Precious Metals Investing

Whats the deal with Gold and Silver?

PREPPER SURVIVAL BARTER OR INVESTMENT?

 How to invest through intelligence and not fear

Ok this is a big hot button topic among the survival and preparedness community, there are divergent opinions on this from individuals who advocate buying none to a little, to 10% of your wealth to putting ALL your savings in Gold and Silver!

Personally I have around 40% of my wealth tied up in gold and silver, and i started buying around 2008/2009 and since then Silver has more than doubled and Gold has risen about 60%

This being said I wish that i knew then what i knew now and had bought differently

ALSO PLEASE STICK TO PHYSICAL METALS!

BY THIS I MEAN DONT BUY ETF’S OR OTHER “BUYS” THAT ARE FALSE PAPER ASSETS, THOSE ARE JUST NUMBERS ON A SPREADSHEET!

ONLY BUY WHAT YOU CAN HOLD IN YOUR HAND, STORE IN YOUR HOME AND HAND OVER YOURSELF!

Typical Forms of Precious Metals


COINS- These could be American Eagles, pre-1964 quarters/dimes/half dollars, collectors editions, etc.

Ingots- This is basically a metal that has been cast into a shape to be used for further processing.  Such as silver/gold ingots that will be sent to manufacturers to be melted into coins, or be used for electronics or sprayed over objects to give them that “shiny look”

Bars- These are the larger amounts of a precious metal, the 10 oz, 100 oz bars that are used more for storage for nations or groups to be held in large amounts for measures of wealth and not trade or used.

Gold

Gold is in my opinion very much overvalued in the prepper and survivor community, and especially since its pushed so hard now on Television as this is the new “sell” product.  I don’t mean overvalued in terms of, its not going to go up, or a crash in gold prices is going to occur, but in terms of the Gold/Silver value ratio.  Note- Precious metals are a “commodity” and in all commodity’s there are ups and downs, and sometimes drastic rises and crashes, but overall YES Gold will continue to rise, as the Dollar is losing its buying power, and is continually being devalued through our governments and the Federal Reserve policies.

A prepper needs to be aware of a few things before buying gold.  If you are buying Gold as a hedge against inflation, or as a long term wealth option to hold and sell as they reach retirement or hand down to grandchildren then maybe Gold is a better option. BUT if you are thinking the possibility of economic collapse is real (and it is), and you wish to use it as survival barter currency, then i would caution you against using gold.

If you think about it in a true collapse scenario where dollars will be worthless (think Zimbabwe in modern times or Weimar Germany) then barter will be king.  Precious metals will fit into this but trade for needed items will be bigger and more needed than metals.  i believe that in this scenario in the beginning people wont take precious metals in trade (or only a few people will), you cant eat gold or use gold to catch and animal or raise a crop.  in the truly rough times ahead it will be an amount of time (how much i don’t know) before things stabilize to a point where a non-barter currency will be accepted (i.e. precious metals/coins).  Your metals will be more for when things begin to be rebuilt and society begins to drag itself up, there will be no dollar or other currency (and if there is a new one or old one re-introduced there will be much skepticism) so this is when these metals will be of value.

That being said, a one-ounce gold coin will not be able to be used as survival barter for say buying a few loafs of bread from the baker or meat from the butcher, or getting new batteries to keep your radio working, its just too much!

if you can see where i went with this then you will see that buying one ounce ingots or coins or what-have-you will be too large to buy what you will need for daily survival.  If you already have them DONT SELL THEM! hold onto them! they could be used for say buying  a couple cows or flock of sheep to put on your homestead or wherever you end up, but these kind of large purchases will be few and far between, but they do have SOME use.

If you wished to buy gold, dont buy AMERICAN EAGLES or coins like this, if you really still wish to buy coins of NUMISMATIC VALUE (The value of the coin itself on top of the melt value of the metal, say the melt value of a coin is $30 the numismatic might be another 6 so the coin is worth $36) then buy kruggerand’s, the old South African gold coins.  These coins are much closer to the real numismatic value than a gold American eagle is, thus the REAL value of the coin.  In a real collapse scenario you aren’t going to find people willing to give you more, or you to give more in trade for a coin because it “look prettier” or was once worth more because of where it was produced.

Also buy smaller denominations such as 1/10 ounce coins (about the size of a dime).  This will give you more flexibility in your purchases and daily trades.

PREPPER SILVER

Silver I believe is highly undervalued as compared to Gold.

Historically the gold to silver ratio is 10:1, so that means for every ounce of Gold found in the ground, there is 10 ounces of silver in the ground.

