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Gold and Silver Questions
Below are some questions I have about gold/silver buying. I don't expect one person to answer all these questions but since we all have different experiences I hope these questions create some good discussions which will help others as well.
1) Are coins the best way to buy gold and silver? (I’m talking a few 10s of thousands of dollars, not millions.) With coins the gold or silver content is known so I’d expect they would be easier to sell them.
2) If I buy gold/silver coins, does it matter on what country they come from? I would think something like Krugerrands or US Eagles would keep the same value since they're both one oz of gold.
3) When buying gold/silver coins, does the condition matter? I'd think you are paying for the metal not the collector's value?
4) Does the percent of gold or silver in a coin matter? In another post someone said he bought Mexican pesos with a few % gold in them. I would think that buying something like an Eagle with 1 or 1/2 oz gold might be easier to sell in the future.
5) Is it better to buy gold or silver or a mix of each? I haven't followed the markets much but I'm wondering things like; Is gold over-valued so silver would be a better investment? Will silver be harder to sell than gold after an economic crash?
6) Is it better to do "cash and carry" for gold/silver? If one buys online then your name & address exists somewhere in a database which could be a problem if the government starts demanding we turn in our gold.
7) Does anyone have a link to some good articles on where to hide your gold/silver? A shoebox under the bed or in the closet doesn't seem safe. Hiding it in the walls of the house or even a safe wouldn't be good if there's a fire and people start going through the ashes. And, I'm not sure I would sleep soundly knowing it was buried in the back yard. Someone must have thought this through and put something on the web.
8) What do you think of the idea of re-financing, taking the equity out of our house and using it to buy gold/silver? If there's an economic meltdown with large inflation, then the precious metals could be used to buy the house outright. If the economy recovers and the Crash Course is not as bad as we all suspect, then I'll probably not lose much in equity since the house will grow in value and we still have the house.
9) This is related to the previous question. If I use my house equity to buy gold, could I be jumping from a housing bubble to a gold bubble and end up loosing on both ends?
Read the story about my avatar at this post: http://www.chrismartenson.com/forum/germ...
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I like gold coins like eagles. More portable, more liquid, less easily counterfeited, etc., as compared to bars. I bought a bunch back in 2001 and not only did the spot price of gold go up but the premiums went up as well. I like eagles better than krugerrands because of the global political "unpopularity" of South Africa and better than maple leaves just because they're an American coin. The higher premiums for eagles seem to back up my preference but of course, you're at more of a disadvantage as a buyer because of this. If you can get krugerrands, maple leaves, kookaburras, or whatever at a good price, however, they're fine.
For silver, I'd just buy a bag or bags of the old pre-1965 90% silver coins. I wouldn't bother with silver eagles ... too much of a premium.
The condition matters more obviously if the coins have numismatic or collectible value but even with bullion coins, if they're more worn, their marketability may be affected since they would have a fractional reduction in their gold content. I'm not a coin collector so I'm sure someone with knowledge about grading might provide you with more helpful information.
The percent of gold in a coin does matter obviously but they're priced accordingly. You can find out the content on websites like http://www.monex.com/.
Gold and silver pretty much move in lock step in the markets. Silver would be used for smaller units of exchange, gold for larger. Silver can take up a lot of space and obviously, it's much, much heavier than an equivalent value of gold. For example, if you wanted to transport $30,000 worth of silver, at the present spot price, it would weight about 130 lbs. An equivalent value of gold would be about 2 lbs. Everyone has their preference but I have about a 10:1 ratio of gold to silver. I've seen other people have a similar ratio but offhand, I couldn't give you a good reason why (although I remember researching it and having reasons when I made my purchases). Both are commodities but gold is more of a currency whereas silver is more of an industrial metal. If I had to pick only one, it'd be gold, hands down.
"Cash and carry" would prevent one's precious metals from being tracking but a reputable dealer has to keep a record so you'd be in violation of the law. Also, are you just going to just plop down $30K in cash to someone you don't know in a situation where you probably won't be on your home turf and where there's no recourse? These are all personal decisions.
