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Discussion in 'Money, Investing & Precious Metals' started by TechAdmin, Oct 13, 2008.
Where do you buy physical Gold and Silver? Coin dealers only? Can you buy straight from the US Mint?
The U.S. mint no longer uses precious metals in the production of our coins.
The Franklin Mint and I think the mint at West Point still use precious metals for commemorative and bullion gold and silver coins.
Coin stores are usually a pretty good way to go. Unless the ones near you are raping you on charging way over spot prices, I'd go that route.
Any better options besides coins when trying to buy physical gold/silver in low amounts? Like 1000 at a time.
Your local coin dealer is probably the best choice. Due to the most unusual market this month, unlike anything I have seen in my 35 years as a coin dealer, they may be out or in very short supply. Larger dealers are in the same boat right now. You cannot buy from the mint, other than proof editions of the bullion coins. The US mint is out of gold and silver right now, suspending production on several products and limiting shipment of others. That is with the largest, by far, mintages of ANY year of the American Eagle series. http://www.find-your-local-coin-shop.com/ is a website to help you find a shop. The larger dealers I have refered customers to when I could not handle the order are all out or just taking orders for delivery later. If you would lilke recommends for the type of coins to look for, LMK
I have access to the Free Lakota Bank currency. I know that they're charging spot + $5.22 for most orders, but you can get 1000oz at spot + $4. This is less than the premiums found on ebay coins and bullion. Free shipping too. Let me know if you're interested.
How do you know that the purity is good? Never heard of those coins. coinguy do you know about them?
Why gold and silver?
I'm very well aware that silver and gold are considered precious metals, and are often used as a store of wealth while markets take a down-turn.
However, if we're talking about more than just a down-turn in society... wouldn't other things have far greater inherent value? Like food, clothing, shelter, medicine, etc?
If things got really bad, you couldn't eat, wear, or shelter under your stock of gold -- and you couldn't trade your gold for any of those three to anyone who realized the same things?
So, is the buying of gold and silver intended as a short-term store of wealth while the economy flounders, or are you counting on using it as de-facto currency?
Both to me. Even though commodities will be useful in the very short term Gold/Silver would be value both short and long.
The problem with that scenario is that the barter system rarely works well for long. The barter system only works when the two people involved have precisely the right quantity of specific items that the other wants. Suppose someone comes to you wanting to trade ammunition for aspirin. You, being the smart cookie that you are, stockpiled both aspirin and ammunition. Your root cellar has 15,000 rounds of ammunition. You probably aren't going to want more ammunition, especially since the ammo he's got isn't the right caliber for your guns. What you really need is some clothes for your three year-old. You have something he wants but he has nothing you want. The barter system doesn't work in that scenario.
This is why things that have intrinsic value (but little practical usefulness) like precious metals make such useful trade medium. In the above scenario, instead of bartering, you can sell him some aspirin for 0.05 Troy ounces of .999 sterling silver, take that silver to someone who makes children's clothes and use it to buy what you need.
Also just because our economy is in the dumps means you could still maybe find people who buy gold/silver for other currencies worth money who then export it.
Both. I figure when 'it' happens, it won't be overnight. It may well be a short time however. If, for instance, the current situation keeps getting worse, a store of gold/silver would help you get through it. You currently probably can't barter for your mortgage, electric bill or gas at the quickymart. I don't have a box to check on my mortgage statement for the amount of gold I am sending them this month. Unca sugar's response has been to pump HUGH amounts of bogus cash into the economy. That WILL lead to massive inflation and gold/silver will grow in value against a paper 'dollar.' If, however, it keeps getting worse, at some point money won't be of much use, no one may be using 'dollars' and barter will take over. Then your stores will be of greater value to you.
Gold and silver do have at least a 6000 year history of holding value in all kinds of situations. Of course so does food.
I do have a number of barter items on the shelves, including lots of booze. Now, no one in my family is a drinker. So why have it? Can you think of something that may hold a greater value to someone that just has to have a drink? I have boxes of ammo in calibers I don't have a gun in. Since I load/shoot over 30 calibers, I still find others to stash. Good trade material for someone needing those calibers.
You just have to think 'outside the envelope' about those things that will be good 'currency' if and when TEOTWAWKI happens.
I (politely) disagree - I think the barter system is less bound to "exact" quantities of what either party wants than a system based on currency, even currency made from pure precious metals. Even the value of a gold coin in that same situation would vary, depending on who you asked. So, maybe the person who has ammunition and wants aspirin (this is starting to sound like my Economics Professor) doesn't have clothes for an infant, but has 1 dozen mason jars of canned peaches instead. Suppose you know a tailor who has been looking for canned peaches. I believe that such flexibility is more likely to be found in a bartering situation.
Try that when you go to the grocery store: "Well, I don't have US currency/gold/silver to pay, but I DO have a 50 pound bag of wheat in my truck - and you can take that down to Fred who lives the next town over - and he'll gladly pay you handsomely for it."
