Gold and silver - how much?

Discussion in 'Vault' started by PACrofter, Dec 9, 2005.

  1. PACrofter

    PACrofter Well-Known Member

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    I've seen recommendations on this board and elsewhere that one should lay aside some gold and / or silver in case TSHTF. That seems to make sense to me.

    What I've never seen discussed, though, is how much to set aside, or in what denominations. It seems that if you were to stock up on 1 oz gold coins, and then try to buy a few eggs after TSHTF, you'd have trouble getting change (or you'd be buying some pretty expensive eggs).

    Any rules of thumb for deciding how many 1/10 oz or 1/2 oz gold coins versus 1 oz silver coins versus junk silver (pre-1964) US coins to set aside? Other than "as many as you can", of course.

    I've priced out the different options online and there's a pretty big premium for the smaller-denomination gold coins or even silver 1 oz coins. Last night this premium seemed to range from 10% for the 1 oz gold Maple Leafs to about 25% for the silver 1 oz coins.

    That means that a 1 oz Maple Leaf gold coin is selling for $577 when gold is selling for $526.30 per ounce (a 9.6% premium). Pretty steep, it seems, but silver is even worse - a 1 oz American silver eagle sells for $11.25 while silver sells for $8.99, a 25.1% premium. (These numbers came from www.ccsilver.com.)

    So it seems you have to weigh the higher price of smaller coins against the convenience you'd get from the smaller values.

    Thoughts? Recommendations?
     
  2. Qwispea

    Qwispea Well-Known Member

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    First of all..What do you mean by TSHTF? I know what the letters stand for..so don't tell me that..just tell me what your definition is of that scenario? Exactly how bad does it have to be in order to be considered TSHTF?

    Second..are you asking for advice on how to invest money in silver or gold in order to make a profit? Or are you thinking that things will get so bad that the only thing of value will be precious metals and you want to know how much to stockpile?
    Well, I'd say if you want to invest and make a profit..then you should buy as much gold today as you can afford while the price is still rising..and sell quickly..and with the profit..buy more if the price is still rising..and sell quickly..etc.
    But if you want to know how much gold to stockpile at $530 an ounce just so you'll be able to buy a few eggs? Well..like many have said on this forum..the silver or gold ain't going to save anybody if it gets so bad that nothing else has any value. Seriously..come on..if it gets to that condition..then the bad guys with the guns are going to be actively hunting for the people with the gold and the eggs.

    Please consider what I've said..and help me understand how bad it has to be before its considered "TSHTF".
     

  3. LittleJohn

    LittleJohn Well-Known Member

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    Well some years ago thir was an article in the now defunct "American Survival Guide" on making money with gold and silver. The guy writing it claimed to make more tradeing his metals back and forth than you can make in a bank CD. I dont remember who wrote it or what the ratios were but his idea was when they hit certain ratios trade (I think) 90% of your metal in for the favored metal whether it was gold or silver. I wish I could remember the ratios anyone here remember? Anyway right now its obviously in favor of silver at 58.5 to 1! That is obviously a very high ratio especialy considering that silver is used more in industry and if you have the pure stuff you can even use it to make coloidal silver. So in short I would buy mostly if not all silver right now. Looks like a great investment at present for many reasons.
     
  4. PACrofter

    PACrofter Well-Known Member

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    Qwispea, I'm not going to define TSHTF because there are so many variations on that theme that it would be pointless. For some the S has already HTF, for others we're starting down that slippery slope, and others wouldn't recognize it if it hit them upside the head. It's all a matter of perspective (reminds me of the Supreme Court's definition of pornography).

    I would expect to rely on gold and silver as a medium of exchange (which may address your question) in many different scenarios. For example: if fiat money becomes worthless - which could be in a case of hyperinflation; if I wanted to conduct a transaction this afternoon that I don't want anyone to be able to trace; if I wanted to deal with someone else who didn't want the transaction to be traced; or if we suffered some sort of catastrophic viral infection that disrupted transportation routes and shut down all normal commerce (bird flu, anyone?). However, I guess I'm making an implicit assumption that trade will have resumed and thus that conditions will have stabilized, so I'm not talking about a situation where a diamond ring will buy a slice of bread. It's more like the end of Farnham's Freehold than the part of The Good Earth where all hell has broken loose and there's nothing to be bought for any amount of gold.

