Give the Gift of Real Money

Well, maybe "real" money isn't the best way to characterize the gold and silver coins that are about to be recommended as gifts this holiday season.

The slips of paper and digital entries that are used as money today are very real indeed to billions of people on the planet - they can be exchanged for real things, so they must be real. No?

Let's see what Merriam-Webster has to say about the word "real".
Hmmm... Not artificial, fraudulent, or illusory.

Ask any senior citizen whether any of these words apply to the money they use to pay their heating bills and medical expenses and you may get an earful about how far money goes these days. Ask any young family what it's like trying to save money for a down payment on a house and you may learn something as well.

Maybe gold and silver coins are much more "real" than government money, fiat money.

Hmmm... More will have to be written on this subject in the new year.

Anyway, Neal over at autoDogmatic wrote a nice little piece about buying silver coins as gifts this holiday season. As the inevitable "slacking off" leading into this weekend is accelerating with each passing hour here, Neal's post is excerpted in full:

If you're struggling to find an X-mas gift to give your friends and relatives, I've got an idea for you: silver or gold coins.

Sure, you can't put them in your DVD player, play them or eat them, but they're awful shiny, not to mention that they are fun to toss in the air or spin on your desk. You can even pretend you are some kinda Pirate and the coin is your "booty". The fun is limited only by your imagination.

Now, I know what you're thinking (And no, I'm not crazy). You give someone a wrapped up Silver Eagle for Christmas and you are going to get some seriously strange looks. It's okay. In fact, that's exactly the reason these coins make such a great gifts!

If you give a friend a silver coin, they won't know what to do with it (Make sure you tell them that the "ONE DOLLAR" stamped on the coin is a joke: spending it anywhere would be like giving away fourteen bucks)! Therefore, it'll likely end up in a sock drawer for years upon years not unlike many other gifts received from older relatives. However, there's one big difference: the coin you give will slowly appreciate in value by both its intrinsic scarcity and as a hedge against the ceaselessly inflating dollar. As a bonus, by giving them a modern relic of what money once was, you're making your friends and family more informed and aware.

So this year, pass on giving your friend a pair of socks or a CD and grab them some silver (or Gold if you're feeling frisky and have a very, very high budget for your gifts). It's no xbox 360, but in about twenty or thirty years, they'll come around. Silver and gold coins are the Christmas gifts that keep on giving.

A very nice suggestion for this holiday season, though twenty or thirty years is surely too long an estimate for the recipients to fully appreciate the gift of "real" money in 2006.

The timing is pretty good at the moment too. Last Friday silver went on sale.
The sock drawer is a good suggestion as well - better to stuff them away somewhere, then check back in a few years when the 2006 price movement looks a lot like the 2004 price movement looks today. The volatility of precious metal prices becomes less and less significant to the owner of precious metals as more time passes.
You see, time is the enemy of fiat money, but time makes no difference to "real" money. This all has to do with the "store of value" quality that is critical to anything that functions as money. While the government's economists may tell you that their fiat money is a good store of value because inflation is only two percent, ask a senior citizen or a young family how this matches up with their experience in the world.

Stop by a coin shop and buy a few silver coins - they're on sale!