[ 2022 ] Gold and silver

[Carolinian]

As with most things in life, balance is the key. The first priority should be to have a food supply so you aren't dependent on others. The nice thing about gold and silver is you can get it in any increment (1/2 gram gold ~$50, 1/10 oz silver $5 and up) and it will never be worth zero.

IMHO the best incremental way to own silver is pre-1965 US silver coins, and second best is pre-1968 Canadian silver coins. The way premiums over spot have gone up and availability down, I suspect a lot of people must think that.

As to gold, my 1/10 ounce play is Austrian and Dutch gold ducats which contain .1107 ounce of gold and are cheaper to buy than the 1/10 ounce bullion coins. The ducat was a trade coin used over much of continental Europe after it was first minted in one of Italy's city states in the 1400s and minted over the years by many countries. It was actively used as a medium of exchange in the Baltics and the Balkans until World War II. The Kingdom of Yugoslavia was the last country to start minting their own ducat-denominated coins, doing so between the world wars. Austria officially stopped minting the ducat in World War I but resumed restriking the 1915 date ducat at the Vienna mint in the 1920s and continues to do so today bearing the imperial two headed eagle and the bust of Emporer Franz Josef. The Dutch first minted ducats in the 1550s and continues to do so each year today, with the current dates but otherwise the design is the same as in the 1500's with a standing armored knight holding a sword in one hand and a cluster of arrows in the other. The Dutch ducats were widely used in commerce in the Baltics until World War II. Since the war, they have been struck mainly for collectors. Both the Austrian and Dutch versions can be bought from bullion dealers for less than the major 1/10 ounce bullion coins even though they contain more gold. The Dutch coins are usually about $10 more than their Austrian cousins, and $20 more if they were struck in proof condition. The proof versions are listed at a $2,000 value in some coin catalogues, many multiples of what bullion dealers sell them for, but I wonder if one could actually sell them for that price. I have a number of the proof versions bought at bullion prices but have never tried to sell them to collectors or coin dealers.

 

[Ralph Sir Edward]

MREs - Meals Rejected by Ethiopians. . .

 

[ScoopKona]

I have a number of the proof versions bought at bullion prices but have never tried to sell them to collectors or coin dealers.

Then I would sell these at my earliest opportunity. I'd be looking for a buyer right now.

Gold is like having a supermodel in the house who has taken a vow of chastity. Lovely to look at, but doesn't do anything at all.

 

[easyrider]

The proof versions are listed at a $2,000 value in some coin catalogues, many multiples of what bullion dealers sell them for, but I wonder if one could actually sell them for that price. I have a number of the proof versions bought at bullion prices but have never tried to sell them to collectors or coin dealers.

I'm not a coin collector other than some Silver or Gold Eagles and they cost more than spot price because of the premium and sell for very little over spot and sometimes at spot through a dealer. So I think a dealer would offer at least spot but a collector might offer spot + half premium. I like tubed bullion and wrapped bars and not so much coins.

Bill

 

[Mongoose]

Then I would sell these at my earliest opportunity. I'd be looking for a buyer right now.

Gold is like having a supermodel in the house who has taken a vow of chastity. Lovely to look at, but doesn't do anything at all.

Except, you can't sell the supermodel, I believe that falls under Human Trafficking.

 

[Ralph Sir Edward]

For a view of the Germany 1923 hyperinflation, I recommend:

Amazon.com: When Money Dies: The Nightmare of Deficit Spending, Devaluation, and Hyperinflation in Weimar Germany eBook : Fergusson, Adam: Kindle Store

When Money Dies: The Nightmare of Deficit Spending, Devaluation, and Hyperinflation in Weimar Germany - Kindle edition by Fergusson, Adam. Download it once and read it on your Kindle device, PC, phones or tablets. Use features like bookmarks, note taking and highlighting while reading When Money...

www.amazon.com

 

[Carolinian]

Not only am I not interested in buying, if someone gave me a ton of gold I would sell it and do something useful with the windfall.

Gold salesmen, every day of every year: "Gold is poised to skyrocket! So buy some from us! Because we clearly have no idea how economics work! We sell things that are going to jump in price tomorrow! Because that's what we do!"

For income, we have rental property. Not buying any more right now, although we would like to pick up another couple of properties, because the market is overheated. Also, bought at the right price, it protects wealth.

Gold and silver are for wealth protection most of all. With the stock market on a losing streak and crypto in the crapper, gold is performing well, trading within a $1,800 to $1,900 range. Actually I was hoping to see one of those dips for a few days in gold that happens when margin calls in the stock market force investors to raise quick cash selling things like gold. Like stocks, precious metals should be bought on the dips.

 

[ScoopKona]

Also, bought at the right price, it protects wealth.

Pretty-much anything, bought at the right price, protects wealth.

But gold never does anything other than sit around and do nothing. That's it's job. And for that reason alone, I don't want any.

One of my guilty pleasures during the pandemic was going through local auction websites and looking for useful items for the farm. Everything from industrial equipment to gardening tools. One of the most common auctions was "von Mises devotee who died with a large gold and silver stockpile, being auctioned off by heirs who just want all this crap gone."

