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Gold and silver ready for anything?

Gold was down almost $20 when I checked the Kitco website this morning.

Silver was down 21 cents.

Both amounts fall within the normal band of daily fluctuations.

When they are, none of us thinks too much about them.

Rather, thought is given to ongoing inflation and future record high prices.

However, we cannot leap from where we are today to record high prices in a single bound.

What this means is we need to be able to continue to live our usual lives in a routine manner without having gold and silver investments become an obstacle.

If gold and silver bullion dropped by half in the next two years, how would that affect your life?

If your answer is not at all, you are well prepared.

It likely means you are not investing with borrowed money subject to margin calls.

It likely means you are not having your bullion stored for you by a firm that could be hurt by financial fluctuations.

It also likely means you are not counting on paying current bills with profits that have not arrived yet.

British economist John Maynard Keynes was nearly bankrupted by his speculations.

He explained that markets can stay irrational longer than his investments could stay solvent.

He was betting at the time on a decline in value of the German mark during its inflationary crash in the Weimar Republic.

He had the right long-term outlook, but the markets moved against him short term.

Don’t let this happen to you.

You might be absolutely correct in your long-term gold and silver assessments.

However, if you structure your investments to be susceptible to short-term market fluctuations, you might unhappily find that being correct and being insolvent can indeed occur together.