Unemployment and Precious Metals

Unemployment Discrepancy and its Impact on Precious Metals Analysts, financial planners and so called “experts” tout a variety of anti-inflation investments, ranging from commodities like oil and coal to sophisticated instruments like inflation-protected treasuries and annuities.  Although all these products may seem to be inflation-proof on paper, none have the intrinsic value of gold, silver or any other precious metals. Intrinsic Means Forever Intrinsic value does not mean that the product may have value for some time, or even for a long time.  Instead, intrinsic value denotes value forever, and that value remains relatively unchanged and equal to the same amount today as it was thousands of years ago. Gold and silver are some of the only products with intrinsic value (excluding food and shelter) because they've been demanded for thousands of years.  In addition, they still purchase the same goods today as they would in ancient times.  The best example is that of the custom suit, which can be purchased today for $1100 (the price of an ounce of gold), just as it could during the 1940s and ancient times for an ounce of gold. Anti-Inflation Investments Must Have Intrinsic Value In order to be a truly anti-inflation instrument, the investment itself must have intrinsic value.  Gold and silver have each produced returns that compare to inflation, making them suitable as safeguards. In contrast, a popular recommendation like oil hasn't been used until the last few centuries, and it wasn't even until the 20th century that producers stopped discarding gasoline and used it for energy.  Therefore, while other commodities like oil, coal, coffee, and pork bellies may rise and fall with inflation, they have no intrinsic value – which means they have no place as a long term hedge against inflation. Read more...