By Dr. David Eifrig, editor, Retirement Millionaire
Friday, January 7, 2011
A couple years ago, I shared two shocking silver charts with DailyWealth readers.
These charts showed how governments around the globe have abandoned silver as money. They’ve decided it’s easier to expand a nation’s credit with fiat paper money than to mine more silver. They’ve sold off their silver stockpiles to industry and investors.
This trend is decades in the making. At first, much of this silver was used up in industrial manufacturing and processes like photography. That silver is gone forever.
But starting around 1997, silver began flowing into private hands. Folks concerned with wars, investment bubbles, and mismanaged economies were buying it up. They turned to silver as a safe form of savings that can’t be debased by a gang of spend-happy politicians.
It was a modern day “silver rush.” And buying silver back then was a smart move. The metal is up sixfold over the last 14 years… while stocks and real estate have struggled to do anything… while paper currencies have depreciated in value.
The thing is, the silver rush is still on. I just recently updated those two charts. Take a look at where we are today…
The above chart shows how silver supplies are moving out of government reserves… and into the hands of private investors.
Below, you’ll find another chart. It shows sales of the U.S. Mint’s popular Silver Eagle coins. Note the huge volume spikes on the right-hand side:
Demand for silver coins is taking off. It’s up almost sevenfold from the mid-1990s. The public is catching on to the value of silver, and I expect this trend to continue for years.
Since my first essay, the price of silver has soared more than 100% – from $13.50 to about $29 today. But over the long term, there’s much more to come.
Here’s how I explained it in 2009:
Governments around the world are behaving absolutely stupidly right now. Our vice president just said with a straight face that the government has to spend more money in order to save the nation from bankruptcy. That’s crazy… but it passes for conventional wisdom these days.
In my 30 years of investing, I’ve never seen so many risks in the financial system. That kind of “patriarchal thinking” is producing those risks.
The stupid thinking I saw in 2009 hasn’t gone anywhere. Governments across the globe are spending with abandon and creating big risks for savers and investors.
That’s why it’s a good idea to keep a portion of your assets in “chaos hedges” like gold and silver. You should know, I’m not the kind of guy who lives in a concrete bunker. I don’t think the world is about to end. I’m not anyone’s idea of a “gold bug.” I buy this stuff just like I buy car insurance.
You should think of gold and silver as insurance against calamity. You should think of it as a safe store of wealth.
As I’ve just showed you, many people are catching onto this line of thinking. I expect millions more will over the next few years…
Here’s to our health, wealth, and a great retirement,
P.S. While demand for silver has changed a bit since my original advice, my preferred method to accumulate silver hasn’t. If you haven’t already stashed away a significant portion of your wealth in silver, this strategy is something you should consider. It’s one of the cheapest, simplest, and most effective ways we know of to own real silver bullion. Believe it or not, it costs as little as $2.08 right now to get a stake in this investment. For details, take a look at this presentation…