Thursday, July 11, 2013

The Other Precious Metals: Part II

I'd like to thank Loren Howe, guest author and founder of preciousmetalpurchase.com for providing this article for us.  Mr. Howe has been involved in precious metal investing for over a decade and here is providing us some information on those rare metals that are not "silver and gold."  Mr. Howe can be reached at info@preciousmetalpurchase.com.

The Other Precious Metals: Part II

Indium, germanium, and iridium are available for physical purchase or resale through www.preciousmetalpurchase.com.  Another option is holding industrial metals through offshore storage programs. The company www.swissmetalassets.com in Panama first developed this option. Through Swiss Metal Assets, much like an ETF, an investor can purchase and resell interest in several baskets of metals including indium, gallium, tellurium, tantalum, hafnium, bismuth, rhenium, molybdenum, chromium, and tungsten. A Canadian company www.smg-indium.com also operates as an ETF for indium.  Lastly, many industrial metals are often available for physical purchase or resale through EBay.

Rare industrial metals are used almost entirely for industry with little room to accommodate investment demand. Nearly all LCD screens, for example, use a dollar or so worth of indium. The price of indium could rise over 10 times before noticeably impacting the finished price of computers or flat screen televisions.




Germanium Bar

It is little wonder that the media grudgingly tells "precious metal" investors to put their money into mining stocks, ETFs, or as a last resort physical gold and silver. Investing in mines subsidizes metal production and drives down prices, while gold and silver investors bid in competition mostly against other sound money proponents. It is interesting to imagine what would happen if sound money proponents forced the market to either allow a non-inflationary currency, or suffer the true consequences of price inflation.

We can see partially, with silver, what happens when investors drive up the price of a rare semi-industrial metal which is not fully controlled by the Establishment. Despite sale from stockpiles, the price of silver increased by a factor of 10 in less than a decade. Now imagine what could happen with metals far more rare than silver, vital to industry, but with no current investor demand.




Indium Bar


In the interest of giving a balanced picture, it is necessary to discuss the downsides of rare industrial metals. A major problem, as discussed, is repression of the market in the Western Establishment. It becomes difficult to trade these metals when at every turn, you find a monopoly unwilling to deal with investors. Due to the general lack of an investor trading community, the spreads on rare metals tend to be greater - in the same way that the spread on palladium is greater than the gold spread due to a shallower trading pool. Secondly, although rare industrial metals are currently somewhat ignored by the media and regulators, it is likely that attacks will be stepped up if they begin to catch favor with investors.

he fight for sound currency has always been difficult, but the community of sound money proponents has been making large gains in education (and profit) over the last decade. Rare industrial metals are a new tool which was effectively hidden but is finally coming to light. It will be interesting to see if this proves to be an unnoticed Achilles’ heel of fiat currency.

1 comment:

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