Precious Metals

[jaybone]

This may have already been brought up here, but I really, REALLY, REALLLLLY want to emplore you all to protect whatever savings you may have by converting a portion to gold and/or silver bullion.

The dollar could very easily take a 30-50% haircut overnight, with trade imbalances, rampant inflation, floundering economy, etc. It is a miracle they have held the federal reserve note together this long.

I am a gold bug, and have invested heavily in PM's and Energy, but that is not what I'm talking about here. Everybody needs to realize that savings held in US$ denominated accounts (ie savings, money market) is vulnerable to a USD collapse. 5% interest on a CD does not look so great when inflation is about 10% (according to non-gov't data)

I'm not trying to push anything here, I just want all you good people to have a little protection in case Hillary wins and pushes us into another great(er) depression.

Many traditional financial advisors advocate putting 5% of total wealth into precious metals, I am more comfortable with 20-30%, but that is an individual function of paranoia (or realism).

For gold bullion I prefer 1-ounce South African Krugerrands, they have the lowest premium of government minted bullion.

For silver I prefer 90% pure "junk" coins consisting of pre-1964 US quarters, halves, dimes, dollars. Before 1964, one US dollar face value was equal to 0.7234 oz of pure silver, take a moment for that to sink in then think about what your federal reserve note is equal to (faith in the US govt and nothing else) I like canadian maple leafs too, but you get the most silver for the $ with junk.

Keep your stash hidden and tell only one other person where it is (the one who gets it if you are dead).

6mos to 1 year of canned/dehydrated food is not a bad idea either, along with some water.

You can convert your rapidly depreciating federal reserve notes into PM's in several ways:
1 - best way - find a local coin dealer and pay cash
2 - good way - use an internet dealer such as www.apmex.com or www.nwtmint.com or www.bulliondirect.com, order it online, pay and wait for the mailman.
3 - cheaper but riskier - Ebay
4 - for the more advanced - www.goldmoney.com or www.bullionvault.com , the pro is that you have PMs offshore if a quick escape is needed, con is possible vulnerability to internet issues that may limit access when you need it most.

I tell people I care about this same message and they look at me like I'm a wacko tin-foil hat wearing fool. I hope since you are all on a Ron Paul forum that you may have a more enlightened and realistic view of the state of the union and take my advice to heart. Ron is on board, he has written about PM's in his Texas Straight Talk essays many times.

Good luck and peace to you alll

 

[Man from La Mancha]

OPINIONS:

Is investing in silver today a "once in a lifetime" opportunity? No, it may be more like a "once in human history" opportunity. Probably never before have a collection of positive, powerful conditions like today ever existed. You may very likely never again in your lifetime experience a better profit opportunity with so little risk.

The long-term investor seeks to capture the best possible return with the smallest possible risk. Five years ago, I felt that silver was at the top of the list, and this has proven to be the case. Based upon all that is likely to occur in the next five years, silver is still at the top of the list. It's the single best asset you can own today. - Theodore Butler, leading silver analyst

In the eyes of the world, only gold compares to silver as an investment. Maybe one in a thousand investors recognizes that silver is more rare than gold, above ground. This is not a secret that can be hidden forever. - Theodore Butler, leading silver analyst

Gold will preserve your wealth. Silver will make you wealthy. - David Morgan, leading silver analyst


Silver may very well become more valuable than gold, as it was in ancient Egypt. - Jerome Smith

The current price does not reflect the scarcity of physical silver.

There is no best- or worst-case scenario in which I can conceive of... silver being a loser. You can mortgage the kids and bet the farm! I beg you on bended knees to buy silver. -Howard Ruff

The accumulated silver inventory is gone, at precisely the time when we experience the greatest demand in history.

When investing in silver, the long-term possibilities for financial rewards, compared with the risks - are spectacular, in my opinion.



FACTS:

1. We have consumed probably 80-90% of all the silver that has ever been mined in the world.

2. As a comparison, we have probably kept 80-90% of all the gold that has ever been mined.

3. For hundreds, if not thousands of years, there was much more silver than gold above ground.

4. Today it is generally estimated that we have about 5 to 6 times more gold than silver, in above-ground inventories. Read that again. Very few people are aware of this fact. Usually the more rare something is, the higher the price is.

5. We continue to consume more silver than we take out of the ground.

6. We continue to pile up gold.

7. Silver is much more rare than gold - when we look at how much is available above ground.

8. Silver has the lowest estimated in-ground resource of any major metal, relative to the consumption. Almost no one is aware of this fact.

9. New industrial uses for silver are discovered and developed on a regular basis. Silver is an industrial metal as well as a precious metal. It is needed in the world economy, like copper and zinc.

