Buying Real Silver and Gold (Not Bitcoin)

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grayfox
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Re: Buying Real Silver and Gold (Not Bitcoin)

Post by grayfox » Fri Dec 15, 2017 10:23 am

So it turns out that the coin store I went to has a second location. The second is in a more upscale neighborhood, so I decided to check it out.

It was on a main shopping street in ritzy area. The store is a lot smaller, higher rent than the other location. But they probably get wealthier people coming in. When I was in there, an older couple were in looking to buy three American Gold Eagles. The guy quoted the price of $1306. They were going to pay cash, but it turns out that no cash us accepted over $1,000. Over $1,000 you have to pay by personal check with your address on it. There goes the anonymity. The dealer said they were heavily regulated, money laundering laws, etc. So the couple had to go home and get their checkbook.

I asked about Silver bullion coins. They had the price printed. Spot+$3.00 for Silver American Eagle. He said Spot Price was $16, so $19 total. I asked about Sales Tax. 7.75% for less than $1,500. He also guy said that they bought back at Spot+$1.50. So only a $1.50 spread.

The dealer said the price was the same at both locations. But guy in the other store said it was Spot+$3.50. But the price at both stores is the same. So what is the Spot Price? Where do they get it? Are they rounding up or something. Very confusing.

Anyway, they also had 1 oz. Canadian Silver Maple Leaf bullion coins at Spot+$2.75 and generic round medallions with an Indian Head that look like a coin but are not Legal Tender for Spot+$1.25.

I like the fact that American Eagles and Canadian Maple Leafs are Legal Tender. It make them sound "official" and more trustworthy. So decided to get a 1-oz Silver Maple Leaf. A gave the guy a $20 bill and he gave me $1.25 change. He didn't charge me Sales Tax! So I paid exactly $18.75. Woohoo! :sharebeer
I'm definitely going back to that guy.

The Maple Leaf has a picture of Queen Elizabeth II on one side. It says 5 Dollars.
The other side has a picture of a Maple Leaf and says FINE SILVER 1 OZ ARGENT PUR. Argent Pur means pure money or pure silver in French.

These are works of art for under $20. Plus they are Legal Tender. Real Money.

ImageImage
Last edited by grayfox on Fri Dec 15, 2017 10:31 am, edited 5 times in total.

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Re: Buying Real Silver and Gold (Not Bitcoin)

Post by smitcat » Fri Dec 15, 2017 10:25 am

nick evets wrote:
Fri Dec 15, 2017 9:51 am
Why do so few mention the (up to) 28% capital gain tax rate with precious metals?

Presumably, this is the advantage in coins, so they can be traded and sold at fairground 'coin shows,' craigslist and the like, without reporting? The ethics aside, I'm guessing there's a moderate criminal risk, and hassle in dealing exclusively in cash.
Yes - 28% cap gains is the largest tax you can pay if you hold for more than a year. Similar with loss harvesting if you have sold at a loss.
Just like many other investments it is very possible your tax will be much lower when selling.
There are many transactions made with regular checks - no need for risking cash or hassle if that is your concern.

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Re: Buying Real Silver and Gold (Not Bitcoin)

Post by technovelist » Fri Dec 15, 2017 10:45 am

grayfox wrote:
Fri Dec 15, 2017 9:28 am
technovelist wrote:
Thu Dec 14, 2017 12:02 pm

Silver is pretty but gold is beautiful. This is my favorite coin ever: Image

It's a bit more expensive though. :D
Too rich for my blood. Yesterday, a 1 troy ounce American Gold Eagle was selling for $1,306 at a local coin dealer. I think the dealer said that price was the spot price of Gold + $34 premium.

Although just now I looked on their website and it shows:
Spot WE BUY WE SELL
1259.45 1264.45 1309.45

So that would indicate $5/$50 premiums over spot price for Buy/Sell

Meanwhile Silver Eagle was $19.00. The ratio of Gold Eagle/Silver Eagle = 1306/19 = 68.
So I can buy 68 Silver Eagles or one Gold Eagle.
But what's a good ratio?