In a situation where financial institutions have become unreliable places to store value... I'd gladly chose a 50 lb bag of seeds for a nourishing food crop, which I can plant, and multiply with a little sweat.
The bartering system may not have fared well for long in the past -- but I think that is not so much because bartering itself is flawed - more often the goods we barter are flawed (coin and paper currency have a longer shelf-life than, say, a crate of apples, or a gallon of milk... and therefore are more likely to hold their value longer). I might keep around a few gold coins, but I wouldn't come close to hedging my bets on it. When push comes to shove, gold is worthless to me if I'm just looking for the basics.
I've seen these, and similar 'coins' of this type. All have been the right weight/purity. I think if you want to have and use them, great, but I would not pay a higher premium for them than another recognized 'round' from someone else, unless you are either supporting the cause or want to collect them. Bullion is one thing, numismatics and collectables are another.
There have been numerous 'free currencies' introduced by people all over the world. The earliest were the Silver Eagles Nest and the coins from the Republic of Minerva. In the 90's there was another Indian nation that marked coins with a face value, promising to 'redeem' them for a certain period of time. Liberty Lobby has made tokens for a number of years in a similar vein. Today we have the Liberty Dollar. I have some just because I like variety and they interest me. However unless you want to collect them, I would not put a greater value on them than other bullion type items. Sorry if you are a supporter of the Liberty Dollar, but I went round and round with Bernard face to face for the better part of a week, when we both had booths at a convention across from each other. That one sounds like nothing more than a multi-level marketing scheme to me. Personal opinion, not meaning to step on anyone's toes. Not that I don't agree with a sound currency, I just think it should be an equal exchange rather that a way to make a percentage or mark-up on every transaction. I don't take paper currency in for less that I spend it for - why should we encourage people to do that in the name of a sound currency?
Gold will only retain it's allure and value as long as someone sees value in having it. In some circumstances, I could imagine a gold "round" not being worth a good pair of work boots or a mule. If someone is starving it might not be worth a loaf of bread. It all depends on circumstances.
I would think that gold is a great hedge during a temporary period of economic termoil as long as a common financial system remains once the termoil is over. If there is no system remaining and goods and services are the new currency, interest in gold will flounder. After all, if my kids were starving, I may rather have a sack of potatoes than a Krugarrand.
There's another issue with attempting to use presious metals as currency. How does one know it's genuine unless a method of testing is available? Some might have access to this resource. Most would not.
Just the opinion of a non-expert.
As a non-expert as well I think Gold has historically shown to keep value even in horrible times. Seems like a safe bet to put a little as investment into just encase.
Actually, precious metals will always retain value. It is commodities that have no value other than what people place on them. You may not find someone with whom to buy or sell, but the value of the metal is in its rarity. How much value depends on a number of factors but no society that I have ever heard of considered gold or silver to be worthless.
Precious metals, most commonly gold, silver, and copper have been used as currency for millenia. To the best of my knowledge it has only been in the last century that any major civilization has abandoned currency based on precious metals. Most of the financial problems we are having right now can be traced back to overextended credit and, indirectly, the fact that the US dollar (along with most, if not all, first-world countries) are no longer based on anything other than our collective trust in our governments.
I am no great history buff, but I am not aware of any civilization that lasted long using a barter system. Every one that I have read about ended up very quickly going to currency made of some sort of precious metal. The odd exceptions were some small islands and such with wooden coins (no idea how they prevented counterfeit fraud) and/or shells and beads. Even they didn't keep it that way for too long once Europeans introduced the concept of coinage.
While I agree that you will always be able to trade with people, I think it is foolhardy to ignore the benefits of precious metals.
Well said narsil
I would ask you to expand upon that thought and educate further but I fear you will be shut down for sharing your knowledge.
Is gold/silver a good investment or capital gains taxes reduce its value too much to be one?
I don’t think anyone is saying to put all your assets into buying gold or silver. It is just good to have a variety of things on hand, you never know what will have value.
Barter is great, IF you can find a group honest enough to work with. I was in a barter group of friends for many years and things did work out pretty good. But, someone always seemed to give more than others and some really didn’t have much to bring to the table but were benefiting anyway. You really need to find a diverse group to have an efficient barter community.
I’m putting stock in various “assets.” Gold, silver yes but tools also. I have construction/destruction hand powered tools. Gardening tools along with many different seeds and such saved from my own garden. And I also have skills to trade.
Keep your options as varied as possible to cover all the bases. Remember, folks will need food, water, safety and shelter before they will need the things they thought they needed today.
I buy silver regularly in the form of Jewelry. Our area is full of Jewlers and there is tons of sterling silver available locally. Gold on the other hand Isn't used much here and is harder to get. I don't make it a major part of my investments, but I have certain pieces of jewelry that I can barter away if I need to. My biggest investment however has been in Ammo.