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)
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.
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.