In 1717, Sir Isaac Newton, master of the Royal Mint, studied this question and decided that the Gold/Silver ratio should be 15½:1.
Silver standard

:idea: It seems that right now Silver is more of a bargain than gold.
I have been following these metals for many years, and one thing I'm pretty sure of is that the gold/silver ratio doesn't mean much. It fluctuates all over the place and has not been down to anywhere near 15 or 16 to 1 since the blowoff top in 1980.

As for the buy/sell spreads, a 3.5% buy/sell spread is pretty reasonable for retail purchases, although obviously if you are going to run a Permanent Portfolio or the like that is going to be very expensive. Maybe buying 10 or 20 ounces at a time will get you a slightly better spread, perhaps 3%.

But moving from a $1 million Bogleheadish portfolio to a $1 million Permanent Portfolio means buying $250,000 worth of gold. That's plenty to qualify for a dealer account at a wholesaler, which can get you spreads as low as 1%. That would save you 2% of $250,000, or $5,000, which would be well worthwhile doing the extra paperwork for a dealer account.
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Re: Buying Real Silver and Gold (Not Bitcoin)

Post by warowits » Fri Dec 15, 2017 10:53 am

grayfox wrote:
Fri Dec 15, 2017 10:23 am
These are works of art for under $20. Plus they are Legal Tender. Real Money.
They are neat, I have one I was given for graduation. I still fail to see the appeal it holds on people.
There are an army of people whose pay checks depend on convincing people to invest in ways that are against their self interest. This forum is the volunteer army that fights back!

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Re: Buying Real Silver and Gold (Not Bitcoin)

Post by technovelist » Fri Dec 15, 2017 10:54 am

nick evets wrote:
Fri Dec 15, 2017 9:51 am
Why do so few mention the (up to) 28% capital gain tax rate with precious metals?

Presumably, this is the advantage in coins, so they can be traded and sold at fairground 'coin shows,' craigslist and the like, without reporting? The ethics aside, I'm guessing there's a moderate criminal risk, and hassle in dealing exclusively in cash.
I report my sales and pay the taxes. I don't deal in cash.

I have paid the top collectibles rate exactly one time, because I've only sold one time while I was in a high tax bracket.

I have done tax gain harvesting for the last two years, paying 0% on quite a bit of capital gains.

In fact one of the tax benefits of gold is that it produces no income, unlike stocks or bonds, so you can take profits at the optimal time.
In theory, theory and practice are identical. In practice, they often differ.

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Re: Buying Real Silver and Gold (Not Bitcoin)

Post by Tramper Al » Fri Dec 15, 2017 12:14 pm

grayfox wrote:
Fri Dec 15, 2017 10:23 am
I asked about Silver bullion coins. They had the price printed. Spot+$3.00 for Silver American Eagle. He said Spot Price was $16, so $19 total. I asked about Sales Tax. 7.75% for less than $1,500. He also guy said that they bought back at Spot+$1.50. So only a $1.50 spread.
Now, I would consider a spread of $1.50 on a $16 purchase to be huge - 9% or so. That's a lot of friction to overcome, and I think this helps to make the ETF form more appealing. Who among us would tolerate even a 1% spread in a stock ETF? That's a few years of ER costs right there in the purchase, yikes.

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grayfox
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Re: Buying Real Silver and Gold (Not Bitcoin)

Post by grayfox » Fri Dec 15, 2017 1:22 pm

technovelist wrote:
Fri Dec 15, 2017 10:45 am


I have been following these metals for many years, and one thing I'm pretty sure of is that the gold/silver ratio doesn't mean much. It fluctuates all over the place and has not been down to anywhere near 15 or 16 to 1 since the blowoff top in 1980.

As for the buy/sell spreads, a 3.5% buy/sell spread is pretty reasonable for retail purchases, although obviously if you are going to run a Permanent Portfolio or the like that is going to be very expensive. Maybe buying 10 or 20 ounces at a time will get you a slightly better spread, perhaps 3%.

But moving from a $1 million Bogleheadish portfolio to a $1 million Permanent Portfolio means buying $250,000 worth of gold. That's plenty to qualify for a dealer account at a wholesaler, which can get you spreads as low as 1%. That would save you 2% of $250,000, or $5,000, which would be well worthwhile doing the extra paperwork for a dealer account.
Right. Looking at the Gold to Silver Ratio - 100 Year Historical Chart it looks like, in the past 100 years, the ratio was close to 15 only three times.

