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Gold News

What is “real” money?

Throughout recorded history, true money has been defined as a tangible item accepted for exchange and considered to have value.

Diverse items ranging from tulip bulbs to seashells to weaponry have been considered money at some point in history. However, none of those items have stood the test of time.

Neither have government issued fiat currencies. Throughout history all fiat currencies have failed or likely will fail again.

Currencies are not “real” money

If you ask the average guy on the street to define “money,” 99 out of 100 will likely answer “paper money,” the U.S. Dollar or a similar response. Technically, that?s an incorrect answer. Paper money and base metal coinage are just government issued currencies, a form of debt.

On the other hand, gold, and to a lesser extent silver, fit the historical definition of money and have for thousands of years.

So why have gold and silver survived the test of time as a true form of money? And why have gold and silver been universally accepted as money throughout recorded time?

gold bullion vs gold coins

Unlike government-issued currencies, gold and silver have been considered “real money” throughout history. [Photo credit: BullionVault Bullion bar in sea of coin via photopin (license)]

Why gold & silver are “real” money

Here are a few reasons why gold and silver are well suited to be considered money:

1. Gold and silver are LIQUID, meaning they are easily exchanged, traded, bartered with or sold for non-monetary government issued currencies.

2. Gold and silver are CONSISTENT. That refers to the fact that gold and silver are easily recognized, and their appearance and composition have never changed.

3. Gold and silver are DIVISIBLE. Smaller or larger units of precious metals are proportional in value. Most other tangible items of value are not.

4. Gold and silver are CONVENIENT, meaning even small units hold noteworthy value and are easy to carry and transport.

5. Gold and silver are DURABLE. That means, as with all precious metals, they are not biodegradable, nor can they evaporate and disappear without a trace. That is not the case with many forms of “so-called” money.

6. And finally, and maybe most importantly, gold and silver cannot be created “on a whim.” Both are FINITE. Whereas there?s almost an infinite amount of paper on this planet, there?s a very finite amount of accessible precious metals.

If you have any questions about true money, which is by historical definition physical gold and silver, please contact the non-commissioned professionals at Jack Hunt Gold and Silver at your convenience.

Diversification, Silver News

An Introduction to Buying Silver 101

This article is a follow-up to our last blog which discussed the merits of owning physical gold. Both novices and long-time investors stand to benefit from a review of the basics of owning physical silver. The following list contains some, but not all, of the reasons to buy tangible silver. Some items on the list hold true for any precious metal, others are unique to silver.

  1. The most obvious reason to own silver is its comparative affordability. As I write this it?s possible to own physical silver for less than $20.00 per troy ounce. As a point of reference, gold is currently 80 times more expensive than silver. We frequently mention to our customers that it?s far more likely for silver to double in value to $37.00 than it would be for gold to double in value to $3000.00 per ounce. Simply put, if your primary motivation for buying precious metals is profit, silver offers you the best opportunity for appreciation.
  2. Silver is more of a commodity than gold. It has numerous practical uses in the fields of technology and medicine amongst others. Whereas virtually all of the gold mined throughout history is above ground and accessible, most of the silver ever mined is gone, much of it inaccessible in landfills, too expensive to recycle. Estimates of the above ground quantities of gold and silver vary wildly but all agree the accessible silver on this planet is far less than the current silver to gold 80:1 price ratio suggests. Based on supply considerations only, gold is either obscenely over valued or silver is grossly undervalued. We tend to believe the latter is true.
  3. If gold, platinum and palladium continue to trend higher many investors will choose to buy silver simply because the other metals are no longer in the average buyer?s budget. This point was touched on in our first pro silver argument. However, in this scenario silver would likely rise due to higher demand. In a precious metals bull market silver could become or already is ?the only affordable game in town? for many precious metal buyers.
  4. Readily available smaller units of silver would be far more useful in an unlikely but possible currency devaluation or financial collapse as well as during, God forbid, a natural disaster or war. Along the same lines, silver?s liquidity during a short-term financial crisis, whether it be unexpected bills or a medical emergency, makes it far more practical than its more expensive counterparts, gold, palladium and platinum.

Jack Hunt Gold and Silver, 2017 1oz US Silver Eagles Coin

There are numerous other reasons to own tangible silver, but many of these reasons apply to all precious metals, not just silver. I?ll review a few of them:

  1. Purchasing and owning tangible silver can be legally anonymous, especially if purchased through Jack Hunt Gold & Silver.
  2. Unlike bank deposits, equities, Treasuries and other paper investments, physical silver cannot default, go broke or file for bankruptcy.
  3. Physical silver is real?it is tangible. Currency, equities, Treasuries, etc., are just paper and promises from the issuer.

In conclusion it should be said that asset diversification is more important than ever in our turbulent and confusing times. We believe that a balanced portfolio should contain some traditional assets such as real estate, equities, bank accounts and cash. However, we strongly believe that a moderate percentage of one?s liquid assets be in precious metals. The non-commissioned professionals at Jack Hunt Gold & Silver would be happy to assist you in any form of precious metal related transactions. 

World Economy

How the Petro-Yuan Will Impact The U.S. Dollar

This past March, China launched trading of the yuan-denominated crude oil futures contracts. These are the first futures that have been listed on China’s mainland to overseas investors.

Given that China is the largest importer of crude on the planet, Asia Times called the launch of the petro-yuan a ?geoeconomic game-changer.?

But what does this mean for U.S. investors?

For the first time, overseas investors will be able to access a Chinese commodity market. And to start, the U.S. dollar will be accepted for deposit and settlement, while several other currencies will be accepted for deposit only, according to the Times.

Will the Petro-Yuan Kill The Petro-Dollar?

Experts say there?s no reason to think the launch of the petro-yuan will immediately end the dominance of the petro-dollar, according to Pepe Escobar of the Asia Times. He writes that the end of the petro-dollar depends on many variables, with the most important being how China controls the global oil market.

Escobar also explains that one benefit of the petro-yuan for China will be that it will bolster the country?s efforts to invest in Asian and Middle Eastern infrastructure, particularly in Saudi Arabia.