Buying gold/silver as a secure investment

[bagend12]

Very interesting discussion. I am thinking a lot these days about prepping for end times/ zombie apocalypse...

Until the SHTF gold and silver will work as hedges against inflation. In other words, as the world economy deteriorates and a dollar buy less rice, gold and silver will continue to buy the same amount of rice. For a while. I admit that's a gross oversimplification, but that's the beasic idea of a hedge.

Once we get to Beyond Thunderdome levels of societal deterioration, gold and silver will have little to no value. In order of imporatnace, resource primacy will look something like this:

1. Defensible land with water and a renewable food system
2. Guns and Ammo
3. Seeds (pesticides might not be a bad thing to have for an emergency. with no outside resources, crop failure can mean death)
4. Antibiotics (other medicines as well, but ABs are the most important- you'll see)
5. Fuel and renewable energy systems
6. Strong, smart people with skills, community wisdom and the the will to kill
7. Libraries of useful information- military training manuals, textbooks, technical manuals, etc.

Back to the subject of precious metals-

If you are walking into pawn shops to buy your coinage- make sure you're not buying semi-numismatic coins. They are not worth what folks claim, they are not "un-confiscatable"...

If I were massing silver and gold for disaster purposes, I'd be mindful of the low-portability aspect of metals (bullets are just as heavy, YesProp)... I'd probably keep about a year of coinage in low value silver coins, a year of higher value silver bullion and the rest of it in Gold. Hard to buy a loaf of bread with a gold ingot worth $5K!!!

Ive been doing the same much of the same. I've got the means to do so now so have been taking measures to make myself as prepared as possible...guns, ammo, food rations for 6 months, next purchases will be a wood stove and a hand pump of some type for my well, along with building up my library of survival texts, and lastly acquring 1k-2k in both gold and silver in small denominations.

I'm not paranoid about TEOTWAWKI, I just like knowing that if some catastrophe hit that rendered the gov't non-functional for a period of time I am able to take care of myself.

 

[dalonghorn]

igrowone,
It seems you are looking at the top google links in terms of selling metals. The best way to sell it is to find your nearest coin/bullion dealer and not some gold buying company that screws you over. If you cannot do it that way, a simple craiglist ad will suffice. I can sell my silver for a dollar over spot prices if I wish to take the time to list on craiglist because that would still be cheaper than buying from the local shop. I always prefer to buy the bullion also instead of coins that have some collectable value.

 

[igrowone]

igrowone,
It seems you are looking at the top google links in terms of selling metals. The best way to sell it is to find your nearest coin/bullion dealer and not some gold buying company that screws you over. If you cannot do it that way, a simple craiglist ad will suffice. I can sell my silver for a dollar over spot prices if I wish to take the time to list on craiglist because that would still be cheaper than buying from the local shop. I always prefer to buy the bullion also instead of coins that have some collectable value.

thanks for the feedback, been searching a number of sources
i've seen quite the range, i'm sure it partly depends where you live, the further you are from the major cities, the less dealers seem to offer

 

[Nondual]

Very interesting discussion. I am thinking a lot these days about prepping for end times/ zombie apocalypse...

Until the SHTF gold and silver will work as hedges against inflation. In other words, as the world economy deteriorates and a dollar buy less rice, gold and silver will continue to buy the same amount of rice. For a while. I admit that's a gross oversimplification, but that's the beasic idea of a hedge.

Once we get to Beyond Thunderdome levels of societal deterioration, gold and silver will have little to no value. In order of imporatnace, resource primacy will look something like this:

1. Defensible land with water and a renewable food system
2. Guns and Ammo
3. Seeds (pesticides might not be a bad thing to have for an emergency. with no outside resources, crop failure can mean death)
4. Antibiotics (other medicines as well, but ABs are the most important- you'll see)
5. Fuel and renewable energy systems
6. Strong, smart people with skills, community wisdom and the the will to kill
7. Libraries of useful information- military training manuals, textbooks, technical manuals, etc.

Back to the subject of precious metals-

If you are walking into pawn shops to buy your coinage- make sure you're not buying semi-numismatic coins. They are not worth what folks claim, they are not "un-confiscatable"...

If I were massing silver and gold for disaster purposes, I'd be mindful of the low-portability aspect of metals (bullets are just as heavy, YesProp)... I'd probably keep about a year of coinage in low value silver coins, a year of higher value silver bullion and the rest of it in Gold. Hard to buy a loaf of bread with a gold ingot worth $5K!!!

