Attention Gold Bugs! Nearly Converted Sceptic (Need information on purchasing gold)

[dejapooh]

As a teacher of economics, I've been very skeptical of the gold bugs here. We've been over the reasons, and the rational. One thing I do know is that the stability and reliability of the banks is the cornerstone of our economy. With the security of the FDIC behind the banks, I felt secure in my cash. Now... EH!

1. The banks have huge investments in Oil Production. With oil prices as low as they are, many of these debts are going bad
2. The banks have huge investments in derivatives. Hundreds of Trillions in potential liabilites. While most of them are offsetting (If x goes bad, we collect from peter, and have to pay paul), there is still substantail risk
3. The congress (mostly due to republican obstanance) is unwilling to reinstate Glass Steagall, which would protect most minor depositors in the banks
4. The government has started to put plans in place that would eliminate the potential of Bail Outs by having Bail ins instead. In a bail in, the creditors of the bank would forfeit some or all of their investment for the benefit of those who have a higher priority debt. The highest priority debt would be the Derivatives... As a depositor, your deposit is essentially an unsecured credit, making you an unsecured creditor. In Cyprus, all deposits more than 250,000 euros was exchanged for shares of stock in the bank.

Now, they have not come up with rules yet as to what, when, or even how much they would take if they needed to, but this whole thing makes me very uneasy. I am thinking it may be time to put a substantial amount of my cash on hand into gold and silver. That leaves me some questions for our local gold bugs...

Where do you get gold as close to spot as possible?
Rounds, bullion, bars, smalls (less than 1oz items), Which should I get? What is the cheapest way to go? What is the best way to go?

Thanks

 

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[bigcaddy64]

Maybe i'm being naive but i don't see purchasing gold as good investment, especially to hedge against a failing economy or bank implosion. Maybe if you had lots of cash for margin play in a volatile market where the price might jump 3% in a day equaling 1000's of dollars but, long term, i don't see the point.

Gold has value assigned by man in a working society/economy. Its great for electronics which pretty much powers a ton of our economy, but in the absence of said economy, what value does it have?

 

[buzzhead]

Apmex, provident, jm bullion are all great to deal with. Watch for sales. I believe there is much upside potential to gold even more so for silver.

 

[silverdollarbill]

Local coin store that will match ampmex or close. Buy Canadian maple leaves because they are 24k. (No need to refine if being used for Chinese or Indian jewelry)

Only one candidate is talking about reinstating Glass Steagall. Their main rival has a family member who repealed it along with implementing the commodity moderation act aka deregulating derivatives.

Next 3 months should be interesting. QE4 is already being discussed. Once your addicted, you need that fix.

 

[dejapooh]

To an extent, I agree. Gold is just like paper money. It is worth something because we believe it is worth something. We could just as easily use palladium or Albino Alligator Poo (you can't tell me that it isn't rare).

The point to me is, if the banks turn bad, and deposits start to get confiscated, things could go really bad, really fast. In that situation, gold and silver may be better to have on hand that putting $100,000 in cash under my bed.

Long term. do I think a speculation in gold is a good bet? not 100% sure. Perhaps. Long term, speculating in Silver seems to be a better bet. Either way... I'll have to do something with my money. I can't put small amounts into 150 different banks. If the ship hits the fan, Worst case scenario, what do I want to have with me? I could put 10% or 20% of my money into medals and sit on them here. I could put 5% of the rest into each of 20 different banks. At least if a bail in happens, I am likely to be protected. If some of my money is converted into equity, it is likely to be a small percentage.

The problem is that this whole thing is so unnecessary. Put glass Steagall back in place and I would be 100% more comfortable. Put laws in place to properly regulate the banks, I'd be 100% more comfortable. Rebuild the bank Bail out funds, and let the banks know that if they have to access that cash, it is not a bail out, it is a BUY out. Throw in automatic 5 year jail terms for the President and VP's of the bank if they have to access that money. 10 years if they don't access the money when they need to and they have to file for bankruptcy. How about 5 years for every Billion the government has to give to bail them out? Get 20 billion, you have a 100 year jail term.

Maybe i'm being naive but i don't see purchasing gold as good investment, especially to hedge against a failing economy or bank implosion. Maybe if you had lots of cash for margin play in a volatile market where the price might jump 3% in a day equaling 1000's of dollars but, long term, i don't see the point.

Gold has value assigned by man in a working society/economy. Its great for electronics which pretty much powers a ton of our economy, but in the absence of said economy, what value does it have?

 

[billn1956]

If that happened you had better have weapons and ammo,and a awful lot of food and a ability to do some thing to make your self useful in your community. our country would see looting and martial law over night. The big city's would burn down, turning there hoards of people loose on the country side..It will not be pretty.

 

[CladSpends2]

If that happened you had better have weapons and ammo,and a awful lot of food and a ability to do some thing to make your self useful in your community. our country would see looting and martial law over night. The big city's would burn down, turning there hoards of people loose on the country side..It will not be pretty.

Bill has it exactly right. Food to eat, firearms to protect your loved ones and yourself, ammo to "feed" your firearms, seeds to plant and the willingness to at least work the business end of a hoe if you can't be more valuable to your community. And after that, a little gold to trade, as you don't want to trade the ammo and firearms for food unless the children are really hungry. Do I think it will happen, probably not, but if it does, it will be even uglier than we can ever imagine or plan for. Just my two cents.

