Trade and Precious Metals

I thought it would be fitting since my site is about trade, to talk about what I think may, in fact, become the most valuable item of trade in the coming years. Precious metals!

Contrarian, you ask? Obviously, do we need to even ask? So let’s get into this bit, shall we.

Gold and silver have been part of my saving and investing strategy for a number of years. Being a contrarian when it comes to economics it’s a natural extension for sure. At one point in history in the not so distant past precious metals buyers were considered tin foil hat wearing nut jobs. I’m sure I’ve been called that behind my back a few times.

No worries I’m used to that sort of thing. However, my position on the subject is slowly being vindicated by the massive numbers of people who are joining the ranks of the insane and jumping on the gold and silver bandwagon. Part of this movement is being driven by the incredible number of people talking about the subject on YouTube. Check out this video here for a very salient example of some clear thinking on the subject.

Granted, there are plenty of opinions that I don’t agree with when I scour the Internet for subject matter but there’s a lot that I do agree with. I’m not convinced that gold is going to skyrocket to $20,000 an ounce like some say. But I am convinced that at some point precious metals will become an underground trade item. It seems that historically when populations become economically oppressed the black market and trade steps in to offset some of the oppression. Gold and silver being one of the last private investment items make them at a prime candidate for underground trade.Gold Maple

If you listen to the more extreme positions on the future of our economy it’s a pretty dark scenario that they portray. I call it the Mad Max syndrome. I’m not convinced in any way shape or form that we will see a Mad Max scenario anytime soon forever for that matter. What I am convinced of is that if governments keep pushing for more and more intervention into the economic lives of ordinary people there will be a reaction. This is natural, of course. People except the necessary evil of government up to a point. But at some point, a line is crossed and people’s reaction to that is to take steps to avoid being robbed. This is where the underground economy was born in my humble opinion. It seems to be the masses natural reaction to an oppressive government.

So I’ve talked about what I don’t think will happen. Let’s talk about what I do think will happen. And in particular, as it applies to trade. I think that at some point people who have been collectors of precious metals we’ll start to use it once again as street money. If you examine a modern scenario of such a reaction one only has to look as far as Argentina. Argentina has suffered several major economic setbacks in the last three years. In each case the underground economy became the saving grace for people in need of food and other necessities. Gold and Silver became a medium of exchange once again among the Argentinian population. Community currencies were also used. In fact, at one point, Community currencies became accepted by a larger business and governments alike due to the fact that the Government currency was so unstable and over inflated.Johnson Matthey 100oz

Argentina it’s a classic case study in the reaction that human populations take when their economic stability is disturbed. People simply will not be held down below a certain standard when push comes to shove. The need for food and shelter are enough to drive people to incredible levels of survival instinct which seems to bring out human creativity in terms of economic alternatives.

Most people would say that you cannot compare the Argentinian economy to the Western world. This is demonstrative of people’s ignorance as they believe that Argentina is some backward nation. Nothing could be further from the truth. Argentina is a first world country with a first world economy. They have universities, doctors, lawyers, Business people of all types and a democratic government. This is not Nicaragua we’re talking about here. This is a country that probably best resembles Canada if I were to choose a parallel in the northern hemisphere. So we have to take this picture at face value when we examine the recent events in Argentina. If it can happen there it can certainly happen anywhere.

BuffaloSo if you’re not currently a precious metals investor you may want to consider starting. When dispensing advice in this regard I like to be as prudent as possible. The following is a bit of advice from a veteran in this field. Myself!

Try to find metals at the best price. Seems pretty simple right, but people will try to tell you that wonder the other dealer at the retail level is better for some arbitrary reason. Usually, they have some agenda of their own I suspect. It doesn’t really matter if the dealer is the biggest dealer as long as they can supply what you want.

Here are a few of my historical choices and also my recent favorite.

kitco.com
apmex.com
durhampreciousmetals.com

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