…… The benefits of physically owning gold or silver

[Hfcomms]

It also may not.

The manipulation can only last so long. Once the metals break out the scheme is over and not even Trump can pull us back from the precipice. The economy and markets is a giant CONfidence game and when people don't buy the con anymore like all good ponzi schemes the collapse is shortly to follow. I like to see the metals break free as most people do but I also know that when that day happens something evil this way comes.

 

[Switchback]

I remember clearly during the last big run that some of those reputable dealers were having difficulty sourcing product due to everyone hitting it all at once. Many dealers were taking payments and delaying deliveries, driving customers crazy. There was also a lot of dealer fraud. People paid but received no metals. Phone calls and emails went unanswered. I remember lawsuits too.
All that sat on top of Chinese counterfeit bars and coin. Even the Canadian royal bank sold someone a fake bar.
When supply is low and Joe Six demand is high, it can get very tricky and dishonest.
Makes no sense to me to start buying now or during a new rise. We've had years of low prices.

 

[hiwall]

Having at least a small amount of PM's on hand makes sense just like having some extra food on hand.

 

[Hfcomms]

To me they are primarily my saving account to use in whatever the economic system looks like after the reset. They might be extremely valuable and then again not. But I do know they will be worth more than paper currency that is in its death throes.

 

[Dozdoats]

Caution - from 1980 up until about 2005 the gold price was fixed at about £200 per ounce.

And the official US grabblement price of gold is still $42.22/ounce....

 

[Kathy in FL]

My opinion is slightly different from other peoples but my husband and I have a business based on assets and putting them to work.

First, yes PMs can be part of your asset/resource portfolio. I would not consider it in the same way you consider a traditional investment but by the looser term if you consider all you own an asset then you can use the looser term investment for any asset including PMs.

Second, PMs are generally some of the laziest assets out there so don't expect it to sit up and sing. Don't expect it to accrue you any wealth. Don't expect it to do much of anything but sit on the shelf in the safe and look shiny and stroke your ego.

You also need to understand that PMs will unlikely be for your personal benefit but for the benefit of your heirs. It is a means of transferring wealth.

If the day ever comes when gold is back in circulation as an accepted medium of exchange for goods and services things are going to be very, very bad. It isn't about gold, but about what that will say for the economy. They'll either have to devalue gold for this to occur, or inflation will be so bad that you'll be lucky if the amount of gold you have stored will be sufficient.

As someone else mentioned, gold is essentially a type of insurance policy. But a real insurance policy should also be part of your asset portfolio to keep your heirs from having to convert the PMs to cash because they will generally be in a losing position at that point.

If you want to cover more bases, instead of bars or blanks purchase old coins that at least have a stated face value if it comes to putting them in circulation.

Don't pay more for your PMs than you can afford to lose because whether we here on TB consider it an investment, most other people do therefore its value is going to swing widely in any given situation you could consider needing to put it into circulation.

PMs are not necessarily the top of the food chain as far as assets go. In my personal opinion they should be one of the last things that you exchange your day-to-day cash for. Other asset areas need to be locked down first because in an emergency situation you are likely to need other assets before PMs are accepted into play. You can't drink them, eat them, live in them, or force people to accept them as payment, including the government which may have a thing or three to say about them being circulated as payment just like they already do today. PMs may be pretty and fun to fondle but they are lazy as crap and are only worth what you paid for them, if that because of the fact they are lazy and don't earn their space in your financial preps.

YMMV and everyone's situation is going to be different. But you get a lot more immediate value by being debt free which will should give you more freed up assets to put into PMs. An ounce of gold is running $1300+ and that is a lot of money just sitting around doing nothing if you are still in debt to someone else paying interest on it.

 

[20Gauge]

What Doz said. They are not investments and anyone that tells you they are does not understand their function. What they are is real money with no counterparty risk. 100 years ago you could go to the bank and exchange a one ounce gold coin for a $20 FRN note and vice verse. Both the coin and the note would buy you a beef cow or a fine business suit. Fast forward 100 years that one ounce coin will still buy you that cow or a suit. The $20 bill will buy you a takeout pizza without the tip.

When you see the gold price going ‘up’ the gold isn’t more valuable it’s the value of the dollar going down. What gold does (and silver) is preserves your purchasing power over time. Look at it as insurance or as a savings account. The metals will see you through to the next financial system. You need to quickly educate yourself on the subject so you can make informed choices.

