Silver as a hedge? Could someone explain?

If SHTF, drop your silver quarter in your milk and it will stay fresh longer, put one in your well to help keep bacteria down in it. Learn to make colloidal silver (although not many coins are appropriate for that.) If things stay half way together, precious metals always have value. If the power grid failed but things were otherwise pretty OK, peoples gadgets would suddenly be worthless, but metals are always valuable due to the intrinsic qualities that got them the "precious" label in the first place.

like there is no tomorrow, it creates inflation and debases the currency. European imports cost more because the US$ has fallen in value against the Euro (and other currencies.)

Gold and silver protect you from this because they are money -- not a substitute, or "fiat", like paper. Precious metal cannot be created by governments and inflated. It must be dug out of the ground. So to preserve your purchasing power, you trade the "bad money" which is falling in value and losing its purchasing power for the real deal.

There was a good example in the "Money Makers" video (was that the name?) someone posted yesterday:

Back in 1964 (when the quarter contained silver), you could buy a gallon of gas. Today, that same quarter is worth over $3.00 ($3.11/$3.15) and can still buy a gallon of gas (more or less). That 1964 quarter was a hedge against inflation for the person who held it.

On the opposite end of the spectrum, we have Zimbabwe were it costs $2 million Zimbabwean dollars for ONE egg because their currency is worthless. I wonder how many of them wished they had gold and silver?

Hope this helps.
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Lisa C.

www.women4ronpaul.com

In finance, a hedge is an investment that is taken out specifically to reduce or cancel out the risk in another investment. Hedging is a strategy designed to minimize exposure to an unwanted business risk, while still allowing the business to profit from an investment activity. Typically, a hedger might invest in a security that he believes is under-priced relative to its "fair value" (for example a mortgage loan that he is then making), and combine this with a short sale of a related security or securities. Thus the hedger is indifferent to the movements of the market as a whole, and is interested only in the performance of the 'under-priced' security relative to the hedge. Holbrook Working, a pioneer in hedging theory, called this strategy "speculation in the basis,"[1] where the basis is the difference between the hedge's theoretical value and its actual value (or between spot and futures prices in Working's time).

Some form of risk taking is inherent to any business activity. Some risks are considered to be "natural" to specific businesses, such as the risk of oil prices increasing or decreasing is natural to oil drilling and refining firms. Other forms of risk are not wanted, but cannot be avoided without hedging. Someone who has a shop, for example, expects to face natural risks such as the risk of competition, of poor or unpopular products, and so on. The risk of the shopkeeper's inventory being destroyed by fire is unwanted, however, and can be hedged via a fire insurance contract. Not all hedges are financial instruments: a producer that exports to another country, for example, may hedge its currency risk when selling by linking its expenses to the desired currency. Banks and other financial institutions use hedging to control their asset-liability mismatches, such as the maturity matches between long, fixed-rate loans and short-term (implicitly variable-rate) deposits.

In the finance lending industry, the term "hedge loan" has come to mean a specific type of financial product based on the melioration of price fluctuation risk in a stock portfolio serving as collateral for a nonrecourse debt structured stock loan.

You can read more here: http://en.wikipedia.org/wiki/Hedge_%28finance%29