I think that's a pretty good take. Precious metals are a hedge mainly and store of wealth in a concentrated form. After WWII in Germany a chicken was worth more than gold. You can't eat gold or throw it hard enough to do damage to someone.

As for fuel I like biodiesel powered vehicles. Biodiesel can store easily for a year and you can't really do that with gasoline. Biodiesel holds up better. You can buy 250 gallon totes, non hazardous, add a bit of a fungal inhibitor and there you go. Solar panels and electric vehicles are great for short distance running otherwise I'd look at biodiesel powered vehicles. A VW TDI Jetta can go close to 1,000 miles on a tankful. Throw some biodiesel in the trunk and you can make long distance trips if and when the fuel distribution system breaks down.

As for gold or silver...when do you buy it? Here's a few charts to ponder. I mean any day anytime is a good time to buy? Some days/times are better/safer than others.

Gold and silver are starting to look a bit oversold (buying opportunity). From what I understand about 50% of silver is used in general commercial commerce and not as a safe haven. Bad recession and silver use will go down more than gold because general consumption will go down. IF GLD drops to about $170, which would coincide with it's uptrending 50 MA, then I think a pretty safe entry point. GLD looks healthier than SLV at this point. SLV looks like it wants to get pushed down a bit while GLD seems it will bounce off of it's 50 MA/$170 mark.

 

[igrowone]

strangely enough, i just saw a silver negotiation on Pawn Stars
they offered actual spot price, but they are pretty reputable

 

[In~Plain~Site]

If you're not diversifying with some PM's, you're missing the boat.

 

[mrpotatohead]

I bought 8 ounces today when I saw it dip below $40. Six silver American Eagles and two Chinese Pandas.

 

[PetFlora]

When the shit hits the fan dry good foods is more valuable

 

[jakeh]

I've been watching both since 96. Unfortunately I only bought 5 100oz bars at $4.25 an oz and sold them at $6. Back then silver's cost of production was higher than the spot price. The only real production was from the biproduct of mining other metals. At today's prices there is far more risk than reward. If the shit hits the fan and inflation sky rockets metals will go higher but so will housing. If I were converting money I'd buy something like silver in 96. Something that costs more to manufacture than it sells for. Like a house that needs some repair. There is a lot more upside there and you can pay cash for material and labor. We need food, shelter and clothing. Metals are not a basic need and they have already multiplied 600-1000%. Just my .02 cents.

 

[igrowone]

precious metals have treated some investors well, how much longer?
impossible to say for sure, but i do recall some old advice from a wizened investor of years ago
he said he had never made any money from investing in the end of the world

 

[mrpotatohead]

precious metals have treated some investors well, how much longer?
impossible to say for sure, but i do recall some old advice from a wizened investor of years ago
he said he had never made any money from investing in the end of the world

I'm not really sure how this turned into an "end of days" discussion. I like silver because it's a 100% anonymous way to invest in a commodity that probably won't hurt you in the long run. How we got in guns and food rations is beyond me.

Btw, beware of scumbags ripping people off. There's a pawn shop here in my town that pays 75% spot value and sells for $6 over spot per ounce!!!!! That means you're paying $46/ounce while this prick is making $16 for every once he sells! Fuck that, man for .999 pure (silver leafs, eagles, pandas, philharmonics, and other private bullion like Englehard or apmex) I pay $1 over spot and for 90% junk silver like war nickels, mercury dimes, Morgan dollars, ect, I pay spot price and not a penny more. I buy from a jewelry store/coin shop that also sells investment grade precious metals. They also pay spot pics to people who sell. Don't get screwed! Shop around!

 

[BuzzyKerbox]

I've been watching both since 96. Unfortunately I only bought 5 100oz bars at $4.25 an oz and sold them at $6. Back then silver's cost of production was higher than the spot price. The only real production was from the biproduct of mining other metals. At today's prices there is far more risk than reward. If the shit hits the fan and inflation sky rockets metals will go higher but so will housing. If I were converting money I'd buy something like silver in 96. Something that costs more to manufacture than it sells for. Like a house that needs some repair. There is a lot more upside there and you can pay cash for material and labor. We need food, shelter and clothing. Metals are not a basic need and they have already multiplied 600-1000%. Just my .02 cents.

Hindsight is for newbie or mom and dad investors, we all wish we should have done this and that back then because this and that has already gone up this much but its worthless thinking. All you can do is try and evaluate the current situation and get a sense where it might be heading, if the negativity and dept problems continue with more popularity in precious metals could go up another 500-1000%; economy could stabilize as well, who knows.

