Silver and Gold

by Peter Saint-Andre

2009-04-22

The more I think about the financial system, the less I understand it. The entire thing is based on, well, nothing at all: fiat money, little strips of paper, the full faith and credit of the United States government (!), and other inanities. Given the utter lack of a foundation, it's no surprise that more people are converting some of their Federal Reserve Notes into things of real value. I'm thinking especially of silver and gold. I'm no expert on the matter, although I have done a bit of experimenting. Since I don't see too much point in having a stock of Krugerrands around the house (where are you going to spend them?), I've focused on two forms of metal: silver coins and gold bullion. So far I've had good experiences with Kitco and especially Apmex for silver coins and BullionVault for gold bullion. BullionVault has an interesting model: you actually buy some percentage of a gold bar in Zurich, London, or New York, which never leaves the vault (thus never leaving the core gold market). Their policies and procedures strike me as very rational and appropriately conservative, so that even if they go out of business, you still own your gold in the vault. Sure, you don't have physical possession, but you reduce your sovereignty risk. Check them out and let me know if you have other recommendations.


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