It doesn’t take much to understand that our economy is headed toward trouble. As such, gold bullion represents an ideal safe-haven asset. However, gold prices have rocketed past the $1,500 level, making it on paper much less of a bargain. Because of this dynamic, buying silver makes more sense.
As you know, silver enjoys many of the same monetary principles of gold. Historically, silver was real money, the currency of choice for the gentleman as the saying goes. Moreover, the white metal is relatively rare, bolstering its intrinsic value.
In fact, because industries use silver extensively, the above-ground supply for the commodity has likely depleted substantially. Although silver exists in products like old electronic goods, it’s uneconomical to extract them. Thus, landfills throughout the world are collectively sitting on large silver mines.
But this supply-demand dynamic, though incredibly intriguing, isn’t the reason why I’m bullish on buying silver now. Instead, I’m focusing on the potential criminal element.
Buying Silver Now to Protect Yourself
At time of writing, the silver price is above $18. Although this represents a huge lift from just a few months ago, it’s still nominally cheap. Recall that in the bull run of 2011, silver prices ran toward their all-time record of $50.
But even with prices above $30, it made sense for unscrupulous agents to make fake silver coins and rounds. Now, silver counterfeiting has been around for a long time. Th best way to prevent buying fake bullion is to always purchase from reputable dealers.
However, that doesn’t prevent fakes from filtering in. As such, the best prevention is to load up on silver purchases through both reputable dealers and during a pricing environment that makes counterfeiting economically impractical.
In contrast, buying silver at higher prices increases risks. That’s when it makes sense for con artists to scam unwitting folks. After all, if silver hits $100 or more like the perma-bulls claim, it’s well worth for scammers to pass off a few bucks’ worth of base metals as a rare commodity.
Therefore, the quick and easy way to protect yourself is to buy silver when it’s below $20. That way, the risk-reward ratio for con artists is relatively low.
Reputation Isn’t Always a Protector
While it’s easy to believe that bullion brokers are your friends, you must remember one basic fact: they’re in as a business. Thus, they buy and sell on a consistent basis. As a retail buyer, you’re the lowest segment of the totem pole.
Thus, you want to make sure that your bullion broker runs a great business and is not just interested in talking shop about the Federal Reserve. I would know.
During the run up to the great bullion bull market, coin shops were all the rage. When prices cooled substantially, they lost their luster. And during the dark years following the 2011 bubble bursting, many bullion brokers went belly up. This included a broker from whom I purchased my coins and ingots.
The point is, buy with the most reputable dealers, but also ones with a strong business model. And that might mean going with the top dogs in this segment. While it might mean paying a little more premium over spot, the peace of mind you’ll receive will be priceless.