The Money Mustache Community

Learning, Sharing, and Teaching => Investor Alley => Topic started by: joer1212 on July 20, 2015, 03:04:09 PM

Title: Gold & Silver in an Emergency
Post by: joer1212 on July 20, 2015, 03:04:09 PM
I am thinking of purchasing a couple of thousand dollars worth of gold and silver coins, which I would keep safeguarded in my home. They would come in handy in the unlikely event of a Greek-style situation or other temporary crisis, when people tend to honor things that have inherent value. 
But even if Armageddon never occurs, gold and silver are a good investment. They increase in value at roughly the rate of inflation in the long run. This is about 3% annually. That's a lot more than what my savings account is yielding, so, it makes sense to keep at least a portion of my liquid assets in these metals.*

My questions are:

1. First of all, is owning coins the best way to hold precious metals? Are there other forms that are better (bars, plates, jewelry, etc.)? Pardon the pun, but what is the gold standard for gold and silver?

2. Is the U.S. mint the best place to buy gold and silver (coins)?
(Some preppers and conspiracy theorists claim that purchasing gold online from the U.S. mint would result in Uncle Sam kicking your door down and confiscating your coins during a crisis. They say it's better to purchase coins with cash from a local dealer, so that the transaction is secret. This sounds a bit far-fetched to me (but who knows?). I would worry more about being ripped off by a shady local dealer than anything else.

3. Let's say that, for whatever reason, I wanted to cash out some or all of my coins at some point. Where would I sell them, and how much of a financial loss would I incur by doing this? I'm assuming I wouldn't be able to cash out my coins at the going price per ounce of gold and silver. The person or institution buying my coins would have to make a profit on the transaction, and thus would offer me less than what my coins are worth. 

I figured that many of you Mustachians can think outside the box, and would be knowledgeable about alternative investments.

Thoughts?




*I already own a diversified investment portfolio of stocks and bonds


P.S. These are the coins I am considering purchasing:

http://catalog.usmint.gov/2015-american-eagle-one-tenth-ounce-gold-proof-coin-PM4.html?cm_mmc=Google-_-PLA+-+Everything+Else-_--_-&mkwid=sxnbmFI2x&crid=81775672273&mp_kw=&mp_mt=&pdv=c&gclid=CILhgs_J6sYCFQoTHwod4LwIhw

http://catalog.usmint.gov/american-eagle-2015-one-ounce-silver-proof-coin-ES6.html?cm_mmc=Google-_-PLA+-+Everything+Else-_--_-&mkwid=sCjL9GkZh&crid=81775487713&mp_kw=&mp_mt=&pdv=c&gclid=CNHa2-rJ6sYCFYiPHwodidMNhQ
Title: Re: Gold & Silver in an Emergency
Post by: nobodyspecial on July 20, 2015, 03:07:46 PM
What sort of emergency would make the US$ worthless and yet leave a market willing and able to trade large denomination gold coins?

Title: Re: Gold & Silver in an Emergency
Post by: forummm on July 20, 2015, 04:12:39 PM
A Greek style situation is impossible here. We have our own currency. And holding lots of metal is a theft risk and will lose value relative to bonds or equities.
Title: Re: Gold & Silver in an Emergency
Post by: maizefolk on July 20, 2015, 07:54:42 PM
Everything else aside that's a really really bad price for gold! (Edit: for me at least, the link in the original post shows a price of $170 per 1/10th oz gold coin.)

Gold is currently trading at ~$1,100/oz and 1/10th oz gold coins can be easily found from reputable dealers for prices between $125 and $135. So building 1/10th oz gold American Eagles from the US mint means overpaying by ~30% relative to other 1/10th oz coins and overpaying by 54% above the spot price.
Title: Re: Gold & Silver in an Emergency
Post by: Retire-Canada on July 20, 2015, 08:39:15 PM
I figured that many of you Mustachians can think outside the box, and would be knowledgeable about alternative investments.

Thoughts?

That sounds like a crazy plan.

If you were stock piling shotguns and chainsaws I'd be more supportive.

If banks run out of cash who is buying your coins and with what?
Title: Re: Gold & Silver in an Emergency
Post by: joer1212 on July 21, 2015, 01:36:06 AM
Everything else aside that's a really really bad price for gold! (Edit: for me at least, the link in the original post shows a price of $170 per 1/10th oz gold coin.)

Gold is currently trading at ~$1,100/oz and 1/10th oz gold coins can be easily found from reputable dealers for prices between $125 and $135. So building 1/10th oz gold American Eagles from the US mint means overpaying by ~30% relative to other 1/10th oz coins and overpaying by 54% above the spot price.

Thanks.
I wasn't going to actually purchase these without first doing my homework about the going rate for gold. But, now that you mention that these coins are overpriced, I will look elsewhere.
It appears as if the U.S. Mint is charging a premium due to the designer appeal of these coins. Is there a cheaper, more efficient way to hold gold? Perhaps small, plain gold bars that have less sex appeal than coins, and thus a more reasonable price tag?
Title: Re: Gold & Silver in an Emergency
Post by: joer1212 on July 21, 2015, 01:50:40 AM
Quote
That sounds like a crazy plan.

If you were stock piling shotguns and chainsaws I'd be more supportive.

If banks run out of cash who is buying your coins and with what?


If SHTF, it would come down to a barter economy (at least temporarily).

I'm aware that my plan sounds crazy, but I bet the same thing was said about the likelihood of the Cretan government confiscating people's bank deposits. Having some physical precious metals in that situation would definitely not hurt.
 
Title: Re: Gold & Silver in an Emergency
Post by: mrpercentage on July 21, 2015, 01:55:24 AM
I have debated this and am not sure it would help.

Can you really imagine going to the grocery store and buying some food with silver. Would the cashier care? Would the manager of a corporate store except anything other than dollars?

You might be able to trade some for the hyper inflated money still being accepted.

If anything if you want to prepare for an emergency of epic proportions then food (not gold) would be the best idea. I bet you can buy enough spaghetti noodles and sauce cans to feed yourself for a month under a hundred bucks. Sure, it might suck, but you won't be starving. Hell, you might be trading some spaghetti for gold. Imagine that.

When society starts falling valuing goes in human needs. Clean water, food, shelter-- then the rest.
Title: Re: Gold & Silver in an Emergency
Post by: joer1212 on July 21, 2015, 02:06:24 AM
A Greek style situation is impossible here. We have our own currency. And holding lots of metal is a theft risk and will lose value relative to bonds or equities.

I already have the lion's share of my net worth in equities and bonds. Gold and silver would be for liquidity and accessibility, not to compete with stocks & bonds. That's not their purpose. It's the same principle for holding cash-- it doesn't have nearly the return of equities, but it definitely has a place in your investment portfolio.
Title: Re: Gold & Silver in an Emergency
Post by: joer1212 on July 21, 2015, 02:20:04 AM
I have debated this and am not sure it would help.

Can you really imagine going to the grocery store and buying some food with silver. Would the cashier care? Would the manager of a corporate store except anything other than dollars?

You might be able to trade some for the hyper inflated money still being accepted.

If anything if you want to prepare for an emergency of epic proportions then food (not gold) would be the best idea. I bet you can buy enough spaghetti noodles and sauce cans to feed yourself for a month under a hundred bucks. Sure, it might suck, but you won't be starving. Hell, you might be trading some spaghetti for gold. Imagine that.

When society starts falling valuing goes in human needs. Clean water, food, shelter-- then the rest.

Aside from any doomsday scenario, I still think a small allocation to physical precious metals makes sense.
As I mentioned in my original post, gold & silver appreciates by roughly 3% annually over the long term. That's not bad for a cash-like asset. This pretty much matches the returns of a stable value fund.
I should also point out that I would be purchasing precious metals with cash that would otherwise just be sitting in my checking account earning virtually nothing. I would not be cashing out from stocks or bonds in order to buy gold & silver. My equities & bonds would remain intact. Therefore, you should judge the merit of holding precious metals in lieu of cash (I would convert about 15%-20% of cash into precious metals).
Title: Re: Gold & Silver in an Emergency
Post by: seattlecyclone on July 21, 2015, 02:29:49 AM
In the extremely unlikely event that our currency becomes worthless and we start trading precious metals for goods and services, I would much rather hold silver than gold. An ounce of gold is worth over $1,000, while an ounce of silver is worth more like $15. I don't know about you, but I spend $15 a lot more often than I spend $1,000. Silver would be more useful as a medium of exchange for everyday purchases. You can get tenth-ounce gold coins like the ones you linked above, but you should be aware that they're really small (slightly smaller than a dime)! Way too easy to lose.

Also you should consider that while silver and gold have historically tracked inflation pretty well, they've gone way up over the past few years and have not yet reverted to the mean. By buying now, you may be setting yourself up for some price declines. Or maybe not! Nobody knows.
Title: Re: Gold & Silver in an Emergency
Post by: kaposzta on July 21, 2015, 03:22:37 AM
Actually, it's not a bad idea to start gathering precious metals in physical form, especially silver. It can be a great investment in 15-20 years, as silver supplies run out in 2029.

Can you pay with silver or gold coins in the US?

In Hungary (and in theory), all silver and gold coins issued by the national bank are legal tender. I can't even imagine the face of the cashier in a grocery store if I would pay with a silver coin like this: http://penzvero.hu/content/prodpics/front/1128.jpg :D
Title: Re: Gold & Silver in an Emergency
Post by: brotatochip on July 21, 2015, 04:09:53 AM
Jmbullion.com
This is the best place to buy silver and gold trust me!  I own several hundred ounces of silver bullion and this site has the best prices.  Silver is so cheap so start stacking
Title: Re: Gold & Silver in an Emergency
Post by: money_bunny on July 21, 2015, 05:07:15 AM
You can use gold to buy stuff once. Then someone is going to come to your house with guns and take the rest of it from you.

There are people who keep gold jewellery and watches on-hand so if the USA becomes hostile to them they can get on a plane and rebuild elsewhere wearing some of their wealth out of the country. 

Food, water, basic medicines, a 30 day supply is a better choice if you are worried about a Greek style crisis. Not needing gasoline every 3 days to 1 week like after Sandy would help also.
Title: Re: Gold & Silver in an Emergency
Post by: kpd905 on July 21, 2015, 05:14:29 AM
Imagine that this crisis goes on and everyone around you is hungry.  Would they rather have a pile of gold coins ($10,000 worth) or one loaf of bread?
Title: Re: Gold & Silver in an Emergency
Post by: boarder42 on July 21, 2015, 06:13:47 AM
WTF is up with all the armaggedon threads recently.  There is one over in ask a mustacian too.  for the life of me i do not understand this irrational fear.  I me if life as we know it ends for any reason stock market crash, hit by a large space object, aliens.  etc. gold isnt going to help you.  if its anything but the first one who the hell cares to stay alive.  Why live out your days in an underground bunker.  I dont quite understand how you can have a logical thought and understand FIRE.  But are so illogical in these disaster ideas.  if you live in a place common to typical natural disasters i could see being prepared for these but to prepare for something so astronomically small in possiblity just seems dumb to me.

Live life save money retire early.