Dec 1979 14.16
Jun 1968 16.12
Dec 1919 17.73

And in recent decades, it has swung between about 50 and 80, although in one extremes it was 31 and 100.

Maybe it's better to just look at Silver and Gold prices separately, and then decide if you think they are expensive or cheap.

Silver feels cheap below $20. I'll probably buy more.
Gold? If it got below $1,000 I might buy some.

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grayfox
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Re: Buying Real Silver and Gold (Not Bitcoin)

Post by grayfox » Fri Dec 15, 2017 5:30 pm

Tramper Al wrote:
Fri Dec 15, 2017 12:14 pm

Now, I would consider a spread of $1.50 on a $16 purchase to be huge - 9% or so. That's a lot of friction to overcome, and I think this helps to make the ETF form more appealing. Who among us would tolerate even a 1% spread in a stock ETF? That's a few years of ER costs right there in the purchase, yikes.
Yes, the spreads are a big negative for buying in physical silver and gold. Yesterday I paid $18.75 for a 2013 Silver Maple Leaf. I believe they would have bought it back at spot price + 0 = $16.00. (Right now their website is showing 16.13/18.88, with silver spot = 16.13). So there's an immediate loss of $2.75 (14.67%). And that's without paying Sales Tax.

Meanwhile you can buy a $20 stock for no commission and a spread of about a penny.

Maybe gold has smaller spread.

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Re: Buying Real Silver and Gold (Not Bitcoin)

Post by technovelist » Fri Dec 15, 2017 7:59 pm

grayfox wrote:
Fri Dec 15, 2017 5:30 pm
Tramper Al wrote:
Fri Dec 15, 2017 12:14 pm

Now, I would consider a spread of $1.50 on a $16 purchase to be huge - 9% or so. That's a lot of friction to overcome, and I think this helps to make the ETF form more appealing. Who among us would tolerate even a 1% spread in a stock ETF? That's a few years of ER costs right there in the purchase, yikes.
Yes, the spreads are a big negative for buying in physical silver and gold. Yesterday I paid $18.75 for a 2013 Silver Maple Leaf. I believe they would have bought it back at spot price + 0 = $16.00. (Right now their website is showing 16.13/18.88, with silver spot = 16.13). So there's an immediate loss of $2.75 (14.67%). And that's without paying Sales Tax.

Meanwhile you can buy a $20 stock for no commission and a spread of about a penny.

Maybe gold has smaller spread.
Yes, gold has a considerably smaller spread. For example, right now Kitco is selling 1 oz gold Eagles at 1299 and buying at 1255, for a 3.5% spread, and that is the retail spread for one coin. You can do better if you buy or sell a significant quantity at once.
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Re: Buying Real Silver and Gold (Not Bitcoin)

Post by linenfort » Fri Dec 15, 2017 8:50 pm

I like these adventures you're going on, grayfox! You learn by doing.
grayfox wrote:
Wed Dec 13, 2017 1:56 pm
Ever seen LOTR. When they have to buy passage on the boat to Laketown, they use silver coins. You can't carry a company with you in your purse, like you can a silver dollar or a 20-dollar gold coin.
I mean, my fantasy is to go out for pizza with friends and pay each other in silver coins, except for the one person who uses a credit card to pay the restaurant. It can never work, of course, unless we all buy the silver together. And, I'm not sure how it would end. Maybe we could exchange back into cash after ten years of playing with these coins.

I see you've discovered the 10% spread. That's why it doesn't feel like money to me. And yes, while the coins are technically legal tender unlike the rounds, what good is it if the face value is a minuscule fraction of what you really paid? With the values of the metal coins untethered from fiat money, and with the exorbitant spread, it just doesn't feel like money to me. Perhaps that's not fair, because you have to pay a fee to change to Euros as well, but at least you can use those Euros to buy things.

I do buy 1oz gold bullion coins.
bogleheads, don't knock state lotteries. They helped defund the mafia.

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grayfox
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Re: Buying Real Silver and Gold (Not Bitcoin)

Post by grayfox » Sat Dec 16, 2017 1:50 pm

linenfort wrote:
Fri Dec 15, 2017 8:50 pm

I mean, my fantasy is to go out for pizza with friends and pay each other in silver coins, except for the one person who uses a credit card to pay the restaurant. It can never work, of course, unless we all buy the silver together. And, I'm not sure how it would end. Maybe we could exchange back into cash after ten years of playing with these coins.
It would be cool if someone opened a Silver Cafe or Pub where you could only pay with Silver coins.

