"Silver and gold have always been a way to preserve wealth through recorded history."
That was then and this is now.
if you stole Inca gold and took it to Spain, you were wealthy because Spain wasn't trading with South America. It was plundering South America. If your country started to tank, you could get on a ship and take your gold to another one which didn't have a common currency.
That mindset – and that ability – doesn't apply anymore. ALL currencies and ALL countries now interact in some way. Greece is going to default. So is everyone else. You can't take your gold and move to a country that isn't part of the system anymore. When your silver and gold become worthless HERE, they become worthless THERE. Because there is no impervious currency you can trade them into and spend. It will ALL be worthless.
So there is no 'gold standard' you can measure your metals against. There always was before about 1964, but that has disappeared. It's gone. Silver and gold have to be a recognized medium of exchange to a specific currency to be valuable – at least in SOME currency – or you simply can't spent it – it is physically impossible – except through a dealer.
The Internet and the concept of a 'Global Village" have created a real New World Order in which the 'value' of silver and gold are relatively fixed. That happened because they are no longer 'pegged' to a major currency. That means that no country actually has to have gold or silver backing it's currency. Now, currency is backed by 'the full faith and credit' of nations – so they can print money against nothing – and they do.
That old adage that silver and gold hold their value means nothing anymore because there is nothing for them to hold their value AGAINST. So the VALUE of silver and gold are generally pretty consistent around the world. What FLUCTUATES is the PRICE and that depends on exchange rate of fiat currencies. Because currency exchange rates and restrictions on transferring precious metals exist, you can buy or sell an ounce of gold in Mumbai for the same price you can in LA.
But still, no one grasps the concept. A person told me he had bought enough silver to 'turn over a fork lift" and that two of his silver dimes will buy a gallon of gas, but two clad dimes will buy…..nothing. He's right but he's not. It's true that as of today (July 8, 2011) a silver dime contains about $2.60 in silver, measured against the US dollar, at today's spot silver market. So what? You can trade your silver to someone who will give you cash at the going rate and buy gas with the cash. But two dimes at the gas station are two dimes no matter what they are made of. You are locked into that silver and gold – you THINK you have squirreled away a fortune, but you have only suckered yourself by making sure someone ELSE controls the value of your investment.
Buying silver and gold is not an opportunity to preserve wealth. It is a well thought-out plan for locking your money into something that can be manipulated. When it IS manipulated, you have no choice. You are stuck with it. Three or four big central banks could go back on the gold standard, print new money and peg gold to $50 or $100 an ounce. That's it for your wealth. And they'll do that WAY before they let their fiat currency crash.