Fortune 500 stocks? No! Silver investing, Gold investing

I have become a fan of investing in gold and investing in silver, not just bullion, but mining stocks and ETF’s funds that hold gold and silver. I have to preface this by saying that two years ago I knew almost nothing about the stock market. Then what little money I had was wiped out in an IRA. A friend who is wealthy taught me about the market and more importantly how he was making money in gold and silver. I thought he was nuts. Investing in gold and investing in silver seemed stupid. I had heard that “gold bugs” who held gold in high regard vs. the American dollar were also members of The John Birch Society, had an arsenal of ammunition for the day the government would be overthrown and strongly believed in a New World Order (made up of political and business leaders) who met secretly to plot the course of the world. Paranoid! At the time I wondered if my friend was crazy. But my friend showed me he had made his fortune investing in gold and silver and he was willing to show me the fundamentals.

 Those fundamentals included economic and political concepts as well as tips on investing in gold and silver. He introduced me to the writings and backgrounds of David Morgan of Silver-Investor, Robert Quartermain, a big player in the owner of silver mining and Richard Maybury of Early Morning Report who writes on the broader political and economic forces at work. Fast forward to today. I listen to CNBC all day, not because I believe their on-staff commentators but because I want to know the course of gold and silver prices and occasionally to hear a guest speak the truth. “If we recover, and I mean if, normal for the economy won’t look anything like it does today.” Or “As the dollar falls and oil and gold rise, look for countries other than the U.S to mount a drive to replace the dollar as the globe’s reserve currency.”

I am not going to try to give you an entire background on how I came to invest in gold and silver mining. My caveat is that I am not the usual “contrarian” who is perhaps best represented by Republican Congressman Ron Paul. I had always thought of myself as a liberal, very willing to spend money on social problems to help not only those who couldn’t help themselves, but also to help average Americans in hard times. I am still altruistic enough to want to do that but it leaves me dichotomized. Yes, I want all those social programs, but in the meantime we are drowning in the kind of debt that means as the government debt grows and the Fed spends more money our entire economy is tanking.

So my number one reason for investing in gold and silver is because I think the dollar may be doomed and the dollars we have saved or want to spend are almost worthless. Contrarians point to this axiom. “No currency has lasted the value of which is the paper on which it is printed. In other words, a currency cannot last that is not based on gold or silver.” They point that we are not alone in having a shaky currency in these recessionary times; others countries are in the same if not worse shape.

All of that points to a replacement of world currency with gold or silver, but no, not anytime soon. This scenario takes a long time to play out. But in terms of investing, how much better to buy gold and silver (very expensive) and gold and silver mining stocks. Of course, part of this reasoning is that the usual big stocks have shrunk in value to almost nothing. They go up on the stock market based solely on the optimistic view that a recovery is around the corner and those stocks will once again regain their value. Not! General Motors is just one example.

The U.S. government is flooding the economy with cash to support floundering Wall Street firms. Other key countries with their own shaking economies are following suit, leaving our global economy drowning in paper currencies.

As paper money continues to be created, the value of each dollar, euro, pound or Yuan actually declines. So to buy a set amount of “stuff,” it takes more inflated dollars Doesn’t it make sense then to own the “stuff” with a fixed value rather than worthless paper? Enter precious metals, the way to own stuff that actually has value. Most people assume gold may be the best metal investment but silver has unique characteristics that make it as good if not better an investment. Silver is in short supply in our world. Gold has been and is being stored but silver has use in energy, technology and jewelry manufacturing. Remember, we have billions of people worldwide already entering the middle class and billions of others poised to do so. The industries that have to have these metals will pay top dollar for silver. Enter the mining stocks that haul up from the ground gold, silver as well as other precious metals collected during the mining process. OK. you are not convinced! You are still betting the Bank of America share will soar and that the usual Fortune 500 companies will once again be the basis of your retirement if not your fortune. Don’t believe me. I didn’t believe my friend. I went out and researched these stocks for myself as well as the basic economic fundamentals that leave me loving Barrack Obama but placing my bets on his being the ill fated captain who took over the Titanic after it had hit the iceberg. I would suggest you subscribe to newsletters on the Internet that discuss gold and silver. A favorite of mine is David Morgan’s Silver-Investor. He has a free newsletter along with a paid subscription that goes in-depth on particular trends and mines. If you never get a paid subscription, there is an entire education on precious metals on the Silver-Investor web site. So tell me I’m crazy! My stocks are doing very well…I’m just saying!