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Gold or Silver
- Thread starter FrugalFannie
- Start date
Rolls of junk silver and here are my reasons:
1) small gold coins have a huge premium
2) 1oz coins or small bars are too difficult to cash out
3) Its easy to buy a roll of junk silver from Apmex or someplace every month
4) Junk silver is very recognizable, compare a silver quarter to a regular one it sounds different and looks different, but its a US quarter
5) A dime or quarter is likely to be close in value or less than the thing you would be trying to buy post SHTF
6) silver prices are pretty good right now if you can find someone to sell you some
IMO its not wise to load up on any one thing. I would rather have a range of supplies rather than a big pile of one thing. Little bit each month and align it closely with your lifestyle. Extra cans of the beans that you eat each week, a extra bottle of tylenol, extra TP, some PM coinage when you have some spare buckazoids. Even if you live to 112 nothing will go to waste.
1) small gold coins have a huge premium
2) 1oz coins or small bars are too difficult to cash out
3) Its easy to buy a roll of junk silver from Apmex or someplace every month
4) Junk silver is very recognizable, compare a silver quarter to a regular one it sounds different and looks different, but its a US quarter
5) A dime or quarter is likely to be close in value or less than the thing you would be trying to buy post SHTF
6) silver prices are pretty good right now if you can find someone to sell you some
IMO its not wise to load up on any one thing. I would rather have a range of supplies rather than a big pile of one thing. Little bit each month and align it closely with your lifestyle. Extra cans of the beans that you eat each week, a extra bottle of tylenol, extra TP, some PM coinage when you have some spare buckazoids. Even if you live to 112 nothing will go to waste.
F
Finalygotabeltfed
Cover all your other bases before thinking about gold or silver.
Food, water(filtration device), medical, guns, ammo, tools, arable land, seeds, skills, ect.
Food, water(filtration device), medical, guns, ammo, tools, arable land, seeds, skills, ect.
THIS!!
my wife said to me one night, she's an accountant and loves money(not that we have a lot), but she said to my surprise. "keep your pound of gold and give me 500 pounds of food" I almost had a tear in my eye as she said it. It's as if all my ranting about the economy and the failures of our overlords had really sunk in.. I do have an interest in the silver coins though and we are going to at least get a little bit of it...
F
Finalygotabeltfed
![[smile]](/xen/styles/default/xenforo/smilies.vb/001.gif "Smile [smile]")
It depends on your resources. If you have a ton of cash and your main concerns are inflation, liquidity and physical mobility than gold is a reasonable means of achieving those objectives. If you have a little bit of cash – lets say $10-20K and have the same goals as above and all your other needs are covered – silver is a reasonable choice. Actually, in case of only $10-15 I’d go with junk silver.
However, from my experience most people who are talking and buying PM do not qualify for such investments. They are up to their eyeballs in debt and live in hope that any day now a total economic collapse will erase their liabilities and with their beans, ammo and silver they’ll prevail as kings in the aftermath. I am not into childish dreams, so I’ll outline a conservative approach, which I am assuming you are asking for.
1. Evaluate your debt. Do you have cc debt? If so, what rate are you paying? If it’s lets say $10K @ 0% for 12m and you bought a $10K 12m CD paying 3%, It’s ok. But if you are paying 9% on $10K cc debt – pay that down before you even start thinking about PM. How about a car loan? What about a mortgage? Any student loans? You know that in a slow collapse they will take your car, home, etc., and you cannot clear student loans via bankruptcy. Where would you live? How would you move? Etc., etc., etc.
2. Assuming debt is under control. Get enough everyday consumables for at least 1y, but building even a 2y or 3y stash is not unreasonable. They are numerous reasons why you might need to rely on these supplies for a long time and you might need to share. Many of these reasons have nothing to do with economic collapse.
3. After 1 and 2 is under control you can deal with investments. Most financial advisers would not recommend putting more than 15% of the portfolio into PM. The actual % is driven by many factors, including but not limited to your age, type of job, risk aversion, financial goals, etc. In many cases only 5% or less should be invested in PM. Also, while on the subject, about 3-6m of living expenses should be in cash. And cash component should not be more than 5% of your overall portfolio. So lets say your family burns through $3K each month. 6m worth is $18K and therefore total portfolio should be around $360K (normally that excludes your home because it is not an investment, but if it is paid out and you could live elsewhere it might be ok to include in the overall portfolio assets). So at max you are looking at about $54K in PM, but most likely only $18 to 36K would be prudent.
