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It seems like there are “gold and silver dealers” on every corner these days urging everyone to cash in anything they have containing those precious metals.

June 29, 2011 – It seems like there are “gold and silver dealers” on every corner these days urging everyone to cash in anything they have containing those precious metals. Cash strapped Americans are easily lured in, eager to dispose of what they are led to believe is “junk.”

In the first place, nothing containing gold or silver is or ever will be junk. More import to consider, however, is the nature of the melt business.

There’s a simple reason the business is booming – gold and silver prices are certain to climb to unimaginable heights as the economy tanks, and swindling a swelling number of desperate and vulnerable people out of their gold and silver at bargain basement prices is a great way to make some very big bucks very quickly. And there is very little control or even oversight to discourage misdealing.

Yet people seem to trust the dealers implicitly, often mailing in their gold valuables and then waiting to be told what they are worth. There is no guarantee of reliable assay.

“Junk silver” in the form of pre-1965 coins is easier to valuate, but there is a better reason to hold onto them as well your gold.

For one thing, there is no fear of depreciation. Wherever the price of gold and silver goes, the metals’ worth in terms of what it can buy is virtually constant.

But the real worth of junk gold and silver is as a practical medium of exchange. According to many experts the collapse of the dollar is all but certain. Should that happen, only gold and silver will buy the things you need to survive. But you wouldn’t want to hand over a Gold Eagle worth over $1500 in today’s currency just to get a few loaves of bread – what would you get in change?

Gold jewelry and other small items would be easier to exchange and would impose much lower risk, and silver coins would be hard to beat for small transactions. US dimes, quarters, and halves minted before 1965 contain silver in direct proportion to their face value ($2.45, $6.13, and $12.26 respectively at last close), making their relative worth universally understood.

You certainly would not want all of your gold and silver to be “junk” – unless you have a huge bank vault to store it all in – but it is extremely prudent to have a sizeable emergency reserve.

Shannon King

Senior Staff Writer – GoldSilver.org

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