Spin-off; "how to sell or trade gold and silver"

[Roadking]

Enjoy the thread of buying/acquiring precious metals. Many folks are following that route...but once you have it and things go south, "how will you use it?"
This is just a brainstorming post while not hijacking the other thread.
So...how will you redeem that;
1) 1 oz gold coin? (.9 oz)
2) Silver dollar (.9 oz)
3) Mercury dime (.07 oz) ?
How will you (and others) value it?
Truely curious as to what it would be valued as in really tough times, considering I've been coming across an increased number of pocket change silver once again. If folks are spending it as regular change, will they see a possible value in it? Or will it be limited to like minded folks?
Thoughts appreciated.
Matt

[Ernie]

Ok, so a little family history here. This is passed down from granny to old spinster aunt and such so I can't verify most of this, but my old aunts will club you with truncheons if you dispute their word so be careful.

My family lived in Kentucky when the Civil War broke out. My great-great grandfather was a mule driver in the Confederate army, too old to soldier, I believe. They had quite a bit of property and weren't bad off. However as the tide began to turn, the Union soldiers were given orders to depopulate the area and began to burn out everyone. The family home was torched and my family fled up into the mountains to stay with more distant relations. After the war they tried to get their land back but the Union soldiers had burned all the records and the courthouses. All of the land was given over to Union sympathizers. My great-great grandfather took the clan and retrieved a cache of buried silver and they went to Oklahoma, moving westward to try to stay out of the government's reach. That didn't last too long, but they used the silver to set up a new life for themselves.

It may not be that the entire United States folds in one fell swoop. Different regions may go down at different levels, and some might not go down at all. If you have to pack up and leave in the middle of the night, leaving your property behind, a pillowcase stuffed with gold or silver might be all the difference between you arriving at your destination with wealth and property, and you arriving at your destination as nothing but a starved and penniless refugee.

Since then, family tradition has been to always keep a little bit of silver around.

[tgmr05]

There will always be someplace near the market area that will take it in trade for whatever currency is being used. The days of seeing gold/silver traded in common transactions are nearly gone. The value of the silver/gold to currency is simply too high. A dime is worth far more than a dollar....... A one ounce gold coin is worth nearly 1500.

Anybody carry a 1500 dollar bill to buy toilet paper??? Tuna?? Water/milk/bread??? How about 50's. A one ounce or old silver dollar is worth nearly that much...

The smaller silver coins may see some circulation as currency, in bad times, as they will be closer to spending 5,10,20's today. But no one knows for certain. You can be assured that there will be folks buying/selling gold/silver, especially in times where currencies are faltering. Just check out any similar situation in history, and you will see the value of the metals. Not necessarily in direct trade - because some folks simply do not understand how to price the different sizes, etc., but you will typically find someone close to the market who will deal with you - also, how it can protect your wealth....

You should have alternative means to pay for stuff, as well. Do not put all your eggs in one basket. Sort of like saving 100 dollar bills only, probably not a good idea. There are multiple threads on this, if you do a search, and a lot of good information.

[Spinner]

I've read that pm's are more for transporting wealth past a major event, not so much for use during a major event. On the other side, when things start settling down into what will be the new normal, FRN's may be (probably will be) toilet paper or fire starter. Pm's should be valuable to purchase land, food, whatever you need/want.

None of us know for certain how things will work out. We are simply using the best judgment we can based on history and current events. We know there will be some type of currency. We don't know if it'll be pm's, paper, or something else. Whatever it is, you can be sure that someone will be willing to convert pm's into the new currency (if pm's are not commonly used for purchases at that time.)

In summery: The purchase of pm's is to carry the value of your FRN's into the future by converting said FRN's into something that will either hold or increase in value as compared to the FRN that is losing value. Holding FRN's today might be akin to holding Confederate money in the mid 1800's.

If you can afford to "throw away" some FRN's, it might be worth keeping some in hopes they will have some value as a collectible someday. Probably not in our lifetime, but they could be worth passing down to children/grandchildren. In that case, the larger notes would be worth more than smaller denominations as there will probably be fewer of the larger denominations saved.

Of course, it's possible that the FRN may survive. But I don't see how it can the way it's being devalued.