4. The composition of PM portion of the portfolio, for those getting ready for SHTF, should be based on today’s needs and prices. For most it translates into $10K in junk, $10K in 1oz silver eagles, $20K in less than 1oz gold eagles and remaining in 1oz or more gold of whatever type you like. So if you need milk – use a war nickel, if meat - quarters, if fuel – silver eagle, if car parts – 1/10 gold eagle and so on.
Hope this helps and gives you some food for thought.
However, from my experience most people who are talking and buying PM do not qualify for such investments. They are up to their eyeballs in debt and live in hope that any day now a total economic collapse will erase their liabilities and with their beans, ammo and silver they’ll prevail as kings in the aftermath. I am not into childish dreams, so I’ll outline a conservative approach, which I am assuming you are asking for.
1. Evaluate your debt. Do you have cc debt? If so, what rate are you paying? If it’s lets say $10K @ 0% for 12m and you bought a $10K 12m CD paying 3%, It’s ok. But if you are paying 9% on $10K cc debt – pay that down before you even start thinking about PM. How about a car loan? What about a mortgage? Any student loans? You know that in a slow collapse they will take your car, home, etc., and you cannot clear student loans via bankruptcy. Where would you live? How would you move? Etc., etc., etc.
2. Assuming debt is under control. Get enough everyday consumables for at least 1y, but building even a 2y or 3y stash is not unreasonable. They are numerous reasons why you might need to rely on these supplies for a long time and you might need to share. Many of these reasons have nothing to do with economic collapse.
3. After 1 and 2 is under control you can deal with investments. Most financial advisers would not recommend putting more than 15% of the portfolio into PM. The actual % is driven by many factors, including but not limited to your age, type of job, risk aversion, financial goals, etc. In many cases only 5% or less should be invested in PM. Also, while on the subject, about 3-6m of living expenses should be in cash. And cash component should not be more than 5% of your overall portfolio. So lets say your family burns through $3K each month. 6m worth is $18K and therefore total portfolio should be around $360K (normally that excludes your home because it is not an investment, but if it is paid out and you could live elsewhere it might be ok to include in the overall portfolio assets). So at max you are looking at about $54K in PM, but most likely only $18 to 36K would be prudent.
4. The composition of PM portion of the portfolio, for those getting ready for SHTF, should be based on today’s needs and prices. For most it translates into $10K in junk, $10K in 1oz silver eagles, $20K in less than 1oz gold eagles and remaining in 1oz or more gold of whatever type you like. So if you need milk – use a war nickel, if meat - quarters, if fuel – silver eagle, if car parts – 1/10 gold eagle and so on.
Hope this helps and gives you some food for thought.
Whatever you do to be better prepared is superior to not being prepared at all. Start with food and water with ample side dishes of brass. Build your resources slowly to keep you out of the poor house. Don’t forget sanitary needs like toilet paper, soaps, a method of eliminating human waste, etc. Then start in on silver. But metals – other than brass – ought to be fairly far down the priority list.
As mentioned before, there are many other ways to save for the future than just PM's. A good piece of rural land that you can build on and stay in is very useful... think multi-purpose in everything you do. A good piece of land can be: 1) vacation retreat 2) recreational property 3) store of wealth for the future 4) a place to live 5) especially, a place to live when "retired" and can't afford the typical suburbia home. Add a cabin, get more value. Plus, your usual preps... food, water, etc. For PM's at this time I'd go for silver since it is easier to afford some of it.
Just so long as people realize that for physical purchase of the most popular silver(i.e. Maple Leafs, Eagles) they are going to pay a huge premium because of volatility and dealer greed. You might find 'house minted' silver for a buck or two over spot, while Maple Leafs are 5-8 over spot. So think about whether you want/need to have it right this minute. My guess is that dealers are pricing a margin of roughly the 30 day volatility of the metal for silver right now(or it's a heck of a coincidence.) That means you've got a bid/ask spread of almost 30%. To OPM's point, you shouldn't be putting money into it at these rates unless you know you won't need the cash in the short to medium term.
Prepper, I have just started looking at a few pieces of land. Of course, my wife thinks that I am an idiot when I explained my purposing but she knew that I was an idiot when she married me! I’ve been looking in MA but it is tough to tell the wife that we have ‘vacation’ land in Leicester. So I am now calling it ‘hunting land’ in NH. And no, she isn’t buying my new, improved descriptions.
