-- Posted Thursday, 9 August 2012 | | Disqus

The central banks of the world all still sit on huge hoards of gold in their vaults, some have silver occupying a lot of space relative to its worth. It represents a value that cannot be destroyed whatever sort of mess a government makes of the economy.

Inflation, deflation, the gold will be there, and you can say pretty much the same about silver which has been used as money for centuries. Find a silver coin from the Middle Ages and you can still spend it.

Intrinsic value

Nothing else has this kind of intrinsic value as a store of wealth. And it has a particular value in times of financial crises when currencies can inflate away to nothing and shares in companies become worthless when they fail.

It is not just that gold and silver will preserve your wealth in the most dire of circumstances. The important point is that you then have your wealth at the ideal time to buy other assets, i.e. when their prices are on the floor.

You would then need to be very careful what you bought with your gold and silver for fear of buying an asset whose value might collapse to nothing. Exactly what to buy is the sort of thing our sister publication the ArabianMoney newsletter considers on a monthly basis (subscribe here).

Buying power

Thus you are not merely preserving your wealth by going for gold and silver but setting yourself up for a bigger prize in the years ahead. That might be the chance to buy blue-chip stocks at generational lows or a house after a big fall in prices or something completely different that you read about in a financial newsletter.

All you are really doing in putting money into gold and silver is exchanging your paper currency for the ultimate reserve currency and following what the central banks do themselves while telling others that the financial system is completely safe.

Why not stick with the ultimate reserve currency with the clouds gathering on the horizon for another financial storm this autumn?

-- Posted Thursday, 9 August 2012 | Digg This Article

About Peter Cooper:
Oxford University educated financial journalist Peter Cooper found himself made redundant by Emap plc in London in the mid-1990s and decided to rebuild his career in Dubai as launch editor of the pioneering magazine Gulf Business. He returned briefly to London in 1999 to complete his first book, a history of the Bovis construction group.

Then in 2000 he went back to Dubai to become an Internet entrepreneur, just as the dot-com market crashed. But he stumbled across the opportunity to become a partner in www.ameinfo.com, which later became the Middle East's leading English language business news website.

Over the course of the next seven years he had a ringside seat as editor-in-chief writing about the remarkable transformation of Dubai into a global business and financial hub city. At the same time www.ameinfo.com prospered and was sold in 2006 to Emap plc for $27 million, completing the career circle back to where it began a decade earlier.

He remains a lively commentator and columnist as a freelance journalist based in Dubai and travels extensively each summer with his wife Svetlana. His financial blog www.arabianmoney.net is attracting increasing attention with its focus on investment in gold and silver as a means of prospering during a time of great consumer price inflation and asset price deflation.

Order my book online from this link

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