Essential Things you Need to Know about Silver and Gold
(Timeless fundamentals about gold make it an ageless element)
Silver Stock Report
by Jason Hommel, June 24th, 2012
To be a store of value:
1 * It should be long lasting, durable, it must not be perishable. Gold does not decay, not even in seawater. Silver may tarnish, but only a little. This is why food items, expensive spices, or even fine silks or oriental rugs, are not generally suitable as money.
2 * It should have a stable value. Gold and silver values do fluctuate, but their value has never gone to zero value, like paper money can and will.
3 * It should be difficult to counterfeit, and the genuine must be easily recognizable. It's just too easy to print more paper money.
Precious metals are a great unit of account. Why?
To be a unit of account:
1 * It should be divisible into small units without destroying its value. Precious metals can be coined from bars, or melted down into bars again, with a low percentage cost. Animals are not suitable as money, in part, because they are not easily divisible, nor can they be put back together when cut apart. If an item can be divisible, it can be fungible, which is the next point.
2 * To be fungible: each piece must be equivalent to another so as to make it easily exchangeable. This is why diamonds, works of art, or real estate are not suitable as money. If an item is fungible, then it can be countable, which is the next point.
3 * It must be a specific weight, or measure, or size to be verifiably countable. You must be able to weigh, measure, and count, your unit of account! And this is why paper dollars are not suitable as money any longer. What are you counting? What are you measuring? Dollars are nothing but promises to pay in more dollars.
Precious metals are a great medium of exchange. Why?
To be a medium of exchange:
1 * It should be cheaply and easily tradeable, with a low cost between the prices to buy and sell it. Also, it should be able to be quickly and easily bought and sold anywhere in the world. Land is not transportable. Even US dollars, or Federal Reserve Notes, are not accepted everywhere in the world anymore.
2 * It should have a high value given a small weight, and thus be easily transportable, and cheap to store away. Precious metals have a high value to weight and size ratio. This is why oil, coal, or water are not suitable as money even though they are valuable. It's why real estate is not money, it's not portable at all. This is also why copper is not money, and neither is wheat or balloons.
3 * It should be durable. Coins are often mixed with 10% copper to improve hardness and durability, and coins are made with ridges around the rim to prevent coin shaving or debasement. Coins last hundreds and even thousands of years. Paper money, surprisingly, is actually expensive as money, because paper wears out quickly, and it costs money to have to re-print the paper.
Now that you know all about silver and gold you should be confident to buy some today from JH MINT!