Posted on 13 September 2011.
Many investors and other people are worried today about rising inflation. While the rate of inflation right now is not as bad as feared, few people doubt that inflation will accelerate due to the huge amounts of money that the US government has pumped into the economy. This inflation will destroy people’s savings, especially if those savings are just based in currency. People holding large bank accounts will see their money become worthless when inflation kicks in
To protect themselves against inflation, these people should begin to use these savings to invest in precious metal stocks. Precious metals cannot be inflated like fiat currencies can. They remain valuable because the amount of precious metals in the world does not increase very rapidly.
Furthermore, each of the precious metals has additional valuable qualities that make them desirable for more than just hoarding in case of inflation. The malleability of a precious metal such as gold has made it useful in many electronics applications, as has its natural inertness. Silver has a number of medicinal uses. Copper is used in construction projects, wiring and pipes. Platinum, a very valuable metal, is used in many forms of machinery. The utility of these metals only adds to their value. Precious metal stocks make good investments even when inflation abates.
The Central Fund of Canada invests primarily in gold and silver bullion. The Hecla Mining Company focuses on silver but it actually has considerable reserves in gold, silver zinc and lead. Silver Standard Resources is transitioning from a development company to a production company. It possesses a huge body of ore in Argentina. Yamana Gold has diversified holdings in many precious metals all over the world. Any one of these precious metal stocks holds great promise in a world certain to experience rapid inflation.
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