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Precious Metals and alternate money

Paladine71

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One of the most serious threats currently facing the United States, and just about every other country in the world, is the excessive debt that has been run up by our politicians. Just in the past few weeks, the Parliament of the Netherlands has collapsed, the International Monetary Fund (IMF) has said that the Euro is likely to collapse as a currency soon, the credit rating of Spain has been decreased again by the S&P, just to name a few. Inflation is starting to increase at a rapid rate and hyper inflation is becoming a very real concern. Other nation's currencies have fallen to no value in the past (Argentina, Zimbabwe and Germany, just as examples) and it could happen to the U.S. as well. Anyone purchasing groceries has probably noticed the rapid increase in prices over the past year. The value of the dollar is falling, and will further weaken as other nations begin to exchange other currencies and gold for oil. Our status as the World's Reserve Currency is the only thing keeping our heads above water. If the dollar collapses, it will bring the stock market down with it.

To maintain some value and protect ourselves, alternate currencies may be needed, as well as bartering items. A number of states have already agreed to recognize gold and silver as legal money again. Other nations are buying precious metals en mass, as are a number of Universities and Corporations.

While food, water and tools are the natural priorities (you can't eat metals), let's talk about alternates to the dollar.

Precious metals come in a variety of forms: mining stocks, mutual funds, ETFs, bullion rounds, bullion bars, base metals, jewelry, coins, numismatic coins, and ammunition.

PreciousMetals.jpg


The goal of this thread is to increase awareness and provide a basic primer for these commodities.
 

Paladine71

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For real protection from a dollar collapse, I'd recommend against stocks, mutual funds and ETFs. The reason is that these investment vehicles are still paper, and are traded on the stock market, and will fall to nothing if things collapse. You can only redeem them in dollars and have physical custody of nothing if the market closes. A common practice is using derivatives, meaning that it is common for 100 ounces of metal to be sold for every one ounce in custody by the mutual fund, stock or ETF. 100 people claiming the same ounce is not a wise investment, especially since none of them can physically touch it. Likely, none of them will get that one ounce if things get bad.

I also recommend against investing in numismatic coins since they are overpriced as long as the market exists, and are only as valuable as their metal content if things collapse. Jewelry bought from a dealer is always overpriced as well. Bullion is the best deal for the most metal for the lowest price.

Finally, I recommend only storing physical precious metals where you can get to them in bad times. If things get bad, banks will likely close their doors at least temporarily, blocking your access to lock boxes.
 
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3Hummers

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Agree. I used to keep gold eagles, krugerrands etc but figured it would be hard to trade those for food or other small or less valuable items so I now keep a large number of US Silver coins for trade/barter.
 

Paladine71

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The four common types of precious metals are as follows in order of value. Each of these metals are used as coins, bullion, jewelry and in industry (computers, vehicle parts, medicine, etc.)

Platinum
Gold
Palladium
Silver

A few, more rare, metals are considered precious but I'd recommend against these as they are mostly unknown. You'd have a hard time finding a buyer or trader for them. An example is Rhodium.

Common base metals that have value are Copper and Nickel.

The more pure that each is, the more value they hold. We'll discuss that later.

The most common units of measurement are troy ounces, kilograms and pounds. Fractionals are also common, such as 1/2 ounce, 1/4 ounce, and 1/10 ounce. Ounces can be grouped more than one, such as 2 ounces, 5 ounces, 10 ounces and even 100 ounces.
 

abearden

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Agree. I used to keep gold eagles, krugerrands etc but figured it would be hard to trade those for food or other small or less valuable items so I now keep a large number of US Silver coins for trade/barter.
I do the same. I have some junk silver halfs, along with some quarters. They're easily recognizable and you can get them in small enough chunks (dimes) that they would be usable for fair-value trade.
 

Pappibri

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It is best to be prepared for any situation.. I keep a tad bit of gold and silver stashed. Our economy collapsing and our country going down a dark path. A lot of people are naive and think, that is crazy talk.. But when it happens then they say, "How did this happen, what are we gonna do, help me". I prefer to help myself...
 

