Friday, January 14, 2011

Hi Ho, Silver!: 3 Quick Reasons to Buy Silver Bars and Bullions

With the economy still in tatters from the Great Recession, many thrifty and street-smart people who learned lessons worth their weight in gold are trying to find ways to keep their bank accounts solvent and heads above water. Fears about a double-dip recession, inflation, and overprinting practices by in-the-red governments drive these recovering investors back to the basics – and precious metals.

Silver bars and silver bullions quickly emerge as a relatively safe investment for three easy-to-understand reasons:

1. Hedge your Bets with Silver Bars

It’s no secret that central banks the world over are printing money at faster rates to steer their economies back on track. Overprinting creates a very tangible concern about inflation, a veritable economic Weapon of Mass Destruction that could destroy the value of a dollar overnight.

Silver bars and bullions retain value because of silver’s status as a precious metal. Whereas the value of its popular cousin, gold, tends to skyrocket in bad times and drop in good, the relatively small market that silver bars and silver bullion represent in the United States and United Kingdom ensures its long-term stability and reliability. The fact that it can be stored in a home safe or with a bank in non-fungible storage means that you can rely on silver through economic crises thick and thin, and trade it in when you need your money’s worth.

2. The Going is Cheap for Silver Bars – for Now

Faltering markets and safe bets aside, silver bars and silver bullion are cheap by most standards in 2011. As of this article’s writing, the market value for an ounce of silver jumped to just over $31.00 on January 3 and since fell to above $28.50 around January 6. Contrast this with one troy ounce of gold, or about 31.10 grams, and the comparison is staggering: that amount of gold was worth $1,381 by January 10.

Moreover, investors are projecting that prices for silver bars and bullion will explode by 2012 – and with them, their long-term value. Money Morning, for example, forecasts that silver bars and silver bullion per ounce could rocket to $50 per ounce in 2012, representing a 150% increase.

3. Demand for Silver is in the Emerging Markets

Every investor wants a piece of the pie in New York or London, but any economist will tell you to keep an eye out for emerging markets, like those in China, India, and Brazil – where, it so happens, a demand exists for silver, and not for the reasons you might think.

Apart from the reputation it enjoys as a precious metal, silver is also an industrial metal. For instance, China is importing or mining copious amounts of raw silver to fill a baseline need in the creation of solar panels and other alternative energy needs. With climate change on the rise, and many countries on the brink trying to curtail the worst effects, investors anticipate that silver will continue to rise in demand.

That creates a two-pronged demand for silver bars, bullion and coins, allowing room to breathe for the investor who remains wary about the caprice of market demand for silver as a precious metal.

Armed with these facts, any investor can see that now might be the best time to mount the horse and ride into a silvery sunset.