Time and again, investor experts are singing the same tune; investors must lose paper assets and move towards real tangible assets such as silver and gold. Investors are urged to keep their ears to the ground so that they understand just what is happening in the economic world. With the U.S. Dollar in peril and debt ceiling issues sure to affect the global economy, it is much safer to hold real assets rather than paper assets. Back in July there was a massive shift from paper to real assets and this meant that investors were taking heed of good advice that has been bandied about.
Gold has really come into its own when compared to the Dow, S&P500 and the ten year Treasury. This is indicative of the fact that countries such as Mexico, South Korea and China are moving huge amounts of paper money into tangible assets. When you combine a depreciated housing market with the QE3 and a retarded economy, it would be foolish for anyone to hedge their bets in paper assets.
Most people who make the shift from paper assets to tangible assets look towards gold first. It is possible though that these investors will eventually move through other commodities eventually. This is quite important when you take into consideration just how much money is involved in order to create such massive movements in the market.
Investors should not fret too much if they missed out on the movement from paper to gold. When the U.S. Dollar eventually crashes, there will be movement to tangible assets that has never before been witnessed. It is believed that silver is going to surprise many people in how it performs even against gold. While at the moment, the ratio is 1:16, it could eventually end up being 1:1.
Investors should not place too much stock in the U.S. Dollar price of gold and silver as the U.S. Dollar will soon be worthless. Another thing is to not sell any silver until the U.S. Dollar has collapsed. Once the new currency has been established, it will be possible to purchase income producing assets for next to nothing. Hold onto your tangible assets as they will give you the ability to buy many things once the new currency has been established.
In gambling terminology, it is no good hedging your bets while the casino is being broken down. If the U.S. Dollar becomes useless as a measuring stick to measure the value of gold then rather resort to ratio investing. Back in the eighties there was a 1:1 Dow to gold ratio. The Gold to Silver Ratio (GSR) is the most well-known ratio and at the moment it is 1:16. It is also well known that silver is rather undervalued when compared to gold. Historical Gold to Silver Ratios (GSRs) tell us that silver should increase in value at a rate of 200 percent quicker than gold. Another factor in silver’s favor is that silver is second only to oil in terms of importance as a commodity.