10. Industrial products consume the silver that is used. It is generally not recovered.

11. Gold is mainly used for jewelry and collectors coins. It is kept by those who purchase it.

12. Central Banks used to have large holdings of silver that they could dump into the market. They don't any more.

13. Central Banks and the IMF still have large holdings of gold. These can be used to manipulate the price of gold.

14. New exchange traded silver funds (ETF) around the world have pulled huge volumes of physical silver out of circulation. Investment demand for silver is increasing.

15. On an inflation-adjusted basis, silver is much cheaper now than it was 25 years ago.This is one indication that the risk from purchasing silver today is very limited.

16. About 70% of all silver produced is a byproduct from the mining of other metals like copper, lead, zinc etc. - so a strong increase in the price of silver does not necessarily mean that a bunch of new silver mines will be opened.

17. Silver will have to move to around $130/oz., just to reach the same price level it already was at around 1980 - on an inflation-adjusted basis. At the time of this writing silver is priced at about $14/oz.

18. Gold is currently trading around $660/oz. and will have to move to around $2,200 to match the price it reached around 1980 - on an inflation-adjusted basis.

19. Circulating coins in the U.S. generally were made from 90% silver through 1964.

20. Gold has not been circulating money for a long, long time.

21. Gold is more abundant deeper down in the ground; so much more is likely available in the ground - that has not yet been discovered.

22. Silver is more abundant close to the surface, so a lot of the easily accessible silver has already been found and extracted.

23. I am not hitting on gold. Gold will probably be a very good investment. I believe silver will be a spectacular investment.

24. There are probably well over 1,000 companies considered gold companies.

25. There are very, very few companies considered pure silver companies

26. It takes 5 to 10 years after finding silver or gold, to bring a suitable property into production.

27. Out of several thousand properties where companies look for silver or gold, probably only a single one will become a mine.

The current price does not reflect the scarcity of physical silver. We have record low inventories. We have strong, and growing industrial demand. We have growing investment demand. We have low prices. This situation can't continue very long.

FUNDAMENTALS:

What we do know is that every day the world collectively takes around 1.75 million ounces of silver from the earth. We also know that the world consumes well over 2 million ounces (the balance comes from recycling and inventory depletion.) We know that this basic production/consumption structure has existed in the world every day for around 60 years.

This deficit has existed so long that the investment world seemingly has become numb to it.

At the end of World War II, total known stocks of silver amounted to around 10 billion ounces, with the US government holding 4 billion ounces of that. We are now down to probably considerably less than 1 billion ounces, down almost 95 percent. The silver has been used up, to fill the growing industrial appetite for silver.

The U.S. government considers silver to be a strategic metal - and used to have an inventory set aside for this purpose. Now even this strategic stockpile is gone. Many modern weapons systems, satellites, missiles, rockets and torpedoes can not function without silver.

Almost all the silver that has been mined in the past 5,000 years has been used up for industrial production - and is gone forever.

*** Today, world silver inventories are at the lowest point in 200 years ***

We have a vital material, known to all men for all time, literally disappearing before our eyes.

No other commodity in the history of the world has ever seen such a prolonged severe depletion of both the above and below ground supply. We are truly running out of a vital commodity. Silver inventories are running out - with silver currently at give-away prices.

Traditionally it has taken about 15 oz. of silver to pay for 1 oz. of gold. Recently it has taken 45-50 oz. of silver to pay for 1 oz. of gold. This is a strong indication that silver is very undervalued and can be expected to climb a long way in price just to get to where the historic value has been.

As I am writing this gold trades around $660/oz., so silver should trade around $44/oz (15:1) - but it is actually trading around $14/oz. This shows how far the silver price has to go according to traditional valuations, even without speculating that there may actually be a serious shortage of physical silver developing.

Adjusted for inflation, just to reach the same price level silver was at in 1980 silver would today need to trade around $130/oz. This indicates to me that the price of silver is very likely to increase substantially.

In 2003 the Chinese government allowed their well over 1 billion citizens to for the first time in over 5 decades own silver and gold. The Chinese are said to traditionally save 40 % of their earnings. China recently announced that they estimate needing 3,000 tonnes of silver annually. As world economies grow, demand for goods increases. As people make more money, they want more stuff, including better homes, improved life styles, medical treatment etc. China just reported a 23% increase in May-07 auto sales compared to a year ago.

Several stock exchanges around the world have recently started to offer the opportunity to buy and sell silver in an easy way, through Exchange Traded Funds (ETF). This opens up for silver investment demand from untold new millions of people.