(paper bills) is useless these days.

You buy gold and silver to hold in the event things go Tango Uniform. It will help you ease past the hardship. It is money and has value. The paper is simply a promise. Should you have everything in gold? That is for you to decide. Yet you should have some gold and silver so that you can perform basic transactions when and not if things go south.

The government will still want their property taxes, they will simply not accept the old currency, but will only accept the new currency. How do you get the new currency? Sell the gold you have. Or be part of the political class that is part of the problem as they will take care of their own.

 

[20Gauge]

The manipulation can only last so long. Once the metals break out the scheme is over and not even Trump can pull us back from the precipice. The economy and markets is a giant CONfidence game and when people don't buy the con anymore like all good ponzi schemes the collapse is shortly to follow. I like to see the metals break free as most people do but I also know that when that day happens something evil this way comes.

I disagree it is a confidence game.

I believe it is a game of faith that is doomed to fail at some point. That is the problem of any currency that is not based upon something tangible.

 

[20Gauge]

Caution - from 1980 up until about 2005 the gold price was fixed at about £200 per ounce.

And the official US grabblement price of gold is still $42.22/ounce....

Was it not $32ish during the Nixon years?

 

[Dozdoats]

$20.67 until FDR in 1932, when it was reset to $35 -
https://www.history.com/this-day-in-history/fdr-takes-united-states-off-gold-standard

It was reset again to $42.22 in 1973 - http://www.munknee.com/beware-official-u-s-government-price-for-gold-is-only-42-22oz/

 

[Dozdoats]

PMs are generally some of the laziest assets out there

So, do you have insurance on your real property? Do you consider your insurance premiums "lazy?"

 

[Richard]

Was it not $32ish during the Nixon years?

https://www.bullionbypost.co.uk/gold-price/gold-price-history/

Thurs November 1st 1973 £40.71

 

[Quiet Man]

For any of you that subscribe to JSMineset.com, take a look at the site now -- Jim has just posted a specific long-term price target for gold, including timing, for the next run up. He has been highly accurate on his price calls, and 'accurate enough' (at the very least) on his timing.

For those not subscribed, the price target is many multiples of where we are now.

A lot can be inferred from this.

 

[Dozdoats]

https://www.bullionstar.com/blogs/koos-jansen/can-pretend-forever-gold-worth-42-22/

We Can Not Pretend Forever Gold Is Worth $42.22
10 Jan 2015 18:56
Koos Jansen

The lawful owner of the 8,134 tonnes of official gold holdings of the United States is the US Treasury. The Federal Reserve handed over the official gold reserves to the Treasury in 1934 and in return received gold certificates – which, by the way, are not redeemable for gold, only for dollars, but that’s not the point now. The point is these gold certificates are still valued on the Fed’s balance sheet at $42.22 an ounce.

The free market price of gold is currently about $1,200. The reason the US capped the value of gold on their books at $42.22 in the seventies is because they wanted to phase out gold from the international monetary system to increase the power of King Dollar; denying the true value of the yellow metal supported this ambition. And so the Fed pretends until this day gold is worth $42.22, all in an effort to make us believe in the strength of the dollar. However, the US can’t pretend forever the price of gold is $42.22.
/snip/ more at the link

 

[Kathy in FL]

PMs are generally some of the laziest assets out there

So, do you have insurance on your real property? Do you consider your insurance premiums "lazy?"

Read the full post Doz and not just the bits that set your pants on fire.

I already said it is insurance … life, casualty, property, flood, yada yada. We have them all. And that package of insurance has paid out on numerous occasions because we've insured the assets that make us money. Of course they are also a direct, physical expense for the business so they come off our income before taxes. The insurance will also pay out in the form of income once we reach retirement age because we invested our business profits into a kind of insurance that doesn't just have a death benefit but has an income portion as well.

There's a lot of things that my family can do different because we took the shots, the risks, and fulfilled our plan starting from before hubby and I got married. We know what an asset is and how to make it work for us. We also know what has failed for other people.

