> How is silver a hedge against inflation?

How is silver a hedge against inflation?

Posted at: 2014-12-05 
Article 1 section 10 of our U.S. constitution says only gold and silver is money. This is because gold and silver is real and can not be ceated out of thin and therefore maintains its purchasing power at the very least and at the most increases in purchasing power. In 1960, a gallon of gasoline cost only a quarter but today, it costs over $3. That same quarter from pre 1965 will be able to buy you the samde amount of gasoline but the dollar or any other currency has lost value and therefore would require more currency than it took in the past to buy the exact same item because of inflation. Pre 1965 quarters are 90% silver which is why that quarter mainted its purchasing power.

If you calculate the correlation between silver prices and CPI you get a slightly negative number. That's all people need to say that it is a hedge against inflation. In our current world with direct inflation derivatives, hedging 1% vol inflation with 25% vol silver means you are seriously duped and mathematically impaired.

Silver and gold are commodities and generally retain their value, or even increase in value over time, and is not as affected by inflation. So while the value of currency may go down or even collapse in an economic disaster, silver will still be as tradeable and valuable as before. More so even

Price increase of Silver is more than the Inflation rate.

Silver is a valuable commodity that has always been a an acceptable trading or barter item.

More than 10% of your portfolio in silver (or gold) is misguided, IMO.

Buy and collect silver (and gold) coins for the great grand kids, but do not put much of your "serious" money in commodities.

Also, silver takes some effort to extract from the ground. Money can just be printed or increased through its velocity. #Inflation