Gold and Silver
always interesting to see investors move into gold mining
stocks and other precious metals when the market gets jittery.
Is this a good safe haven when the markets get bumpy? Is this
a good long-term parking place for capital? What are the pros
and cons of the different precious metals? Gold is where
most pessimists think of parking their assets. In moderate
market down turns there is little advantage to move to gold
verses shifting into cash in a brokerage account, or government
bonds. In a major world economic meltdown holding gold may
make sense for a large amount of money, but you still can't
eat it. In a major melt down you're better off with a piece
of rural property, a garden, and a gun.
problem with gold is that it is essentially where it was a
decade ago, which may create a safe defense against a traumatically
negative economic situation, but don't look for much appreciation.
Appreciation is much easier to choreograph in the stock market.
There are a couple of points in gold's favor. It
reportedly costs $425 an ounce to mine and refine it, a price
much higher than where it currently trades. Gold is also
used for the traces on the ever-present printed circuit boards
that surround us and on high-end electrical connectors, like
those used on auto airbags.
has very little industrial value and is used primarily for
jewelry. Like gold, it has traded at roughly the same price
for the last decade. The one advantage silver has over
gold in a major economic melt down (that is likely to never
happen) is that a one-ounce piece has a reasonable value for
bartering for common goods where you aren't likely to get
change back on a transaction; for example it's a little
rough trying to buy a loaf of bread with a one-ounce piece
of gold worth $270 where a $5 one-ounce piece of silver makes
more sense. Compared to the other metals Platinum is in relatively
short supply and its industrial use is on the rise in many
areas beyond the catalytic converters used on cars. For moving
a large amount of money, diamonds make a lot more sense than
gold, unless you are traveling by dump truck. Diamonds can
be worth many hundreds of thousands of dollars per ounce.