Paladine71

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You can't eat gold and silver. I guarantee, if the economy collapses and SHTF, the most valuable metals will be copper-jacketed lead.

That's exactly why I mentioned it in my first post. Initially, precious metals won't have as much value as food, water, tools and guns. After things start to recover a bit, they will be very useful because they are universally recognized as a store of value. In a really nasty scenario, such as a currency collapse, you could see the wealthy made poor because all of their money was in paper, while a poorer person could be made very wealthy because they have things of recognized value. Ultimately the choice is yours, of course.
 

3Hummers

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I think the best course of action is to have a plan that encompasses as many scenarios as possible. I keep some cash, silver and gold for trade/barter but it is just part of the plan. You never know what your trading partner might want or need. Max, as the former owner of a wholesale ammunition business I can assure you that my stock of ammunition, in the calibers that I prefer, is quite sufficient.
 

Hans3T

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Paladine, what would you suggest to be a fair-sized store for someone just getting "into the game". This is fascinating.
 

abearden

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Hans, just like modifing your truck, you start with what you can afford and build over time as you can.
This.

Depending on what you're aiming for, you can get junk silver rolls of dimes for a little over $160, quarters for around $530. Those are .900 silver. The pure stuff, .999, rings in at 1 ounce bars for about $35.

If you're interested in gold, 1 gram "bars" go around $80, and 1 ounce bars for around $1700.

All of that changes daily as prices fluctuate. Just read up on why and what, then invest what you're comfortable investing and locking up. Personally, I'd love to have a nice mixture of junk and bar silver (30-50 ounces total), with some gram bars and a couple ounce bars of gold (maybe 3-5 ounces total). Unfortunately I have other stuff to spend money on so I've got far less than that. One day. :D
 

Paladine71

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For clarity, "junk" silver isn't really junk at all. It is coins minted by governments that contain different amounts of silver based on the country and the year. In the U.S., for example, we had 90% silver in our dollar coins, half dollars, quarters and dimes up until 1964. The other 10% was copper. From 1965 to 1970, our half-dollars were 40% silver. A few Eisenhower Dollars from 1971 to 1976 are 40% silver, only a few. There were a few years during World War II that our nickels actually had about 35% silver in them (1942 to 1945). For all other years, nickels were made of.... nickel. To reflect the chaos of today's markets, the metal content of a nickel is worth about 7 cents, but the face value is still only 5 cents. Even the copper has been removed from our pennies. Most people don't know that. It really is slow robbery of the American people. "Here, you can have paper, and we'll take your precious and base metals." In the end, we'll have nothing, they'll have everything.

Many other countries used silver in their coins until recently, Canada and Mexico included. Junk silver is a great way to invest starting out since they are readily recognizable, cheaper than most bullion and (most importantly) in small fractions. That's important for using as little silver as you need to for bartering or exchanging for other currency types.

Here is a great website to compare melt values of each coin type. You can plug in the type, quantity and today's spot price on the stock market to show you the current value. http://www.coinflation.com/coins/silver_coin_calculator.html

It's facinating to see how our money has lost value. 10 cents can buy you a gallon a gas (if the two nickels were from 1944).
 
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Hans3T

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Hans, just like modifing your truck, you start with what you can afford and build over time as you can.

Sounds innocent enough. :)

Do you all purchase your "junk" silver coins from anywhere in specific, or just sort of catch as catch can?
 

Kurt

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Austin, TX
Finally, I recommend only storing physical precious metals where you can get to them in bad times. If things get bad, banks will likely close their doors at least temporarily, blocking your access to lock boxes.

Make sure you store it well, with serious safe and security and not anything that can be moved easily without serious manpower. If you have a safe, I'd have a professional commercial model installed running a few grand, all the store brought safes [ie. Sentry] are useless.

My Girlfriend had a very substantial amount of gold stolen out of her high security condo in Beverly Hills, they took the entire large safe and managed to sneak it out without security noticing. Shes keeping her future gold in a vault at a bank or a security company. But shes taking the investment from a inflation standpoint, not survival. The police is still investigating.