And since the doomer porn hasn't come to fruition … and has no real time line regardless of the number of crystal balls and pounds of tea leaves people use. So, to survive today is what is the primary responsibility while planning for multiple POTENTIAL outcomes in the future. Gold absolutely is lazy. However, as I said, as a form of wealth transference and insurance it is okay. It just doesn't provide much insurance if you haven't got your bases covered because even with it in your hands to fondle there isn't going to be a disaster that happens that the insurance pays out the next day.

PMs cannot be the sum total of your basket of assets and it shouldn't even be the biggest part of it. Because you'll run out of PMs eventually and if they are all used up what are you going to have left if you have no other assets to work with?

We've done more than fine with our plan in the here and now and we've got our golden years done up just fine as well. We even have it covered if the markets tank and/or our health does. We have a basket of unencumbered assets sufficient to our needs and wants and the liquid assets to take care of them regardless of which way the winds of war send the weather vane. Other people can live life their way on their terms … but I get tired of the bitching and moaning because while they might have the apocalypse nailed down, their day to day sucks and they aren't doing anything about it. Time to focus on the current reality and not just lust after what they think may happen but might just as easily be pushed so far down the road that it won't be experienced in our life time and then all the planning for TEOTWAWKI is for nothing.

 

[Kathy in FL]

https://www.bullionstar.com/blogs/koos-jansen/can-pretend-forever-gold-worth-42-22/

We Can Not Pretend Forever Gold Is Worth $42.22
10 Jan 2015 18:56
Koos Jansen

The lawful owner of the 8,134 tonnes of official gold holdings of the United States is the US Treasury. The Federal Reserve handed over the official gold reserves to the Treasury in 1934 and in return received gold certificates – which, by the way, are not redeemable for gold, only for dollars, but that’s not the point now. The point is these gold certificates are still valued on the Fed’s balance sheet at $42.22 an ounce.

The free market price of gold is currently about $1,200. The reason the US capped the value of gold on their books at $42.22 in the seventies is because they wanted to phase out gold from the international monetary system to increase the power of King Dollar; denying the true value of the yellow metal supported this ambition. And so the Fed pretends until this day gold is worth $42.22, all in an effort to make us believe in the strength of the dollar. However, the US can’t pretend forever the price of gold is $42.22.
/snip/ more at the link

The value of gold is whatever you can exchange it for. The dollar value of a PM really doesn't matter if you don't plan on exchanging it for dollars.

 

[alchemike]

Thats the only way and the owning gold on paper is a scam.

This...

o)<

mike

 

[20Gauge]

$20.67 until FDR in 1932, when it was reset to $35 -
https://www.history.com/this-day-in-history/fdr-takes-united-states-off-gold-standard

It was reset again to $42.22 in 1973 - http://www.munknee.com/beware-official-u-s-government-price-for-gold-is-only-42-22oz/

That's right! FDR took all of the gold and then revalued it.

 

[Quiet Man]

PMs may be pretty and fun to fondle but they are lazy as crap and are only worth what you paid for them, if that because of the fact they are lazy and don't earn their space in your financial preps.

I agree with some of the things you wrote, including getting out of debt, and making the present a priority.

I disagree on your point re PMs being lazy. Gold has outperformed the S&P since 2000. You might say that this is cherry picking, because gold was at very low valuations in dollar terms at that time. I would agree. We are, though in the same place now -- Gold priced in dollar terms, accounting for the falling value of the dollar, is now back to where it was in 2000. Those who understood this in 1998-2000 did well.

 

[glennb6]

Ahhh, lots of good discussion on PMs. I shall toss in my two cents. First, I like and have PMs, have for 12 yrs since the 07/08 mess. Haven't lost any money nor have I gained enough worth mentioning. Yea yea, it's money, it's insurance, must hold it and all that - I know. Lately I've been having some reservations.

First off, I bought during last recession because I thought if the dollar was in serious jeopardy and was loosing confidence, that govt would decree that it was to be supported, backed partially or fully by PMs. The population would immediately recognize good as GOLD and the dollar would be safe. Of course PMs would have to appreciate considerably too. Figured if all that happened, and it seemed quite possible back then, that I would be able to trade in my PMs for newly supported dollars and be rewarded for my astute move. Ahem. Today, I think that's about the ONLY way PMs would have value.

