Gold News

Swapping Paper for Silver

However you buy it, Silver Bullion is a straight swap of metal for paper currency...

A LETTER from one of my subscribers asks a question many readers have asked before, writes Chris Weber, editor of The Weber Global Opportunities Report, in the Daily Wealth email.

When I buy a silver ETF, should I buy it in Swiss francs, Euros, or US Dollars? (Either way, I have to go through foreign exchange.) Will there be any difference in these currency choices after a few years?

To answer, I have to repeat what I have said many times before. When you are buying these sorts of ETFs of precious metals, you are essentially selling – exchanging – paper money and, in return, buying a specific weight of metal.

You may be buying a certain amount of ounces. You may be buying a certain amount of grams or kilograms. It does not matter at all which currency you choose to sell in order to buy the weights of metals. Please, please, stop losing sleep over this.
Ideally, you should just sell your own currency to buy the weights of gold or Silver Bullion. This saves any currency conversion fee. But the idea that buying, say, three ounces of gold with Canadian Dollars is better than buying that same amount with American Dollars or buying that weight with Swiss Francs is better than using any other currency...this simply misses the point of what you are doing.
Your aim is to accumulate weights of precious metals.

If you want to get a huge head-start over most everyone else on this planet, you will start thinking in terms of ounces, or kilograms, or grains, or taels – or whatever weight comes naturally to you – and not in terms of Dollars, Francs, Euros, or Dong.

I understand this isn't always easy to do. It may be easiest to own a round number of weights so you can easily track how much they are worth in terms of your own currency. For instance, say you own 100,000 ounces of silver. If Silver Bullion happens to be trading at $36 per ounce, it is easy to reckon the value of that silver in Dollars. In this case, you own $3.6 million of silver.
But that currency amount can always change. What doesn't change – unless you accumulate more – is the fact that you own 100,000 ounces of silver.
I don't know how else to put this. People ask me which currency to hold their gold or silver "in." Which currency has a better chance to hold its value over the years? This is not the right question. You are not buying currency. At least, you are not buying paper currency. You are instead selling it and buying specific weights of gold or silver.

It would be a happier and wealthier world if people stopped thinking in terms of national currencies and thought in terms of weights of metals. If this happened, governments would not be able to manipulate the values of their national currencies and cause all sorts of misery.
But you can't control this: If it happens at all, it will happen in the future – and sadly, probably far into the future. However, this doesn't mean you can't stop thinking in terms of national currencies whenever possible.

I understand that when you go to buy gasoline, milk, or bread, you will be charged some denomination of some national currency. But the amount of that national currency needed to buy the same amount of bread or gasoline or milk has been increasing over the decades. That means these national currencies have been debased.

Some of them have been debased faster and worse than others. But had you kept your money in silver for the last 60 years, you'd be spending less of it for each gallon of petrol or litre of milk or loaf of bread than you are today with your increasingly worthless pieces of national paper currencies.
Buy Silver – tax-free – using the ultra-secure, low-cost Bullion Vault service today...

Starting with $650 saved from his newspaper round, Chris Weber began buying and trading gold at age 16. A millionaire by 20, he switched into foreign currencies and debt investments as the US Fed finally started to tackle inflation in the early '80s. Now he shares his trades and insights with private investors through the Weber Global Opportunities Report.

See full archive of Chris Weber articles

Please Note: All articles published here are to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it. Please review our Terms & Conditions for accessing Gold News.

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