Cup of Coffee 10 cents
Beer 25 cents
Sandwich 50 cents
Large Pizza $1

For people without silver coins, they could have an exchange window where they could buy silver coins.

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grayfox
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Re: Buying Real Silver and Gold (Not Bitcoin)

Post by grayfox » Sat Dec 16, 2017 2:10 pm

On thing that bothers me is this idea of Sales Tax when buying Gold or Silver American Eagles. Now I can see charging sales tax for the other stuff like generic rounds and bars produced by private companies. You are just buying a Medallion. But the American Eagles are Legal Tender, produced by the United States Mint. It's official money sanctioned by the United State of America.

They should not be required to collect Sales Tax when exchanging money for other money. Imagine if every time you went to the bank and got some cash, the state and local governments charged you 7.75%. In LA, I think its 9%. Highway Robbery. :x

Right now, the website shows 19.13 for one ASE. If I buy 20, that's $382.60.
But 7.75% sales tax will add $29.68, making the total $412.28

Unless they waive the Sales Tax, it's costing me another $30 for 20 ounces. It would make more sense to buy online. But I suppose then you will have to pay for shipping. But it's got to be less than $30 to ship 20 ounces of silver.

This stupid tax only hurts the local coin dealer. There oughta be a law against this. :x

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Raymond
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Re: Buying Real Silver and Gold (Not Bitcoin)

Post by Raymond » Sat Dec 16, 2017 3:56 pm

Sales taxes on precious metals, coins and paper money vary by state:

https://thecoinologist.com/sales-tax-st ... breakdown/
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Re: Buying Real Silver and Gold (Not Bitcoin)

Post by MrDogg » Sat Dec 16, 2017 4:34 pm

Mohamed Aly El-Erian, chief economic adviser at Allianz, the corporate parent of PIMCO where he served as CEO and co-chief investment officer (2007-2014). He served as chair of President Obama's Global Development Council (2012-17), and is a columnist for Bloomberg View, and a contributing editor to the Financial Times says your investment portfolio should have at least 5% Gold.

Warren Buffet says 0% Gold.

3FP says 0% Gold

I agree with Buffett and 3FP so I don't have any gold.

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Re: Buying Real Silver and Gold (Not Bitcoin)

Post by technovelist » Sat Dec 16, 2017 4:38 pm

grayfox wrote:
Sat Dec 16, 2017 2:10 pm
On thing that bothers me is this idea of Sales Tax when buying Gold or Silver American Eagles. Now I can see charging sales tax for the other stuff like generic rounds and bars produced by private companies. You are just buying a Medallion. But the American Eagles are Legal Tender, produced by the United States Mint. It's official money sanctioned by the United State of America.

They should not be required to collect Sales Tax when exchanging money for other money. Imagine if every time you went to the bank and got some cash, the state and local governments charged you 7.75%. In LA, I think its 9%. Highway Robbery. :x

Right now, the website shows 19.13 for one ASE. If I buy 20, that's $382.60.
But 7.75% sales tax will add $29.68, making the total $412.28

Unless they waive the Sales Tax, it's costing me another $30 for 20 ounces. It would make more sense to buy online. But I suppose then you will have to pay for shipping. But it's got to be less than $30 to ship 20 ounces of silver.

This stupid tax only hurts the local coin dealer. There oughta be a law against this. :x
Good point, but apparently there is an exemption in California for "large" purchases over $1500, according to the site referenced above.

I think the most interesting entry is the one for Oklahoma:

"“The new law also exempts all state-level taxes that Oklahoma residents would otherwise have to pay when exchanging gold or silver back into paper money: For taxable years beginning on or after January 1, 2015, there shall be exempt from Oklahoma taxable income, or in the case of an individual, the Oklahoma adjusted gross income, any amount of net capital gains … which result from the sale or exchange of gold or silver for another form of legal tender.”