Lets do a scenario involving said doomsday in the market  - 2025

OP:  - bought gold coins/ silver - Pushed retirement to 2030
OP2: invested money in smart index funds - retires in 2020

OP now has tons of worthless gold b/c no one wants it bc food is more important.  and has been living in fear of colapse for 15 years
OP2 enjoyed 5 years of retirement and had a happy life leading up to it. 

Post crash op and op2 are likely in similar places still.

which would you rather be. 
Title: Re: Gold & Silver in an Emergency
Post by: I'm a red panda on July 21, 2015, 06:51:08 AM
All I know is that I have some of my Roth IRA in Gold/Silver funds and OMG, the value of them makes me want to cry.  We have a "sell" price in mind (still just a fraction of its value at its highest point), and now I wonder if it will ever get that high again.

So now sure seems like a good time to buy; but I wouldn't recommend it as an investment, just way too volatile.
Title: Re: Gold & Silver in an Emergency
Post by: mrpercentage on July 21, 2015, 07:29:43 AM
WTF is up with all the armaggedon threads recently.  There is one over in ask a mustacian too.  for the life of me i do not understand this irrational fear.  I me if life as we know it ends for any reason stock market crash, hit by a large space object, aliens.  etc. gold isnt going to help you.  if its anything but the first one who the hell cares to stay alive.  Why live out your days in an underground bunker.  I dont quite understand how you can have a logical thought and understand FIRE.  But are so illogical in these disaster ideas.  if you live in a place common to typical natural disasters i could see being prepared for these but to prepare for something so astronomically small in possiblity just seems dumb to me

There is nothing dumb about reasonable preparation.
$100 of cheap long term storage food is reasonable. Imagine if the U.S. froze all bank transactions and ATM withdrawals for 2 weeks. Would you be cool? Or would you be saying WTF how do I eat? How do I buy gas to get to work? It's a good idea to have $300 stored somewhere in your house too. It's not like people are breaking in left and right is it? New Orleans, LA Riots, earthquakes, gas rationing, shit happens. A little silver or gold can be a good investment when threat of inflation looms near. We do have a strong dollar and we buy low right? Depends on what you want the silver for. If it's for disaster buy food and store cash
Title: Re: Gold & Silver in an Emergency
Post by: FLBiker on July 21, 2015, 07:53:35 AM
I used to be pretty doomsday, but I was never interested in precious metals.  If the SHTF, I don't want silver or gold, I want canned goods, water, sewing needles, etc.  To me, it would make more sense to stockpile a grand or two of stuff like that.

That said, I've gotten a lot less doomsday over the last couple of years (which I attribute more to meditation than to any changes in the geo-political landscape).
Title: Re: Gold & Silver in an Emergency
Post by: Scandium on July 21, 2015, 10:36:51 AM
Food, water, basic medicines, a 30 day supply is a better choice if you are worried about a Greek style crisis. Not needing gasoline every 3 days to 1 week like after Sandy would help also.

The Greece situation seems to be a nice poster boy for the gold/prepper crowd. "OMG look; they closed the banks!" Yeah, for all of three weeks, and the EU was already discussing humanitarian aid to Greece. And greece has been a well-known basket case for half a decade. Plenty of time to prepare. I really don't see that as a great reason to hoard either gold, guns or canned food (beyond 72 hrs or so of foood and water).

If I have a basement full of spaghetti Os and you come with your $10,000 gold bar I'll laugh in your face. 
Title: Re: Gold & Silver in an Emergency
Post by: joer1212 on July 21, 2015, 10:43:51 AM
Imagine that this crisis goes on and everyone around you is hungry.  Would they rather have a pile of gold coins ($10,000 worth) or one loaf of bread?

True, but the same can be said for pieces of paper with dead presidents on them. They have virtually no inherent value. We choose to assign value to currency for convenience. In a crisis, Gold & silver would become the new proxy for value, just like money is now, though I doubt this would ever happen.
Title: Re: Gold & Silver in an Emergency
Post by: joer1212 on July 21, 2015, 10:57:04 AM
WTF is up with all the armaggedon threads recently.  There is one over in ask a mustacian too.  for the life of me i do not understand this irrational fear.  I me if life as we know it ends for any reason stock market crash, hit by a large space object, aliens.  etc. gold isnt going to help you.  if its anything but the first one who the hell cares to stay alive.  Why live out your days in an underground bunker.  I dont quite understand how you can have a logical thought and understand FIRE.  But are so illogical in these disaster ideas.  if you live in a place common to typical natural disasters i could see being prepared for these but to prepare for something so astronomically small in possiblity just seems dumb to me.

Live life save money retire early.

Lets do a scenario involving said doomsday in the market  - 2025

OP:  - bought gold coins/ silver - Pushed retirement to 2030
OP2: invested money in smart index funds - retires in 2020

OP now has tons of worthless gold b/c no one wants it bc food is more important.  and has been living in fear of colapse for 15 years
OP2 enjoyed 5 years of retirement and had a happy life leading up to it. 

Post crash op and op2 are likely in similar places still.

which would you rather be.

I actually agree that a doomsday scenario is very unlikely in America. A temporary disruption (similar to Greece or Crete) is more plausible.
But that's not the primary reason for holding physical precious metals. I think they would add excellent diversification in one's portfolio. Keep in mind that PM would replace a portion of one's cash allocation. You would not buy PM in lieu of equities and bonds, but in addition to them.
For example, if you have 10% of your portfolio in cash (savings/checking account, CD's, etc.), gold & silver could replace a portion of this (e.g. 2%-5% PM).
If I recall correctly, Harry Browne's Permanent Portfolio calls for a 25% allocation in physical gold, though that may be a bit high, IMO.
Title: Re: Gold & Silver in an Emergency
Post by: 2Birds1Stone on July 21, 2015, 10:57:33 AM
Actually, it's not a bad idea to start gathering precious metals in physical form, especially silver. It can be a great investment in 15-20 years, as silver supplies run out in 2029.

Can you pay with silver or gold coins in the US?

In Hungary (and in theory), all silver and gold coins issued by the national bank are legal tender. I can't even imagine the face of the cashier in a grocery store if I would pay with a silver coin like this: http://penzvero.hu/content/prodpics/front/1128.jpg :D

LOL, silver is not "running out" any time soon. It is predominantly a byproduct of mining other metals. That being said, I have a huge physical position myself. But for different reasons. 
Title: Re: Gold & Silver in an Emergency
Post by: joer1212 on July 21, 2015, 11:08:09 AM
You can use gold to buy stuff once. Then someone is going to come to your house with guns and take the rest of it from you.

There are people who keep gold jewellery and watches on-hand so if the USA becomes hostile to them they can get on a plane and rebuild elsewhere wearing some of their wealth out of the country. 

Food, water, basic medicines, a 30 day supply is a better choice if you are worried about a Greek style crisis. Not needing gasoline every 3 days to 1 week like after Sandy would help also.

I agree. In a crisis, those that have the means to enforce their will will thrive. The guy with the gun makes the rules, not the guy with the gold!
That said, I am well prepared for this possibility.
Title: Re: Gold & Silver in an Emergency
Post by: Scandium on July 21, 2015, 11:14:24 AM
Imagine that this crisis goes on and everyone around you is hungry.  Would they rather have a pile of gold coins ($10,000 worth) or one loaf of bread?

True, but the same can be said for pieces of paper with dead presidents on them. They have virtually no inherent value. We choose to assign value to currency for convenience. In a crisis, Gold & silver would become the new proxy for value, just like money is now, though I doubt this would ever happen.
[citation needed]
Title: Re: Gold & Silver in an Emergency
Post by: joer1212 on July 21, 2015, 11:15:33 AM
In the extremely unlikely event that our currency becomes worthless and we start trading precious metals for goods and services, I would much rather hold silver than gold. An ounce of gold is worth over $1,000, while an ounce of silver is worth more like $15. I don't know about you, but I spend $15 a lot more often than I spend $1,000. Silver would be more useful as a medium of exchange for everyday purchases. You can get tenth-ounce gold coins like the ones you linked above, but you should be aware that they're really small (slightly smaller than a dime)! Way too easy to lose.

Also you should consider that while silver and gold have historically tracked inflation pretty well, they've gone way up over the past few years and have not yet reverted to the mean. By buying now, you may be setting yourself up for some price declines. Or maybe not! Nobody knows.

Interesting point, and one that I've heard mentioned before by at least one prepper.
He also mentioned that silver would rise much more than gold when equities are beaten down, which means it would be an excellent portfolio diversifier.
Title: Re: Gold & Silver in an Emergency
Post by: joer1212 on July 21, 2015, 11:17:14 AM
Imagine that this crisis goes on and everyone around you is hungry.  Would they rather have a pile of gold coins ($10,000 worth) or one loaf of bread?

True, but the same can be said for pieces of paper with dead presidents on them. They have virtually no inherent value. We choose to assign value to currency for convenience. In a crisis, Gold & silver would become the new proxy for value, just like money is now, though I doubt this would ever happen.
[citation needed]

OK, I concede that I should have said gold and silver could become the new proxy for value.
Title: Re: Gold & Silver in an Emergency
Post by: Scandium on July 21, 2015, 11:25:13 AM
Imagine that this crisis goes on and everyone around you is hungry.  Would they rather have a pile of gold coins ($10,000 worth) or one loaf of bread?

True, but the same can be said for pieces of paper with dead presidents on them. They have virtually no inherent value. We choose to assign value to currency for convenience. In a crisis, Gold & silver would become the new proxy for value, just like money is now, though I doubt this would ever happen.
[citation needed]

OK, I concede that I should have said gold and silver could become the new proxy for value.

I've watched The Road, Waterworld and Mad Max, I don't remember any talk of gold in any of them (?). Personally, I think bottle caps will become the currency, time to start stocking up!
Title: Re: Gold & Silver in an Emergency
Post by: nobodyspecial on July 21, 2015, 11:30:45 AM
I've watched The Road, Waterworld and Mad Max, I don't remember any talk of gold in any of them (?).
Also strange that Mad Max didn't feature more bicycles if the oil had run out
Title: Re: Gold & Silver in an Emergency
Post by: Jack on July 21, 2015, 12:03:10 PM
I've watched The Road, Waterworld and Mad Max, I don't remember any talk of gold in any of them (?).
Also strange that Mad Max didn't feature more bicycles if the oil had run out

The first Mad Max movie wasn't post-apocalyptic. No idea why there aren't more bikes in the sequels, though.
Title: Re: Gold & Silver in an Emergency
Post by: Scandium on July 21, 2015, 12:09:24 PM
I've watched The Road, Waterworld and Mad Max, I don't remember any talk of gold in any of them (?).
Also strange that Mad Max didn't feature more bicycles if the oil had run out

The first Mad Max movie wasn't post-apocalyptic. No idea why there aren't more bikes in the sequels, though.

yeah, something like this for example:

(https://tse1.mm.bing.net/th?&id=JN.IGe/olh1jJkAlF2eghNBFQ&w=300&h=300&c=0&pid=1.9&rs=0&p=0)
Title: Re: Gold & Silver in an Emergency
Post by: GreenPen on July 21, 2015, 12:19:41 PM
I am thinking of purchasing a couple of thousand dollars worth of gold and silver coins, which I would keep safeguarded in my home. They would come in handy in the unlikely event of a Greek-style situation or other temporary crisis, when people tend to honor things that have inherent value.