In terms of storing precious metals (wherever that may be), I for one would never write something on the web about a secure arrangement that I had. Here's where imagination and creativity and anticipation of worse case scenarios comes into play. Good luck.
I would be very careful with the refinancing idea. Gold is inherently very volatile and timing of purchase is everything. If you doubt that, look at the swings in the past on http://www.kitco.com/charts/historicalgold.html . In 2008, it was up to well over 1000 and down to just above 700. And at the moment, gold is "overheated" and most likely due for a pullback. If you review the charts, you'll get a sense of when an opportune buying time might be.
EVERY asset eventually overshoots its true value, then undershoots its value when it plummets, and eventually reverts to the mean ... including gold. I think it's a great investment now, purchased at the right time, but it won't be forever.
Hope this helps.
Brian
Mr. Fri,
Check out the page that Chris already created on this subject. I think he answers a lot of your questions. Good luck!
Welcome to this forum, Mr. Fri.
I buy eagles and maple leaves, one at a time, because I never have enough money to buy several. I also have a stash of old silver coins. I also bought a couple of ounces from local gold miners (in northern California). This gold is in dust and little nuggets.
I have about as much gold as I want. What I wish to invest in now is assets like fencing to keep the deer out of the garden, repairs to vehicles, home remodelling and upgrades, and a nice shelter for my firewood. I have a dream to get my well and water storage together, but I'm not very organized or disciplined. We paid off our home and property a few years back, so that belongs to us free and clear. These are the things that are very important to me, even more important than precious metals.
I bought gold from a coin dealer, but the sales tax was killing me. I recently had a very, very good experience with apmex.com and I recommend them. However, paying with your credit card leaves a paper trail.
Thanks everyone for the input.
I've done some more reading and am learning a lot. When I get some time, I'll try to sumarize the things I've learned for others who may be where I'm at.
Read the story about my avatar at this post: http://www.chrismartenson.com/forum/germ...
Just another suggestion for reading: There are a number of articles available at www.onlygold.com that appear to me to be a good source of information, especially in regard to debunking some of the commonly held misconceptions which allow many folks to be misled and exploited by the "less scrupulous" of the many gold and silver dealers. Interesting stuff.
I recently joined and this has been a great eye opener so far, thank you to Chris all the contributors!
On the topic of precious metals, I was wondering if anybody has experience/recommendation in holding physical gold in a self directed IRA ?
Thanks in advance!
Bump.
Thanks from the Beautiful Blue Ridge Mountains, Tycer
SailAway
First, welcome to CM. You've found a wealth of information and a good source for the latest world events that will help you prepare in a timely manner.
I have PM's in an IRA. It is physical and stored in Delaware. Of course, I'm old enough that I can make withdrawals without a penalty. It has been the best growth asset in my financials for the last couple years, but there is no guarantee that will continue. I'm still adding to it as insurance in the expectation that the USD will lose value at some point. Read Chris's latest addition to the Basics of Resilience, Protecting Wealth.
Good luck,
Doug
SailAway
First, welcome to CM. You've found a wealth of information and a good source for the latest world events that will help you prepare in a timely manner.
I have PM's in an IRA. It is physical and stored in Delaware. Of course, I'm old enough that I can make withdrawals without a penalty. It has been the best growth asset in my financials for the last couple years, but there is no guarantee that will continue. I'm still adding to it as insurance in the expectation that the USD will lose value at some point. Read Chris's latest addition to the Basics of Resilience, Protecting Wealth.
Good luck,
Doug
Hi Doug,
I'm just curious ... do you know how long it takes to liquidate your PMs in your IRA? Specifically, from the time you make the call (or fax the written request), do you know exactly how long it is until your PMs are converted to cash? I'm assuming you're with Goldstar or Sterling? Also, are your PMs insured for theft, fraud, etc. at the Delaware depository and do you know who provides the insurance and how fiscally sound they are?