By John DamzalskiSilver is one of the best-returning assets of the last 12 months. I believe the recent run in silver is just the beginning. Keep in mind, during similar financial times (for example in the 1970s), silver prices shot up 3,733%.
You probably already realize one of the world's best long-term investments right now is silver. But did you also know that you don't need to buy 'investment' silver in order to take advantage of this trend? To learn more, keep reading.
One reason for silver's surging investment potential is simple: Silver is real money, and money talks!
With government spending getting out of control, silver is where the smart money is going. Silver is also a great way to actually make money go further, instead of the wilting dollar.
Remember that during the similar economic climate of the 1970's, silver went on an unprecedented rocket ride from $1.29 per ounce to just shy of $50... an increase of nearly 3,733%.
There's no guarantee that you'll see a 3,733% return over the next few years. I believe you can and will make money in silver over the next few years - more than you could with ordinary stocks, bonds, or mutual funds.
Fundamental changes in the market could send silver soaring to $50, $100 and even back to historical highs above $1,000/oz (in 2010 dollars).
"The first thing to understand about silver is that it is close to a 5,000 year inflation-adjusted low." - silver and gold expert James R. Cook
If you're like me, 5,000 years may be hard to comprehend, so let's take a look at the last 700 years.
Back around 1444, Silver was at it's all time high of $1,057. Then, the new world was discovered, the Potosi mines opened in 1545 - and the price dropped to around $600. Later silver discoveries in the western U.S. brought prices down even further to around $100. Fast forward to 2004 and Silver hit rock bottom at around $5.
Today, Silver is making a bullish charge, rising to today's price of $36.10. Even so, Silver is incredibly cheap right now, especially compared to gold.
A gold/silver ratio of 15 would put silver in the $102 range... more than double the current price. But there's a few facts you should know that really separate silver from gold and other precious metals.
Unlike gold, which is used primarily as a store of value, more than 95% of the demand for silver comes from industry.
Silver is used in everything from healthcare to cell phone to batteries.
"Silver is a component in many up-and-coming "green" technologies." - journalist Lara Crigger
Silver can also be found in new fabrics to create odor resistant clothing. It's found in swimming pools, in energy efficient windows, on CDs, on DVDs and even in toys.
Because silver is used for industrial and technological purposes, it is used up... and it cannot be reused. So, it's gone from supply... forever.
Here's the bottom line on silver: There aren't any stockpiles of silver left anywhere in the world. That makes silver a great opportunity for anyone who wants to make money work harder (and safer) for them.
The U.S. Government mints a coin called the Silver American Eagle that makes the perfect choice for taking advantage of this opportunity. These coins have traditionally been collectible in nature because of their rarity but recent trends have turned these collectibles into even more.
There are 3 unique properties of U.S. government issued Silver Eagles that make these collectible coins desireable:
These coins are widely recognized and therefore liquid. It has always had an eager market for owners who want to sell it.
It is easily divisible should you need to "cash-in" a portion of your investment. You'll be able to use it to buy goods and services in the future.
It is already "pre-certified" and should not need independent verification of purity and value like silver bars, silver rounds, or collectible grade coins. This is because every Eagle is date-stamped and has official U.S. Government markings.
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