[TnAndy]

Originally Posted by Roadking

So...how will you redeem that;
1) 1 oz gold coin? (.9 oz)
2) Silver dollar (.9 oz)

Minor points of correction:

Many modern 1 oz gold coins, such as the US eagle, the Canadian Maple Leaf, and the South African Kruggerand have a full ounce of gold in them, not .9 In the case of eagles, and Krugs, they use 90% gold, and 10% copper/silver ( different amounts for the two ), but both contain a full ounce.....the coin itself is over an ounce. The Maple Leaf is a smaller coin, weighting exactly one troy ounce and is pure gold, .999 or .9999 fine, depending on the year minted.

Current US silver eagles have a full ounce, and prior US silver dollars ( the Peace and Morgan ) have about .75oz allowing for a little wear. ( .7725 when freshly minted ) The Eisenhower 'silver' dollar had 40% silver some early years, and none later on....you have to know your years there.....they are a confusing coin.


As to the subject of the topic:

My belief is most SHTF situations DON'T last forever, and the need for a monetary system will return, simply because the use of SOMETHING for money is such an improvement over barter......Ernie said it good the other day in that other thread about the guy who wandered the local market all day looking for someone to trade his bee's wax for a ball of string. Barter can, and does work, but overall, it is a clunky system of exchange.....which is WHY money was invented....and one of the qualities of money is a STORE OF VALUE. This is where the paper FRN fails so miserably.

So, no.....I can't sit here and tell you exactly HOW gold and silver will play out in any future time......all I can do is look to past history ( Like Ernie's family story ), and see millions of examples where metals have shined, and paper money has ALWAYS ALWAYS ALWAYS failed, only to be replaced by a new round of it as the bankers scam people yet ONE MORE TIME. Its way too good a scam for them to let go of now that they have it in their play book.

SO, while it's true you probably won't want to take a one oz gold eagle to the bakery unless they have a way to make a lot of change, at some point down the road when the BANKERS roll out the "new and improved" form of paper baloney, you will be in a position of advantage over the folks that have to start from scratch earning those paper notes yet again.

Thus says history.

[Tarheel]

My thinking (passed down by ancestors) is you at least want to be able to cover your taxes. During the depression a lot of people lost their farms because they could not pay their taxes. Thus the larger gold & silver coins come into play. I am sure that your local government is not going to turn down "real money"(see TnAndy I did learn something :happy0035 for your taxes etc. The smaller silver will be for your milk, bread, wheat etc.

The little bit of silver you are seeing now is probably where some kid has got into pa's silver and spent it for candy of coarse without his knowledge. My business goes through a lot of change in a week's time and I bet we dont find over 1 or 2 pieces of silver a month now. Most people have it figured out.

[rhome]

In a severe scenario where there are no coin/bullion shops or any internet trade available. Then IMHO you'll have much bigger concerns and worries than cashing out some of your stash.
In the same scenario I hope that folks will recognize the value of silver and gold coins for exchange of goods and services.

As always the circumstances you're having to cope with at the time have EVERYTHING to do with whether or not any of the forms of wealth you list will have any value.

Under one set of circumstances cash money as in a fist full of ten and twenty dollar bills may serve you better than a pocket full of Gold Eagles.

Under other circumstances the paper money may be literally worthless or at least steeply discounted while the Gold Eagle may get you everything you need. If you can find someone who recognizes it for what it is and is willing to deal with you honestly for it.

American silver coinage is still pretty widely recognized and if you are dealing with someone who has some idea of what the silver in that coin is worth chances are you'll be able to strike a deal.

Gold, in just about any form, is going to be harder to bargain with. You both have to find someone who knows how much the gold is worth, but also has some means of verifying that the coin(s) you are presenting are what you say they are. In the modern day most any coin dealer or gold broker should be able to satisfy themselves as to the veracity of your gold, but how many other people will be able to do that? At the present moment very few. As the scenario runs on more people would probably learn how to do this, maybe. The same is going to be true for silver bullion that isn't as readily recognizable as American silver coinage.

The circumstances of the moment have everything to do with how easy or hard it's going to be to deal with any form of precious metal, paper bills, or whatever. I'd have some of all of it if I could.

