Precious Metals as Currency

Until 1933, the US government backed all its money with gold. A person could take a $10 bill to the bank and exchange it for $10 worth of gold. Since the Federal Reserve has taken over the nation's banking, the US basically has a fiat currency. In other words, that $10 bill is only worth $10 because it is backed by the full faith and credit of the US government. As many people are aware, the US bears a national debt exceeding $18 trillion. While the US government's credit is still excellent worldwide, many fear that one day America will be unable to repay its debts. Therefore, its currency will lose value and its economy will collapse.

With the future economic collapse of the US monetary system in mind, many people invest in precious metals, typically gold or silver (although platinum and palladium have become poplar recently as well). Silver is easy to purchase, and it may occasionally be found in pocket change, as American dimes, quarters, and half dollars were made with silver as recently as 1969.

What are your thoughts on investing in precious metals? Do you see it as a wise investment in general, or are you concerned about the collapse of the American economy and the need to have a reserve currency?

 

You make a good point. People who store their cash in the bank think that they are not losing anything by risking it in an investment vehicle. But they forget to account for inflation, which chips away 3-4% of their money's real purchasing power every year. With gold or silver, there is a risk that the value will drop, but it always finds its way back up. I have often heard the maxim, "Don't put all your eggs in one basket," and there is a lot of truth to that statement. I have other sources of retirement, but I find precious metals investing to be wise, safe, and fun. I collect old coins anyway, and this gives me an excuse to work on my collection while I invest at the same time!