Precious Metals Facts
Stacking means collecting physical precious metals, mainly silver and gold, with some people also stacking patinum and palladium. Silver (Ag) and Gold (Au) are natural elements found on Earth and are listed on the Periodic Table of Elements. They are mined and turned into bullion, coins, and jewelry as well as used in industry. For over 5,000 years, Silver and Gold have served as money and are the only forms of currency mentioned in the U.S. Constitution and are spoken about over 100 times in The Bible.
Most countries store gold to show their economic strength, and it’s often moved internationally as payment. The U.S. reportedly holds about 8,000 metric tons of gold, mainly at Fort Knox and West Point. Russia has recently decided to include silver in its central bank reserves.
Precious metals are weighed in Troy ounces, where one Troy ounce equals 31.10348 grams, unlike an American ounce which is 28 grams.
While less than 1/2% of Americans stack precious metals, most Asian countries encourage their citizens to stack regularly.
Aside from being money, Silver and gold have various industrial uses. Gold is primarily found in jewelry, electronics, and medical devices such as dental crowns, and it doesn’t tarnish or rust. Silver has over 10,000 industrial applications, being the most reflective and heat-conductive metal, used in electronics, solar panels, mirrors, batteries, military weapons, water purification and even preserving milk. While Silver tarnishes, it doesn’t rust.
Why “Stack” Precious Metals
Stacking precious metals keeps your money outside of the banking system with no counterparty risk. Counterparty risk is the risk that one party in a transaction (the counterparty) will not fulfill their contractual obligations, such as repaying a loan, settling a trade, or delivering a product or service. It's a form of credit risk, but specifically related to the risk of a counterparty defaulting and can occur in various transactions, including investments, credit, and trading.
Precious metals are readily available to sell or barter with. You don’t have to wait for banks or trading markets to open up to gain access to your metals and they are simple to store and transport.
Gold Is the only Tier 1 asset aside from the American dollar. As a Tier 1 asset, physical gold is valued at 100% of its market value, offering banks a reliable method for meeting reserve requirements. Central banks can leverage gold's stable market value to boost confidence in their liquidity. They can use it as collateral to secure loans or in financial exchanges.
Precious metals have a rich history of resisting inflation. Typically, what a troy ounce of gold could buy 100 years ago, it can still buy and more today and more.
Many consider precious metals stacking a hobby that brings as much enjoyment as stamp, coin and other forms of collecting and educational too. Most folks who learn about the history of precious metals gain a fundamental understanding of how money, currency, the banking system and global trade function. Topics such as inflation, debt and liquidity are often intertwined within the discussion of precious metals.