[Blu3duk]

Like any other trade, when two people strike a deal the exchange is made, if it does not suit you then you really are not obligated to exchange your metal for the goods offered or presented, f the presenter of the goods really wants your metal and is not offering enough then they will "sweeten" the pot so to speak or you "walk away" and find someone more to your liking...... same as you do today.

Most folks though today get in their rig, drive to the store and buy the items at the price that the market has placed upon them, they know not how to "deal", "dicker" or "haggle" for a better price. It is an art form to watch to hagglers "striking a bargain" some folks are better than others, if you are not good at it now, you at least have time to practice.

As far as trades go, I will trade for gold and silver bullion right now for the equipment i offer for sale, I know placer gold is not always pure, and that gets adjusted accordingly, but i also know how to refine it to near pure and have the equipment to do so. I like to go to yard sales and practice my skills for not paying as much as someone else wants, just like other folks come to our yard sales for the same reason..... it is fun now, but a skill needed for future trading such as the OP inquired about.

All precious metals are is another medium of exchange, but one recognized as holding certain values over the lifetime of nearly every civilization that has used them for trade. you stil cant eat them, but they give peace of mind to those who know that they are there for use should they need them in the future, they dont make any interest, but they dont lose anything to inflation either.

William
Idaho

[mightybooboo]

In Utah you can pay your taxes with em!
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http://www.thenewamerican.com/index....tender-in-utah

With Gov. Gary Herbert’s signature on March 25, the state of Utah became the first in recent times to officially accept gold and silver coins as legal tender at their true value, prompting praise from sound-money advocates warning about the future of the Federal Reserve System and its fiat money.
The "Utah Legal Tender Act," as the new law is known, “recognizes gold and silver coins that are issued by the federal government as legal tender in the state and exempts the exchange of the coins from certain types of state tax liability,” according to the bill. The law does not force anyone to accept or pay in precious metals, but rather provides the option for those who wish to do so voluntarily.

In essence, the bill legalizes currency competition in Utah by removing punitive state taxes on individuals and businesses trading in precious-metal coins. Among the taxes that federally minted gold and silver coins are now exempt from are state sales and capital gains. Federal taxes, however, still apply — despite the U.S. Constitution’s clear language stating that no state shall make anything except gold or silver a tender in payment of debts.

On top of the state-tax exemptions, the law also orders the revenue and taxation committee to study the possibility of adopting another form of legal tender for the state. After the study is completed the committee is instructed to offer recommendations and prepare legislation for the 2012 legislative session.

[yailukmuu]

If you're finding pre-1965 silver coins in pocket change, it's likely that it's a result of someone stealing it and not knowing better. This is what happened to most of my collection--my brother's friends would sneak into my mother's room where my collection was and steal anything that looked valuable--many did not understand that the 50 cent pieces were worth (in 1975) saving, because then, they really weren't.

Let’s look at a silver dollar, which was worth, well--$1 in 1964. Today you can buy one for $33 in fair condition. That’s a 3,300% increase already.

Now let’s consider historical episodes of hyperinflation, at the end of each I’ll try to estimate what a Morgan Silver dollar in fair condition’s value would be based upon these historical instances taken from Wikipedia.

Argentina 1983-1992: 1 (1992) peso = 100,000,000,000 pre-1983 pesos. 1 Morgan Silver dollar would be worth about $3,300,000,000,000

Austria: From 1914 to January 1923, the consumer price index rose by a factor of 11836, therefore using this model 1 Morgan Silver dollar would be worth about a paltry $390,588.

Brazil: A 1967 cruzeiro was, in 1994, worth less than one trillionth of a US cent, after adjusting for multiple devaluations and note changes. In that same year, inflation reached a record 2075.8%. 1 Morgan Silver dollar would be worth about (unable to figure this one out, I don’t have a scientific calculator).

Germany: Germany went through its worst inflation in 1923. In 1922, the highest denomination was 50,000 Mark. By 1923, the highest denomination was 100,000,000,000,000 Mark. In December 1923 the exchange rate was 4,200,000,000,000 Marks to 1 US dollar.[22] In 1923, the rate of inflation hit 3.25 × 106 percent per month (prices double every two days). Beginning on 20 November 1923, 1,000,000,000,000 old Marks were exchanged for 1 Rentenmark so that 4.2 Rentenmarks were worth 1 US dollar, exactly the same rate the Mark had in 1914. 1 Morgan Silver dollar would be worth about $4,200,000,000,000.

