Real Estate, Precious Metals and Silver Coins

Listeners’ Questions – February 23, 2012

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Thomas from Derby, Derbyshire (U.K.)
In an environment of high inflation, perhaps hyper, do you think that real estate or precious metals are a better investment? We’d assume inflation remains high for a large period of the mortgage – 5 – 10 years? And that the mortgage is a fixed-interest rate from the start, below the rate of inflation. So, in our present circumstances, would you buy a property to live in, or would you rather buy physical gold or silver at spot plus fair commission?

Mike from Danville, CA
In Peter’s recent newsletter, Jeff Clark points out that “The yellow metal gained 10.1% — a solid return, though moderate when compared to previous years.” I know that Peter has mentioned previously that gold is not an investment, but it’s a storer of wealth. So I don’t understand it when people say that gold has “gone up in value” or that it is “appreciating.”

Nate from Hatfield, PA
I am 17 years old. Since inflation is on the rise, interest is low, and gold is “cheap,” why not take out a loan, buy gold, and pay off the inflated dollars off down the road? As long as you sustain income throughout this period, that adjusts for this inflation, you should be able to benefit from the dollar losing its value and gold prices going up. Is there any risk to this?

Jason from Salem, UT
What is your opinion on Freddie Mac? Is it going to implode or is it so tied to the Fed and all the insiders that it will never go under?

Scott from Wilmington, NC
I’m buying physical silver coinage as a hedge; I plan to use it as barter/currency when the dollar collapses. What do I do with 50k of silver once the dollar is kaput, and hopefully a new monetary system is put in place? Will there be a “new” world currency? If so will our silver be redeemable in the “new” currency at the then current value of silver?