Shorting is when traders sell stocks/commodities that they don't own; expecting to buy them back after they hope prices will fall. As of Apr.-07 the Commitment of Traders (COT) Report shows that the 4 (or fewer) largest traders on the COMEX are net short the equivalent of 145 days of global silver mine production, or short over 253 million ounces of silver. This is in violation of the law, and outrageous - and stands out like a sore thumb. No other commodity comes within a country mile of having such a concentrated short position. In all likelihood these 4 largest traders would not be able to deliver the physical silver if they had to. It simply isn't readily available. There never was a legitimate economic reason for such large and concentrated short positions in silver. Who, in their right mind, would desire to be short more than all the known quantity of a vital commodity in a world tight on most, if not all, vital commodities? - Theodore Butler, leading silver analyst

Today less than 1% of silver trading is in physical silver. It will take just a small change from paper to physical trading, for the price of silver to explode. In 2006 Peru was the world's largest silver producer, accounting for 17% of the total, Mexico (15%), China (12%), Australia (9%). These 4 countries thus accounted for 53% of global silver production. Total supply of silver fell by 1.5 per cent in 2006, to just under 912 million ounces.

 

[CAKochenash]

thx for your insight brother...i have been buying 99% fine silver coins for about 3 years now from a local pawn shop. I really enjoy it. Its fun and provides financial security.


What are your thoughts on buying siver for numastic value. I have thought about buying maple leafs and american eagles but i have found that they cost more...and its the same amount of silver. If there was an econmic collapse, who is going to care about a misprint on a coin? I just stick to buying "happy 50th birthday" and "let it snow" type coins. Your thoughts?

 

[jaybone]

Numismatics (rare coins) could possibly fetch a huge premium IF YOU SELL AT THE RIGHT TIME.
That is, in a currency crisis, junk will be king, silver will be valued for it's silver content alone. However, if the USD goes on a slow grinding path down, numismatics could do very well.
I do not buy numismatics, if I want to leverage the price of silver or gold I buy stock in junior mining companies.
Coins are for insurance, stocks are for profit.

 

[Ponce]

Already posted many times about buying PM......... I invested $28,000 in 1972 which became $723,000 in 1980.

The silver that I have now was bought between 1982 and 2002 and is now one of my survivalist tools.

Before you buy PM be sure to have at hand food for at least six months, I have it for 3.5 to 4 years.

The most important items for what is to come are......secured shelter, water, food, heat, weapons, ammo, first aid and then PM......the reason for that order is that at first you will not be able to buy anything even with PM.

You will have two to three weeks to get ready (and if you have the cash) when TSHTF and the reason for this is that most everyone will be sitting around thinking "No, this is impossible, it should be ok in a couple of weeks".......keep on dreaming.

Be ready, not sorry.

Don't invest in paper PM, after all......"If you don't hold it, you don't own it"... Ponce

 

[CAKochenash]

Numismatics (rare coins) could possibly fetch a huge premium IF YOU SELL AT THE RIGHT TIME.
That is, in a currency crisis, junk will be king, silver will be valued for it's silver content alone. However, if the USD goes on a slow grinding path down, numismatics could do very well.
I do not buy numismatics, if I want to leverage the price of silver or gold I buy stock in junior mining companies.
Coins are for insurance, stocks are for profit.

okay...i think i had the definition of numismatics backwords. Thanks for the clarification.

I agree with you. Thats why I buy the coins no one thinks are 'neat' .. I am not looking to make money...just keep it.

 

[constituent]

you know, it is funny but in case of a financial crisis, neither silver nor gold will mean Jack!

What will? Family, fuel, water, agricultural space, refridgeration, arms and ammo, chronic dystemia, and electricity.

 

[constituent]

oh yea, medicine.

 

[jaybone]

IT's not just for TSHTF scenario, but to protect what you have earned and accumulated from inflation.
If the chinese dump $1.2 Trillion tomorrow, the USD will be worth about a nickel. That probably will not happen.
But, if the current rate of actual inflation continues your dollar is worth $0.75 in two years.
PM's are a good place to park your wealth in uncertain times, and it does not take a full-on meltdown to make that so.

 

[constituent]

Yea but aren't PMs susceptable to the same type of dumps you speak about with the Chinese and the dollar?

It seems like gold has had a couple dumps from governments worldwide in the past little while, not certain about silver. PMs suffer from the same problem that dollar bills do... in that the only REAL currency is labor and productive resources.

 

[RonPaulGetsIt]

whole heartedly aboad the silver bandwagon - doubled their worth in fiat dollars last 3 yrs and im still buying more - cant get enough of it

 

[DAZ]

Yea but aren't PMs susceptable to the same type of dumps you speak about with the Chinese and the dollar?

