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Silver Bullion is Quickly Becoming The Place To Be

Not only is silver bullion about to take off in price, but of all the long-term investment options available, it is the cheapest, easiest, and most liquid. This is true regardless of the economic environment.

What is Bullion?

Bullion refers to refined, pure metal and is almost exclusively associated with precious metals. After being mined and refined, bullion can be melted to fit a variety of molds, most commonly, rounds (coins) and bars.

For most investors, especially when first starting out, silver coins are the fastest way to begin and the easiest to find. As people learn the entire silver story, their comfort level with other forms of silver—like bars and numismatics—often increases to the point where any silver metal they can hold is worth obtaining.

Silver represents one of the best investment opportunities available, though it is still considered, at best, an alternative investment in today's world. And this, of course, is yet another important reason to buy.

People are slowly waking up to the silver bars or silver rounds, there need not be much confusion—we’re referring to pure, .999 oz silver. It can be easily weighed or assayed (using nitric acid) to demonstrate its value.

Given the manipulation of price and silver price history, there has been little motivation for silver counterfeiting yet. Bullion needs no marking other than the .999 oz hallmark or the name of the private mint/refinery.

Why Bullion and Why Now?

Plain and simple, silver bullion is still very inexpensive, especially when compared with its counterpart, gold. The fact there is much less silver both above and below ground than there is gold in existence adds fuel to this already tiny and severely suppressed market.

The limited amount of silver available above ground combined with the innumerable silver uses amidst decreased production, points to a long-awaited, though inevitable, shortage of physical silver. It is only a matter of time before industrial demand for silver launches the price into the hundreds of dollars per ounce. And yet silver will still be cheap relative to gold. The historic gold:silver ratio is 15:1. We are at approximately 80:1 today.

Bullion continues to have the lowest premiums of any other option in silver. Certainly, this has changed in light of the widespread retail shortage, but prices over spot (in the local coin shop) remain reasonable.

Furthermore, physical silver is easy to store and to handle. Most people need less than a few thousand ounces to protect their families and friends. This amount (about 150 lbs) can be easily stored in the home or office without the need for much space.

What About Pre-1965 Silver and Numismatics?

Pre-1965 or 90% silver or junk bags are probably the next best option to silver bars or rounds.

Given the economic downturn and a central banking policy that aims to avoid recession at all costs, we will likely see some form of inflation. Indeed, the bank rescues, stimulus packages, and spending policies that are coming will add unprecedented amounts of liquidity into the financial markets. This is bad news for the already fragile dollar and could spell hyperinflation.

In this scenario, having multiple forms of bullion will be a smart option should the dollar lose its value and a panic ensues.

Here's an article on silver bullion prices and China's recent monetary policy shift.

The Most Liquid of Investments

Silver futures contracts, ETF's, and silver pools may just be mouse clicks away, but they are ultimately someone else's liability. The beauty of physically holding silver bullion is that it is the most liquid of all types of investments.

Furthermore, psychologically speaking, it is more difficult to sell physical silver during normal short-term price fluctuations. While this might sound counter to the liquidity argument for investing in silver, you will always have the comfort of knowing that you can take it to the bank, the coin shop… even on the road if you need to.

For a comparison of the various ways to invest in silver bullion, click here.

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