But one caution on buying land… it is NOT an asset unless one makes money in its use. If one must buy land (or a home for that matter) using a mortgage, the property is a liability and an asset to the lending institution. Rule of thumb from Rich Dad, Poor Dad, is if it takes money from your wallet and puts it in another person’s wallet, it is a liability. To be a true asset it must put money in your wallet.
Citizen, when I started buying silver, the store treated me like a one-time customer. They were in it to get every dollar of mine they could. They were curt and seemingly unfriendly. But I took a chance (as they were referred to me by a friend) so I bought a few more times from them, each time BS’ing with them a little more. Now we get along fine and he gives me good a ‘break’. Now I get darn good prices because I come in at least once per month. I realize that he makes a profit on each transaction but after all, that is why he is in business. Now I also send my friends there (and take them in the first time to make sure they are treated well). Sure, they don’t make a lot of money off me because I don’t buy tons at a time. But they know that I am a frequent buyer and that I bring them new business. And word of mouth advertising is the best advertising.
And your recommendation of only using money you will not need in the near future is spot on! +1!! One should only buy precious metals using money that they can ‘do without’ for the near future.
But one caution on buying land… it is NOT an asset unless one makes money in its use. If one must buy land (or a home for that matter) using a mortgage, the property is a liability and an asset to the lending institution. Rule of thumb from Rich Dad, Poor Dad, is if it takes money from your wallet and puts it in another person’s wallet, it is a liability. To be a true asset it must put money in your wallet.
Citizen, when I started buying silver, the store treated me like a one-time customer. They were in it to get every dollar of mine they could. They were curt and seemingly unfriendly. But I took a chance (as they were referred to me by a friend) so I bought a few more times from them, each time BS’ing with them a little more. Now we get along fine and he gives me good a ‘break’. Now I get darn good prices because I come in at least once per month. I realize that he makes a profit on each transaction but after all, that is why he is in business. Now I also send my friends there (and take them in the first time to make sure they are treated well). Sure, they don’t make a lot of money off me because I don’t buy tons at a time. But they know that I am a frequent buyer and that I bring them new business. And word of mouth advertising is the best advertising.
And your recommendation of only using money you will not need in the near future is spot on! +1!! One should only buy precious metals using money that they can ‘do without’ for the near future.
In nominal and real terms I think commodities will continue to rise.
The only think that might sheer off 10% to 15% in the next year or so would be a stock market crash where investors make the predictable "flight to quality" which is still US Treasury debt.
I see that as probably the last real buying opportunity.
The only think that might sheer off 10% to 15% in the next year or so would be a stock market crash where investors make the predictable "flight to quality" which is still US Treasury debt.
I see that as probably the last real buying opportunity.
Rob Boudrie
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This is not accurate.
You only get that kind of bid/asked spread if you deal with "walk in an sell your metals" places like the shopping mall kiosks or retail stores.
While there is a premium for bullion coins, the market makers also pay a premium when buying them. For example, Apmex is selling Silver Eagles for $38.40 (quantity 100 and above), and has a buy price of $37.01 with spot at 35.31 bid 35.41 asked.
That shows a premium over spot of about $3.00 (although it goes up to $4.60 if you buy quantity one), and a buy/sell spread of 2.7%.
Of course, there may be some merit to your speculation on the spread if things go post-apocalyptic and there are no organized brokerage houses, organized markets, etc. and everyone is dealing with bartering for food, ammunition and antibiotics. While metals can provide a hedge for such a societal collapse, a more realistic scenario is economic turmoil but with much of the trading infrastructure in place.
Privately minted rounds do not carry as great a premium over spot, but the round trip spread is pretty close. The advantage of private rounds is that you can invest in more silver at the same price. The disadvantage is that you will probably get a reduced price if you sell them to any investment firm other than the original minter (due to the liquidity and/or assay issues the vendor faces - nobody is going to pay Apmex or Boston Bullion full price for an assortment of rounds from random vendors).
Rob Boudrie
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The problem with ebay is that you insert a payment premium if you use any sort of payment (paypal) where you have recourse for non-delivery. The same exists with Apmex, Boston Bullion, Monex, etc. - but those places are easier to check out than an ebay screen name.
Plus eBay will also report the transactions to the government (just in case anyone has such concerns -- I sure don't!) I was wondering about buying/selling PM's on Craig's List, but I have some hesitation about doing that... something about meeting a complete stranger at some designated location, carrying either a huge pile of cash or PM's, is a bit troubling.