True, but the same can be said for pieces of paper with dead presidents on them. They have virtually no inherent value. We choose to assign value to currency for convenience. In a crisis, Gold & silver would become the new proxy for value, just like money is now, though I doubt this would ever happen.

I really can't make sense of this "inherent value" talk about gold. Since when does gold have inherent value? We assign value to gold, just like we do with other currencies that you mention.
Title: Re: Gold & Silver in an Emergency
Post by: seattlecyclone on July 21, 2015, 12:44:43 PM
I really can't make sense of this "inherent value" talk about gold. Since when does gold have inherent value? We assign value to gold, just like we do with other currencies that you mention.

Gold has some inherent value due to some really nice properties (high conductivity, no corrosion in air) that make it ideal for certain industrial applications. The current "ooh, shiny" value far eclipses this inherent industrial value however.
Title: Re: Gold & Silver in an Emergency
Post by: hodedofome on July 21, 2015, 02:20:21 PM
Precious jewels like diamonds/rubies/emeralds/sapphires, stuff like that, is much easier to transport than metal. It is much, much smaller per $ and you can stuff thousands, maybe even tens of thousands of $$$ in your shoes without even walking funny. If a giant war broke out in the US and I had to take off to another country in a hurry, and take only what I could carry with me, jewels would be my choice.

I'm not doing this FYI. And I can't see me realistically doing it unless I was worth millions. But yeah, you'll see me running to the train with rings on each finger, diamonds in my pockets, wearing a big fur coat in July. Plus a few packs of cigarettes to bribe any military guys at a checkpoint.
Title: Re: Gold & Silver in an Emergency
Post by: markbike528CBX on July 21, 2015, 02:59:22 PM
Aside from any doomsday scenario........
I should also point out that I would be purchasing precious metals with cash that would otherwise just. Therefore, you should judge the merit of holding precious metals in lieu of cash (I would convert about 15%-20% of cash into precious metals).

I've done this for what otherwise would be long-term cash holdings.

the downside is that there are significant transaction costs to gold/silver
I  pay 3% for each transaction, I'd have to see 6% gain, just to break even.
If it were cash, it would lose 3%/year.   
so my gold/silver would have to gain 6% AND be held greater than 2 years (my plan is more than 5years or indefinitely).


I've watched The Road, Waterworld and Mad Max, I don't remember any talk of gold in any of them (?). Personally, I think bottle caps will become the currency, time to start stocking up!

? used beer bottle caps??   Whooooho, I'm Rich!! Ready to FIRE :-)
Title: Re: Gold & Silver in an Emergency
Post by: tomsang on July 21, 2015, 03:00:21 PM
I think it is comical that people think that Gold or Silver will get them out of a jam if the Shit Hits the Fan.  Do you trade an ounce of gold for a loaf of bread or a candy bar?  What is the value?  What is the going rate for gold when the world is coming to an end?  I could understand if you feel that the world is going to come to an end that you might stockpile a water purifier, food, gun, and tools but would you really rather have a pile of gold and silver?  That seems crazy. 

Last week, you may have seen the guy giving either a free 10 oz silver bar($150 value) or a free refrigerated jumbo candy bar($2?).  It is pretty indicative of what people will do if you are waving around an ounce of gold or silver for some valuable food.  They will probably laugh at you.  If you stockpile food, you could probably trade it for tons of gold if you think the world will come back online and they are desperate.

Silver for Candy Bar Video
https://www.youtube.com/watch?v=bYhTFz_SGw0

Video on the same guy trying to sell an ounce gold coin($1,500 at the time $1,100 today) for $25.
https://www.youtube.com/watch?v=ndshbH3qZ6Y

I think if you are considering purchasing silver or gold to help during a disaster then you should first see these videos.  When the world is great, and the choice is $25 or $2 chocolate bar, people are seeing more value in those vs. $1,500 gold coin or $25 silver coin. You can extrapolate what they would be worth if you are trying to get medicine, food, shelter, guns, etc. 

Title: Re: Gold & Silver in an Emergency
Post by: Jack on July 21, 2015, 05:39:09 PM
I think it is comical that people think that Gold or Silver will get them out of a jam if the Shit Hits the Fan.  Do you trade an ounce of gold for a loaf of bread or a candy bar?  What is the value?  What is the going rate for gold when the world is coming to an end?  I could understand if you feel that the world is going to come to an end that you might stockpile a water purifier, food, gun, and tools but would you really rather have a pile of gold and silver?  That seems crazy.

Not to mention, if I stockpile weapons and you stockpile gold... then I end up with the weapons and the gold!
Title: Re: Gold & Silver in an Emergency
Post by: joer1212 on July 21, 2015, 09:20:50 PM
I think it is comical that people think that Gold or Silver will get them out of a jam if the Shit Hits the Fan.  Do you trade an ounce of gold for a loaf of bread or a candy bar?  What is the value?  What is the going rate for gold when the world is coming to an end?

If the civilized world is "coming to an end", nothing could save us, unless you are willing to live a primitive life of self-reliance in the wilderness. Gold and/or silver would only tide you over until things get back to normal (like in Greece). In the meantime, gold would still have some kind of quantifiable value, and you would barter it just like you currently barter money for goods and services.
Title: Re: Gold & Silver in an Emergency
Post by: joer1212 on July 21, 2015, 09:30:07 PM
I've done this for what otherwise would be long-term cash holdings.
the downside is that there are significant transaction costs to gold/silver
I  pay 3% for each transaction, I'd have to see 6% gain, just to break even.
If it were cash, it would lose 3%/year.   
so my gold/silver would have to gain 6% AND be held greater than 2 years (my plan is more than 5years or indefinitely).

You raise a very valid point regarding the feasibility of keeping gold & silver as a store of value. In fact, the only reason I have not already purchased these metals is precisely because of the potential transaction costs of buying and redeeming them. However, like you said, if you purchase gold and silver and hold on to them for some time (minimum 5-10 years, IMO), I can't see how this could be a bad investment compared to cash.

Title: Re: Gold & Silver in an Emergency
Post by: nobodyspecial on July 21, 2015, 09:50:56 PM
I can't see how this could be a bad investment compared to cash.

http://www.economist.com/blogs/economist-explains/2015/07/economist-explains-17 (http://www.economist.com/blogs/economist-explains/2015/07/economist-explains-17)
Title: Re: Gold & Silver in an Emergency
Post by: tomsang on July 21, 2015, 10:31:10 PM
I think it is comical that people think that Gold or Silver will get them out of a jam if the Shit Hits the Fan.  Do you trade an ounce of gold for a loaf of bread or a candy bar?  What is the value?  What is the going rate for gold when the world is coming to an end?

If the civilized world is "coming to an end", nothing could save us, unless you are willing to live a primitive life of self-reliance in the wilderness. Gold and/or silver would only tide you over until things get back to normal (like in Greece). In the meantime, gold would still have some kind of quantifiable value, and you would barter it just like you currently barter money for goods and services.

Did you watch the videos that I linked? In a calm environment people weren't willing to give up a candy bar for 10 ounces of silver. They weren't willing to give up their drink for a $1,500 gold coin. The US owns its own currency. So a Greece can not happen. People recognize the dollar. I am confident that they would have taken a $20 bill vs a candy bar or fifteen $100 bills for $25. Neither the dollar nor gold have any true value in an emergency. At least people understand what a dollar was worth at one point in time. Flashing a gold coin not so much. YMMV
Title: Re: Gold & Silver in an Emergency
Post by: joer1212 on July 22, 2015, 12:38:41 AM
I can't see how this could be a bad investment compared to cash.

http://www.economist.com/blogs/economist-explains/2015/07/economist-explains-17 (http://www.economist.com/blogs/economist-explains/2015/07/economist-explains-17)

I am by no means a gold bug, but let's face the facts. There is simply no way in heaven or earth that gold will not keep pace with inflation in the long run. It has been increasing in value for thousands of years. If it didn't, gold would be nearly worthless by now. Obviously, that didn't happen. So, I would take this article's negative tone towards gold with a grain of salt.
Also, the writer of this article repeats the same fallacy that I hear from many other gold critics-- that by purchasing gold, you are somehow missing out on the returns of stocks or bonds.
Actually, gold should be purchased in place of cash, not in place of bonds or stocks. In other words, if you have 10% of your net worth in cash, and 90% in stocks and bonds, you would purchase gold with part of that 10%, and leave the 90% intact. You would not reduce your stock and bond allocations in order to purchase gold.
Therefore, you would not be buying PM with the expectation that it will match or exceed the returns of stocks and bonds. That would be foolish. You are purchasing gold because you expect it to match or exceed the return of cash, which it does handsomely in the long run.
Title: Re: Gold & Silver in an Emergency
Post by: joer1212 on July 22, 2015, 01:39:25 AM
I think it is comical that people think that Gold or Silver will get them out of a jam if the Shit Hits the Fan.  Do you trade an ounce of gold for a loaf of bread or a candy bar?  What is the value?  What is the going rate for gold when the world is coming to an end?

If the civilized world is "coming to an end", nothing could save us, unless you are willing to live a primitive life of self-reliance in the wilderness. Gold and/or silver would only tide you over until things get back to normal (like in Greece). In the meantime, gold would still have some kind of quantifiable value, and you would barter it just like you currently barter money for goods and services.

Did you watch the videos that I linked? In a calm environment people weren't willing to give up a candy bar for 10 ounces of silver. They weren't willing to give up their drink for a $1,500 gold coin. The US owns its own currency. So a Greece can not happen. People recognize the dollar. I am confident that they would have taken a $20 bill vs a candy bar or fifteen $100 bills for $25. Neither the dollar nor gold have any true value in an emergency. At least people understand what a dollar was worth at one point in time. Flashing a gold coin not so much. YMMV

Watched the videos.

I agree that in an end-of-the-world scenario, gold would most likely be useless. But in a less extreme situation, for example, in a currency devaluation or hyperinflationary climate, gold would be....er.....golden.
Title: Re: Gold & Silver in an Emergency
Post by: I'm a red panda on July 22, 2015, 07:55:05 AM

Silver for Candy Bar Video
https://www.youtube.com/watch?v=bYhTFz_SGw0

Video on the same guy trying to sell an ounce gold coin($1,500 at the time $1,100 today) for $25.
https://www.youtube.com/watch?v=ndshbH3qZ6Y


Maybe I'd take the candy bar deal, not much to lose; but no way I would have gone with the gold for $25.  A deal like that- clearly you are getting a fake.  Wouldn't MOST people be skeptical they are being scammed out of $25?
Title: Re: Gold & Silver in an Emergency
Post by: Iron Mike Sharpe on July 22, 2015, 08:13:52 AM
Um, yeah, this isn't Dungeons & Dragons.  I can think of no situation where I would ever accept gold or silver pieces for a good or service.
Title: Re: Gold & Silver in an Emergency
Post by: ginklord on July 22, 2015, 09:12:05 AM
I can't see how this could be a bad investment compared to cash.

http://www.economist.com/blogs/economist-explains/2015/07/economist-explains-17 (http://www.economist.com/blogs/economist-explains/2015/07/economist-explains-17)

I am by no means a gold bug, but let's face the facts. There is simply no way in heaven or earth that gold will not keep pace with inflation in the long run. It has been increasing in value for thousands of years. If it didn't, gold would be nearly worthless by now. Obviously, that didn't happen. So, I would take this article's negative tone towards gold with a grain of salt.
Also, the writer of this article repeats the same fallacy that I hear from many other gold critics-- that by purchasing gold, you are somehow missing out on the returns of stocks or bonds.
Actually, gold should be purchased in place of cash, not in place of bonds or stocks. In other words, if you have 10% of your net worth in cash, and 90% in stocks and bonds, you would purchase gold with part of that 10%, and leave the 90% intact. You would not reduce your stock and bond allocations in order to purchase gold.
Therefore, you would not be buying PM with the expectation that it will match or exceed the returns of stocks and bonds. That would be foolish. You are purchasing gold because you expect it to match or exceed the return of cash, which it does handsomely in the long run.

