Steel, orange juice, pork bellies, corn, wheat, gold, silver, and a hundred other things, are all ‘commodities.’ What’s wrong with being a commodity? The Dictionary definition of a commodity as: “1. Any useful thing. 2. Anything bought and sold. 3. Staple products, as of agriculture.” Without commodities, there would be no human race. We eat commodities and use them in every facet of our life. Since commodities cover just about everything, for all practical purposes, we should use commodities to trade with, and use as money, or we eventually will anyway. Money is also defined in the dictionary, as “Things used in trade.” Commodities, are physical, tangible things. Commodities, can he held, weighed, and used for whatever purpose they serve, be they beans, aluminum, gold, silver, or pig iron. Gold, being a commodity, has a symbol, and it is AU. Silver is AG, Palladium is PA, and platinum is PT. For a small laugh, plutonium is PU.
There is no symbol for paper and ink, because they are not commodities. Neither are stocks, bonds, T-Bills, or money market accounts. The typical “financial manager,” doesn’t deal in commodities. Futures contracts in anything, are not commodities, but simple gambling, that in some future date, the contract may be worth more dollars, than they are now. Stocks are an indication that you may own a millionth of GM, and a bond, is merely a promise to repay. All of these things are bought and sold in dollars, not in tangible pounds, ounces, gallons, or bushels. It therefore makes sense to store surplus wealth, in physical, tangible commodities, doesn’t it? The problem with storing surplus wealth in any commodities other than gold and silver, is that they require refrigeration, huge storage requirements, insurance, transportation, and interest if bought on time. If the dollar fails, and all currencies eventually fail, it may eventually become necessary to trade with commodities, such as maybe using a dozen eggs for a pound of hamburger, or two ounces of silver for a gallon of gas. Since sivler currently is about an 84th the price of gold, silver for future use as a trading vehicle, makes sense, and even a half ounce of silver, if silver goes way up.
Do commodities priced in dollars go up and down? Yes, because prices of anything, are dependent on desire to own, as well as supply. Supply in just about any commodity, can depend on rainfall, sunshine, fertility, and many physical things, although fertility, rainfall, and sunshine may not apply to gold and silver. Is there a finite supply of gold and silver in the earth? Maybe, but it has not happened yet, and if it ever does, the prices will blossom to the heavens. Silver, being about an 84th the price of gold, means it takes 84 times as much space to store it, and more to ship it, if it is desired to sell. Silver has always been called a ‘poor man’s gold,’ but I love both anyway.
In some financial circles, ‘experts’ on what stocks, bonds, or other contracts, all denominated in dollars, of course, are pitted against the office steno, who throws darts at a board, I suppose with various stocks, bonds, etc. on it. May times, the dart throwers do better than the experts, who have played with their customers’ money, not theirs.
Since neither David, Melissa, Morgen nor I, know what will happen ten minutes from now, we, unlike the dart throwers or ‘experts,’ will not predict anything, other than there is no limit as to high any commodity can or will go, because their prices depend on how many dollars are printed, of which there is no limit and never has been. Commodity prices of most everything, other than silver and gold, will depend on hurricanes, tornados, droughts, floods, and fertility. Oh, I forgot. Dealers in commodities all have office rents, advertising, printing, payroll, employee tax numbers and insurance. We don’t, and our homes are free and clear. We’ve never spent a quarter on advertising. Word of mouth and reputation are priceless. When you can buy a one-ounce silver coin for maybe $4 more than the miner got for maybe a ton of ore, when he took it out of the ground, that’s pretty good. That ore has first to be milled to a face powder consistency. The mill takes the .001% of the metal from the 99.99% ore body. The gold and silver metals are rarely seen with the naked eye in the ore. Ask us, as we have all been ‘underground,’ in a mine. After milling, the metals have to be smelted, manufactured, transported and distributed, etc. Many years ago, I bought from a mine superintendent, some “High Grade,” which is a rich piece of gold ore which has been cut and polished so you can see the tiny bits of gold. “High Grade,” is highly collectable. Never forget either, that the gold and silver mines have had thousands of days, and years of exploration, to even discover the mine! Gold and silver bars and coins, require an incredible amount of machinery and technical know-how. All three of us, having lived in the mining town of Silverton Colorado, fully appreciate where the coins and bars originate. If you ever get a chance to take a mine tour, you will find it almost unbelievable. Wheat grown in a farm, requires huge amounts of cost, labor, technology, etc. to turn it into a loaf of bread. Since we have no sales pitch, we just love to talk to our customers! They usually love us and we love them. don@coloradogold.com. or 1-970-249-4646 to chat.