Tuesday, 6 September 2011

My Venture into Precious Metals

To start, the whole point of me getting into precious metals is... pretty straight forward, the economists say that money is constantly getting devalued, so every time the banks print money (request it from the Bank of England) then the value of the money that exists becomes less, because we have gold reserves that don't really change, so printed bank notes in relation reduce their own amount when they are printed, its like you have the gold reserve as a whole, and the total of money is split within it, so every time money is printed, its singular value goes down, but remains the value within the gold. Or something like that. Maybe another way to put it is, say the gold is worth just £20, all the money within that is made up of pound coins, and then when more pound coins are made and put into the system, the pound coins have the value of 50p's.

This continues to happen day in and day out, for every pound that is printed it has a 20 pence debt on top of it, meaning all money has debt, IF there is only £1 in existence, there is no way for the person who borrowed it to pay back the 20pence, so they have to use it to make money with, to create income, to create income you need people with money to buy your stuff, so they can pay their debt off, so you take out a loan and now there is £2 in existence, you have a pound, and the other guy has a pound, and you both have debts of 20 pence. There is still no way to get out of the system. Anyway, money is printed and money is earned.

The thing that makes crazy sense is making money from debts, if you take a loan out, and use it to create stable income, for example a house that you rent out, then the bank is all up for that, you can have plenty of debt if the money is coming back in.

There are also commodities that business men get into, and thats things like, gold, silver, oil, things that are like property that you can easily sell when their prices go high.

However i've been interested in buying gold 'stock' for a while now, you could buy gold and store it at home, but its not so practical, so ive joined a thing called Goldline, which i found out about through The Telegraph newspaper, an article from 2009 prior to the recession. (Though ive only just seen the article)

The point of it is, is to buy gold or silver, they keep it, and you can sell it back to them whenever you like, so you can make money from it, long term, and if you buy at the right time, I don't know if i've bought at the right time or not, that is to speak in a roughly stable market, HOWEVER, these economists say its wise to have as little money in banks as possible, due to the fact that when the value of money gets knocked so far down the line to been worth nothing, business and government will have to resort to using/buying gold and silver for use as currency, meaning the value of gold and silver will be twenty times that of its general market value, possibly making a hell of a lot of money.

If this were to ever happen, then say someone with £100,000 worth of gold, might get $1,000,000 value if this situation was to occur, and economists continue to expect it to happen, nobody is sure when, but they will when it gets close.

So i've put £100 worth into precious metals, £50 in gold, £50 in silver, and basically have been watching the market a couple of days with an app on my iphone. I'm a very impatient person, and I dont know if i'll have what it takes to see this through into seeing some real profit. But here are the little details;

I bought £50 in gold and in silver, this then had like a 7% cost to it due to card transactions it costs the company, so when i bought it, both were valued at £3-3.50 less than what i paid, so a little room for recovery will be needed there... so next is whats been happening with the market? Which is whats really confusing, because its so hard to tell, i read that september was going to be really good for silver, and that silver is great to get instead of gold due to it having a more industrial use as well as been a precious metal, and that people tend to go for gold, and silver is currently more rare, so i hoped for silver to be a winner for me. The market these past couple of days have been up and down, silver has spent the past 2 days with generally 0 change, and ive seen gold go from been up in the mid 0.20's and down to minus 0.14, so its hard to say.

This is going to have to be something thats watched closely, i will probably put another £100 in a spread it over both perhaps, or just on silver depending on the market. But for me its not a big deal as the money is student money and interest free student overdraft, so i guess if theres a time to try my hand at the market it is now.

It has only been a couple of days now, but i can't let my impatience get the better of me, i need to see this through, see what happens and hope to make some cash down the line. The real thing that makes it worth a try is Gold and Silver will always have value, real value, which is where paper bank money falls down.

Here's the video that pushed me to finally go buy some gold and silver.
(Not to mention Max Keiser, Alex Jones and other Economists that have told me)

Robert Kiyosaki: Taxes & Debt Are Supposed To Make You RICH 


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