So in Oklahoma, gold and silver are treated BETTER than other capital assets rather than worse as at the federal level!
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Re: Buying Real Silver and Gold (Not Bitcoin)

Post by willthrill81 » Sat Dec 16, 2017 5:37 pm

Wakefield1 wrote:
Wed Dec 13, 2017 2:22 pm
technovelist wrote:
Wed Dec 13, 2017 1:31 pm
So you're saying this time it's different? :mrgreen:
This time is worse.
So you know something that the market doesn't?

The EMH should apply just as well to Bitcoin as to stocks and bonds.

It's a good thing I don't believe in the EMH myself! :wink:
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Re: Buying Real Silver and Gold (Not Bitcoin)

Post by technovelist » Sat Dec 16, 2017 6:25 pm

willthrill81 wrote:
Sat Dec 16, 2017 5:37 pm
Wakefield1 wrote:
Wed Dec 13, 2017 2:22 pm
technovelist wrote:
Wed Dec 13, 2017 1:31 pm
So you're saying this time it's different? :mrgreen:
This time is worse.
So you know something that the market doesn't?

The EMH should apply just as well to Bitcoin as to stocks and bonds.

It's a good thing I don't believe in the EMH myself! :wink:
I believe in the EMH version that says that you are probably not going to do better than the average returns available in the market.

I don't believe in the version that says that everything is properly priced all the time (if I'm stating that correctly, which is doubtful). :sharebeer
In theory, theory and practice are identical. In practice, they often differ.

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grayfox
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Re: Buying Real Silver and Gold (Not Bitcoin)

Post by grayfox » Sat Dec 16, 2017 8:38 pm

If anyone is interested in collecting Silver, try searching for "Silver Stacking" on YouTube. There are a bunch of "Stacker" channels where people talk about "Stacking" and they show their "stack". This is a big hobby for a lot of people. Basically they are saving their money up and buying Silver bullion coins, Silver bars and rounds, numismatic silver coins, poured silver sculptures, etc.

They do unboxings, so you can see what you get when you order Silver online from various vendors. They all give their opinions on where to buy, what to stack, why they stack, etc.

I never heard that term before. Silver Stacking. Check it out.

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Re: Buying Real Silver and Gold (Not Bitcoin)

Post by willthrill81 » Sat Dec 16, 2017 8:55 pm

technovelist wrote:
Sat Dec 16, 2017 6:25 pm
willthrill81 wrote:
Sat Dec 16, 2017 5:37 pm
Wakefield1 wrote:
Wed Dec 13, 2017 2:22 pm
technovelist wrote:
Wed Dec 13, 2017 1:31 pm
So you're saying this time it's different? :mrgreen:
This time is worse.
So you know something that the market doesn't?

The EMH should apply just as well to Bitcoin as to stocks and bonds.

It's a good thing I don't believe in the EMH myself! :wink:
I believe in the EMH version that says that you are probably not going to do better than the average returns available in the market.

I don't believe in the version that says that everything is properly priced all the time (if I'm stating that correctly, which is doubtful). :sharebeer
According to the EMH, the market price is the single best a priori indicator of the 'right' price, and you cannot beat the market price with publicly available information. Ergo, we cannot know whether Bitcoin is currently in a bubble.

I personally reject it for many reasons, one of which is because markets are comprised of people who can, en masse, make irrational decisions that can be exploited, albeit not perfectly and with some degree of difficulty.

Someone who is a true believer in the EMH should not believe that Bitcoin or any other cryptocurrency is 'overpriced'. The many on this forum who believe that these assets are overpriced are demonstrating that they too reject the EMH to some extent.

My two cents. :beer
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Re: Buying Real Silver and Gold (Not Bitcoin)

Post by technovelist » Sat Dec 16, 2017 9:55 pm

willthrill81 wrote:
Sat Dec 16, 2017 8:55 pm
technovelist wrote:
Sat Dec 16, 2017 6:25 pm
willthrill81 wrote:
Sat Dec 16, 2017 5:37 pm
Wakefield1 wrote:
Wed Dec 13, 2017 2:22 pm
technovelist wrote:
Wed Dec 13, 2017 1:31 pm
So you're saying this time it's different? :mrgreen:
This time is worse.
So you know something that the market doesn't?

The EMH should apply just as well to Bitcoin as to stocks and bonds.

It's a good thing I don't believe in the EMH myself! :wink:
I believe in the EMH version that says that you are probably not going to do better than the average returns available in the market.