For now I am comfortable putting some cash into bullion and will see what happens the next 12-24 months.

 

[Groseph]

The metals are very volatile.. so before you invest make sure you can handle the constant ups and downs. It can be very stressing if you drop a large sum of money into PM and then it corrects to a lower USD price after you've bought.

Dont sweat it.. and dont sell. Precious metals will go down and up, but the long term trend is up as far as I'm concerned. Both are a store of wealth and a hedge against inflation as the FED continues to massively inflate the dollar. Forget about the day to day spot price. It is a paper silver price which in many opinion is heavily manipulated/suppressed.

Gold has to account for the expansion of our currency as it always has throughout history... and for that to happen again gold has a LONG way to go.

I suggest buying .999 bullion rounds/bars and junk silver. Get a position in silver and maybe pick up a bit of gold as well. Gold to me feels less volatile and safer where as silver is fueled by both investment demand and industrial demand and has a much higher upward potential.

- -

If you are just getting into buying i'd suggest dollar cost averaging where you purchase a little silver whenever you can afford to. Your overall dollar cost IN will average out over your purchases. Or if you have a large chunk of change perhaps wait for a dip and make a big purchase. We've been sideways since the large dip into the low 30s in may. Look to have support around $39-$40 and many feel we'll continue the upward trend now that we go into Oct - Winter. Others are calling for a larger correction as we may go into a deflationary period for a bit before central banks start "printing" like crazy to get us out of it..equaling the potential for hyper inflation.

The metals are cheap right now in my opinion. Buy physical and hold it. Think of it as a long term investment/hedge against inflation. Its not for weak hands.

- -

Not a fan of APMEX.. I personally recommend gainesvillecoins.com or scottsdalesilver.com however dont rule out your local coin shop or craigslist. There is something to be said about purchasing coins from a private individual with no shipping/waiting/record. Coin shops are a hit or miss. Some charge high premiums and many are now requiring sales tax on bullion purchases.

The Buffalo round is good bullion to buy which doesnt carry super high premiums. 10oz bars are nice as well and the scottsdale silver stacker bars are just plain sexy.

//

I hate the argument about gold/silver not being worth anything if SHTF. Maybe not at that very moment in time, but it will always have value and define your wealth as things recover and trade resumes. If you have 30lbs of potatoes and want to exchange it for a tractor that is all and well if the tractor owner wants your potatoes.. otherwise you need a medium of exchange where the tractor owner could take your payment (gold/silver) and then down the road exchange for something else besides your potatoes (because he already has a lot of his own). Ya dig? Go ahead and stack can goods and laugh at us metal bugs. It'd be silly to think that we are not stacking food/preps as well in addition to gold. I dont see why a lot of preppers hate on metal bugs because you cant eat gold and silver. Thats just one sided extremely ignorant thinking in my opinion.

 

[jakeh]

Hindsight is for newbie or mom and dad investors, we all wish we should have done this and that back then because this and that has already gone up this much but its worthless thinking. All you can do is try and evaluate the current situation and get a sense where it might be heading, if the negativity and dept problems continue with more popularity in precious metals could go up another 500-1000%; economy could stabilize as well, who knows.

For now I am comfortable putting some cash into bullion and will see what happens the next 12-24 months.

My post had more to do with foresight than hindsight. All I am saying is the risk/reward is much greater now. When guys like George Soros are selling gold and the guys on the pot forums are talking about buying and looking at the next 500-1000% upside it reminds me of the nasdaq in 2000. The other thing to consider is are you the kind of person who can sit on $20k that doubled in a year and wait for it to go up 500%. It is tough to do. I agree you should put some cash into bullion but I wouldn't go over 10%. Since we wrote our posts silver is down over 10% and gold 6%. As for hindsight it is hardly for newbie or mom and dad investors. The last time silver shot up the feds raised margin requirements and it broke the Hunt brothers. It is a fixed game. If you like gold at $1800 and think it is capable of hitting $9-18k an oz you shouldn't even be looking at physical metal. The mining stocks are priced at $1000 an oz gold and will go up way higher than physical if your predictions are correct. The tax on metals is 28-29%. On stock held over a year it is 20% and will be on a much higher number. If you say bullion is anonymous try selling a $10k gold 1 oz coin to a pawn shop. They have to report any cash transaction over $10k. It is not anonymous. You would have to buy 1/10 oz gold coins to have any form of an anonymous transaction and sell in small quantities. Back to the house if you bought one that needed rehabbing you could pay cash for parts and labor, grow in it for 2 years with no landlord issues and sell it after 2 years and pay no tax. When tech stocks boomed people buying gold and silver for $300 and $4 an oz were considered fools. Right now people that are buying houses at 50% discounts from recent prices are considered gamblers and the metal buying group is looking like the smart ones but they didn't buy metals at today's prices. Just my 2 cents. I sincerely hope your 2 cents turns in 20.

