First off, this is not investment advice, I offer my thoughts here for your consideration. I have been thinking more and more about this:
Gold and Silver are perhaps the only “asset” that is not someone else’s liability, a pure asset.
Let me explain.
The US Dollar is sometimes described as an asset – that is if you have a pile of cash under your mattress you have assets. However, when we examine what is actually happening you may be surprised.
Although you may consider the cash as an asset (to you), it is actually the government’s liability. It retains value only on the presumption that the government honors all its liabilities. Further, if you deposit the cash into a bank account, the asset is becomes the banks liability. If there is an issue with the stability of the bank, and the bank goes under, it is insured by the government through the Federal Deposit Insurance Corporation (FDIC).
A lot must happen to keep your asset an asset.
It can be argued that even property is not a true asset, not only because of the cost of continued maintenance, but the simple realty that tax most always be paid on the asset. Failure to pay the tax may result in forfeiture of the asset.
Gold and Silver is nobody’s liability.
When you own it, you own it. It has intrinsic value based on what it is, and is internationally recognized.
I plan on writing more on Gold and Silver, and would love to hear your comments.
– Update: I’m reading The Story of Silver by William L. Silber – fascinating, highly recommend!