    To clarify my original post, though, I certainly don't intend to make any money dabbling in precious metals. If I wanted to profit from the increasing price of gold I'd be buying options and futures on the metal itself, or buying the stock of mining companies. To me, those are different activities than buying the metal itself for its intrinsic value; the transaction costs involved make it difficult to profit from the small amounts I'd be able to invest.

    By the way, if / when it *does* happen, I intend to be the one selling the eggs, not buying them. I expect that the bad guys with the guns will already be hunting me when that time comes anyway. (Plan for the worst, hope for the best.) I've got the food, shelter and defense issues settled and now I'm working on less important stuff, like engaging in trade with others. Hence my question.
     
  5. Qwispea

    Qwispea Well-Known Member

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    Thank you Donal for your very polite reply..I much appreciate your mature response.

    I can let you know what I think about when I hear the term "TSHTF"..and its a scenario much like I hinted at when I said the bad guys with guns will be actively hunting those who hold the gold and the eggs. I also think that if it gets so bad..there will come the time when gold will be worthless..nothing safe to eat or drink..and people will know the end is near..and what good will all the gold do when everyone is facing certain death anyway.

    Basic survival has NEVER depended upon gold..it has always depended upon having enough food and water..and upon shelter. If/When it gets so bad that TSHTF..I highly doubt that people will calmly walk down the street looking for a vendor willing to trade gold for eggs.

    Anyway..not knocking your original post..its just that I've seen such staunch defenders of gold as a means of survival..and to me..gold (or any other precious commodity) is a means of financial wealth..and has nothing to do with basic survival.

    And I do agree that gold will likely be very beneficial when fiat money becomes worthless. But when fiat money becomes worthless..that is not my definition of 'TSHTF'..because such scenarios as "worthless money" has happened countless times in the past..even during our own memory.
     
  6. TnAndy

    TnAndy Well-Known Member Supporter

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    Donal,

    You are quite right.....there are MANY possible SHTF possiblities.....bird flu, an nuke attack by another country, even an asteroid dropping out of space.

    But the most likely thing to happen in the future in my fogged crystal ball is the FederalReserveNote becomes more and more worthless, since the Fed seems determined to print as many of them as the govt and public is willing to go in debt to accept ( and that seems unlimited )....which means they are going to go down in value, a fact the rest of the world seems to recognize even if we don't. The thing I see different about the FRN going to nothing is it is nearly a predictible and likely event.....much more so that a nuke war or bird flu.....so it pays to have some preparations in that direction.

    Now, to Quispea, that doesn't qualify as a 'true SHTF'...and that's fine, we can all define it in our own way.......but I think IF bread suddenly costs 25FRNs/loaf, it will bring out the worst in folks.....folks that didn't have anything to start with, but also folks that saved all their lives and have that savings in FRNs or something that doesn't keep pace with runaway inflation. Social chaos will likely result.

    Some precious metals in this case may well make a difference....if nothing else, just to be able to pay your property taxes so you don't loose your place to the taxman.


    And, Donal....if your intents are NOT to 'play' the metals market, then the dealer premium over the costs almost makes no difference....you are buying and holding for REAL rainy day. Along that line, you'll find SA Kuggerands have the lowest premium for gold coin, and I'd go ( and have ) with 90% US coin for my silver holdings.

    Hanes Tulving has 90% bags for 7 cents an ounce over spot right now.....and 65-69 40% Kennedy halves for 3 cents under spot.

    http://www.tulving.com/goldbull.html
     
  7. mightybooboo

    mightybooboo Well-Known Member

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    Advice is 10% of assests in metal.

    Prices from www.ajpm.com

    Key to Terms used

    Buy Price = We "Buy" from you.