T.

 

[DeepseekerADS]

Rolls & rolls of silver dimes. You don't want to use an ounce of gold to pay for a loaf of bread. I view circulated silver coins as a basic bartering tool.

.22 longs would be a good bartering item.

Check out the "Survival Tips" forum under "Everything Else".

 

[silverdollarbill]

For the record, I am not a gold bug and even if there is a collapse in the financial markets I am not expecting a societal collapse. I view gold as an insurance policy. If you plan on holding gold, I think physical gold is important because there is way more 'paper gold'. Everyone has storage preferences but I think safety deposit box or reputable storage place is best.

If you think society/currency may collapse, I agree that junk silver coins make the most sense.

 

[buzzhead]

Holding physical assets in a bank owned safety deposit box?? [emoji15][emoji849][emoji17]

 

[dejapooh]

For the record, I am not a gold bug and even if there is a collapse in the financial markets I am not expecting a societal collapse. I view gold as an insurance policy. If you plan on holding gold, I think physical gold is important because there is way more 'paper gold'. Everyone has storage preferences but I think safety deposit box or reputable storage place is best.

If you think society/currency may collapse, I agree that junk silver coins make the most sense.

If the banks close, how will you get to the deposit box?

 

[Tallone]

I view my small holdings of gold and silver as an insurance policy, not an investment. I have a variety of denominations of pre-1965 US coins and a few US gold coins. I also have some gold necklaces. I acquired these after reading up on what happened in Argentina when the kind of scenario mentioned above actually happened. In Argentina, because the government currency was virtually worthless, many people turned to making their basic purchases with small bits of gold from necklaces.

 

[dejapooh]

I don't necessarily think that money will be worthless, I believe people will have a very difficult time getting to their money. 93% of the U.S. Currency that exists doesn't, in fact, exist (estimate I heard on a NPR radio program. I can not site the source). The vast majority of the money that exists does so in computers. It is shuffled from this account at the federal reserve to that account at the federal reserve. Example, you probably didn't get paid at your job this month, you probably got a check (or direct deposit). That money electronically shuffled from your boss' account to yours. What happens when that electronic link works, but you can't get any CASH? what happens if the electronic link to your cash is broken, it is still there, but you can't access it? There have been times where money has disappeared in the U.S. in the mid 1830's and again around 1861. Finally, in 1931-3. The Metal value of the currency was greater than the stated value of the currency. People horded medal cash and banks ran out of medal to give to depositors. Not because the bank was not liquid, but because no one had made a deposit of medal, so there was none on hand. In the 1830's and 1860's, businesses resorted to stamping their own tokens to use as change when people paid because the store didn't have any money on hand to use as change (see hard times tokens and Civil war tokens). The reason for going to fiat currency was to allow the government, through the fed, to have some control over the amount of money there was in the system. When you work from a hard currency, sometimes you will not have enough currency to meet the economic needs of the country, sometimes you will have too much (there was an inflationary period under gold after the transcontinental railroad was completed because now there was a safe and cheap way to move that western gold to the east. You now have more gold chasing the same amount of goods. Again with Silver and the Comstock load.

Anyhow, Things could be bad, I do not expect a break down, long term, of civil society.

Funny, a few months ago, I was at an estate sale where they had cases and case of Emergency food. It was a temptation, but I decided not to go for it. Too close to the expiration date.

 

[trsynsh]

One thing that a lot of people overlook is what the value of metals would actually be if the banks were to close. We assume they'll remain high in value, and that's a possibility, but a lot of that would depend on the severity of the economic turmoil. In most dire situations, many turn to more practical ways of bartering. It's why bales of tobacco were the primary currency in the U.S. before we got our own currency system. Would gold/silver be worthless? Of course not, but those that have large stockpiles assuming that they'll be kings if the market truly crashes might be overestimating the value of precious metals in such a circumstance. You take away the dollar value assigned to weights of gold and silver and it suddenly becomes very difficult to use efficiently as currency, albeit not impossible.

 

[silverdollarbill]

Holding physical assets in a bank owned safety deposit box?? [emoji15][emoji849][emoji17]

I know there is a historical precedence for the confiscation of gold from personal safety deposit boxes. However, if you think that is likely to happen you are better off investing in lead.

In regards to actual physical currency, most do not understand fractional reserve lending and how it allows banks to artificially inflate the money supply. Fractional reserve lending is a scam.

 

[buzzhead]

I've got lead...

 

[buzzhead]

And no sdb

 

[Beachkid23]

Anymore I just keep the silver and gold I find a yard sales and thrift stores. I used to go buy coins and bard but when I can find a sterling silver at a yard sale for five bucks that's 10 ounces that's way better to me than spending $160 on the bar. Even a piece of gold jewelry Mark want it is put it in a bag unless it's high-value then I'll sell it. That's my investing, although I did just buy Morgan's at a yard sale recently but those fit a lot better in the safe. When we have a whole bunch saved up or if we're going to get the house remodeled or even possibly buy it but I'll send off everything I have to the refinery and put it towards a down payment.

 

[JimDon]

One word! Real Estate! Well that's two.

 

[dejapooh]

One word! Real Estate! Well that's two.

Normally, I would agree, but I do not have enough money to buy any real estate. If the market crashes, it will be time to buy...