That's why I don't purchase gold or silver - my cash is only there for emergencies and cash flow, not to appreciate in value. I need it as liquid as possible, and cash beats gold or silver there. Also, less risk thanks to FDIC insurance. Keeping 10% in cash seems like a waste, when it could be invested in the stock market for higher returns than gold or silver.
Title: Re: Gold & Silver in an Emergency
Post by: Scandium on July 22, 2015, 09:40:31 AM
I don't know, historically gold doesn't look like that great of an investment to me. If you bought in colonial america, you'd still be waiting to break even, 300 years later!

(http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2012/01/Gold%20Long-Term.jpg)

from
http://www.zerohedge.com/news/charting-price-gold-all-way-back-1265
Title: Re: Gold & Silver in an Emergency
Post by: tomsang on July 22, 2015, 10:39:26 AM

Silver for Candy Bar Video
https://www.youtube.com/watch?v=bYhTFz_SGw0

Video on the same guy trying to sell an ounce gold coin($1,500 at the time $1,100 today) for $25.
https://www.youtube.com/watch?v=ndshbH3qZ6Y


Maybe I'd take the candy bar deal, not much to lose; but no way I would have gone with the gold for $25.  A deal like that- clearly you are getting a fake.  Wouldn't MOST people be skeptical they are being scammed out of $25?

And how would that be different if there was an emergency?  BTW he offered people to go get it authenticated at the local coin shop.  Everyone thought they were going to get scammed, which I think would be the same if there was an emergency.  The belief that you would just trade it in your gold or silver for food, water, shelter, medicine, supplies seems very far fetched when you look at these videos.  People were not willing to do it in the best of times.  In the worst of times, I think it would be more challenging. 
Title: Re: Gold & Silver in an Emergency
Post by: I'm a red panda on July 22, 2015, 11:02:36 AM

And how would that be different if there was an emergency? 

Point taken. 
Title: Re: Gold & Silver in an Emergency
Post by: joer1212 on July 22, 2015, 12:10:58 PM
That's why I don't purchase gold or silver - my cash is only there for emergencies and cash flow, not to appreciate in value. I need it as liquid as possible, and cash beats gold or silver there. Also, less risk thanks to FDIC insurance. Keeping 10% in cash seems like a waste, when it could be invested in the stock market for higher returns than gold or silver.

Don't get too caught up with the percentages I mentioned. I used 10% only as an example. I myself do not keep 10% of my net worth in cash. It's more like 3%. So, in my case, I would purchase gold & silver with a portion of this 3%. That would amount to only 2-3k. We're not talking about a lot of money here.
Title: Re: Gold & Silver in an Emergency
Post by: joer1212 on July 22, 2015, 12:17:24 PM
I don't know, historically gold doesn't look like that great of an investment to me. If you bought in colonial america, you'd still be waiting to break even, 300 years later!

(http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2012/01/Gold%20Long-Term.jpg)

from
http://www.zerohedge.com/news/charting-price-gold-all-way-back-1265

Something's not right here. If the price of gold remained stagnant for hundreds of years, inflation would eventually render it worthless. But that hasn't happened. Gold is still very expensive. Walk into any jewelry store, and you'll see what I mean.
Title: Re: Gold & Silver in an Emergency
Post by: Scandium on July 22, 2015, 12:20:37 PM
I don't know, historically gold doesn't look like that great of an investment to me. If you bought in colonial america, you'd still be waiting to break even, 300 years later!

from
http://www.zerohedge.com/news/charting-price-gold-all-way-back-1265

Something's not right here. If the price of gold stayed stagnant for hundreds of years, inflation would eventually render it worthless. But that hasn't happened. Gold is still very expensive. Walk into any jewelry store, and you'll see what I mean.

Sorry forgot to mention; this is inflation adjusted in 2010 GBP. So it sometimes keeps up with inflation, sometimes not. But it also fluctuate a lot, especially since 1995!
Title: Re: Gold & Silver in an Emergency
Post by: SuperSecretName on July 22, 2015, 12:22:04 PM
it might be crazy, but if SHTF, I think a couple of ounces of gold can buy you and your family across the border.  That is the only reason I hold some.  It would never be useful in everyday situations in a doomsday scenario.
Title: Re: Gold & Silver in an Emergency
Post by: joer1212 on July 22, 2015, 12:28:56 PM
I don't know, historically gold doesn't look like that great of an investment to me. If you bought in colonial america, you'd still be waiting to break even, 300 years later!

from
http://www.zerohedge.com/news/charting-price-gold-all-way-back-1265

Something's not right here. If the price of gold stayed stagnant for hundreds of years, inflation would eventually render it worthless. But that hasn't happened. Gold is still very expensive. Walk into any jewelry store, and you'll see what I mean.

Sorry forgot to mention; this is inflation adjusted in 2010 GBP. So it sometimes keeps up with inflation, sometimes not. But it also fluctuate a lot, especially since 1995!

Oh, ok. That's more like it.

There's no question in my mind that gold is a 'bad' investment if you're seeking growth (i.e. returns above inflation). That's what equities and bonds are for.
Title: Re: Gold & Silver in an Emergency
Post by: Kaspian on July 22, 2015, 12:36:21 PM
A Greek style situation is impossible here. We have our own currency. And holding lots of metal is a theft risk and will lose value relative to bonds or equities.

^^ Exactly this!!

BTW, what's going on with MMM today?  Where did all this schizo paranoia come from all of a sudden?  ...Fear, fear, FEAR!  We all live in the Kingdom of Fear! 
Title: Re: Gold & Silver in an Emergency
Post by: joer1212 on July 22, 2015, 12:40:14 PM
holding lots of metal is a theft risk and will lose value relative to bonds or equities.

I agree with the theft risk, but gold losing value relative to stocks & bonds is irrelevant. Cash also loses value to stocks & bonds, but we all still keep some of it on hand for liquidity purposes.
Title: Re: Gold & Silver in an Emergency
Post by: LordSquidworth on July 22, 2015, 01:10:40 PM
I don't know, historically gold doesn't look like that great of an investment to me. If you bought in colonial america, you'd still be waiting to break even, 300 years later!

(http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2012/01/Gold%20Long-Term.jpg)

from
http://www.zerohedge.com/news/charting-price-gold-all-way-back-1265

So looks like once it gets down around $450 it'll be a good buy.

Something's not right here. If the price of gold remained stagnant for hundreds of years, inflation would eventually render it worthless. But that hasn't happened. Gold is still very expensive. Walk into any jewelry store, and you'll see what I mean.

It's buying power has been declining over the past couple hundred years (aside from the spike from 2008 we're still in).

When you walk into a jewelry store, you're not buying gold, you're buying that jewelry. The jewelry is often worth no where near what you paid for it in actual gold.

Oh, ok. That's more like it.

There's no question in my mind that gold is a 'bad' investment if you're seeking growth (i.e. returns above inflation). That's what equities and bonds are for.

Gold is a bad investment because it is not an investment. Gold is a hedge. Serves a different purpose.

Title: Re: Gold & Silver in an Emergency
Post by: Scandium on July 22, 2015, 01:23:46 PM
I don't know, historically gold doesn't look like that great of an investment to me. If you bought in colonial america, you'd still be waiting to break even, 300 years later!

(http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2012/01/Gold%20Long-Term.jpg)

from
http://www.zerohedge.com/news/charting-price-gold-all-way-back-1265

So looks like once it gets down around $450 it'll be a good buy.

Yeah, and if you're real lucky could get another 100 year bull market. Only ended by that pesky Columbus flooding the market!

Hmm, what if NASA finds a 10 million ton pure gold asteroid nearby? Instant fall in gold prices?
Title: Re: Gold & Silver in an Emergency
Post by: Twenty4Me on July 22, 2015, 01:31:45 PM
I am thinking of purchasing a couple of thousand dollars worth of gold and silver coins, which I would keep safeguarded in my home. They would come in handy in the unlikely event of a Greek-style situation or other temporary crisis, when people tend to honor things that have inherent value. 
But even if Armageddon never occurs, gold and silver are a good investment. They increase in value at roughly the rate of inflation in the long run. This is about 3% annually. That's a lot more than what my savings account is yielding, so, it makes sense to keep at least a portion of my liquid assets in these metals.*

My questions are:

1. First of all, is owning coins the best way to hold precious metals? Are there other forms that are better (bars, plates, jewelry, etc.)? Pardon the pun, but what is the gold standard for gold and silver?

2. Is the U.S. mint the best place to buy gold and silver (coins)?
(Some preppers and conspiracy theorists claim that purchasing gold online from the U.S. mint would result in Uncle Sam kicking your door down and confiscating your coins during a crisis. They say it's better to purchase coins with cash from a local dealer, so that the transaction is secret. This sounds a bit far-fetched and paranoid to me (but who knows?). I would worry more about being ripped off by a shady local dealer than anything else.

3. Let's say that, for whatever reason, I wanted to cash out some or all of my coins at some point. Where would I sell them, and how much of a financial loss would I incur by doing this? I'm assuming I wouldn't be able to cash out my coins at the going price per ounce of gold and silver. The person or institution buying my coins would have to make a profit on the transaction, and thus would offer me less than what my coins are worth. 

I figured that many of you Mustachians can think outside the box, and would be knowledgeable about alternative investments.

Thoughts?




*I already own a diversified investment portfolio of stocks and bonds


P.S. These are the coins I am considering purchasing:

http://catalog.usmint.gov/2015-american-eagle-one-tenth-ounce-gold-proof-coin-PM4.html?cm_mmc=Google-_-PLA+-+Everything+Else-_--_-&mkwid=sxnbmFI2x&crid=81775672273&mp_kw=&mp_mt=&pdv=c&gclid=CILhgs_J6sYCFQoTHwod4LwIhw

http://catalog.usmint.gov/american-eagle-2015-one-ounce-silver-proof-coin-ES6.html?cm_mmc=Google-_-PLA+-+Everything+Else-_--_-&mkwid=sCjL9GkZh&crid=81775487713&mp_kw=&mp_mt=&pdv=c&gclid=CNHa2-rJ6sYCFYiPHwodidMNhQ

I just briefly read through the replies so far. I'm going to keep my reply to the OP though....

When it comes to owning PMs, the best is to own a version that is easily recognizable, so I personally would suggest coins and jewelry. Yes, when you resell it, the buyer is going to give you a little under spot price for the item. You can, however, shop around to see who will give you the closest to spot price to get the best price for your PMs.

