Since MoneyWeek grew keen on it in 2004, silver – both an industrial and a precious metal – has risen from under $8 to almost $14 an ounce. Silver: The Single Best Asset You Can Own

Hmmm. That’s a 75% increase in what, 3 years? Appreciative, but not even close to the rising costs on other goods.

How can silver be the “single best asset you can own?” The reality is, it can’t. This type of hype and propaganda is misleading and dangerous for those that follow it.

Silver, like all metals, is a consumable product. Silver is experiencing a steady, high demand and has for a long time. Quite a bit of consumed silver can be recovered, especially from photgraphic processes. But some silver cannot, and is “lost” (thrown out) into landfills and garbage heaps or is permanently “consumed” in industrial processes where it will never be recovered. More silver is simply stockpiled and stored away for safekeeping, against the day that it will noticeably appreciate.

But that silver is still “there”. It’s not consumed, it’s simply not in circulation. If it was put into circulation, the stockpile of silver would drop a tiny bit, while the circulating amount of silver would increase a tiny bit.

On a much larger scale, if a giant horde of silver was suddenly put into circulation, say when a new mine opens, or investors suddenly dumped their silver, this would have a tremendous impact upon silver prices. The gains hoped for (assuming silver has appreciated, it doesn’t alway appreciate) would be worth much less.

So silver, like all metals, is subject to its supply and demand. Its availability determines its price. But there is at least one other thing that determines its price. It’s advertising. Just like diamonds, there is no shortage of silver. Not even close. Silver is one of the most abundant metals on Earth in reality. But not all silver is readily available, so it’s availability and mining / extraction costs have a lot to do with is current price. But so does it’s advertising. As investors are convinced it’s the next best thing to sliced bread, the demand for silver by their buying goes up — and so does it’s price.

Silver is widely consider to be a “safe bet” and a “sure thing”. Perhaps it is, but is it really the single best asset you can own?

Those that claim it is usually have something sell you. And obviously, that something is silver itself.

There you have it in a nutshell, short, sweet and to the point, but that will be too simple and too obvious for most people. So let me continue.

Let’s say you invested in silver. Heck, even I have some. It’s good way to keep me from spending some cash. The idea is, I can liquidate this silver, turning it into cash someday to buy something else I need, or to pay for some expense I have. But I must first turn this into cash, I can’t use the silver directly. If I do, I could actually get arrested.

So my silver must be “cashed out” at the going rate. I have to time it’s sale to be the most beneficial to me, if I’m doing my job right. But silver is a volatile market item. It goes up and it goes down. And it stays down, for long periods of time. This is because the market becomes flooding with lots of circulating silver and people are liquidating their hordes for needed cash.

I’m still waiting for my personal silver horde to go back up to the price I paid for it. So far, I’ve not even seen a glimmer of those 75% gains. Nope, not yet, still waiting.  My silver horde is actually worth less (still) then what I paid for it.

Meanwhile, the cost of goods (living) goes up, up and up. Unfortunately, this is not an asset you can actually buy, because the cost of living would REALLY make a good investment. But that’s not possible. So what do you do? You pay the going price for the cost of goods, whatever that cost actually is.

Housing goes up, food goes up, fuel goes up, electricity goes up, it all goes up. Just like death and taxes, there is no escape. So your horde of silver, converted to cash, goes to paying for the cost of goods which has gone up, up and up.

You have to time the market just right to sell silver quickly, sometimes literally overnight, to get the best possible price. Then, before the costs of goods rises too fast, you must spend your now converted silver into cash quickly too. Otherwise, any gains you realized (if any) will be wiped out.

Whew! All for a 25% gain per year. Maybe. It’s often miserably less.

Is it worth it? Depends on who you ask. Ask the silver bugs (investors) and they will assure you that it certainly is. So ask them if they’ve made in real money. I’m not talking a few hundred dollars, but thousands in the last few years. Have they? And what kind of investment did it actually initially take to do so? Do you have that kind of money to tie up for several years in the hopes that silver will spike and you’ll time the sale just right?

Perhaps you do. Good for you. But I’m not selling you any silver, so I think you can do a lot better then this by investing in something else. Actually, almost anything else. And since I don’t carry just anything, I’ll let you imagination roam for a minute on what other commodities rise in price, without fail, year after year after year. Why, everything, of course!