I'd consider having a special insurance rider to insure your gold although it can be very expensive [the rates I saw were 1-5% of your gold value]

Which brings up a second point, with gold, trust no one, Don't tell your kids [who may show it off to their friends like "hey check out what my Dad has"], don't show it to other family members, etc. This will come back to bite you.

I like the idea of investing in silver, lower cost of entry, and more practical to use.
 

Paladine71

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As odd as this may sound, I'd go for less obvious places to hide it and spread it around to different sites in your house, etc. Thieves look for things that hold valuables, like safes. Additionally, storing all of your valuables in one place guarantees that you lose them all at once if that place is discovered. A creative person can find all sorts of clever places to put things that wouldn't appear out of the ordinary. Just a word of caution, make yourself a list of what is where so you don't forget it.

Of course, there is also the buried Pelican Case option... :shifty:
 

Paladine71

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There is a difference between coins and rounds, whether gold, silver, palladium, copper or platinum. Both are circular in appearance, so a lot of people confuse them.

Coins are minted by governments to be used as currency. As such, they are easily recognizable, usually carry a higher price for the metal content, and are more trusted because you have the "weight" of the government behind the purity and weight of the coin. Here are a few examples:

The United States Gold Eagle. Note that it's face value is $60, but you'd be a fool to sell it for that. This coin is worth about $1,875.00 on the market right now because it is 1 troy ounce of pure gold.

GoldEagle.jpg


Here is the U.S. Silver Eagle. It's face value is $1, but it's worth about $40 on the market because it is 1 troy ounce of pure silver.

SilverEagle.jpg


Other countries have coins too, of course...

The Canadian Gold Maple, Face value of $5 Canadian Dollars, but it's 1/10th ounce of Gold, so it's actually worth about $200 U.S.

GoldMapleLeaf.jpg


South African Krugerrand. No shown face value, 1/2 ounce of gold, worth about $900.

Krugerrand.jpg


100 Mexican Peso. This year's mintage contains .64 ounces of silver, worth about $24.

100Peso.jpg


Bullion rounds and bars are minted not by governments, but by private mints. They come in a large variety of sizes and styles. Examples:

Northwest Territorial Mint's 1 troy ounce silver Stagecoach Round. This one is divisible for trading if you have a chisel. It's worth about $35. Note that it has the exact same silver content as the Silver Eagle above, but is cheaper because it is not minted by a government.

SilverRound.jpg


Credit Suisse 10 gram gold bar. A full troy ounce is 31.1 grams, so this is about 1/3rd of an ounce. Private mint, worth about $600.

10GramBar.jpg


10 troy ounce Silver Scottsdale Stackers. Again, private mint, each is worth about $340. Bet that briefcase is heavy!

10OunceBars.jpg
 
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Pappibri

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Yes I agree... Dont tell anyone..Our kids is awesome, but I told the wife.. They are not to know.. Kids dont think and tell their friends and next thing you know... Gold is gone.. But I believe in the spread it out staple as well.. Mason Jars buried on property does well too... I map it out in a way that nobody has a clue what it is except me and the wife....
 

3Hummers

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I agree with the spread it out theory but an 1800# safe, with 1000# s of stuff, bolted into the foundation with four 10" j bolts and disguised to look like a piece of furniture is a tempting place to put stuff.
 

DJinCO

Well-Known Member
Good advice. Platinum is currently trading at $1533 and Gold is $1636. Gold has been trading for more than platinum for a couple of years now.
Alcohol. Booze. Even the cheap stuff. According to a recent refugee/emigre from Bosnia, booze is worth more than metals. Stockpile whiskey, scotch, bourbon, vodka. If you are bugging out to the southeastern US, then just stockpile beer. :giggle:

Also, basic first aid items were in short supply. Ammo was also traded as well as high quality firearms. Bosnia had plenty of cheap AK's.

Personally, I would be very familiar with the edible plants in the area you are going. Meat/animals may not always be available.

Just my comments.
 
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