How Gold and Silver protects you from the coming western world debt collapse

09 Oct


How Gold and Silver protects you from the coming western world debt collapse

By Stefan Krämer

Gold and silver are in a long term bull market since the year 2000. Starting from 279 $/oz to 1,659 $/oz or 595% in gold. Silver moved from 5.30 $/oz to 32.30 $/oz or 609%. In the same time the total supply of US Dollars has increased from $1.8 trillion to over $14 trillion or 777%.

The pricing of gold in the US-Dollar, Euro and British Pound is nothing more than showing how much the currency has become weaker or stronger. Meaning a high gold price indicates a weak currency, a low gold price shows a strong currency.

Historically gold and silver were always used as money and their value was stable for centuries as goods were measured in precious metals. Later a gold-dollars standard came along with the US-Dollar being as good as gold. But then in 1971 the US-Dollar changed from being a gold currency into a paper currency. A gold currency means that every note is backed by the exact amount of gold. Meaning if the money supply increases, the total amount of gold backing the notes increases as well.

Paper currency (Economic term is fiat-money, the Latin word ‘fiat’ means ‘Let there be money’) is backed by the promise of the government. Money gets created out of thin air. More often than not the circulating notes are backed by government bonds and can therefore be increased easily; the government needs only to create more debt and the Central Bank prints the money – that is the way it works.

With every Dollar, Euro and Pound that is freshly printed the currency looses a tiny bit of purchasing power regardless in what invested.

Now here are two historical facts that are important to know: First without any exception Paper money systems have always collapsed at the cost of the normal person. The value of people’s savings lost 90 to 95%. (Please read: This time it’s different, 800 years of financial folly ISBN-13: 978-0691142166)

Second, is that there was no more debt than today. And there are only two solutions to the current debt crises:

1 Default on the debt or

2 Print money to pay for it

Governments are not showing any resolve implementing austerity programs and either of the two scenarios above is bullish for gold (and silver).

Governments do not like gold as money. For example every member-state of the International Monetary Fund (IMF) not allowed to have a gold backed currency (See IMF Articles of Agreement ). All the Western Economies are IMF members and that means all major currencies, like the EURO, British Pound, US-Dollar, Canadian Dollar, Swiss Franc, etc. are all paper currencies.

In Summary gold and silver have always worked as a store for wealth – and the whole western world runs on paper which is backed by nothing. If gold and silver are to be viewed as money and not as an investment it’s easy to see how the precious metals can protect ones wealth. So it’s more important than ever to hedge against a likely currency devaluation. Even a small share of 10 to 20% of your portfolio will turn out to be a smart move.

Many market insiders like Jim Sinclair who is one of the world’s most knowledgeable gold experts ( predict a stratospheric rise in Gold in the coming years. Jim Sinclair sees gold at $5,000/oz in the next few years.

Gold (and silver) is best bought and held physically in bars and/or coins. There are many options available but only the direct physical ownership and possession give you the biggest safety.

The most widely recognized and accepted coins globally are the Krugerrand, Maple Leaf and Vienna Philharmoniker with a purity of 22K (Krugerrand) to 24 karat or 999/1,000 metric purity.

Bullion is usually sold ‘investment grade’ with a purity of 24 karat in different sizes for example 1 oz, 100 gram, 250 gram, 500 gram and 1 kilo.

Any precious metal you buy will have a premium to the current market price (also called spot price) included in the sale price. Before buying check the market price at or any other financial website. A premium between 4 and 7% is normal for 1oz gold coins. The bigger the ‘chunk’ the smaller the premium; going down to a 1 kilo bar of 1% on average.

For silver investors it’s important to know that there is vat on silver in Europe. The cheapest vat rate for silver coins is Germany with 7%, so it’s best to buy through Germany if you need the goods delivered. Or Switzerland if you like to store them permanently as you’d get charged vat of the country of destination. Meaning 21% vat in Ireland and 20% vat in the UK.

CELTICGOLD specialises in filling buy & sell orders for precious metals from private clients, usually gold and silver coins or small bars (up to 1 kilo). CELTICGOLD trades in Europe but is based in Ramsey, the Isle of Man.

Gold orders are delivered by safe and insured bullion couriers like G4S, Brinks, FedEx and T.K.S. Packages usually arrive on the third working day. Large orders are delivered by private plane to European airport of choice.


Jim Sinclaire Website:



Phone: +44 20 8144 4339

Phone: +353 76 602 55 11″


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