Anyone with any interest in gold or silver may have noticed recently that the "spot" price for silver and gold is a joke and nowhere near the price you'll pay if you actually want to invest in or own precious metals.  In most cases, gold coins are selling for 50% above the spot price while silver bullion is enjoying premiums of 80-100% or more above the "official" price.  This should concern everyone for the simple fact that these events are a huge indicator of highly inflationary times to come.  But the bigger news is that this enormous price discrepancy can't (and won't) last forever - something has to give.

Here's an article that explains just what's going on with precious metal prices. It explains recent events in the precious metals markets much better than I can, but I'll provide some notes and highlights here anyway.

The main problem is that the "spot" price of silver and gold do not reflect reality.  With the spot price of silver under $10/ounce, you'll get laughed at if you show up at the local coin shop trying to buy silver at this price.  Chances are they don't have any silver at all and if they do, the price will be closer to $18-20/ounce.  The article linked above focuses on gold but the same problems plague the silver markets - and to a much greater extent since the silver market is substantially smaller than the gold market and it won't take near as much money or investor demand to trigger a price explosion.

First, let me expand on the spot price of precious metals.  This is a price set on commodity markets by large hedge funds and financial institutions who place bets on the future price of silver (or gold) via paper contracts.  There isn't a whole lot of physical metal to back these contracts, which normally isn't an issue since most bets are simply rolled over or cashed out as the contracts expire.  However, there is an option to take physical delivery of the precious metal outlined in the contract, and with the contract price of silver and gold being so much less than the physical price, human nature says a large majority of contract holders will be inclined to take delivery on the metals.

When there are a large number of contracts demanding delivery of precious metals at artifically deflated prices - with relatively small amounts of physical metal to back these contracts - the most logical outcome is a default on the contracts.  In other words, people who pay $10/ounce for silver contracts and expect to take delivery of the physical metal won't be able to do so.  There's simply not enough precious metals to meet the soaring demand.

When this happens (which could be as early as December 2008), the "spot" prices of silver and gold will be exposed as the manipulated scams they represent and the physical prices of these precious metals will take over.  Some people "in the know" predict that if/when this happens, gold and silver prices will double in a matter of days.

Well shoot, if physical silver is already selling for double the spot price and the physical price takes over, silver prices will effectively double in an instant if this happens.  Actually, they've already doubled the "official" price so your guess is as good as mine as to how much higher silver prices will go from there.  But whatever the case and arguments, all signs are highly bullish for silver, gold, and all other precious metals.

As a side note, I still consider silver to be a much better investment than gold.  If you wish to invest in precious metals and feel you must own gold, consider the following:

• Silver is an industrial metal and more silver is consumed every year than is produced - this has been going on for 20+ years, eating away at the available supply of physical silver.  On the other hand, gold is NOT consumed.  Virtually all of the gold that has been produced since the beginning of mankind is still available in one form or another.

• The Gold-to-Silver ratio is currently around 80 to 1.  This means that one ounce of gold can be traded for approximately 80 ounces of silver.  Historically this ratio is closer to 20 to 1 and was only 50 to 1 only a few months ago.  It's become increasingly out of whack.  So if you must own gold, buy 80 ounces of silver instead of 1 ounce of gold, wait for the ratio to return to the historical norm, and then trade your 80 ounces of silver for 4 ounces of gold.

• The physical market of available silver decreases every year while the phsyical market of available gold increases every year.

Of course, there are other reasons to own silver over gold but all signs seem to indicate that owning any precious metals is a far better option than trusting your wealth (and livelihood) to paper money that's backed by nothing.  And remember, the paper markets are extremely skewed and don't represent reality so they currently can't be trusted.  It may be cliche, but everything is worth what someone else is willing to pay for it and as far as precious metals go, people are willing to pay much, much more than the "official" price.

Good investing!

This is a new section of the site that I am devoting to different ideas you can use to make some additional money. I can't guarantee that all the ideas will be for everyone, or that they will guarantee any level of success, but hopefully they will get you thinking and looking at different ways you can bring additional monthly income into your life. Most people I know could use some extra money on a consistent basis, and I'll bet you could too. My aim then, is to help spark ideas that can bring about this extra income.

So I hope that my first idea in this section does not seem like a cop-out or no-brainer. The first idea is to write articles and sell them online. There are several reasons I like this idea and would suggest it to anyone looking to earn some extra cash, but the main reason is that this is something that can be done once, yet provide a continual stream of income for years to come. But first, let's look at what I'm talking about here and how you can do it.

Anyone can write articles and sell them online. This is another reason why I like this idea – anybody can do it. It doesn't take a rocket scientist or exclusive training to write articles, and we are all an expert on something which means we should be able to come up with ideas on topics to write about.
So, the simple explanation on how to do this is to “just do it”. Pick a topic, write an article, and then submit it to an online site that either buys the article outright, or puts it up for sale on your behalf (and takes a commission on each sale). But this wouldn't be a very good article if we just left it at that, so we will look into the process further.

I think the first thing to determine is what type of “articles” you want to write, and what sort of compensation you expect for your efforts. The pay for new, unproven authors is generally low at first, but if you keep at it, you can eventually build up a large portfolio of articles that consistently generate income for years down the road. The type of articles you write and the topics are totally up to you, but how you intend to profit from the articles will have an effect on the type of content written and how it is structured. So it is important to know what you want the end result to be before ever writing an article in order to determine which style and methods are right for you.

There are a couple different ways you can earn money from the articles you write. Some online companies will buy your articles outright, providing you with immediate payment and the satisfaction and convenience of quickly selling your work. One such site is www.AssociatedContent.com, which buys articles on current events, news, culture, and more.
The advantage of selling your articles to a place such as this is that they buy the articles immediately, so it is ideal if you need to quickly generate some income. The dis-advantages are that the pay is often low (around $5 per article), and you give up the rights to each article you sell. For many, this is a huge problem, and the minor payouts simply aren't worth the effort. On the other hand, it does provide immediate income and is a reliable stepping stone for aspiring authors looking to earn some extra money.

Another method for earning money from your articles might be a little bit slower, but usually results in much higher earnings over the long run. This method is to submit your articles for sale on a content delivery website. There are many of these sites around (check Google), but one I have used in the past is www.Constant-Content.com. You submit your articles for sale on their site, and they take a commission each time an article is sold.
The advantage of using a system such as this is enormous. They offer full control over the licenses offered with the articles you sell, so you only sell the rights that you are comfortable with, and at a price you set. This means that with the right licenses, you can sell the same article many times over, reaping potentially huge rewards for a one-time effort. Plus they have already built up a stable base of paying customers who are looking to buy the content you write so your articles have a much better chance of selling than if, for instance, you were to setup your own website and try to sell them there.

One last method I'll briefly mention is to write articles for your own blog or website. The obvious advantages here are that you keep 100% of the profits earned while maintaining full control over your creative works. The problem then, is that it is tough to create a website with consistent traffic and earnings. So if you are just starting out or your website has little traffic, the immediate rewards for pursuing this method will be little to nothing. Of course, the potential payout of a wildly popular website is virtually unlimited which means that building up a content-rich website could pay off nicely over time.

Whatever method you choose, the main idea here is that it is possible to earn extra income writing articles and selling them online. It doesn't take much to get started, and if you are reading this then you already have the tools needed to get going. And if writing articles to sell isn't your thing, maybe there are other writing opportunities that you would be better suited for. The possibilities are endless, and the level to entry is low. So why not get started today, or at least start thinking about possibilities for yourself that may not have been explored before?