The Silver Bullet Against Inflation

The price of silver reached its highest point in over three decades in mid-2011.

Over the last few years the United States and World have been witness to near economic collapses, government boondoggles, corporate scandals, financial ponzi schemes, and 'bail outs' of many ‘too big to fail’ companies. It comes as no surprise then, that people are apprehensive about their economic future. There are many people talking about commodity inflation these days, and for good reason. As the price of crude oil continues to hover around the $100 per barrel mark, and the prospect of a sustained Quantitative Easing campaign by the Federal Reserve, the purchasing power of the U.S dollar does not buy what it used to be, while at the same time the basics of everyday living, like food and fuel, are becoming more expensive. While there is no silver bullet for such a complex economic problem as inflation, there are measures that average individuals can take to insulate themselves from the declining purchasing power of the US dollar.

A Compelling Asset

What is it about silver that makes it such a compelling asset to hold in the face of inflation?

Consider these key qualities about silver bullion which make it an ideal choice as a precious metals investment to hedge against inflation:

  • Silver has many real-world applications that go beyond just being a safe-haven store of value. It is also an industrial metal that serves many industrial functions. The anti-microbial qualities found in silver are used in the medical field. Since silver is an excellent conduit of electricity, it has become indispensible in the manufacture of many popular consumer electronics. These are both examples of growing industries which consume silver. Growing industrial demand for silver alone should keep the value and price of silver steady.
  • In comparison to other precious metals, silver is an incredible value. The silver/gold ration measure the amount of silver required for an equivalent amount of gold. With the historical silver/gold ratio being 16 to 1, the higher ratio's in today's marketplace suggest that silver is actually undervalued.
  • The price of silver reached its highest point in over three decades in mid-2011 over concerns about the Quantitative Easing measures introduced by the Federal Reserve and the inability of Congress to rein in spending and address the mounting pile of debt. If those things sound familiar, it is entirely possible that silver could rally again, especially with the Federal Reserve currently employing an open-ended Quantitative Easing program, and the failure of Congress to address the debt situation in any profound way.
  • Silver is the ideal currency for a barter economy. While it is true that that many people cannot image a currency collapse, the fact of the matter is that they do happen. History is littered with the corpses of those who have been careless with their monetary policies, and the United States government is not exempt from the “too big to fail” club. As silver is less expensive than other precious metals, it is easier to trade in smaller amounts and has more potential to act as a universally accepted currency.

An Ideal choice

If you're looking for a few silver bullets to fight against inflation, then silver bullion is the ideal choice in today's economic circumstances.