    Sell Price = We "Sell" to you.
    --------------------------------------------------------------------------------THIS IS PRICES WITH GOLD AT 527.10------------------------

    American Eagle Buy Sell
    33.9 grams
    22 karat
    Buy Sell
    1 oz 537.00 547.00
    1/2 oz 270.05 281.05
    1/4 oz 135.18 144.18
    1/10 oz 52.71 58.21


    Canadian Maple Leaf Buy Sell
    31.1 grams
    24 Karat
    BUY Sell
    1 oz 531.00 544.00
    1/2 oz 270.05 281.05
    1/4 oz 135.18 144.18
    1/10 oz 52.71 58.21

    South African
    Krugerrand Buy Sell
    33.9 grams
    22 Karat
    Buy Sell
    1 oz 521.00 533.00

    BooBoo<------Golden Dog,WOOF!
     
  8. edcopp

    edcopp Well-Known Member

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    The problem will have as many answers as there are people. Logically the amount to be invested in gold would be part of ones savings. Today most Americans do not save anything, so the problem solves itself. :buds:

    Now if you have some money saved in cash, the reccomendation will range from 5% to 20% depending on who is talking, and what they sell.

    It seems important to consider why we would be holding metals. Some hold gold for very long term, like the grandchildrens children. So that would be one amount, and placed where it might easily survive any problems. Seems to me that no more than 5% of ones cash should be invested like this. In a deep hole. In a secret place.

    I think that junk silver would be very good for most transactions needed for day to day living. Things like food, fuel, and energy could be bought with small silver coins. Larger purchases could be made with larger coins, or bags if necessary. Gold coins could be involved here too. The gold coins could make major purchases, and may also be needed for bribes and ransom payments.

    So I would think that 10% junk silver, 5% gold coins on hand, and 5% gold buried deep and secret would be a nice mix. Most Americans have nothing saved, so they will not have to think at all. :shrug:
     
  9. Hip_Shot_Hanna

    Hip_Shot_Hanna Well-Known Member

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    The only problem I have with using gold to purchase or trade in difficult times is that there will be those that watch and notice what you are doing. I don't like the idea of being followed home and being robbed/killed. I don't know how to solve that particular problem either. I doubt I'll be living in a fortified retreat with enough manpower to solve that difficulty. Guess I'll have to hope that barter will be sufficient in such a scenario.
     
  10. PACrofter

    PACrofter Well-Known Member

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    Qwispea, the definition you give of TSHTF would definitely make precious metals irrelevant! And I couldn’t agree with you more about how useful metals are when you’re hungry and there’s nothing to be had at any price. Like I said, I’m thinking more of less-drastic TSHTF scenarios, and I’ve been more concerned in the past with the real survival issues like food, shelter and defence. Now I think it's time to expand to include other issues.

    TnAndy, you make a good point about the irrelevance of the premium, since I’m not speculating in the metals. I guess what it boils down to is that I’m cheap! Thanks for the pointer on the Kruggerands and the tulving web site. I’ll look into both.

    Mightybooboo, thanks for the pointer to that web site. I’ll be checking that too.

    Edcopp, you make good points about savings (or lack thereof, for many Americans) and the use of junk silver. I think I’ll look into some of that. I should probably consider keeping some of my savings in regular FRNs for ‘normal’ uses (i.e., decoy) but make metals part of my regular savings program.

    Hip Shot Hanna – I share your concern, and hope that barter will work too. Let’s hope we never have to find out!
     
  11. mamakatinmd

    mamakatinmd Well-Known Member

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    check out www.kitco.com. They've been around for 30 years. Most web sites are quoting their graphs. They will sell you metal cheap. They have pool accounts which will let you hold metal in their pool without the coinage fees. You can cash out in any currency you wish. They are a Canadian company which does not report it's sales or purchases to any goverment agency.
     
  12. BigBoy

    BigBoy No attitude here...

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    Here is my reply from an earlier post...

