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Many analysts specialising in precious metals and other types of assets are warning of the value that gold \u2013 and, above all, silver \u2013 may acquire in the future. They argue that, in the case of silver, the global scarcity of this metal means that only around 7 grams per person on the planet have been mined. This is indeed scarce, if we consider it as an asset to which money can be anchored in the near future.<\/p>\n
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These specialists maintain that it is very difficult to find silver mining companies in which to invest, as they are also much scarcer than companies that mine primarily gold.<\/p>\n
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Furthermore, silver is a heat-resistant metal and a good conductor of electricity, and has historically been used as a medium of exchange alongside gold. Over the last 30 years, global consumption of silver has far exceeded the amount mined. And current global silver reserves are at an all-time low.<\/p>\n
The very guru of precious metals himself, Eric Sprott (I recommend you follow him via his blog<\/a>), defends the value that silver already holds today and predicts a meteoric rise for it \u2013 and never has that phrase been more apt. Sprott is a leading figure in the management of precious metals funds. Unfortunately, however, these funds \u2013 which have delivered excellent returns of close to 20% per annum despite the sharp falls of the past year \u2013 are not accessible to investors who do not have a suitable international management structure in place (as we have already pointed out in this article<\/a>). I recommend the presentation Mr Sprott recently gave to a small group at a dinner in Manhattan, entitled \u201cManipulation Meltdown<\/a>\u201c, as devastating as life itself.<\/p>\n The reasons for believing that money should once again be linked to metals are entirely reasonable. The staggering accumulated debt of developed countries \u2013 which will either be paid off with more debt or left unpaid \u2013 means that fiat money \u2013 paper money backed by nothing more than mere trust \u2013 is an asset that is set to lose value dramatically in the coming years.<\/p>\n A couple of years ago, some people called it \u201cInflation Temptation\u201d, but rather than giving in to temptation, what we have actually done is print worthless paper to prevent a global financial collapse, driven purely by an instinct for survival \u2013 a comfortable survival.<\/p>\n As evidence of the depreciation already suffered by \u201cfiat\u201d money, here is just one example: the loss in purchasing power of the US dollar from 1990 to the present day amounts to no less than 72%.<\/p>\n In other words, what we used to buy for 28 dollars in 1990 now costs us $100\u2032- If we convert these figures to real annual inflation, the result is that over the last 22 years we have suffered an annual devaluation of our currency of 6%, although I fear that those of us affected by the euro have lost even more during the transition from the peseta to the single currency.<\/p>\n But the most alarming thing is that, since 2009, the figures for money creation and the money supply in circulation have skyrocketed to infinity and beyond, as we can see in the chart above. And this abuse \u2013 or headlong rush \u2013 is likely to make the inflation and loss of purchasing power experienced from 1990 to the present day look like small change by comparison.<\/p>\n The worst is yet to come when it comes to devaluation or the loss of money\u2019s value, without a doubt. And the process of the shift in Value has probably already begun, even though most people are not yet aware of it.<\/p>\n The million-dollar question is: where can we safeguard our assets so that they do not lose value? It should be obvious to everyone that, in such an uncertain climate, fixed-income investments are an asset class that dooms us to a loss of value, as over the years no coupon payment will preserve our purchasing power in this environment.<\/p>\n![\"\"](\"http:\/\/4.bp.blogspot.com\/_nSTO-vZpSgc\/SufrV85vfxI\/AAAAAAAAHLA\/hCeXqyws2vo\/s400\/Base+Money+Supply.png\")
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