They all had similar tastes in what they thought meant "hold value." I saw hundreds such auctions. Always the same gold and silver coins being sold alongside the same sports memorabilia and tchotchkes. (It's as if these people were all whacked with a clone stick. Always the exact same stuff.) But frankly, these gold bugs were the biggest suckers of all -- dead, with some metal in their portfolio that people just want to be rid of.

 

[90_Min_Sales_Pitch]

To answer the main question, I am using Apmex's OneGold, for storage and low premiums. Storage fees are 0.12%.

As far as how you would barter with gold and silver, the answer is you wouldn't. Let's say you purchased 1 oz of Gold in 1970 for $35, even with the upcoming hyperinflation, you're not going to saw that gold coin into shavings. You cash it out at the current rate. If your currency has completely collapsed, then you cash it out for whatever the replacement currency is, whether that be foreign or otherwise.

 

[easyrider]

But gold never does anything other than sit around and do nothing. That's it's job.

The main reasons people have precious metals is that it is a tangible store of wealth. When you say it just sits around and does nothing you are missing the point that it does go up in value over time, occasionally increasing in value very fast.

Bill

 

[Carolinian]

To answer the main question, I am using Apmex's OneGold, for storage and low premiums. Storage fees are 0.12%.

As far as how you would barter with gold and silver, the answer is you wouldn't. Let's say you purchased 1 oz of Gold in 1970 for $35, even with the upcoming hyperinflation, you're not going to saw that gold coin into shavings. You cash it out at the current rate. If your currency has completely collapsed, then you cash it out for whatever the replacement currency is, whether that be foreign or otherwise.

Apmex is one of the firms I buy from, but I often find somewhat better prices at JM Bullion and SD Bullion. I check that trio of firms when there is a dip in price. Some dips can be anticipated. A hit to the stock market can often set off selling of gold as people sell anything they can quickly sell in order to make margin calls. Those dips can be short-lived, so one has to move on them when they happen. Financial advisers regularly recommend selling silver when a recession is expected and that is often a good point to buy silver.

Premiums vary based on the item. For a roughly half ounce gold coin, I have found the 1967 Canadian $20 gold piece to be one with a low premium, and one of those where Apmex generally has a better price than JM Bullion. For my tenth ounce favorite, the Austrian and Dutch ducats, it is reversed, and JM Bullion generally has the best price. Where SD Bullion generally comes through is on British sovereigns.

I keep my gold and silver in a couple of safe deposit boxes. I like having it close. The weight of the silver is one of several reasons I have been concentrating more on gold, although the higher premiums on silver compared to gold is a bigger reason.

 

[Carolinian]

China and Russia have been buying up gold for some time. A number of European countries are getting into the act as well, the most recent being the Czech Republic, whose new central bank chief has announced they plan to massively increase their gold holdings.

https://www.zerohedge.com/markets/czech-republic-join-poland-and-hungary-central-european-gold-rush

 

[dago]

I invested in gold just to diversify my portfolio. But not coins or bars. Too difficult to store and sell later. I have a small portion in an ETF. Yea, I probably wont make the huge profit on it, but I can easily sell it at anytime and don't have to worry about where to store it. KISS

 

[pedro47]

We are not buying gold or silver this time. We are looking at buying some government I Bonds.

 

[dago]

We are not buying gold or silver this time. We are looking at buying some government I Bonds.

May be a good choice

 

[Carolinian]

I invested in gold just to diversify my portfolio. But not coins or bars. Too difficult to store and sell later. I have a small portion in an ETF. Yea, I probably wont make the huge profit on it, but I can easily sell it at anytime and don't have to worry about where to store it. KISS

Safety deposit boxes work fine for gold. Silver gets a bit heavy to carry the boxes around. We have now gotten a second box but had to divide the silver between the two so we could lift them. I am buying mostly gold now as the silver premiums are a good bit higher. In the last few weeks I have added Austrian and Dutch ducats, Canadian $20 gold pieces, and German 20 marks, all coins with reasonable premiums. But, yeah, I did add a few rolls of Franklin half dollars, too.

Another play on precious metals in buying stock in gold and silver mining companies, but that takes some serious research into the companies.

 

[pedro47]

Safety deposit boxes work fine for gold. Silver gets a bit heavy to carry the boxes around. We have now gotten a second box but had to divide the silver between the two so we could lift them. I am buying mostly gold now as the silver premiums are a good bit higher. In the last few weeks I have added Austrian and Dutch ducats, Canadian $20 gold pieces, and German 20 marks, all coins with reasonable premiums. But, yeah, I did add a few rolls of Franklin half dollars, too.

Another play on precious metals in buying stock in gold and silver mining companies, but that takes some serious research into the companies.

I totally agree with your last sentence. You much do some serious research.

 

[e.bram]

In New Jersey you have to pay sales tax on gold and silver purchases. It hase to increase 6 1/2 % to break even.

