A presentation of 'guide to investing in gold and silver.net'. The site provides a review of Mike Maloney's best selling book on precious metals investing.

1. GUIDE TO INVESTING IN GOLD
AND SILVER
AUTHORED BY MIKE MALONEY
By Steven Bolton
(Founder & owner of guidetoinvestingingoldandsilver.net)
23rd December 2012

2. Introduction
• This presentation is a precise of the contents of guidetoinvestingingoldandsilver.net. The
website provides a review of Mike Maloney’s best selling book, ‘Guide to Investing in Gold
and Silver.’
• The book was written in 2008 and forms one of Robert Kiyosaki’s series of ‘Rich Dad’ books
advising on wealth creation and financial management. The book was released at a timely
moment, coming in the same year as the collapse of Lehman Brothers and the onset of the
credit crunch.
• Mike Maloney is the founder and CEO of GoldSilver.com. Mike founded the company in
2007, and since 2005 has been precious metals advisor to Robert Kiyosaki. The book is the
best-selling book ever on precious metals investing.

3. Guide to Investing in Gold and Silver
• Review
• The book is divided into 4 parts, focusing respectively on monetary history, the situation the worlds
monetary system is in and how it got there, how things will develop in the future and the different ways
people can buy gold and silver, including pitfalls to avoid.
• Mike Maloney places significant emphasis on the history of money, and the characteristics sound money
should possess. The book starts with the origins of money and the monetary systems of the ancient
classical civilizations. The value of this approach becomes apparent as the reader will soon realize that the
saying “there is nothing new under the sun” applies to the history of money just like everything else. Mike
guides the reader through the debasement of the coinage in ancient Rome, and its origins in the political
class making spending promises they could not possibly deliver in order to covet short term
popularity. Ultimately the original silver and gold coinage was both debased with lesser metals, the coins
made smaller and the same coins re-cast with higher values stamped on them. This increased the money
supply but there was increasingly less value attributable to each unit of money (sound familiar?). Closer to
the current period there is an overview of the period comprising the classical gold standard during the 19th
Century up the First World War, and the subsequent period through Bretton Woods, President Nixon
closing the convertibility of currency to gold on 15th August 1971, through the inflation of the 1970’s and
the popping of the Dot Com bubble in the late 1990’s. What is disappointing is the predictability of the
current problems, and the cycle of hubris and opportunism which lead to them.

4. Guide to Investing in Gold and Silver
• The part of the book dealing with the current situation argues that effectively the value of most financial
assets has been falling since 1999/2000. This time comprises both the top of the stock market in real
terms, and the bottom of the gold and silver market. This was the time when paper assets were most
lauded, and the real money of gold and silver bullion was most un-loved. Mike maintains that in practice
falling asset values since then has been disguised by inflation. Although the prices have either gone up or
remained static when priced in paper currency, when valued against commodities and gold, values have
been falling. Another interesting point Mike makes regarding the stock market is that the value of shares
when measured in price/earnings ratios have been falling over this time.
• Mike outlines within the book the soaring government deficits and unfunded liabilities, and how these are
being financed via the expansion of the money supply. An important point to grasp is that rising prices are
not themselves inflation, but rather a symptom of the inflation/expansion of the money supply.
• When considering the future the book emphasizes to the reader the cyclical nature of markets, and that
the length of these cycles can range from a few weeks up to centuries. This is an important point as the
premise of the book is that the cycle is turning in favour of the real money of gold and silver. Essentially
currency will need to be printed to pay the debts denominated in those currencies, which will lead to a
loss of purchasing power of those currencies. However, wealth will not so much be destroyed by the
diminution of the worlds’ paper currencies, as transferred to those holding other assets, particularly real
money (gold and silver). An informative eg given in the first part of the book is that at the end of the
hyperinflation in Weimar Germany, a block of commercial real estate in downtown Berlin could be
purchased for just 25 ounces of gold. Ultimately when the cycle turns and gold and silver become
overvalued against other assets, Mike Maloney advises that gold and silver should be sold to purchase
alternative assets. Mike acknowledges a drawback with gold and silver investment is the absence of a
cash flow.

5. Guide to Investing in Gold and Silver
• Within part 4 of the book there is an informative guide to the options available for people looking to buy
gold and silver, their different characteristics and pitfalls purchasers should be aware of when entering the
market. Mikes general rule of thumb is that “if you can’t touch it you don’t own it”. Notwithstanding this
for persons who do not wish to purchase physical precious metals alternative options are explored. The
book cautions though that the gold and silver price are suppressed by amongst other things the practice of
selling the same precious metals to different parties, and in the event every party who believes they have
a call on gold and silver bullion asked for delivery there would likely be a failure to deliver. Accordingly if
eventually you want to take delivery it could be dangerous to delay, as at some future point it may be
more difficult to obtain physical delivery of bullion.
• I found the book intriguing and very easy to read, and would recommend it both as a specific text on
precious metals investing, but also for people seeking to improve their financial education
generally. However, I felt a short term downside of investing in gold and silver bullion is the alleged price
suppression directed against them, which could make them unsuitable for investors seeking to frequently
trade in and out of them. I felt the book could have recognized this as a danger for this type of
investor. The emphasis was very much on the purchase of the physical precious metals and to treat them
as a long term hold. I am concerned that without diversity into other assets within a portfolio, the
investor could be caught short if they needed to liquidate part of their portfolio to fund other purchases.