Currently it is around 50 ounces of silver to buy on ounce of gold, so you can see that HISTORICALLY Silver is FAR undervalued as compared to Gold.

This is why I said i wish i knew then what i know now.  i wish i had bought more silver than gold, but im still holding onto my Gold

In an Economic Collapse Survival Silver will be the easiest form of barter and transaction.

The second part I wish i had done was buy “JUNK” silver, that is a horrible term, but its good for YOU!

In 1965 we finally went to a full FIAT money system, as before then all dimes, quarters and half dollars had 90% silver content

these coins are now called JUNK silver.

I LOVE LOVE LOVE Junk silver, as you get the most prepper silver for your money

Example:  Today (3/24/12) You can buy a one ounce American eagle for $35.24, and one ounce of silver from JUNK silver (14 dimes) costs you 32.48, thats a savings of $2.76 per ounce!  that doesnt sound like alot, and wow! those eagles sure are pretty! YES THEY ARE! but think if you are buying 50 ounces of silver right now, that savings could have gotten another 4+ ounces of silver!

In an economic collapse survival silver in the form of pre-65 dimes and quarters will give an easy and divisible form of currency for the purchase of day to day items.


YOU GET MORE SILVER FOR YOUR MONEY WITH JUNK SILVER THAN ANY OTHER TYPE OUT THERE CURRENTLY!

The other main reason i love junk silver is that it is easily divisible, and you can barter better with that.  In a survival barter situation if someone wants and ounce for a basket of bread but you only want a loaf, are you going to try and cut it down? or are you going to “trust” that person with a credit for future purchases? maybe

But it would be easier to just give them 2 dimes and call it a day!

If you dont believe a collapse will happen, thats ok as well (i think you need to do more research PLEASE) but regardless, JUNK silver, despite its name is and will be accepted by coin and bullion dealers anywhere, so if you decided to buy and NOTHING happens (i hope to God it doesn’t, i really do) then you can still sell it back as you would any other coin.

Other Metals (Platinum, Rhodium, etc)


I really dont have believe these are good buys for a prepper, as if you are looking for collapse barter trade, no one is really familiar with their worth as compared to the understanding of the daily person of silver and gold.  if you have done the research and think its a good buy for you for investing and what-not, then have at it, I’m not a financial adviser or retirement specialist.

BUT MY HUMBLE OPINION as a prepper is stick to Silver and maybe gold.

HOW MUCH SHOULD I BUY?

This is a tricky question.  It depends on you.  Look at your other preps, if you are pretty well set and have extra cash YES buy.

But if you dont have good food preps and other things are left wanting In my opinion never buy silver and gold as opposed to real world useful items for Preparedness.

If you really want, consider buying a bag of $10 face dimes, they run around $200-250 for around 7.15 ounces of silver.  This is a small purchase (relatively) and wouldnt be bad to have a little around.  But please dont just have 3 months of food and go and spend $3000 on silver and gold and that have taken up all your prep budget for the foreseeable future. I believe that you SHOULD have silver and some gold as part of your preps, but should never forgo food and other preps to be able to purchase it, as with everything, little steps and balanced approaches ALWAYS win the day.

As far as my diatribe AGAINST numismatic coins, As much as i believe that small divisible coins (i.e. Junk silver) are the best option for post collapse barter, there is a place for numismatic coins (i.e. American eagles, Canadian maple leaf, etc.).  These coins do have the recognizable factor going for them, in a survival barter situation when someone sees them they KNOW that they are guaranteed to have the amount of silver/gold in them that they claim on the mint.  With this you have the trust and confidence of the buyer or seller, depending on what side of the table you are on.  They also have the heritage aspect as since they are “collectible” and “recognizable” you can pass them down, or hold onto to them and they have a guaranteed value.

(NOTE- junk silver also has this as it is U.S. Mint coin, and also even if for some reason precious metals became outlawed or they discover that the moon is made of silver, gold and cotton candy, rendering the metal worthless you still have a buck, 10 bucks, 100 bucks in that coinage that still would have that value)

This is once again my opinion, don’t take it as Gospel truth, Do your own research, never trust my opinion or the opinion of others, collect as much information as possible, and make the BEST DECISION FOR YOU!

I am not the one responsible for you, YOU ARE, You know yourself and your situation best, so take what I’ve said here, put it together with whatever else you find and decide yourself.

LINKS

JUNKSILVERONLINE- Good guide on what to look for, good overview

SONS of Liberty Academy- Chris Duane is a great person to listen to and read about this

DONTREADONME-Blog about investing and economics

 

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