 

[Carolinian]

Paper silver and gold have had a dip and while that impacts prices on physical gold and silver, it is causing a run on actual availability of physical gold and silver. My wife and I have been buying both on the dip. The outlook for physical silver may be the most intriguing, as the biggest by far storehouse of it in the world, the London Bullion Market Association (LBMA) has been seeing a huge decline in their holding, now the lowest ever on record. The LBMA is a consortium of major banks and bullion traders in the world's major precious metals marketplace:

The availability of silver products, particularly in coin form is thin. Many items that used to be regularly in stock are now often just not available from the three major bullion dealers I buy from. The premiums over spot have also gone up.

For gold, I am also seeing thin availability and rising premiums over spot. Some of my favorite coins to purchase have jumped their premiums. For years I could buy the Austrian 1915 4 ducat restrikes with almost half an ounce of gold for 3% over spot from one dealer and 4% over spot at another. Now both are over 10% over spot when they are available. The Canadian $20 gold piece of 1967 with .5288 ounce of gold used to be sold at 4% over spot all the time. Now they are over 10% over spot. Finding particular types of US silver coinage has become less of a sure thing. On a silver dip, I wanted to pick up some rolls of Mercury dimes, but for several days none of the three bullion firms I deal with had any. Usually they all do and it is a matter of comparing price.

WIth all the money printing and inflation going on, I want to up my stash of real money that is put away in my safe deposit boxes.

 

[esia.sj]

My mother wants to buy a couple of thousand of physical gold just to have something on hand. I’m not convinced so I’ll stick with stocks and cash. And a very well stocked pantry lol.


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[Brett]

Gold Loses Status as Haven
This Should Have Been a Great Year for Gold. Here’s Why It Isn’t.

The yellow metal is supposed to be a haven when stocks are a mess, but it is down about 8% this year

https://www.wsj.com/articles/this-s...t-year-for-gold-heres-why-it-isnt-11663526294

"Gold has lost 8.2% this year as nervous investors turn to Treasury bonds

The most actively traded gold contract is on pace to decline for six consecutive months, with a loss of 14% through that period so far. That is a significant drop for an asset that is supposed to be a haven and marks the longest losing streak since September 2018, when prices fell 9.9% over six months.

“The outlook for gold remains vulnerable until the Fed stops hiking rates,”

JPMorgan Chase & Co. analysts forecast that gold prices will keep falling

Investors have pulled money from precious metals Gold prices are off almost 20% from the all-time levels they hit in August 2020"

 

[Carolinian]

My mother wants to buy a couple of thousand of physical gold just to have something on hand. I’m not convinced so I’ll stick with stocks and cash. And a very well stocked pantry lol.


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I have a lot more in rental real estate than precious metals. It has its vulnerabilities, too, with rising interest rates, but then we can just raise the rents to cope with inflation. If I were keeping a big pile of cash, I would do it in a currency of a country where the government has not been running the printing presses like crazy. It would not be the US dollar, but probably the Swiss franc or Norwegian kronor. The problem is that western European banks these days generally decline US citizen business due to the reporting requirements on banks from the Obamacare legislation. Many eastern European banks, on the other hand, take the position that the US has no authority to require them to do anything, and they still take US citizen accounts. I haven't checked lately, but I know in the past the Commercial Bank of Romania, one of the country's largest banks still let US citizens maintain accounts there and you could do so in four currencies, Romanian lei, US dollars, euros, or Swiss francs. My account there was in euros, not because it was a strong currency, although at the time it was relatively so, but for convenience of paying for things in euros. If you have an overseas account over a certain amount, you have to report it to the IRS. I was lucky on the paperwork on that because I controlled two other overseas accounts for my employer and that had to be reported, so they did the paperwork on my personal accounts for me at the same time.

 

[DrQ]

Precious metals and other tangible assets will take hits along with the stock market to cover margin calls and provide liquidity for aggressive investors. It is usually temporary.

 

[Carolinian]

Precious metals and other tangible assets will take hits along with the stock market to cover margin calls and provide liquidity for aggressive investors. It is usually temporary.

Precious metals are something easy to sell to make margin calls. When there is a major hit to the stock market, I watch bullion prices to take advantage of the likely dip.

 

[Carolinian]

“The outlook for gold remains vulnerable until the Fed stops hiking rates,”

JPMorgan Chase & Co. analysts forecast that gold prices will keep falling

Investors have pulled money from precious metals Gold prices are off almost 20% from the all-time levels they hit in August 2020"

On the other hand, the world's largest hedge fund, Bridgewater, is recommending gold to their clients.

Bridgewater’s Rebecca Patterson: Fed risks credibility in inflation fight

In an exclusive interview, Bridgewater's chief investment strategist discusses how the world's largest hedge fund is counseling clients as the Fed battles inflation.

www.pionline.com

Here is an excerpt:

"So what can you do about it? In those environments, again, looking at 100 years of market performance, the assets that did best in those stagflationary periods tended to be inflation-linked bonds, gold and broad commodities.

What did worse was equities. Equities were the ones that really got hurt from the falling growth, rising inflation dynamic."