Smaller coins (eg. 1/10th oz, etc) have a higher premium on them, so that is why they cost more than the full oz coins, but that doesn't mean that you get that premium back when you try to resell it, so if possible, try to avoid those types of coins. If that means that you only stick to silver, then I would suggest buying Maple Leaf coins instead of the Silver Eagle (they're cheaper).

Whatever you decide to do (buying online or at a local dealer), do not fall for the hype of numismatic coins. No one is going to care about the numismatic value of the coin in any sort of SHTF situation. Also, in the USA, I believe there is some sort of limit on how many coins you can sell in a year before you have to declare capital gains on your tax return. Look that up to see if that limit is something that you're satisfied with or not. As for shady local dealers.... google them. You'll pick up quickly if there's any bad reviews on a dealer local to you.
Title: Re: Gold & Silver in an Emergency
Post by: MoonShadow on July 22, 2015, 03:11:39 PM
I am thinking of purchasing a couple of thousand dollars worth of gold and silver coins, which I would keep safeguarded in my home. They would come in handy in the unlikely event of a Greek-style situation or other temporary crisis, when people tend to honor things that have inherent value. 
But even if Armageddon never occurs, gold and silver are a good investment. They increase in value at roughly the rate of inflation in the long run. This is about 3% annually. That's a lot more than what my savings account is yielding, so, it makes sense to keep at least a portion of my liquid assets in these metals.*

My questions are:

1. First of all, is owning coins the best way to hold precious metals? Are there other forms that are better (bars, plates, jewelry, etc.)? Pardon the pun, but what is the gold standard for gold and silver?


Generally speaking, precious metals should be the last place you put your 'crisis funds', and this is coming from a gold bug.  Don't think of 'crisis funds' as an investment, or even "preservation of capital", think of it as insurance against a significant social disruption.  Insurance, even the kind you keep in your own safe (rather than a contract), has an opportunity cost.  In the case of 'crisis funds' that opportunity cost is the gains you give up by not investing those funds in productive ventures.  When allocating 'crisis funds', look at it like this; ask yourself "if there were a bank holiday for X weeks, what products would I need the most, and can I keep an alternative solution without spoilage?".  Follow the 'hiearchy of needs' for yourself and your family, and attend to that which you can have direct control over first, before you consider buying gold or silver.  For example, everyone needs to eat, but we don't necessarily need to eat well during a real crisis.  You could buy a couple dozen pounds of rice and beans, or you could just buy a case of MRE's from the Army-Navy store.  Continue along those lines until you are satisfied that you could, if the situation required it, feed you family without needing to buy more food for whatever X weeks means to you.  Then move onto the next need until you have covered them all.  If, and only if, you have satisfied all those (minimum) needs to the best of your ability, and you still want more in the way of "crisis funds",  consider buying boxes of common ammunition sizes & storing them in a cool dry place before buying gold, as they have several of the qualities of a barter trade good (i.e. natural money); they are more or less fungible (standard unit), durable (they don't rot or otherwise decline if stored well) and have a known utility (they are ammunition, after all) so they always have some value to someone.  This is true even if you don't personally own a firearm that can use them, or even if the person you wish to barter with doesn't, so long as s/he is aware of someone else s/he could further trade/use those caliber bullets.  In the US, at least, the very best choices for this are round ball 22 long rifle and hollowpoint 9mm parabellum.  If this is not legally or practically possible, then move to silver before gold.  Silver is an industrial metal, with a lot of uses that cannot be substituted; also it is only one of two metals that have the ogliodynamic effect (https://en.wikipedia.org/wiki/Oligodynamic_effect) and is not toxic to humans (the other being copper) and therefore has great antibiotic applications, which is also useful in a real crisis.  (Lead does also, but it's quite toxic)

Quote
2. Is the U.S. mint the best place to buy gold and silver (coins)?
No, they overcharge.  The best place to find 'junk silver' coins (i.e. quarters & dimes minted back when silver was the primary construction metal) is a flea market or similar 'second hand' store.  This is also a fine way to sell them, if you are patient.  Any other method will involve a 'tax' of some sort, either a sales tax and/or a special investment tax, but the real purpose is to discourage physical (as opposed to paper) metals investing; but since this isn't investing (but insurance) that shouldn't really be an issue for you.

Quote

3. Let's say that, for whatever reason, I wanted to cash out some or all of my coins at some point. Where would I sell them, and how much of a financial loss would I incur by doing this? I'm assuming I wouldn't be able to cash out my coins at the going price per ounce of gold and silver. The person or institution buying my coins would have to make a profit on the transaction, and thus would offer me less than what my coins are worth. 


Correct.  IF you are in a hurry to get dollars for gold or silver, but particularly for gold, the other party is likely a pro or semi-pro in the field of numismatics (coin collecting, basicly) and will expect something for himself, plus the issue of the special taxes noted above.



Title: Re: Gold & Silver in an Emergency
Post by: MoonShadow on July 22, 2015, 03:15:17 PM

Hmm, what if NASA finds a 10 million ton pure gold asteroid nearby? Instant fall in gold prices?

This was just yesterday...

http://www.marketwatch.com/story/asteroid-passing-by-earth-may-hold-5-trillion-in-precious-metals-2015-07-20
Title: Re: Gold & Silver in an Emergency
Post by: joer1212 on July 22, 2015, 03:33:30 PM
I am thinking of purchasing a couple of thousand dollars worth of gold and silver coins, which I would keep safeguarded in my home. They would come in handy in the unlikely event of a Greek-style situation or other temporary crisis, when people tend to honor things that have inherent value. 
But even if Armageddon never occurs, gold and silver are a good investment. They increase in value at roughly the rate of inflation in the long run. This is about 3% annually. That's a lot more than what my savings account is yielding, so, it makes sense to keep at least a portion of my liquid assets in these metals.*

My questions are:

1. First of all, is owning coins the best way to hold precious metals? Are there other forms that are better (bars, plates, jewelry, etc.)? Pardon the pun, but what is the gold standard for gold and silver?

2. Is the U.S. mint the best place to buy gold and silver (coins)?
(Some preppers and conspiracy theorists claim that purchasing gold online from the U.S. mint would result in Uncle Sam kicking your door down and confiscating your coins during a crisis. They say it's better to purchase coins with cash from a local dealer, so that the transaction is secret. This sounds a bit far-fetched and paranoid to me (but who knows?). I would worry more about being ripped off by a shady local dealer than anything else.

3. Let's say that, for whatever reason, I wanted to cash out some or all of my coins at some point. Where would I sell them, and how much of a financial loss would I incur by doing this? I'm assuming I wouldn't be able to cash out my coins at the going price per ounce of gold and silver. The person or institution buying my coins would have to make a profit on the transaction, and thus would offer me less than what my coins are worth. 

I figured that many of you Mustachians can think outside the box, and would be knowledgeable about alternative investments.

Thoughts?




*I already own a diversified investment portfolio of stocks and bonds


P.S. These are the coins I am considering purchasing:

http://catalog.usmint.gov/2015-american-eagle-one-tenth-ounce-gold-proof-coin-PM4.html?cm_mmc=Google-_-PLA+-+Everything+Else-_--_-&mkwid=sxnbmFI2x&crid=81775672273&mp_kw=&mp_mt=&pdv=c&gclid=CILhgs_J6sYCFQoTHwod4LwIhw

http://catalog.usmint.gov/american-eagle-2015-one-ounce-silver-proof-coin-ES6.html?cm_mmc=Google-_-PLA+-+Everything+Else-_--_-&mkwid=sCjL9GkZh&crid=81775487713&mp_kw=&mp_mt=&pdv=c&gclid=CNHa2-rJ6sYCFYiPHwodidMNhQ

I just briefly read through the replies so far. I'm going to keep my reply to the OP though....

When it comes to owning PMs, the best is to own a version that is easily recognizable, so I personally would suggest coins and jewelry. Yes, when you resell it, the buyer is going to give you a little under spot price for the item. You can, however, shop around to see who will give you the closest to spot price to get the best price for your PMs.

Smaller coins (eg. 1/10th oz, etc) have a higher premium on them, so that is why they cost more than the full oz coins, but that doesn't mean that you get that premium back when you try to resell it, so if possible, try to avoid those types of coins. If that means that you only stick to silver, then I would suggest buying Maple Leaf coins instead of the Silver Eagle (they're cheaper).

Whatever you decide to do (buying online or at a local dealer), do not fall for the hype of numismatic coins. No one is going to care about the numismatic value of the coin in any sort of SHTF situation. Also, in the USA, I believe there is some sort of limit on how many coins you can sell in a year before you have to declare capital gains on your tax return. Look that up to see if that limit is something that you're satisfied with or not. As for shady local dealers.... google them. You'll pick up quickly if there's any bad reviews on a dealer local to you.

Thanks for the useful tips.
Title: Re: Gold & Silver in an Emergency
Post by: joer1212 on July 22, 2015, 03:49:33 PM
Quote
2. Is the U.S. mint the best place to buy gold and silver (coins)?
Quote
No, they overcharge.  The best place to find 'junk silver' coins (i.e. quarters & dimes minted back when silver was the primary construction metal) is a flea market or similar 'second hand' store.  This is also a fine way to sell them, if you are patient.  Any other method will involve a 'tax' of some sort, either a sales tax and/or a special investment tax, but the real purpose is to discourage physical (as opposed to paper) metals investing; but since this isn't investing (but insurance) that shouldn't really be an issue for you.

Basically, what I want is the metal itself, without the price distortions associated with 'designer' coins and/or 'used' coins, jewelry, etc. I'm thinking plain silver and gold bars would be best. That's probably how precious metals trade hands on an international level. I doubt countries hold their PM's in coin or jewelry form. If I'm not mistaken, they hold only gold & silver bars.
The problem with PM bars, of course, is that they are very expensive and hard to sell because of their value. Also, I'm not sure if PM bars are even legal to purchase. If not, are there smaller bars/plates that can be purchased that would represent gold & silver's spot price more accurately than coins?
Title: Re: Gold & Silver in an Emergency
Post by: MoonShadow on July 22, 2015, 04:00:55 PM
Quote
2. Is the U.S. mint the best place to buy gold and silver (coins)?
Quote
No, they overcharge.  The best place to find 'junk silver' coins (i.e. quarters & dimes minted back when silver was the primary construction metal) is a flea market or similar 'second hand' store.  This is also a fine way to sell them, if you are patient.  Any other method will involve a 'tax' of some sort, either a sales tax and/or a special investment tax, but the real purpose is to discourage physical (as opposed to paper) metals investing; but since this isn't investing (but insurance) that shouldn't really be an issue for you.

Basically, what I want is the metal itself, without the price distortions associated with 'designer' coins and/or 'used' coins, jewelry, etc. I'm thinking plain silver and gold bars are best.
If you are an institution, yes.  As an individual, probably not.  The reason you might want gold or silver in a crisis is because they are both natural monies, with trade histories longer than any current country.  But the problem then becomes, how would you barter with a 100 ounce gold bar?  It's hard enough with a one-troy ounce gold coin, because how do you get change for that?  The only way is to buy more stuff at a time, and that is only if the person you are bartering with has enough to barter that much value.  Under a barter economy, the 'transaction costs' shoot up quite a bit, and this problem of unequal trade values is part of the reason why.  The only way to minimize that is to use a smaller unit.