I don't believe in the version that says that everything is properly priced all the time (if I'm stating that correctly, which is doubtful). :sharebeer
According to the EMH, the market price is the single best a priori indicator of the 'right' price, and you cannot beat the market price with publicly available information. Ergo, we cannot know whether Bitcoin is currently in a bubble.

I personally reject it for many reasons, one of which is because markets are comprised of people who can, en masse, make irrational decisions that can be exploited, albeit not perfectly and with some degree of difficulty.

Someone who is a true believer in the EMH should not believe that Bitcoin or any other cryptocurrency is 'overpriced'. The many on this forum who believe that these assets are overpriced are demonstrating that they too reject the EMH to some extent.

My two cents. :beer
I agree that a true believer in the EMH thinks that it is impossible to tell whether anything is overpriced. That seems contradictory to several examples I have personally witnessed, which is why I don't qualify as a true believer. :sharebeer
In theory, theory and practice are identical. In practice, they often differ.

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Re: Buying Real Silver and Gold (Not Bitcoin)

Post by Bastiat » Sat Dec 16, 2017 10:31 pm

JBTX wrote:
Thu Dec 14, 2017 10:15 am
If you want to buy a few coins in case of the zombie apocalypse knock yourself. But to have any meaningful impact on your portfolio you’d have to buy a lot and then store it somewhere safe which in my mind is a PITA.

Seems to me if civilization has collapsed then if you toss out silver or gold coins they are likely to get stolen in the post apocalyptic anarchy state.
As the OP stated, it doesn't have to be a zombie apocalypse, or anarchy.

Do you think someone in Puerto Rico (much of which is still without electricity,) at some point in the past three months, may have found use of a few silver or gold coins? What about Greece during their banking crisis when online accounts were frozen (and nearly confiscated), and ATM transactions limited? Venezuela, Syria... there are countless examples. I had a grandparent who only escaped the Iron Curtain because of a bribe of gold to a border guard. We never expect to find ourselves in such situations, but it is such inexpensive insurance in case we do.

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Re: Buying Real Silver and Gold (Not Bitcoin)

Post by technovelist » Sat Dec 16, 2017 10:47 pm

Bastiat wrote:
Sat Dec 16, 2017 10:31 pm
JBTX wrote:
Thu Dec 14, 2017 10:15 am
If you want to buy a few coins in case of the zombie apocalypse knock yourself. But to have any meaningful impact on your portfolio you’d have to buy a lot and then store it somewhere safe which in my mind is a PITA.

Seems to me if civilization has collapsed then if you toss out silver or gold coins they are likely to get stolen in the post apocalyptic anarchy state.
As the OP stated, it doesn't have to be a zombie apocalypse, or anarchy.

Do you think someone in Puerto Rico (much of which is still without electricity,) at some point in the past three months, may have found use of a few silver or gold coins? What about Greece during their banking crisis when online accounts were frozen (and nearly confiscated), and ATM transactions limited? Venezuela, Syria... there are countless examples. I had a grandparent who only escaped the Iron Curtain because of a bribe of gold to a border guard. We never expect to find ourselves in such situations, but it is such inexpensive insurance in case we do.
Yep. And unlike most insurance, sometimes you benefit from it without the occurrence of the disaster you were trying to insure against.

Not to mention that it is a lot prettier than a house insurance policy. For example:

Image
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Re: Buying Real Silver and Gold (Not Bitcoin)

Post by obgraham » Sun Dec 17, 2017 12:35 am

On our 25th anniversary, Mrs O bought me 250 ounces of silver, at $4.33 an ounce.

Now we're coming up on our 50th. It's true those big old bars are worth 4 times as much.

But I've lugged the damn things around for 25 years. They're heavy and bulky. I'm hoping she doesn't go out and buy me 500 more ounces. There's other assets I think are better!

I guess if I need to cross that bridge after the apocalypse, though, I'm in good shape.

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Re: Buying Real Silver and Gold (Not Bitcoin)

Post by technovelist » Sun Dec 17, 2017 1:23 am

obgraham wrote:
Sun Dec 17, 2017 12:35 am
On our 25th anniversary, Mrs O bought me 250 ounces of silver, at $4.33 an ounce.