See, you can't by anything from Wallyworld, the gas station, pay your taxes, or otherwise spend PMs (other than coins albeit at their face value maybe) in a mainstream way. Maybe the local haberdashery who personally knows you and you know the proprietor, he might take a one oz gold bar for a suit, but as far as using physical PMs as a currency as we do with cash and plastic today - I see no viable way to do so directly.

Ok, if FRN/USD becomes worth less, and I did not say worthless, and PMs appreciate in a favorable ratio thereof, should one want or need to spend them, the next option is to convert ones PMS to a currency. I will presume that this would be sort of 'an event' where people who have been stacking for the past 20yrs decide to unload to cash because their stack just went to the moon in value. Ok, where - coin shops, online PM dealers, uh... that's it? I think the daily lines would go on for miles at coin shops, any online buying entity would be promptly overwhelmed to the point of exhaustion, and the level of scammery would be huge. Sounds like an interesting problem - gold is worth say 5k USD an oz and there's virtually no where to spend or exchange for cash in order to spend.

I will not go towards the extreme ends of the bell curve like bartering for a cow or a mad max world where an AR15 would be more valuable that a pound of gold, simply because I don't think those are likely events.

So I feel like I'm holding a bag of valuable shiny metal, lovable as it is, emmm... what's a viable practical exit strategy?

 

[Dozdoats]

Purchasing power is where it's at, no matter what you call it, FRN$, PMs, business plans, bank balances, insurance, real estate or whatever. Either you have purchasing power when you need it, or you don't. Purchasing power talks, everything else walks.

That is the bottom line.

 

[coalcracker]

Purchasing power is where it's at, no matter what you call it, FRN$, PMs, business plans, bank balances, insurance, real estate or whatever. Either you have purchasing power when you need it, or you don't. Purchasing power talks, everything else walks.

That is the bottom line.

Correct, and to push your thought a bit further, gold and silver will be valued in whatever future digital currency system is put into place. Advancements in technology assure we won't be dealing with coins or wampum as currency. That means our gold and silver (which we all agree is better than fiat paper) will ultimately have some arbitrary value within the future currency/exchange system. I personally don't see us getting rich. The "gold will soar" idea comes from thinking the future currency will be backed by gold, but that thinking is so pre-computer. Our world has been forever changed by technology.

 

[20Gauge]

Ahhh, lots of good discussion on PMs. I shall toss in my two cents. First, I like and have PMs, have for 12 yrs since the 07/08 mess. Haven't lost any money nor have I gained enough worth mentioning. Yea yea, it's money, it's insurance, must hold it and all that - I know. Lately I've been having some reservations.

First off, I bought during last recession because I thought if the dollar was in serious jeopardy and was loosing confidence, that govt would decree that it was to be supported, backed partially or fully by PMs. The population would immediately recognize good as GOLD and the dollar would be safe. Of course PMs would have to appreciate considerably too. Figured if all that happened, and it seemed quite possible back then, that I would be able to trade in my PMs for newly supported dollars and be rewarded for my astute move. Ahem. Today, I think that's about the ONLY way PMs would have value.

See, you can't by anything from Wallyworld, the gas station, pay your taxes, or otherwise spend PMs (other than coins albeit at their face value maybe) in a mainstream way. Maybe the local haberdashery who personally knows you and you know the proprietor, he might take a one oz gold bar for a suit, but as far as using physical PMs as a currency as we do with cash and plastic today - I see no viable way to do so directly.

Ok, if FRN/USD becomes worth less, and I did not say worthless, and PMs appreciate in a favorable ratio thereof, should one want or need to spend them, the next option is to convert ones PMS to a currency. I will presume that this would be sort of 'an event' where people who have been stacking for the past 20yrs decide to unload to cash because their stack just went to the moon in value. Ok, where - coin shops, online PM dealers, uh... that's it? I think the daily lines would go on for miles at coin shops, any online buying entity would be promptly overwhelmed to the point of exhaustion, and the level of scammery would be huge. Sounds like an interesting problem - gold is worth say 5k USD an oz and there's virtually no where to spend or exchange for cash in order to spend.

I will not go towards the extreme ends of the bell curve like bartering for a cow or a mad max world where an AR15 would be more valuable that a pound of gold, simply because I don't think those are likely events.

So I feel like I'm holding a bag of valuable shiny metal, lovable as it is, emmm... what's a viable practical exit strategy?