    "Just like most, I like my investments and all is good as long as the 'system' is in place but when it gets down to it, if everything went south tomorrow then gold is nothing more than yellow metal. And, for most gold investors, a yellow metal that someone else actually has possession of.
    In a worst case scenario, only real goods and know-how are really worth anything."
     
  13. mightybooboo

    mightybooboo Well-Known Member

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    Why did the government call in the Gold during the depression?
    Because it was the ONLY money that had TRUE value.If not so then why did they call it in? Hmmmm????


    As always,things really hit the fan in occupied Europe,yet Gold still traded.For anything you wanted.Right down to buying your life,and buying food,even when The Jews were in hiding,gold bought food.I dont foresee any situation tougher than that.

    BooBoo
     
  14. Qwispea

    Qwispea Well-Known Member

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    mightybooboo,
    ..its all a matter of perspective..whether insightful speculation..or merely fanatical conjecture.

    Yes..gold does have value..always has had..and in the right time and the right place..will continue to have value. I've repeated this over and over again throughout the past couple of weeks..but who is listening.

    Again..gold has value..but it ain't gonna save anybody..and for you to equate the value of gold to the holocaust is a bit of a stretch..and perhaps downright unethical. In fact..gold got a lot of people killed..painfully killed.


    But because of the talk I've seen on this forum the past couple weeks..I'm now thinking about promoting the heck out of gold..but not for the reason of survival..but because I'm now thinking of buying a lot more..and then dumping it when the market peaks. Nothing like promoting a precious metal in order to scare the behind off of folks into buying something that may do very little to help them when they really need it.

    But oh well..gold fever could become as contagious now as ever..depending upon how scared the folks are.

    Tell me..who would be the prime target to sell gold at huge profits??? Or would you suggest just buying huge hoards of it and waiting for the end of times..and then cash in?

    (BTW: Paper currency bought far more food during the WWII time period than did gold..including food for those in hiding. And I'm not touting paper currency either..just stating a fact that you conveniently left out.)
     
  15. TnAndy

    TnAndy Well-Known Member Supporter

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    If you're refering to the dollar, at that time, the dollar could be redeemed by governments for gold, and by the average cititzen for silver. It had backing.

    Not the case today.....faith based only now.

    How long will that faith last in a crisis ? Not long I suspect......in fact, since gold is up 12 greenbacks this morning, I suspect the faith is getting to be less all the time.
     
  16. Hip_Shot_Hanna

    Hip_Shot_Hanna Well-Known Member

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    Read the above article , from a company that advises others how to invest , they are expecting the STHTF , and are doing whet they can to protect their investors funds ,
    Gold has gone UP $70 since the second week of November , that would be front page news if it were ANY companie's share price , the savy people are positioning themselves to ride out a storm !
     
  17. mightybooboo

    mightybooboo Well-Known Member

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    And the beat goes on,539 right now.

    Say what you will,accept the truth,GOLD is marching away right now.Dont know when its going down,do know its going up NOW,BIGTIME.

    Not bad for a worthless substance.Looks like a good investment now.At least if you buy low and sell high,which is the point of investing,isnt it?

    If you had bought,instead of telling me how wrong I am,you would have made money.

    BooBoo<---Who can see a trend,and isnt too pigheaded to admit it when he does.And tries to point it out for others to do the same.
     
  18. mightybooboo

    mightybooboo Well-Known Member

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    put the link in body as

    www.safehaven.com/article-4242.htm
     
  19. mightybooboo

    mightybooboo Well-Known Member

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    I liked the part where FDR devalued the dollar 44%.

    Not that everything isnt pointing to another meltdown.
    Sure wouldnt want worthless gold when that happens,now would we.

    BooBoo
     
  20. Hip_Shot_Hanna

    Hip_Shot_Hanna Well-Known Member

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    gold has never been worthless if the worst comes to the worst you can use it as amunition , its heavy enough :cool: , paper money i spose has a use, hung behind the out house door ,
    There will allways be someone willing to trade you something for gold , I give you If the SHTF for the first 6 months nothing will have value , including life , after the die off in the cities, things in the rest of the country will stabalise and there will be a need of a currency and silver and gold will be it .