or internet services, you pay for 1 month's worth of service. When the month is over, the service stops, unless you BUY MORE. If you BUY food, it expires once you've eaten it. Clothes wear out. Cars wear out. Even houses eventually wear out, or you have to BUY MORE of it, or repair of it.
The point is, BUYING and INVESTING is basically TRADING your LABOR for something that is finite and expires in time.
My kids said: "OK, I can understand that. Not a problem. Are you saying because silver and gold don't expire, or wear out, etc. you aren't buying it"?
I said: "Sort of; but not exactly". I asked them; "when you went overseas to travel, and they didn't use the American Dollar there, what did you do for money"?
They said; "We exchanged the dollars for British Pounds, or Euros, etc".
I said: "EXACTLY..... You EXACHANGED onr currency/money for another. And that is what I am doing. I am EXCHANGING American Dollars for SILVER. I am EXCHANGING one currency/money, for ANOTHER".
This is where some people get really confused. They don't see Silver and Gold as CURRENCY or MONEY. Yet, it's the OLDEST Currency and Money on the planet. It's been currency and money for approximately 6,000 years. That's a hell of a long time. Why would I trust a piece of paper, MORE than a solid metal that has been universally excepted in just about every country in the world? Now; MOST GOVERNMENTS, before they've gotten greedy and turned socialist, trying to spend MORE MONEY than they take in through taxes, had their paper currency BACKED by Gold and Silver. When greed sets in, and they want to spend MORE than they take in, and live beyond their means, they have to remove themselves from the silver and gold standard. Once they do this, their currency becomes useless. BUT, the silver and gold maintain value. Albeit manipulated at times.
So, I'm NOT Buying Silver..... I'm NOT Investing in Silver...... I'm simply EXCHANGING American Dollars (One Currency) for Silver (Another Currency).
So of course, my kid's NEXT most logical question, "WHY"????????
Simple: "Silver and Gold (Currency/Money) will maintain and retain it's value and it's purchasing power when other currencies can't".
Yes, there will be ups and downs with silver and gold. (Due to manipulation). But generally, they both will maintain their value. Here are some examples over the last 50 years.
1. In 1964, a new car cost $3500 on average. Let’s say you had 3500, silver dollars from back then. Today, a new car with an average cost of over $30,000 will only require you to give up around 1500 of those silver dollars! (@ $20 an ounce for silver)
2. The average cost for a home in 1964 was $19,000, which required 15,000 ounces of silver ($1.30/oz price in 1964) to purchase. Today, you would only have to give up 13,000 ounces of your stash – and that’s even after you factor in the average cost of a home now being $260,000. The remaining 2,000 ounces of silver, would still leave you a value of about $40,000. Almost a year's pay.
MORE IMPORTANTLY. Let's pretend, that in 1964, the DAY BEFORE you were about to "EXCHANGE" your silver back to PAPER DOLLARS so you could buy that car or that house, you had an accident and went into a COMA. And let's say you stayed in that COMA for 50 years and woke up in 2014. You DIDN'T buy that new car or house back then. But you still have your 15,000 ounces of silver you were going to buy the house with. So, you "EXCHANGE" it today. You can STILL buy that same house. The 15,000 of silver will get you $300,000 in dollars today. If you still had the 3500 ounces of silver you were going to buy a new car with, you could STILL buy a $70,000 car today if you wanted.
BUT MORE IMPORTANT THAN THE PREVIOUS MORE IMPORTANT!!! What if you EXCHANGED the 3500 ounces of silver for the car for PAPER DOLLARS; or the 15,000 ounces of silver for the house for PAPER DOLLARS, and before getting to the car dealer or realtor, you had your accident and went into a COMA. Your money stayed in your wallet for those 50 years until you came out of the COMA. Do you think you could buy an average house for $19,000??? Could you buy a NEW CAR for $3500??? No, but you could have if you STILL HAD THE SAME SILVER before you EXCHANGED IT!!!
Do I really need to continue on? At this point, my kids "HAD AN EPIPHANY". It all started to make sense. A gallon of gasoline in 1964 cost $0.25. Currency was silver then. TODAY, that SAME 1964 quarter, can STILL BUY A GALLON OF GAS!!! Today, that quarter is worth about $3.00 .
But some will say; the cost of living was different then. Wages were much lower then. True. But once you do the math, you realize that it all works out. In 1964, silver was about $1,30 an ounce. Income today, is approximately 8X more. $54,000 today vs $6,500 in 1964. Gas is about 8x more. $2.40 today vs $0.30 in 1964. Car is about 9X more. $31,500 today vs $3,500 in 1964. So that means that silver should be around $11.70 an ounce today. That's 9x more than in 1964.
Obviously, this LAST PART about what silver should exchange at today doesn't sound good. Especially when silver is in the $17.50 - $18.00 range. Some would say that silver and gold is over-valued. DON'T FALL FOR THE MANIPULATOR'S TRAP!!! The reason Silver and gold should not only be where they're at, but actually much higher, is because in 1964, the GOVERNMENT and the CURRENCY was BACKED BY GOLD/SILVER. Remember; the coins WERE SILVER. Every paper dollar on the street was backed by an equal amount of gold. But the USA got off of the gold standard in 1971. Since then, the government has printed money out of control. They are $20 trillion in debt. There's $200 trillion in unfunded liabilities. Unfortunately, the debt is so great, the United States can't even go back to the gold standard. However, if manipulation stopped today, Silver would be closer to to $50-$60 an ounce and Gold would be closer to $2000-$2500 an ounce. Due to industrial uses, silver would eventually get back towards a 30-40 : 1 ratio with gold. And depending on the value of the paper currencies, silver (Without Manipulation) will eventually get into the $250-$300 an ounce range. Gold will be in the $10,000 an ounce range. The reason for manipulation is; if not, the DOLLAR would totally die and the US Economy would be a 3rd world country.
But that is a different story. What is important, and sorry for the long winded blog; is silver and gold maintains it's purchasing power. Silver and Gold ARE MONEY. They ARE CURRENCY. There will be ebbs and flows, but on average, what you can buy TODAY with your silver, you'll be able to buy with that same amount of silver 10, 20, 30, 50 years from now. You can't say that with your paper currency. Especially with banks paying basically 0% interest. So; don't look at it as BUYING Silver or Gold. And don't look at it as INVESTING in Silver and Gold. You are EXCHANGING one CURRENCY for another CURRENCY. Just so happens, that the currency you are exchanging your dollars for, is a currency (Silver/Gold) that will maintain it's purchasing power.
Take Care;
CYA: SE:
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