Now we're coming up on our 50th. It's true those big old bars are worth 4 times as much.

But I've lugged the damn things around for 25 years. They're heavy and bulky. I'm hoping she doesn't go out and buy me 500 more ounces. There's other assets I think are better!

I guess if I need to cross that bridge after the apocalypse, though, I'm in good shape.
Yeah, silver is pretty clumsy. Gold is a lot easier to deal with; a small safe deposit box will hold a very large value of gold.
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Re: Buying Real Silver and Gold (Not Bitcoin)

Post by 1nv35t » Sun Dec 17, 2017 6:35 am

obgraham wrote:
Sun Dec 17, 2017 12:35 am
On our 25th anniversary, Mrs O bought me 250 ounces of silver, at $4.33 an ounce.

Now we're coming up on our 50th. It's true those big old bars are worth 4 times as much.

But I've lugged the damn things around for 25 years. They're heavy and bulky. I'm hoping she doesn't go out and buy me 500 more ounces. There's other assets I think are better!
Trivia ... if instead of silver Mrs O had bought gold at the end of 1991 then you'd only have had to lug around 3 ounces. To recent that gold would be worth around 3.5 times more in value. Had however you'd matched the $1082.50 worth of gold with a equal amount of stock value and rebalanced back to 50/50 weightings each year, you'd now have 6.3 ounces of gold to lug around. Somewhat as though not only had the value of each ounce risen, but also magically materialised more gold along the way.

Holding a extreme barbell of 50/50 stock/gold would have recent value nearly twice that of had you instead bought a bond bullet ... before consideration of any taxes. All bonds however is rather conservative, so if instead you'd held 75/25 stock/gold as a 50/50 stock/bond proxy, in gross terms you'd have seen similar outcomes https://tinyurl.com/yd6cpes5 . In net terms however the stock and gold combination can for some be the more tax efficient. 75/25 BRK-A and gold for instance eliminated regular/ongoing interest/dividend taxes and once purchased had no ongoing fees/costs other than safe storage and any rebalance trade costs/taxes.

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Re: Buying Real Silver and Gold (Not Bitcoin)

Post by Valuethinker » Sun Dec 17, 2017 7:56 am

technovelist wrote:
Sun Dec 17, 2017 1:23 am
obgraham wrote:
Sun Dec 17, 2017 12:35 am
On our 25th anniversary, Mrs O bought me 250 ounces of silver, at $4.33 an ounce.

Now we're coming up on our 50th. It's true those big old bars are worth 4 times as much.

But I've lugged the damn things around for 25 years. They're heavy and bulky. I'm hoping she doesn't go out and buy me 500 more ounces. There's other assets I think are better!

I guess if I need to cross that bridge after the apocalypse, though, I'm in good shape.
Yeah, silver is pretty clumsy. Gold is a lot easier to deal with; a small safe deposit box will hold a very large value of gold.
The main thing about silver is that in small denominations, it should be easier to spend - more fungible in that sense.

But if you want a store of value that has a historic track record-- gold.

William Bernstein's piece "the Most Patient Asset" seems to be the canonical, non technical summary of its role in portfolios.

Note Campbell Harvey at Duke has done a fairly good academic demolition job on the gold (and commodity) stats.

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Re: Buying Real Silver and Gold (Not Bitcoin)

Post by Valuethinker » Sun Dec 17, 2017 8:05 am

Bastiat wrote:
Sat Dec 16, 2017 10:31 pm


As the OP stated, it doesn't have to be a zombie apocalypse, or anarchy.

Do you think someone in Puerto Rico (much of which is still without electricity,) at some point in the past three months, may have found use of a few silver or gold coins?
In a word. No. The US dollar would be just as good as it is now. As it was in Zimbabwe, or the fall of the USSR. Or just about any place with currency controls and risk of hyperinflation.
What about Greece during their banking crisis when online accounts were frozen (and nearly confiscated), and ATM transactions limited?
No. Euros. And VISA credit card balances soared. What people did was buy consumer durables (fridges, even cars).
Venezuela, Syria... there are countless examples.
US Dollars in the former. Syria? Not sure. Maybe Euros-- to buy the paperwork to get you into some other country. But, mostly, food, fuel, medical supplies, spare parts for cars and generators. All been in short supply.
I had a grandparent who only escaped the Iron Curtain because of a bribe of gold to a border guard. We never expect to find ourselves in such situations, but it is such inexpensive insurance in case we do.
Nice. But gold is heavy. The preferred way for a Jew out of pre WW2 Europe was diamonds via the Antwerp diamonds market (still probably the largest in the world).

