Precious Metals vs. Land
By John | June 19, 2011
If you believe, as I do, that world fiat currencies are in danger of collapse, the next question becomes, what do I invest in?
I have mentioned previously that I recommend precious metals – gold and silver – or land. I came across some anecdotal information that might help clarify which you should be investing in.
In 1864, the Robinson Family purchased a 103,000 acre island in Hawaii for $10,000 in gold. At that time, an ounce of gold was equivalent to $20.67, so $10,000 in gold represented about 484 ounces of gold. Now suppose, instead of buying the island, the Robinson Family had just kept the 484 ounces of gold. How would those two respective investments look today?
The 484 ounces of gold are the equivalent of about $726,000 today. $726,000/103,000 acres, means you would have to be able to purchase that 103,000 acre island for about $7 per acre today for the two investments to be equivalent. I suspect that island is worth several thousand dollars per acre today.
What conclusion can we draw from this? If you are expecting to need to spend your investment in the near future, you need to be investing in something that is liquid, that can be converted to cash and spent. In that case, I recommend gold or silver coins. However, if you are looking for an investment that is long term, an investment you can pass on to your heirs, I recommend land.
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