Quote
Also, are PM bars even legal to purchase?

In the US, yes.  At least right now, they haven't always been.
Quote
If not, are there smaller bars/plates that can be purchased?

Yes, quite small, in fact.
Title: Re: Gold & Silver in an Emergency
Post by: joer1212 on July 22, 2015, 04:39:43 PM
Quote
If not, are there smaller bars/plates that can be purchased?

Quote
Yes, quite small, in fact.


Would mini bars be superior to owning coins? For example, of the following, which would you rather own as a proxy for silver?

http://catalog.usmint.gov/american-eagle-2015-one-ounce-silver-uncirculated-coin-ES7.html?cm_mmc=Google-_-PLA+-+Everything+Else-_--_-&mkwid=s8U0RCjcQ&crid=81775487713&mp_kw=&mp_mt=&pdv=c&gclid=CJrv7pPm78YCFUGRHwodmvgKaA

http://www.ebay.com/itm/like/311382524075?lpid=82&chn=ps

What's striking to me is the large price difference between an identical 1 oz. quantity of silver. The form of the silver actually distorts the price quite a bit it seems. I know you mentioned that the U.S. mint overcharges, but c'mon! 1 oz. of silver is not worth 1 oz. of silver, apparently. Is there maybe a difference in the quality of the silver?
Title: Re: Gold & Silver in an Emergency
Post by: MoonShadow on July 22, 2015, 05:29:16 PM
Quote
If not, are there smaller bars/plates that can be purchased?

Quote
Yes, quite small, in fact.


Would mini bars be superior to owning coins? For example, of the following, which would you rather own as a proxy for silver?

http://catalog.usmint.gov/american-eagle-2015-one-ounce-silver-uncirculated-coin-ES7.html?cm_mmc=Google-_-PLA+-+Everything+Else-_--_-&mkwid=s8U0RCjcQ&crid=81775487713&mp_kw=&mp_mt=&pdv=c&gclid=CJrv7pPm78YCFUGRHwodmvgKaA

http://www.ebay.com/itm/like/311382524075?lpid=82&chn=ps

If the price were the same, I'd take the Eagle, simply because the reputation of the mint does matter, as well as the fact that the US Eagle is technically currency; while Scotsdale Mint doesn't have much reputation in the US outside of numistatic circles.  When it comes down to it, the guy you are bartering with is still going to have to trust that the silver is real; and almost no one you are likely to trade with has much experience with pure silver or gold in our modern world to know what he is looking at.  In such a case, the one that says "American Eagle" and otherwise looks like a coin to an American (or anyone else that uses US currency on any regular basis) is more likely to look at the Eagle coin and believe it's actually silver.

But the price isn't the same, is it?  The name recognition does result in a price difference, even in our modern world where almost anyone can look up the mint online, and nearly every pawn shop has an electronic tester that can tell them what it's silver content actually is.

Quote
What's striking to me is the large price difference between an identical 1 oz. quantity of silver. The form of the silver actually distorts the price quite a bit it seems. I know you mentioned that the U.S. mint overcharges, but c'mon! 1 oz. of silver is not worth 1 oz. of silver, apparently. Is there maybe a difference in the quality of the silver?

Almost certainly not.  It really comes down to what I said above; that the reputation of the mint, and it's legal status as currency today, matters a great deal in the very situations that most precious coin buyers (of this smaller unit size) would expect to need to trade them.  Mexico also has an official silver coin, as does Canada, that have legal tender status; and they both trade well above spot as well.  But there are few mints around the world that have a better reputation than the US mint, and that is an unavoidable fact that will not change unless and until fake Eagles are discovered in the wild, or until the US government collapses.  What you have to decide is whether or not the premium that the US mint (or Canada, or Mexico, whatever) charges is worth it to you for the purpose that you intend to buy them.  On the side of the Eagle, however, is that they tend to trade above spot consistantly, so if you make it to retirement without a crisis, they are just as likely to have appreciated with inflation as junk or spot silver is.

Again, however, this should be the last thing you put money into for a crisis.
Title: Re: Gold & Silver in an Emergency
Post by: Scandium on July 22, 2015, 05:44:38 PM
I thought people poked holes in this barter economy use for gold?

What's the historic precedent for the emergence of a barter economy? What type of crisis was it? How long did it last? How was gold or silver used, and it what denomination? What happened to people who didn't have gold?

The people here who advocate for it must have researched this? I'd be curious to know, it's an interesting concept.
Title: Re: Gold & Silver in an Emergency
Post by: MoonShadow on July 22, 2015, 06:05:02 PM
I thought people poked holes in this barter economy use for gold?

What's the historic precedent for the emergence of a barter economy? What type of crisis was it? How long did it last? How was gold or silver used, and it what denomination? What happened to people who didn't have gold?

The people here who advocate for it must have researched this? I'd be curious to know, it's an interesting concept.

http://www.investopedia.com/articles/07/roots_of_money.asp

To be technical, trading with gold or silver is not barter, because they are both true natural monies.  I was using that term because it would be closer to the kind of in-person-with-only-two-parties transaction that doesn't really occur in modern economies, because there is always a third party involved; be it a credit card company, a bank, Ebay, or a government.  It is because both parties 'trust' the third party (which, in every case, is an institution with a reputation; not an individual) that such modern, quick and relatively-low-transaction-cost type transactions may occur.  It's that third party trust that is nearly invisible in our modern economies, that would not likely exist in any crisis that would result in a return to physical precious metals being traded as money.  That is part of the reason that Greece is, and will continue to be for some time, so screwed up; the public has lost faith in their government and their banking institutions, and that trust is going to be hard to regain.
Title: Re: Gold & Silver in an Emergency
Post by: Scandium on July 22, 2015, 06:09:48 PM
I understood what you meant, but that didn't really answer my question. During capital controls in Greece did people start "bartering" with gold or silver? What are other examples where people have?

By the way I disagree with your assessment of Greece. People still have faith in the currency itself, they just don't have any.
Title: Re: Gold & Silver in an Emergency
Post by: MoonShadow on July 22, 2015, 06:38:42 PM
I understood what you meant, but they didn't really answer my question. During capital controls in Greece did people start "bartering" with gold or silver?

Silver, yes.  I know of no case that gold is being traded in Greece, but then I don't live there either.  Bitcoin is doing pretty well also, and the US Dollar has been doing well there as a street currency for some time.

Quote

 What are other examples where people have?


The Colonial States prior to the US Revolutionary War.  The "dollar" was, originally, a misprouncation of the name of a one-ounce silver coin from Germany, that was in common use in the states primarily because Sterlings (i.e. officially minted British currency) were so hard to come by...

https://en.wikipedia.org/wiki/Thaler

But because a full size Thaler was of too great a value for daily transactions, many of those coins could be 'cut' (usually using a tool similar to a cleaver) into pie shaped pieces.  It was normal to cut it into either quarters or eights, which is not only where we got the term "pieces of eight", but also the "bit"; as in "a quarter is two bits".  For most of it's history, the mint that made the actual thaler coin was a private mint, so the thalers that traded didn't have any political connotation to the populations that used them.  That is not the case with nationally minted silver coins, however; considering how nationalistic people today get over the national origin of a motor vehicle, imagine how nationalistic some people could get over a foreign silver coin!  Moreso during a war with the afore mentioned foreign power.  For this reason, the thalers had a slight advantage for wealth preservation that nationally minted coins did not, simply because the nationally minted coins had a political "taint" to their use in the open market during certain periods.  Also, for similar reasons, it was not uncommon for national mints to re-mint precious metals that were received from another nations in international trade.

Quote

By the way I disagree with your assessment of Greece. People still have faith in the currency itself, they just don't have any.

Yes & no.  While it's true that Grecians still have faith in the Euro generally, it's not entirely true that Greece cannot make more....

https://en.wikipedia.org/wiki/Identifying_marks_on_euro_coins

While Greece doesn't have the "legal" right to make more than their quota, they do have the physical machines capable of both printing and minting currency that is indistinguishable.  That is, in effect, counterfitting.  It remains to be seen if Greece tries it, but if they do, Euros with identifying marks that associate it with Greece will start to trade at a discount as compared to those that do not have such marks; and Europe will end up with two international currencies that are officially the same value, but trade independently in practice.  It is difficult to say how this would end, but it certainly wouldn't end well, and European wars have been fought over much less.

Either way, the faith of the Greek people in the Euro may not have a long lifespan.  Only time will tell, this is a new political territory.
Title: Re: Gold & Silver in an Emergency
Post by: joer1212 on July 22, 2015, 07:07:13 PM
Quote
If not, are there smaller bars/plates that can be purchased?

Quote
Yes, quite small, in fact.


Would mini bars be superior to owning coins? For example, of the following, which would you rather own as a proxy for silver?

http://catalog.usmint.gov/american-eagle-2015-one-ounce-silver-uncirculated-coin-ES7.html?cm_mmc=Google-_-PLA+-+Everything+Else-_--_-&mkwid=s8U0RCjcQ&crid=81775487713&mp_kw=&mp_mt=&pdv=c&gclid=CJrv7pPm78YCFUGRHwodmvgKaA

http://www.ebay.com/itm/like/311382524075?lpid=82&chn=ps

If the price were the same, I'd take the Eagle, simply because the reputation of the mint does matter, as well as the fact that the US Eagle is technically currency; while Scotsdale Mint doesn't have much reputation in the US outside of numistatic circles.  When it comes down to it, the guy you are bartering with is still going to have to trust that the silver is real; and almost no one you are likely to trade with has much experience with pure silver or gold in our modern world to know what he is looking at.  In such a case, the one that says "American Eagle" and otherwise looks like a coin to an American (or anyone else that uses US currency on any regular basis) is more likely to look at the Eagle coin and believe it's actually silver.

But the price isn't the same, is it?  The name recognition does result in a price difference, even in our modern world where almost anyone can look up the mint online, and nearly every pawn shop has an electronic tester that can tell them what it's silver content actually is.

Quote
What's striking to me is the large price difference between an identical 1 oz. quantity of silver. The form of the silver actually distorts the price quite a bit it seems. I know you mentioned that the U.S. mint overcharges, but c'mon! 1 oz. of silver is not worth 1 oz. of silver, apparently. Is there maybe a difference in the quality of the silver?

Almost certainly not.  It really comes down to what I said above; that the reputation of the mint, and it's legal status as currency today, matters a great deal in the very situations that most precious coin buyers (of this smaller unit size) would expect to need to trade them.  Mexico also has an official silver coin, as does Canada, that have legal tender status; and they both trade well above spot as well.  But there are few mints around the world that have a better reputation than the US mint, and that is an unavoidable fact that will not change unless and until fake Eagles are discovered in the wild, or until the US government collapses.  What you have to decide is whether or not the premium that the US mint (or Canada, or Mexico, whatever) charges is worth it to you for the purpose that you intend to buy them.  On the side of the Eagle, however, is that they tend to trade above spot consistantly, so if you make it to retirement without a crisis, they are just as likely to have appreciated with inflation as junk or spot silver is.

Again, however, this should be the last thing you put money into for a crisis.