It seems like gold has had a couple dumps from governments worldwide in the past little while, not certain about silver. PMs suffer from the same problem that dollar bills do... in that the only REAL currency is labor and productive resources.

You may be right about labor and productive resources, but a barter economy is just too clumsy. People prefer a common medium of exchange to make transactions smoother and make values more transparent. Gold and silver have been used as mediums for exchange for thousands of years. I think that makes them a bit more stable than the dollar.

 

[Shooterman]

IT's not just for TSHTF scenario, but to protect what you have earned and accumulated from inflation.
If the chinese dump $1.2 Trillion tomorrow, the USD will be worth about a nickel. That probably will not happen.
But, if the current rate of actual inflation continues your dollar is worth $0.75 in two years.
PM's are a good place to park your wealth in uncertain times, and it does not take a full-on meltdown to make that so.

The dollar is only worth about $.04 of the value it had prior to 1913.

On one site, possibly Mises, I read in 2006, the purchasing power of the dollar was about 40% less than what it was in 2000. That is somewhere in the neighborhood of 7% inflation per year, yet Uncle Sugar tells us it is only running about 2 to 2 1/2 %. Would our governement lie to us? In a heart beat!

 

[Ponce]

You know friends? don't spend ALL your money on PM, keep some funny money for WTSHTF because at first that's what everyone will be accepting.

 

[jonahtrainer]

Yea but aren't PMs susceptable to the same type of dumps you speak about with the Chinese and the dollar?

It seems like gold has had a couple dumps from governments worldwide in the past little while, not certain about silver. PMs suffer from the same problem that dollar bills do... in that the only REAL currency is labor and productive resources.

Keeping 5-10% of one's assets in physical food, guns, land, silver and gold in their possession is always a wise allocation of capital. All paper assets are potentially worthless.

Yes, the market can be flooded. But gold is the most salable asset on the planet.

Earlier this year, the Swiss dumped 80 tons and the market burped and asked for seconds.

There are massive amounts of capital moving into the precious metals. This trend will only continue as all major fiat currencies are inflated. I doubt we will see a 30-50% haircut in the USD overnight, but it is possible. There is just too much capital allocated to USD denominated assets for it to move that quickly. But bank runs are irrational and when the gig is up there will be a massive shift in wealth.

We may see the average American and average Chinese could exchange standards of living in a very short period of time:

http://www.kitco.com/ind/AuthenticMoney/jul102007.html

 

[ShaneC]

you all sold me on it.

I bought some Silver on ebay. Granted, its an insignificant amount, but its a start.

Either "thank you" or "you suck" depending what happens

I'm pretty sure that I'll be thanking you. I highly doubt that I'll lose my investment either way.

so, a preemptive thanks.

 

[jonahtrainer]

you all sold me on it.

I bought some Silver on ebay. Granted, its an insignificant amount, but its a start.

Either "thank you" or "you suck" depending what happens

I'm pretty sure that I'll be thanking you. I highly doubt that I'll lose my investment either way.

so, a preemptive thanks.

I purchase my precious metals through GoldMoney.com or if I take physical possession, Apmex.com. Local coin dealers are a great source also.

I would be a little leery buying through Ebay.

 

[DAZ]

If you do buy on Ebay, make sure you pay attention to the spot price of whichever metal you're going for. You can find that many places, including here . Those prices are listed in $/troy oz. I'm just starting out with all this myself. Good luck!

 

[Man from La Mancha]

Support your local coin dealer. cash and a hand written reciept. no visa ,check or shipping records.

 

[constituent]

I actually have a silver coin myself

given to me the day the Republic of Texas came to town.

Also, go ahead and call me a conspiracy theorist, but I just don't believe that the international power establishment is going to allow the currency to bust in a way that means anything... they still own the guns, the aircraft carriers, the ICBMs, all the things that our second amendment does not adequately cover protection from...

It is all fake from the start, yet it seems pretty real. this issue is who will control society's future perceptions of what that reality is... if it is throw away your paper money and move to commidities based currency, then so be it... but in this digital age where so many store so much about their lives on a little phone (just wait), do you really believe there will be any sort of physical specie (I think that's the spelling) for the archaeologists to examine from the mid to late 21st?

Just wait and see as we become the machines we have built. Money will not exist as we now know it, only "credits" or "points" earned by successfully negotiating the set of obstacles placed before an individual (putting up w/ your boss to keep your job, responsible social behavior a la Bloomberg, good grades). This is inevitable lest we return to an agrarian society. Will the state then need gold to back this currency? Absolutely not, just obedience.