 

[nomaad]

many things to consider that were not on my radar before. thanks for the informative posts. I wouldn't fuck around with more than 10% in metals anyway. I just want to have some (small denomination ) metal around as a means of exchange IF it becomes the means of exchange should the currency fall out. But I don't play around in markets of any kind. I just see metals (specifically low value coinage) as part of a balanced SHTF preparation.

 

[igrowone]

from my own humble perspective, we seem to be in a deflationary environment
oil has stopped its advance for a while, wages sure as hell aren't going up, and housing has become much more reasonable
in spite of the USA's missteps, trouble, and ills, the big winner has been the dollar
so what does best in a deflationary environment? provided that is what we are in

 

[Hydrosun]

How has the big winner been the dollar? Rents aren't cheaper and getting a paper mtg on the now cheaper housing isn't so easy.

10 years ago 100oz silver to buy an OZ of nice indoor, today 100oz will get you more than a lb. Yep 16x more weed for silver than a decade ago, paper dollars will only get you about 1.2x more weed than a decade ago.

Silver was the HUGE winner.

 

[igrowone]

How has the big winner been the dollar? Rents aren't cheaper and getting a paper mtg on the now cheaper housing isn't so easy.

10 years ago 100oz silver to buy an OZ of nice indoor, today 100oz will get you more than a lb. Yep 16x more weed for silver than a decade ago, paper dollars will only get you about 1.2x more weed than a decade ago.

Silver was the HUGE winner.

dollar has been more of a recent winner, for the last year couple of years
the PM have been big winners on the longer time scale
more of a question, what does well in deflationary environments? not much comes to mind, other than sitting tight on the currency of your choice
which is what a lot of investors seem to be doing

 

[Groseph]

The dollar hasnt been a winner since 1971

 

[BuzzyKerbox]

My post had more to do with foresight than hindsight. All I am saying is the risk/reward is much greater now. When guys like George Soros are selling gold and the guys on the pot forums are talking about buying and looking at the next 500-1000% upside it reminds me of the nasdaq in 2000. The other thing to consider is are you the kind of person who can sit on $20k that doubled in a year and wait for it to go up 500%. It is tough to do. I agree you should put some cash into bullion but I wouldn't go over 10%. Since we wrote our posts silver is down over 10% and gold 6%. As for hindsight it is hardly for newbie or mom and dad investors. The last time silver shot up the feds raised margin requirements and it broke the Hunt brothers. It is a fixed game. If you like gold at $1800 and think it is capable of hitting $9-18k an oz you shouldn't even be looking at physical metal. The mining stocks are priced at $1000 an oz gold and will go up way higher than physical if your predictions are correct. The tax on metals is 28-29%. On stock held over a year it is 20% and will be on a much higher number. If you say bullion is anonymous try selling a $10k gold 1 oz coin to a pawn shop. They have to report any cash transaction over $10k. It is not anonymous. You would have to buy 1/10 oz gold coins to have any form of an anonymous transaction and sell in small quantities. Back to the house if you bought one that needed rehabbing you could pay cash for parts and labor, grow in it for 2 years with no landlord issues and sell it after 2 years and pay no tax. When tech stocks boomed people buying gold and silver for $300 and $4 an oz were considered fools. Right now people that are buying houses at 50% discounts from recent prices are considered gamblers and the metal buying group is looking like the smart ones but they didn't buy metals at today's prices. Just my 2 cents. I sincerely hope your 2 cents turns in 20.

Hey yeah I do not disagree with any of this, was not suggesting at all though that silver or gold would go up another 500-1000%, just made the point that how far they have come is irrelevant to how much further they might go.

Yes it is interesting to see silver drop so hard, my understanding though is that gold and silver have short term drops because people are pulling out cash to cover margins in a falling stock market; mid term they will be the ones to recover if the markets continue to tank.

Also agree of only putting a small percentage in pm's, 10, 20, 30% max. I am not a serious investor though, just someone with an interesting in the markets, dabbling in shares and who likes bullion and numismatic coin collecting, if I can make 100% over 24 months that would be cool and cash it in for a new van and surfboard quiver