I have never met a coin dealer that offered good prices on anything or even seemed happy about me coming into his store (that otherwise had almost no business at all). So, I'm not too thrilled about coin dealers either.
I have never met a coin dealer that offered good prices on anything or even seemed happy about me coming into his store (that otherwise had almost no business at all). So, I'm not too thrilled about coin dealers either.
You clearly know more about this than I do, and I am not trying to introduce false information into the discussion. I was basing that statement on pricing I saw at the beginning of the week, where spot was 31 and change, and they were selling for 38+ with 8-10 week delivery and had a buy price of ~32.
And when I called a local place in Boston he basically said *if* he had them, Silver Eagles would be selling for 38 or so for 1's and 2's, with, as you say, better pricing in quantity. So if you aren't savvy, and you're just walking in the door, you're going to get killed.
I'm contrasting this with my prior experience(about 10 years ago) when they had a flat 3% premium in either direction, and at $5/ounce, that didn't seem egregious, even though you'd never take that on a stock transaction.
Anyway, I'll stop talking now.
Be sure you don't explain your purchasing of land as "We need some place to go when the EMP nuke goes off over the country"; that usually doesn't impress them. You're on the right track by selling it as "vacation" land, but you're also right that it isn't very believable if you're buying in Leicester (which I know nothing of, but it is spelled similar to Leominster and I know for sure you wouldn't want to vacation there!) Skip MA entirely. NH or Maine are where you want to be, and Maine is far cheaper with more opportunities for land you can afford with mountain views. While land for purely practical purposes (place to live, keep neighbors at a distance) doesn't have to be "vacationy" looking at all, your potential land purchase will sell better if you look for features that you'd expect in a vacation retreat. So, look for land that has potential mountain views or even lake views once some trees are cleared. And, a scenic brook running through the land is good to have; it also provides water which you'll want, maybe even some fish, but it adds much value to land being used as a vacation retreat. Also, the neighbors should be building cabins, not McMansions... nobody wants to vacation in a cul-de-sac.
I disagree that land is not an asset. It is an asset. Maybe you mean it is not an investment; you should not necessarily expect land to earn a profit over time just because time moves forward, although it might if you do things right... buy a large piece of land, hold onto it, then subdivide it and sell the pieces for a much larger cost per acre. Although, that is not my goal... I bought to store value as well as to build on and have a place to live permanently someday. Unlike paper investments which literally are just pieces of paper that can be reduced to zero value at the stroke of a pen, things like land have real intrinsic value. If you buy 100 acres of land today, 10 years from now you will still have 100 acres of land - same intrinsic value, possibly higher or lower actual market value if you were hoping to sell. You can't say that for any "conventional" paper investment. And, if the land is improved... clearing sections of it, adding trails, building a cabin, then its intrinsic value is increased.
Even PM's don't really have much intrinsic value. Silver does have industrial uses, and gold not so much (no it really isn't needed to make contacts for electronic equipment). Although, historically people have always believed they had value just because they are rare, not necessarily because the people actually needed to USE the PM's for any specific purpose. It'd suck as a bullet-making material due to its price to obtain. You can't eat it. Etc. In a true complete SHTF situation, I would suspect it would have no value for a while. But, we may not actually have such a SHTF scenario... probably more like Argentina or Ukraine or other impoverished place, all of which still will be willing to trade PMs just because they know others still believe it has value even if you can't do anything "useful" with it.
Both, but based on monetary coinage rather than ingots, etc.
Gold: Kruggerands, Maple Leafs, American Eagles
Silver: Pre-1965 silver US coins
In Argentina, gold coins were actually redeemed by banks at world rates (whatever that would be in a post-SHTF situation). Other gold was redeemed as junk jewelry by non-banks.![[frown]](/xen/styles/default/xenforo/smilies.vb/003.gif "Frown [frown]")
See NES thread here.
I agree with the others in this thread that you need to have a "balanced portfolio" of SHTF planning, approaches, and supplies.
Gold: Kruggerands, Maple Leafs, American Eagles
Silver: Pre-1965 silver US coins
In Argentina, gold coins were actually redeemed by banks at world rates (whatever that would be in a post-SHTF situation). Other gold was redeemed as junk jewelry by non-banks.
See NES thread here.