It is not an exit strategy at all. It is an item with actual value like that AR15. Yes, it is cumbersome to use at this moment in time, but you are preparing for the moment in time where the dollar has no value.

 

[20Gauge]

Correct, and to push your thought a bit further, gold and silver will be valued in whatever future digital currency system is put into place. Advancements in technology assure we won't be dealing with coins or wampum as currency. That means our gold and silver (which we all agree is better than fiat paper) will ultimately have some arbitrary value within the future currency/exchange system. I personally don't see us getting rich. The "gold will soar" idea comes from thinking the future currency will be backed by gold, but that thinking is so pre-computer. Our world has been forever changed by technology.

The PM allows you to transition to the "new" currency. No you won't get rich. That is not the purpose of prepping or having PMs in my mind.

 

[glennb6]

well yes, if the dollar has no value then it is likely PMs will have value. however I said, and it's just my opinion, that the dollar may be worth less but not worthless. the dollar is the defacto world reserve currency and no matter how some nations and some people call it counterfit and just a piece of paper (or the digital representation thereof), it is still what you are paid in, spend in, and most of the world trades in. world reserve currencies don't just disappear and certainly not suddenly.

but 'if' the dollar becomes worthless it will of course be good to have PMs, but the likelihood of that is far less than the likelihood of just worth 'less'. therefore I still don't have a great answer and I still say an exit strategy is 80% necessary.

 

[Blacknarwhal]

The PM allows you to transition to the "new" currency. No you won't get rich. That is not the purpose of prepping or having PMs in my mind.

It occurs to me, though, that if you've insured your wealth, and almost no one else has, and something happens to destroy wealth and only yours is insured, you suddenly have a lot more wealth than other people. Which means, essentially and with all the ifs and buts stripped away, you got rich.

 

[Dozdoats]

"Rich" is a matter of comparison, yes.

The classic financial advice from the 1970s (remember the 1970s?) was to put 5 to 10% of your net worth in physical PMs. The theory was that amount would be sufficient to reconstitute your total net worth to previous levels if Bad Things Happened.

 

[Blacknarwhal]

"Rich" is a matter of comparison, yes.

The classic financial advice from the 1970s (remember the 1970s?) was to put 5 to 10% of your net worth in physical PMs. The theory was that amount would be sufficient to reconstitute your total net worth to previous levels if Bad Things Happened.

Of course, your ability to actually USE that wealth will likely be quite curtailed. Sure, you might be able to afford a Rembrandt with one cartwheel, but where would you go to get it?

 

[hiwall]

well yes, if the dollar has no value then it is likely PMs will have value. however I said, and it's just my opinion, that the dollar may be worth less but not worthless. the dollar is the defacto world reserve currency and no matter how some nations and some people call it counterfit and just a piece of paper (or the digital representation thereof), it is still what you are paid in, spend in, and most of the world trades in. world reserve currencies don't just disappear and certainly not suddenly.

but 'if' the dollar becomes worthless it will of course be good to have PMs, but the likelihood of that is far less than the likelihood of just worth 'less'. therefore I still don't have a great answer and I still say an exit strategy is 80% necessary.

Of course stored dollars are worth less (have less value) every day. Since 1913 the dollar has lost 98% of its value and gold has lost none of its value.
Storing dollars is like storing ripe apples on your counter, they lose any value they have rapidly.

 

[Kathy in FL]

Correct, and to push your thought a bit further, gold and silver will be valued in whatever future digital currency system is put into place. Advancements in technology assure we won't be dealing with coins or wampum as currency. That means our gold and silver (which we all agree is better than fiat paper) will ultimately have some arbitrary value within the future currency/exchange system. I personally don't see us getting rich. The "gold will soar" idea comes from thinking the future currency will be backed by gold, but that thinking is so pre-computer. Our world has been forever changed by technology.

Yes, a good point. It is one of the reasons why our personal plan has been to diversify our assets as much as possible so that regardless of who we have to deal with in the future, we have something that they'll want to make a deal for.

 

[Kathy in FL]

Of course stored dollars are worth less (have less value) every day. Since 1913 the dollar has lost 98% of its value and gold has lost none of its value.
Storing dollars is like storing ripe apples on your counter, they lose any value they have rapidly.