Hungary: It is the most severe known incident of inflation recorded, peaking at 1.3 × 1016 percent per month (prices double every 15 hours).[25] The overall impact of hyperinflation: On 18 August 1946, 400,000,000,000,000,000,000,000,000,000 or 4×1029 (four hundred octillion (short scale)) pengő became 1 forint. 1 Morgan Silver dollar would be worth about (I’m unable to calculate).

Mexico: In spite of the Oil Crisis of the late 1970s (Mexico is a producer and exporter), and due to excessive social spending, Mexico defaulted on its external debt in 1982. As a result, the country suffered a severe case of capital flight and several years of hyperinflation and peso devaluation. On 1 January 1993, Mexico created a new currency, the nuevo peso ("new peso", or MXN), which chopped 3 zeros off the old peso, an inflation rate of 10,000% over the several years of the crisis. (One new peso was equal to 1000 of the obsolete MXP pesos). The Morgan dollar had a bit more silver than the Mexican Peso, but not a lot more. Therefore the Morgan silver dollar would be worth, under this scenario, (which is probably the most practical one to look at) $33,000.

How worried are people about hyperinflation? Let me give you a real example. In 1980 I purchased a book called “The Penniless Billionaires” for about $5. Look for it on half.com or addall.com (book search engines) yesterday some were available for $300 to $700 though I see two today on half.com for ~$122, I shall sell mine and buy some Australian gold mining stock. Let’s see, that’s a 2200% increase from the $5 that I paid—I’m happy with that.

The concept may seem ludicrous and utterly impossible—but I assure you, it seemed the same to the average Jane in any of these historic episodes. Keep in mind it is not that the value of the silver dollar rises, it does not, it’s that the value of the underlying fiat currency falls.

The Silver dollar will still get you about 6 gallons of gas, even if gas is $5000/gallon. A dime will still get you a pound of hamburger, even if the farmer is not supposed to sell it to you. That's the kicker.

[yailukmuu]

Originally Posted by mightybooboo

In Utah you can pay your taxes with em!
-----------------------------------------

http://www.thenewamerican.com/index....tender-in-utah

With Gov. Gary Herbert’s signature on March 25, the state of Utah became the first in recent times to officially accept gold and silver coins as legal tender at their true value, prompting praise from sound-money advocates warning about the future of the Federal Reserve System and its fiat money.

Please correct me if I'm wrong, and I admit, I may be, but I suspect this is all smoke and mirrors.

The "true value" of an American Eagle gold coin is $50. I'll take as many as you want to give as long as you two for each $100 bill.

Look up the "Liberty Dollar" online, and you will find (from Wikipedia):

"The Liberty Dollar (ALD) was a private currency produced in the United States. The currency was embodied in minted metal rounds similar to coins, gold and silver certificates and electronic currency (eLD). ALD certificates are warehouse receipts for real gold and silver formerly owned by ALD certificate holders. The metal was warehoused at Sunshine Minting in Coeur d'Alene, Idaho prior to a November 2007 raid by the Federal Bureau of Investigation (FBI) and the Secret Service.[1] Until July 2009, the Liberty Dollar was distributed by Liberty Services (formerly known as NORFED), based in Evansville, Indiana. It was created by Bernard von NotHaus, the co-founder of the Royal Hawaiian Mint Company.[2] In May 2009, von NotHaus and others were charged with federal crimes in connection with the Liberty Dollar and, on July 31, 2009, von NotHaus announced that he had closed the Liberty Dollar operation, pending resolution of the criminal charges.[3] On March 18, 2011, von NotHaus was found guilty on various counts, including the making of counterfeit coins."

Von NotHause I believe was sentenced to 15 years in prison, and none of these coins or notes in any way tried to come off as US money...

So yes, a person can use gold or silver eagles, but please tell us, can they pay their, for instance $1200 property tax bill with one $50 Gold Eagle, or will they need to give the property tax people 24 coins worth $33,600. If it is the latter, then there is my comment on "smoke and mirrors."