So, the Eagle is basically the standard-bearer for silver in the United States (at least in small denominations). It is widely recognized, and trades above silver's spot price, which justifies paying a premium for it. I guess that's what I'll buy if I decide to hold PM.
Title: Re: Gold & Silver in an Emergency
Post by: MoonShadow on July 22, 2015, 07:19:38 PM

So, the Eagle is basically the standard-bearer for silver in the United States (at least in small denominations).

Correct.

Quote
It is widely recognized, and trades above silver's spot price, which justifies paying a premium for it. I guess that's what I'll buy if I decide to hold PM.

Only you can decide whether it's justified or not.  Again, I said I would choose the Eagle if the price were the same, but they never are.  Today's spot silver price is about $15 per troy ounce; I, personally, would not pay twice spot for an Eagle.  I would consider it for 150% of spot, but not likely over that.  I don't own any Eagles, but I do own some other mints' 'rounds'.
Title: Re: Gold & Silver in an Emergency
Post by: wombat on July 22, 2015, 08:00:07 PM
Some argue to buy Gold or Silver as part of a diversified portfolio but only in single digit %s. Not much use in such a small amt so why bother at all? Keep it simple.
Title: Re: Gold & Silver in an Emergency
Post by: joer1212 on July 22, 2015, 11:10:14 PM

So, the Eagle is basically the standard-bearer for silver in the United States (at least in small denominations).

Correct.

Quote
It is widely recognized, and trades above silver's spot price, which justifies paying a premium for it. I guess that's what I'll buy if I decide to hold PM.

Only you can decide whether it's justified or not.  Again, I said I would choose the Eagle if the price were the same, but they never are.  Today's spot silver price is about $15 per troy ounce; I, personally, would not pay twice spot for an Eagle.  I would consider it for 150% of spot, but not likely over that.  I don't own any Eagles, but I do own some other mints' 'rounds'.

There's also the condition of the coins to consider. If you purchase a bunch of new silver Eagles, but don't take care of them, resulting in coins that are worn, their market value will surely be affected.
Holding Eagle coins as a store of value is not simple and straightforward, like purchasing a silver bar that is worth X amount of dollars based on its weight alone. An Eagle is more of a collector's item than a pure commodity.
Title: Re: Gold & Silver in an Emergency
Post by: MoonShadow on July 22, 2015, 11:15:16 PM
I'm just going to leave this here...

https://www.youtube.com/watch?v=2jMviz4cymw
Title: Re: Gold & Silver in an Emergency
Post by: Drifterrider on July 23, 2015, 04:58:30 AM

P.S. These are the coins I am considering purchasing:

http://catalog.usmint.gov/2015-american-eagle-one-tenth-ounce-gold-proof-coin-PM4.html?cm_mmc=Google-_-PLA+-+Everything+Else-_--_-&mkwid=sxnbmFI2x&crid=81775672273&mp_kw=&mp_mt=&pdv=c&gclid=CILhgs_J6sYCFQoTHwod4LwIhw

http://catalog.usmint.gov/american-eagle-2015-one-ounce-silver-proof-coin-ES6.html?cm_mmc=Google-_-PLA+-+Everything+Else-_--_-&mkwid=sCjL9GkZh&crid=81775487713&mp_kw=&mp_mt=&pdv=c&gclid=CNHa2-rJ6sYCFYiPHwodidMNhQ

Proof, Unc and slabbed coins (certified by someone like PCGS) have numismatic value above their melt value.  Standard business strikes have value based on melt value.  If you want to hold silver and gold coins for the value of the metal, go with circulated "business strike" coins. 

In standard natural disasters (hurricanes, tornados, etc) cigarettes, booze and toilet paper are good investments.  If it is the zombie apocalypse, lead is a better investment (at least it is on the Walking Dead).
Title: Re: Gold & Silver in an Emergency
Post by: LordSquidworth on July 23, 2015, 06:49:11 AM
I don't know, historically gold doesn't look like that great of an investment to me. If you bought in colonial america, you'd still be waiting to break even, 300 years later!

(http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2012/01/Gold%20Long-Term.jpg)

from
http://www.zerohedge.com/news/charting-price-gold-all-way-back-1265

So looks like once it gets down around $450 it'll be a good buy.

Yeah, and if you're real lucky could get another 100 year bull market. Only ended by that pesky Columbus flooding the market!

Hmm, what if NASA finds a 10 million ton pure gold asteroid nearby? Instant fall in gold prices?

I'd be curious to see if the decline in gold followed along a line similar to the issuance of paper currency.

Not really familiar with it's history world wide, but I'd imagine part of the decline is due to a decline in demand for coining.

Title: Re: Gold & Silver in an Emergency
Post by: matchewed on July 23, 2015, 07:15:07 AM
I don't know, historically gold doesn't look like that great of an investment to me. If you bought in colonial america, you'd still be waiting to break even, 300 years later!

*Snip for space*

from
http://www.zerohedge.com/news/charting-price-gold-all-way-back-1265

So looks like once it gets down around $450 it'll be a good buy.

Yeah, and if you're real lucky could get another 100 year bull market. Only ended by that pesky Columbus flooding the market!

Hmm, what if NASA finds a 10 million ton pure gold asteroid nearby? Instant fall in gold prices?

I'd be curious to see if the decline in gold followed along a line similar to the issuance of paper currency.

Not really familiar with it's history world wide, but I'd imagine part of the decline is due to a decline in demand for coining.

Monetary history (very generalized) usually has gone the route of currency made of the precious metals, then currency backed by the precious metals (paper currency), then currency no longer backed by precious metals (fiat currency) but by general supply and demand for the paper, an invented value.

Note the second one, you can still not coin using the metals but still have a demand for them.
Title: Re: Gold & Silver in an Emergency
Post by: Chuck on July 23, 2015, 09:58:46 AM
Gold and Silver will be almost useless to you in an emergency. If surviving civic unrest is your goal you need to stockpile a small supply of the items you would try to purchase with that gold/silver.

Get a small generator, a carbon based water filtration system with several jugs of water and some freeze-dried foodstuffs. Also a firearm of some kind, preferably a shotgun. Make sure you have LED flashlights, candles and plenty of blankets around the house.

That's it. That will allow you to shelter in place until whatever disaster has befallen you passes. No metal required, and much cheaper than trying to buy water with thousands of dollars worth of precious metals on you.
Title: Re: Gold & Silver in an Emergency
Post by: MoonShadow on July 23, 2015, 02:50:47 PM

In standard natural disasters (hurricanes, tornados, etc) cigarettes, booze and toilet paper are good investments.  If it is the zombie apocalypse, lead is a better investment (at least it is on the Walking Dead).

Plus (as I noted before) a box or two of common ammo calibers, to trade as a box or individually.  For example, it such a crisis were to come down to eating local game, or starvation; you could trade 3 or 4 22LR rounds with that kid who is a hell of a shot with his 22 rifle, and get a rabbit.

Another good choice, and better than metals, is salt; particularly if you live far away from the ocean.  Salt is almost money, and has been used as money for longer than gold has.  The root of 'salary' comes from the latin for salt, as does the phrase "he is not worth his salt".  Also, salt has many household uses, for which the volume demand will increase dramaticly in an extended crisis.

Hell, even a few standard bicycle inner-tubes is a better crisis investment than metals.  This is coming from someone who actually owns silver, and has taken all of his own advice.
Title: Re: Gold & Silver in an Emergency
Post by: powskier on July 23, 2015, 08:31:45 PM
Fear has been on a consistent upward trend for since 2001 in the USA. Not sure if it is 9/11 PTSD or some other combination of  reasons. Maybe it is just one of those pendulum swings....there is always someone with a "the end is near' sign around their neck, but I digress.
Precious metals would only be valuable in an "end times" scenario if there was a certitude of a reestablishment of order thereafter, hence it wouldn't really be that apocalyptic after all. Preparing for the least likely of any scenario based on history seems foolish, and using a shiny expensive metal for that seems even more foolish. Axe heads, ammo, water filters and bike frames and parts make far more sense and would likely be easier to trade with more people.
Title: Re: Gold & Silver in an Emergency
Post by: forestj on July 23, 2015, 10:28:40 PM
If I was going to buy precious metals, I would do it either because I was trying to be a long term market timer, or if I wanted a tail risk hedge for the current financial system.

But if I'm gonna gamble, I'd rather gamble with bitcoin. It could be a good tail risk hedge too. It has seen faint whimpers of that behavior already -- see Cyprus. Somehow I expect that in the future, more people are going to be able to verify a SHA than the purity and chemical composition of a metal. And I think everyone is gonna be online. You can't fit a gold coin into a USB port.

I agree with everyone else here that gold and silver is not good in an emergency -- look to the hierarchy of needs for what IS good in an emergency. Don't forget about the needs that we take for granted, too: temperatures between -30F and 100F, and a non-toxic gas to breathe that contains oxygen should be at the top of the list. If I was worried about SHTF scenarios that could occur in our lifetime I would be thinking nuclear, biological, chemical, nano, and climate, not famine and marauding mobs ala Mad Max. Heck, if I'm gonna worry about those things, I'd also worry about a technological singularity, but if that happens, there isn't much you can do about it...

Title: Re: Gold & Silver in an Emergency
Post by: joer1212 on July 24, 2015, 02:06:43 AM
Precious metals would only be valuable in an "end times" scenario if there was a certitude of a reestablishment of order thereafter, hence it wouldn't really be that apocalyptic after all.

This is precisely one of the reasons to hold precious metals-- for a temporary crisis; emphasis on 'temporary'.
Title: Re: Gold & Silver in an Emergency
Post by: milesdividendmd on July 24, 2015, 03:19:55 AM
holding lots of metal is a theft risk and will lose value relative to bonds or equities.

I agree with the theft risk, but gold losing value relative to stocks & bonds is irrelevant. Cash also loses value to stocks & bonds, but we all still keep some of it on hand for liquidity purposes.

You are underselling your argument here.Cash loses value relative to gold long term because of inflation.  Thats a slam dunk.  A real value chart of cash starts at the top left and marches ever down and to the right.
Title: Re: Gold & Silver in an Emergency
Post by: Scandium on July 24, 2015, 06:05:58 AM
Precious metals would only be valuable in an "end times" scenario if there was a certitude of a reestablishment of order thereafter, hence it wouldn't really be that apocalyptic after all.

This is precisely one of the reasons to hold precious metals-- for a temporary crisis; emphasis on 'temporary'.

How? Can you cite some resent crisis where gold or silver helped people? What did they do with it? Did others trade food/shelter for it?

I asked the same further up and was told pre-revolution america, which left me unconvinced.
Title: Re: Gold & Silver in an Emergency
Post by: MoonShadow on July 24, 2015, 12:11:37 PM
Precious metals would only be valuable in an "end times" scenario if there was a certitude of a reestablishment of order thereafter, hence it wouldn't really be that apocalyptic after all.

This is precisely one of the reasons to hold precious metals-- for a temporary crisis; emphasis on 'temporary'.

How? Can you cite some resent crisis where gold or silver helped people? What did they do with it? Did others trade food/shelter for it?

I asked the same further up and was told pre-revolution america, which left me unconvinced.