Meh. FRNs aren't the only asset worth having but they aren't necessarily worth "less" every day. It all depends on how your put them to work. FRNs don't do any more for you stuck in the bank of Sealy than a stack of blanks in the safe. They are both a means of trading for something you desire or need.

The problem as I see it is that people are all in that PMs are the only asset that retains value or that will be the only asset that will be recognized at some point. Then you have people that say … you can eat it, drink it, grow it so for a long time it is going to be worthless and I can pick it up for nothing during the apocalypse. The reality is that it isn't an either/or situation and both are short sighted in scope. PMs can - assuming you have other areas covered first - be a part of plan. But if you don't have the FRNs to pay off debts now to avoid the tax man then how do you have the FRNs to exchange for PMs? Because the PMs then sit and do nothing for you but using your FRNs to pay off debt means they are working for you to save both in the now and the future.

Whether people like it or not, the world revolves around FRNs and the US$ is the FRN of choice for a lot of countries, even those that have their own currency. Your purchasing power with an FRN is going to be greater than with a blank or faced coins of silver content. Exchange your buying power with your current FRNs to get out of debt or use them to leverage some debt so you have an asset that extends your buying power by bringing in more FRNs that you can then use to buy other assets, pay off debt, etc. Start a business so your aren't dependent on a paycheck from someone else for your day-to-day.

It isn't either/or. It's both and more besides. Diversity is the name of the game because we really don't know what is coming down the road. Eventually all assets and our bodies are going to pass away. Just do the best you can with what you have. Yes, plan for the unknowable future, just don't forget there is a real world and real life outside the front door that can be taken advantage of as well.

 

[Kathy in FL]

Also, had a discussion with a couple of old timers at two different times and in two different countries.

The discussion was long and involved and traipsed all over history and life. But the bottom line from both men was that it didn't matter if the US$ was backed by gold or not because it was backed by the purchasing power and military might of the US.

And, if that purchasing power and military might disappeared then it was dollars to donuts that donuts would be worth more than FRNs or PMs. So are we supposed to stack donuts for the future?

I know that is an oversimplification and a little silly, but so is the insistence that gold is the only thing that will hold its value and that FRNs will lose all their value.

 

[Quiet Man]

what's a viable practical exit strategy?

Good chance that gold is the exit strategy.

 

[West]

I know this. If I had bought gold instead of insurance since 1985, claims adjusted, I would have a huge pile of gold. Like over a million maybe two million. For 17 years my insurance liabilities was at least $2000 a month and most of that time gold was under $450 a ounce.

 

[AuEagle]

The dollar closed for the weekend @ 1/1398th of a Troy ounce of Gold.

 

[Gitche Gumee Kid]

Delete

 

[hiwall]

Inflation was just about invented just to shore up fiat currencies. People have been trained to hope for at least 2% inflation each year. How dumb is that? There should not be any inflation.

 

[Dozdoats]

Here is the Westegg Inflation Calculator. https://westegg.com/inflation/

It can begin calculations in 1800. All the other inflation calculators I know of begin in 1913. Wonder why?

Check on inflation rates from 1800 to 1860. Try some other dates after 1870 or so and before 1913. For example-

What cost $100 in 1870 would cost $78.19 in 1913.
Also, if you were to buy exactly the same products in 1913 and 1870,
they would cost you $100 and $137.85 respectively.

Do you want to do another calculation?

Do you know what that is? It is called DEFLATION. That means YOUR MONEY BUYS MORE NOT LESS.

Is that weird or what? Somehow that never got mentioned in school, did it?

 

[Troke]

Inflation was just about invented just to shore up fiat currencies. People have been trained to hope for at least 2% inflation each year. How dumb is that? There should not be any inflation.

Murray Rothbard used to argue that a gold standard with 0.5% deflation was the way to go.

You could put your money in your mattress and watch it gain in value with your doing absolutely nothing. Talk about a free lunch.

 

[glennb6]

Inflation was just about invented just to shore up fiat currencies. People have been trained to hope for at least 2% inflation each year. How dumb is that? There should not be any inflation.

yup.
debt based money requires inflation.

vs a fixed supply monetary system in which the supply is fixed and the need/demand for money increases = the value per unit increases. PMs and proper crypto currencies are very similar.

watch the pendulum swing that direction when some day or some lifetime the monetary system changes