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Trader Interviews

Dana Samuelson: Why Precious Metals Are Still Important

By Lisamarie Lamb on May 12, 2019

5 (100%) 1 vote[s]

Since the 1980s, Dana Samuelson has seen over $1bn dollars’ worth of gold transactions and founded the world-renowned American Gold Exchange Incorporated. When it comes to precious metals, Dana Samuelson is the man who knows them best.

Takeaways

  • Precious metals – both silver and gold – make sense as investments; paper money will become worthless, but precious metals will always be there.
  • Buying precious metals is easier than people think providing you have access to a trusted vendor.
  • Precious metals can be used both as an investment and as an insurance policy.
  • Silver can be the ideal way to get into the precious metals market. It is cheaper than gold, so a good way to start, but it is highly volatile (compared to gold).
  • The Gold/Silver Ratio is currently at a pen-ultimate all-time-high making silver a more accessible and affordable investment to potentially swap into gold when the value of gold falls relative to the value of silver.
  • Buying precious metals provides an excellent hedge against inflation and the diminishing purchasing power of fiat currency – the US Dollar has lost 95% of its purchasing power since the inception of the Federal Reserve Bank (1913).
  • Bitcoin potentially a good way to make a speculative return but as an investment it is dangerous – precious metals are much more stable.

Dana Samuelson

Key Lessons

Dana Samuelson feels that people wanting to hold physical precious metals is a yes and no debate; it’s always going to be a matter of preference, even though he feels there are a number of excellent benefits. Since the economy is reasonable at the moment – the best in the past four or five years at least – the public has definitely been more attracted to the stock market; they have ‘spare’ money with which to invest and are feeling a little bit more confident. Gold is a great place to start for those who haven’t invested before.

Yet there is a bigger, more important, trend among central banks worldwide. These banks in Russian, China, India, even Japan, have been stockpiling gold over the past five to 10 years. It’s a good way to hedge against all the paper money that has been created and is a way to help the economy recover after the recession of 2008.

It was a boom, however, that first made Dana Samuelson interested in precious metals. He got into the market in the 1980s just after the first big precious metals boom since the US went off the gold standard in 1971 and started printing more money. There was more paper money than there was gold in Fort Knox at that time. Now, the whole world has done the same. There is more paper money than ever before, and more debt than ever before. This is why gold makes sense; eventually there will be too much paper money and it will effectively be worthless – gold is what will count. It is, after all, the oldest and most trusted form of currency.

From 1933 until 1974, gold was illegal in the US and was ‘confiscated’ from the American people to cover the national debt. Is there anything that could stop this from happening again? Dana Samuelson doesn’t think it is likely. It was done to stabilise the economy, to stop people using gold and start to use paper money instead. Today, only around five to 10 percent of the general public holds physical gold, and it’s no longer money – it’s a commodity. So confiscation probably wouldn’t happen. It just wouldn’t make financial sense.

Silver is known as gold’s ‘emotional sister’ since the moves in silver are much more emphasized than gold. It costs less per ounce than gold but could be a much more precious metal. Gold is real value that you can transport easily, whereas silver is much more useful in daily transactions. It’s the spending money, whereas gold is how you can transport real wealth easily. $130,000 of gold is about the size of a paperback novel, whereas you would need a truck to carry $130,000 of silver.

Right now, though, silver is cheaper when compared to gold than it has ever been. Many people are choosing gold to hedge their bets against paper money, but remember: if more paper money starts to be printed, silver will suddenly catch up, and you will make much more on your silver investments than you will on your gold since it was a lot cheaper to begin with.

Buying silver is a good strategy – it’s a good way to get started in the precious metals market and perfect trading for beginners.

Samuelson thinks bitcoin is an interesting idea. Sales of precious metals suffered as a result of the cryptocurrency boom; people were dumping their precious metals to buy it. Bitcoin has allowed people to use a non-government backed currency to make private transactions. This can be a big draw, especially with younger people. It’s a viable way to trade, but is it a good investment? They are replaceable and repeatable, so which one will be left standing at the end?

The silver Morgan dollar is particularly popular in the US, but Dana Samuelson suggests that most of the European coins that were minted from the 1700s to the 1900s just don’t have the equivalent value as they would have in the USA. There were many more countries making these gold coins in the European area whereas in the US there were very few coins relatively speaking. Therefore you should look for older coins if they come from Europe. They will be rarer, and more valuable. If you are interested in American coins, you can search for more contemporary ones and still find value in them.

There is a lot of value to be had in the old US gold coins from the 1920s, for example. You can buy these fairly cheaply, but they will rise as paper money reduces.

Gold is an excellent insurance policy against the rest of your money. Look at it this way instead of as an investment – if you have, say, 10 percent, in gold, you can always be sure you will have some return.

www.amergold.com

Questions:

1. Would you say there is an increasing appetite today (2019) from people wanting to hold precious metals in their physical form?

2. Why do you think this is?

3. Dana Samuelson, do you think the proliferation of crypto-currencies will challenge this? Bitcoin is now regarded by some luminaries as a “safe haven” holding away from the fiat currencies.

4. Owning Gold was once illegal in America back in 1933 when Roosevelt realised he had a shortage of it and urgently needed to cover rampant government spending. Back then, the Fed just could not print money fast enough and as US law required 40% of every dollar printed to be backed by Gold – who better than to steal the Gold from to make this a reality – the US citizens. Now this ban was lifted in 1974 a few years after the abolition of the Gold Standard.

5. Given the enormous deficit the US government currently has along with its bloated national debt…do you think this could happen again?
How and why did you get into precious metals?

6. What would be your tips for anyone who is just getting into gold/silver investing.

7. The silver Morgan Dollar is generally viewed by coin collectors / numismatists as having a dual benefit for investors and coin collectors alike– people can own a coin that appreciates in its historical value (this is dependent, of course, on the grade) as well as its underlying bullion value. As many listeners are from the UK, what would be an appropriate equivalent for Brits?

8. For those who want to find out more about you and what you offer, Dana, where can they find you?

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Lisamarie Lamb

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