I agree with the others in this thread that you need to have a "balanced portfolio" of SHTF planning, approaches, and supplies.
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Both, but based on monetary coinage rather than ingots, etc.
Gold: Kruggerands, Maple Leafs, American Eagles
Silver: Pre-1965 silver US coins
In Argentina, gold coins were actually redeemed by banks at world rates (whatever that would be in a post-SHTF situation). Other gold was redeemed as junk jewelry by non-banks.
See NES thread here.
I agree with the others in this thread that you need to have a "balanced portfolio" of SHTF planning, approaches, and supplies.
Yeah but Krugeraands are ridiculously expensive because of collectibility value, a value that will not be there when everyone turns to precious metals for currency, IMHO
Rob Boudrie
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True, but you only own a transferable lease on land. Skip your annual rent payments and the land is seized.
There is no hiding land in the back of your safe, under a mattress, safe deposit box, etc. or handing it to your heirs without government involvement. Possession is tracked, taxed, monitored and the land is subject to civil judgement. Gold is also subject to civil judgement, and naturally, any law abiding citizen would fully disclose his holdings and surrender all of their metals if on the losing end of a suit.
In shtf world 99% of people are going to think you are full of it if you try to tell them a 1958 quarter is worth anything. They are not going to be able to google it to verify. Now if you hand them a coin from a legit mint that says 1 troy oz fine silver, they will be more likely to trust you. I think in a shtf world even private mints like apmex, sunshine, engelhardt, etc. will be more widely accepted than junk silver by your average person. Just my opinion. Btw I own junk silver. if you do want junk silver, I find 5 reichsmarks can be had below spot, if you can get passed the negative symbolism used on them.
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Rob Boudrie
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Who was offering this sort of pricing? Apmex, Boston Bullion and Monex all offer much smaller buy/sell spreads than the 30% or so you were quoted.
If you are investing, you need to deal with an investment house, not a "local place" (unless it happens to be an investment house).
It will be very easy to convince people that pre-65 silver coinage is worth it's silver content, as it is hard to fake US coinage. What will be difficult is convincing someone to pay for numismatic, rather than intrinsic metal, value. If you are buying old coins for SHTF or metal value, stick to coins sold on that basis. If you are not an expert, buying "collectable" coins is a risk business.
That being said, there have been cases of counterfeit Morgan silver dollars sold for silver content - but I've never heard of someone faking well work 1960ish dimes and quarters.
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After some time it may be accepted knowledge that pre 64 is 90% silver, but I doubt it will very quickly. Go out in public and try to sell a pre 64 quarter for $5 to random people. unless someone happens to know the value, they are going to think you are crazy. These are the same people you will be bartering with. People way overestimate how common the knowledge is about silver content in circulated coins. There was a video on youtube of a guy trying to sell a gold maple leaf on the street for $50 and most people said canadian money is worthless and kept walking. You think these same people are going to pay over face value for a dime? Doubtful
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Agreed. I saw some really nice late 1800's (I think they are called) Flying Mercury dollars today selling for a few hundred dollars a piece. If I had a couple of those, I'm pretty sure I'd trade them for Maple Leafs or pre-'65's.
I tend to like Maple Leafs, then Eagles, then old coins. The old coins are good because many of the things you'd want to buy will cost less than an ounce of silver, so just having tons of Eagles makes it hard to trade. Old coins give you an important ability to trade set amounts of silver in known purities and quantities.
I think that in a SHTF scenario, the old coins would do okay. Initially, sure, 99% of the people probably won't take your old quarter. But those are probably the same idiots who would still take cash. When it comes down to it, silver and gold have always been accepted as currency, and should paper currency fail, the coins are still worth their weight in silver and would come to be viewed as desirable once credit and paper money were no longer accepted. As Rob says, I see the coin, and I know it's 90% silver, or 40% silver, and then we can negotiate what we think it's worth in trade.
Rob Boudrie
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Also, numismatic value presents the classic "buy at retail; sell below wholesale" problem, whereas bullion coins from investment houses trade for bid/asked brokerage spreads. You also need to consider the redemption code in situations where the S does not HTF.
True. It's actually happened to me, I think in June or July 2009. I was taking routine delivery of single and five-gram gold ignots and had two non-delivery events. The seller didn't want to refund the sale, so I had to escalate through PayPal or my credit card.
If memory serves me, I think the seller was based in Turkey and had to go through multiple carriers so there was probably a hiccup along the delivery route.