Well, I told you that, but there are other examples.  Both World War 1 & 2, but particularly #2.  During that time paper currencies were very suspect outside of large nations removed from the actual fighting, in part because opposing powers were counterfitting each others' currencies.  In regions far flung from Europe, but still colonial protectorates (i.e. South America, Africa, Asia) national currencies became hard to use if the locals didn't know you well.  This was particularly so in Asia, in regions where the locals' loyalties were suspect; such as Hong Kong and many Pacific islands, because simply using a particular currency might 'out' a spy, or simply draw unwanted attention from agents of some power.  This effect was notable enough in Hong Kong, as a territory of Britain but too cosmopolitan to keep Axis agents out, that Hong Kong appeared as a short story in the book Cryptonomocon by Neal Stephenson.  A small supply of gold coins was a standard issue for cladestine units & submarines operating in the Pacific theater for this reason, so that such units might have a chance to resupply locally in a pinch.

A widespread state of war is exactly the kind of crisis that would favor physical metals as a trade currency, but there are many kinds of shorter term problems that I can think of that actual metal might be more useful than paper cash.
Title: Re: Gold & Silver in an Emergency
Post by: Kaspian on July 24, 2015, 12:51:18 PM
Precious metals would only be valuable in an "end times" scenario if there was a certitude of a reestablishment of order thereafter, hence it wouldn't really be that apocalyptic after all.

This is precisely one of the reasons to hold precious metals-- for a temporary crisis; emphasis on 'temporary'.

How? Can you cite some resent crisis where gold or silver helped people? What did they do with it? Did others trade food/shelter for it?

I asked the same further up and was told pre-revolution america, which left me unconvinced.

Well, I told you that, but there are other examples.  Both World War 1 & 2, but particularly #2.  During that time paper currencies were very suspect outside of large nations removed from the actual fighting, in part because opposing powers were counterfitting each others' currencies.  In regions far flung from Europe, but still colonial protectorates (i.e. South America, Africa, Asia) national currencies became hard to use if the locals didn't know you well.  This was particularly so in Asia, in regions where the locals' loyalties were suspect; such as Hong Kong and many Pacific islands, because simply using a particular currency might 'out' a spy, or simply draw unwanted attention from agents of some power.  This effect was notable enough in Hong Kong, as a territory of Britain but too cosmopolitan to keep Axis agents out, that Hong Kong appeared as a short story in the book Cryptonomocon by Neal Stephenson.  A small supply of gold coins was a standard issue for cladestine units & submarines operating in the Pacific theater for this reason, so that such units might have a chance to resupply locally in a pinch.

A widespread state of war is exactly the kind of crisis that would favor physical metals as a trade currency, but there are many kinds of shorter term problems that I can think of that actual metal might be more useful than paper cash.

Just no.  You should have gold for an event which hasn't happened since Harry Truman was president?  I didn't see anyone on TV in Greece lined up at the gold ATMs.  And the people with gold?  What do you think they were trying to do with it?  That's right--switch it to cash.  And when everyone around you is trying to convert something to cash, what happens?  It's a buyer's market.  You'll get even less for it. 

...And given the WWII scenario, you better stock up on silk stockings, rubber, sugar, and waste fat too.  :/
Title: Re: Gold & Silver in an Emergency
Post by: MoonShadow on July 24, 2015, 01:23:58 PM

Just no.  You should have gold for an event which hasn't happened since Harry Truman was president?  I didn't see anyone on TV in Greece lined up at the gold ATMs.  And the people with gold?  What do you think they were trying to do with it?  That's right--switch it to cash.  And when everyone around you is trying to convert something to cash, what happens?  It's a buyer's market.  You'll get even less for it. 

...And given the WWII scenario, you better stock up on silk stockings, rubber, sugar, and waste fat too.  :/

You asked for a more contemporary example, I gave you one.  Please, don't be an ass.  No, I don't know of any crisis that metals would have helped with (better than cash) since WW2; but someone else might.  Still, thinking that WW2 isn't a valid example simply because it's been 70 years since the world last tore itself apart is an example of normalcy bias.  Perhaps a book recommendation is in order here, The Fourth Turning is a book about generational social theory.  If you read it, you will realize that the US political class believes it, because they act accordingly.  In this generational social theory, 'Western' cultures (at least) go through a repeatable cycle of calm and conflict, each cycle ending in a 'crisis period' that persistantly alters the cultures going forward.  Such examples of crisis periods include the War of the Roses, The attack of the Spanish Armada, King Phillp's War, the  US Revolutionary War, The US Civil War and  World War 2.  The cycle averages about 88 years, what the ancient Romans called a "seculum".  If this theory has any validity at all, as opposed to simply being corrolation bias, it would be unwise to assume that such a widespread crisis will not come around again.  It seems to me that our species is programmed for conflict.

https://en.wikipedia.org/wiki/Strauss%E2%80%93Howe_generational_theory
Title: Re: Gold & Silver in an Emergency
Post by: Kaspian on July 24, 2015, 01:52:28 PM
One generation still equals way, WAY too long to have a substantial amount invested in a stagnant asset "just in case".  US dollars during WWII?  Still worked.  And it certainly wasn't me who'd asked for a contemporary example because I'd call tin-hat brigade on the whole "complete collapse of fiat currency" thing any day of the week.  "Normalcy bias" also applies to the fact that they'll probably keep making TV shows and gravity is likely to work tomorrow morning.  If the Nazis...  (Sorry, ISIS?  ISIL?) come knocking on your door, running to the closet to grab your doubloon chest is going to be the least of your worries.
Title: Re: Gold & Silver in an Emergency
Post by: MoonShadow on July 24, 2015, 03:21:42 PM
One generation still equals way, WAY too long to have a substantial amount invested in a stagnant asset "just in case".  US dollars during WWII?  Still worked.

What defines 'substantial' in this context?  I have less than 0.1% of my net worth in silver in a gun safe in my house.  I have vastly more value in actual guns inside that same safe alone.

And in the United States, yes, paper money still worked fine.  Yet at the time, the official currency of Hong Kong was the British Pound; things were a bit dicey there, even though the pound could be used for a time.  In German island colonies in the Pacific Ocean, using Marks could get you killed, while using Pounds might just get you an inqusitive look, but no takers.  Some of the natives didn't care for their colonial sponsors, but that didn't mean they had any more love for the opposition either.  So it's always a local phenomenon, if it happens at all.

Quote

 And it certainly wasn't me who'd asked for a contemporary example because I'd call tin-hat brigade on the whole "complete collapse of fiat currency" thing any day of the week.

Go ahead.  I certainly didn't claim that a "complete collapse of fiat currency" was a pre-requisite for metals returning to common trade.  Something as rare, and also as likely in my own lifetime, as a Carrington Event causing systemic harm to the Internet and/or banking infrastructure, even only regionally, would be enough to justify some crisis funds in metals.

Quote

  "Normalcy bias" also applies to the fact that they'll probably keep making TV shows and gravity is likely to work tomorrow morning.  If the Nazis...  (Sorry, ISIS?  ISIL?) come knocking on your door, running to the closet to grab your doubloon chest is going to be the least of your worries.

I think you might be projecting an image you hold of me in your mind.  I don't have such worries.
Title: Re: Gold & Silver in an Emergency
Post by: milesdividendmd on July 24, 2015, 06:24:20 PM

One generation still equals way, WAY too long to have a substantial amount invested in a stagnant asset "just in case".  US dollars during WWII?  Still worked.  And it certainly wasn't me who'd asked for a contemporary example because I'd call tin-hat brigade on the whole "complete collapse of fiat currency" thing any day of the week.  "Normalcy bias" also applies to the fact that they'll probably keep making TV shows and gravity is likely to work tomorrow morning.  If the Nazis...  (Sorry, ISIS?  ISIL?) come knocking on your door, running to the closet to grab your doubloon chest is going to be the least of your worries.

Isn't Isis using gold for currency?  That's pretty current.

If you live under ISIS, of course, portfolio construction is likely the least of your concerns, but a bar of bullion might help you make it across the order into Turkey. Worth a shot.
Title: Re: Gold & Silver in an Emergency
Post by: MoonShadow on July 24, 2015, 06:37:33 PM

Isn't Isis using gold for currency?  That's pretty current.


Well, yes and no, but they aren't doing that because of any shift in economics due to crisis.  They do it because they are fundamentalists, and the Koran says that gold is money.  They seem to take such statements quite literally.
Title: Re: Gold & Silver in an Emergency
Post by: milesdividendmd on July 24, 2015, 06:45:25 PM


Isn't Isis using gold for currency?  That's pretty current.


Well, yes and no, but they aren't doing that because of any shift in economics due to crisis.  They do it because they are fundamentalists, and the Koran says that gold is money.  They seem to take such statements quite literally.

This might be too dismissive Moon.

After all if you were a fundamentalist sadistic mullah running an embargoed war torn territory, wouldn't gold be your obvious choice of currency (universally valued and accepted)?  And wouldn't you justify your rational choice of currency with religious text?
Title: Re: Gold & Silver in an Emergency
Post by: MoonShadow on July 24, 2015, 06:57:18 PM


Isn't Isis using gold for currency?  That's pretty current.


Well, yes and no, but they aren't doing that because of any shift in economics due to crisis.  They do it because they are fundamentalists, and the Koran says that gold is money.  They seem to take such statements quite literally.

This might be too dismissive Moon.

After all if you were a fundamentalist sadistic mullah running an embargoed war torn territory, wouldn't gold be your obvious choice of currency (universally valued and accepted)?  And wouldn't you justify your rational choice of currency with religious text?

Assuming I were such a leader, I could justify just about everything I want to do with some religious text, most of which are taken out of context anyway.  Gold is too hard to come buy sometimes, perhaps a barter trade of European sex slaves for a horse or two?  After all, it's written in the book.

I think I just wrote the entire history of humanity for the last couple thousand years.
Title: Re: Gold & Silver in an Emergency
Post by: Kriegsspiel on July 24, 2015, 07:34:36 PM


Isn't Isis using gold for currency?  That's pretty current.


Well, yes and no, but they aren't doing that because of any shift in economics due to crisis.  They do it because they are fundamentalists, and the Koran says that gold is money.  They seem to take such statements quite literally.

This might be too dismissive Moon.

After all if you were a fundamentalist sadistic mullah running an embargoed war torn territory, wouldn't gold be your obvious choice of currency (universally valued and accepted)?  And wouldn't you justify your rational choice of currency with religious text?

Assuming I were such a leader, I could justify just about everything I want to do with some religious text, most of which are taken out of context anyway.  Gold is too hard to come buy sometimes, perhaps a barter trade of European sex slaves for a horse or two?  After all, it's written in the book.

I think I just wrote the entire history of humanity for the last couple thousand years.

Has anyone done any technical analysis on this trade? Would be interested.
Title: Re: Gold & Silver in an Emergency
Post by: Kaspian on July 27, 2015, 11:34:42 AM

Quote from: Kaspian

  "Normalcy bias" also applies to the fact that they'll probably keep making TV shows and gravity is likely to work tomorrow morning.  If the Nazis...  (Sorry, ISIS?  ISIL?) come knocking on your door, running to the closet to grab your doubloon chest is going to be the least of your worries.

I think you might be projecting an image you hold of me in your mind.  I don't have such worries.

...Nope, just sarcastic and sceptical by nature, nothing personal.  Gold arguments are sort of up there in my peeves alongside Creationism and anything Dr. Oz says.