Unlike silver, which caters to a small niche in the overall society, there are other investments that can be made that everybody needs. These are the obvious consumable goods, such as food, water, power, transportation and industrial metals. All of these commodities go up in price, without fail, year after year after year because they are all in extremely high and constant demand (unlike silver), they are widely used by peoples throughout the entire world, and they are all becoming shorter and shorter supply.

Their demand, and their availability, is causing their prices to rise higher and higher. This is because they are all dependent upon cheap energy, just like silver, for their location, extraction, processing, manufacturing and distribution to you, the ultimate end “consumer”. At every step of the way, it takes energy and effort by a entire army of people to make even the smallest component available for your purchase. But don’t forget, there is constant, ongoing world wide competition for these products, including their manufacture and availability.

The most competitive products are consumable products. These are products absolutely EVERYONE needs, without fail. Not a single human on Earth can do without them. This is food, water, textiles (clothing), shelter, and energy (transportation, heating and cooling). The rest is “negotiable” on it’s global demand and price, and it’s availability is subject to that demand, which rises and falls as demand increases and decreases.

There is absolutely no doubt, that food is the real single best asset you can presently own (in time, it will be fresh water). Everybody needs it, not just a niche industry, or ‘investors’, everybody wants it, without a single exception, global demand is constantly increasing, it’s an asset that does not have a long life span like silver, thus increasing it’s constant demand, and it’s availability, price and distribution is subject to the constantly rising cost of energy. Since energy is skyrocketing now in price also, food is too, and this is one of the main reasons food is jumping up in price so much, but not the only reason. Climate change is having a severe impact on the global food supply too.

I sell food and I have a vested interest just like anyone else in selling my products. But unlike those selling products you don’t actually need, I’m in the business of selling what you actually need. That is neither my fault or my problem. It’s yours. You need food. You don’t “need” silver. You need water, clothing, housing and energy too. Everything else is gravy. But please bear in mind, all of these needs are non-negotiable. They cannot be lived without.

Food is now inflating in cost around 30% per year. Many grains such as wheat are now in global short supply. Other food products are suffering from drought or flood caused by global climate change. This is unfortunate, but it’s a problem nobody knows how to solve. The drastic and necessary steps that should be taken to ensure the world’s food supply are not being performed. Instead, it’s “business as usual”, with people thinking they can make a killing in one market or the other.

Well, good luck. I wish you well. I’m a lot more concerned about what my kids are going to be eating then whether or not my silver portfolio has risen a point or two. The rising cost of foods has me seriously concerned. I know I can’t live without it. I know my kids are going to continue to need it, as will I, as long as I live. Worst of all, I know that I can’t grow all the food I’ll need. I’m going to have to buy quite a bit of it.

Fortunately, I know what I can do about it. I know that I can store enough food to offset all future price increases should I want to. I know that by having a stash like this, I’ll be protected in ways that silver or gold or money or any other ‘investment’ won’t do. None of these things can possibly do what food does, because unlike food, I don’t need silver or gold or even money. But I do need to eat, otherwise, I will die and so will my family.

I don’t know if I’ll always have the means to make money to buy food. But I do know that when I have money to buy food, it’s the very best investment I can now make, because it will always be there when I need it. An absolutely critical, essential and personal resource that I absolutely must have. And so does everyone else, which will cause it’s price and availability in a depleted world to go up, up and up, forever. But I can protect myself against this by buying the food I need right now, at todays prices, and storing this for as long as I’m likely to live.

I can also help myself out by learning to grow my own food and raise as much as I can learn how. This will make a huge difference in my personal dependency on the world’s diminishing food supply. But due to my own failures, and crop failures, storage losses, pest, bugs, mold and mildew, I’ll need an abundance to ensure I actually really do have enough. This is exactly how the old timers used to do it, they couldn’t just store “just enough”, because they understood that things happen, things go wrong, and their pantry’s needed to be well-stocked to ensure they could get through until the next harvest. This is sound advice, something that we all need to pay heed to.

If you really want to “invest into the cost of living”, the answer is staring you in the face. Buy food. It is the real single best asset you can now own. And best of all - it’s still legal and always will be.

By the way — when you get ready to cash in that silver horde, don’t plan on taking it to the grocery store to buy food. You can’t. You might find a farmer or roadside stand that might take an interest, but perhaps not. He must might be hoarding his own harvest for himself and his friends. And you’ll need to convert that stash into cash. Then you can take that cash and go buy some food. Seems like a lot of trouble to me only to get what you could have started out with.