With Nazi Germany it was in fact possible to buy your way out, officially, with Reichsmarks-- the German state ran a nice financial surplus on its asset confiscation services (read Philip Kerr/ (Bernie Gunter) or Alan Furst thrillers) . The problem was that no country wanted them-- there was that ship of Jews which bounced between American and Canadian ports, because no politician (not FDR and certainly not the Canadian PM, Mackenzie King) wanted to take the responsibility for them, even of setting up a temporary refugee camp in the US Carribean. The usual suspect newspapers and radio commentators were decrying getting involved in foreign problems, and taking in foreign Jews who were not Anglicized, would never fit into our culture etc. Remember we turned into the "good" guys ;-).

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Re: Buying Real Silver and Gold (Not Bitcoin)

Post by technovelist » Sun Dec 17, 2017 8:28 am

Valuethinker wrote:
Sun Dec 17, 2017 7:56 am
technovelist wrote:
Sun Dec 17, 2017 1:23 am
obgraham wrote:
Sun Dec 17, 2017 12:35 am
On our 25th anniversary, Mrs O bought me 250 ounces of silver, at $4.33 an ounce.

Now we're coming up on our 50th. It's true those big old bars are worth 4 times as much.

But I've lugged the damn things around for 25 years. They're heavy and bulky. I'm hoping she doesn't go out and buy me 500 more ounces. There's other assets I think are better!

I guess if I need to cross that bridge after the apocalypse, though, I'm in good shape.
Yeah, silver is pretty clumsy. Gold is a lot easier to deal with; a small safe deposit box will hold a very large value of gold.
The main thing about silver is that in small denominations, it should be easier to spend - more fungible in that sense.
Right, that's why I mentioned silver dimes and quarters.
obgraham wrote:
Sun Dec 17, 2017 12:35 am
But if you want a store of value that has a historic track record-- gold.
Yep.
In theory, theory and practice are identical. In practice, they often differ.

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Re: Buying Real Silver and Gold (Not Bitcoin)

Post by grayfox » Sun Dec 17, 2017 9:50 am

They call Silver "Poor Man's Gold". Right now it takes about 77 ounces of Silver for 1 ounce of Gold**. The ratio averages about 50.

So it doesn't take a lot of money to get started "stacking silver". As I've shown, you can pick up a 1-oz American Silver Eagle for less than 20 bucks. Even a teenager working part-time at Jack-in-the-Box could afford to buy a Silver Eagle each week. I can think of worse things for a teenager to spend $20 on.

Even a kid could buy a pre-1965 90% silver dime or quarter for only a couple of dollars. A dime should be worth about $1.15 and a quarter about $2.88. If wonder if the coin store would sell a kid one silver quarter? Probably.

Most of the Silver Stackers seem to be working class people. On the other hand, Gold seems to be for people of greater means. Like that older couple I saw in the coin store looking to buy three Gold American Eagles which would cost about $3900.

**Gold to Silver Ratio - 100 Year Historical Chart

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Re: Buying Real Silver and Gold (Not Bitcoin)

Post by jadedfalcons » Sun Dec 17, 2017 10:17 am

Years ago, when gold was $280 an ounce, I wanted to buy some bullion but had no idea how to go about doing it. I appreciate the good information in this thread. I do have a question for the more knowledgeable people here. What is the difference between these two items?

https://www.jmbullion.com/2017-american-silver-eagle/
https://catalog.usmint.gov/american-eag ... 47&start=1

If they're both uncirculated, is the difference just the "added value" of the nicer packaging from the US Mint?

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Re: Buying Real Silver and Gold (Not Bitcoin)

Post by grayfox » Sun Dec 17, 2017 10:32 am

So what what exactly are Silver Stackers stacking? In English, what silver products can you buy if you want to collect or invest in Silver. Here is what I found out watching YouTube videos:

1. Sovereign Coins--These are the coins from government mints and are Legal Tender.
American Eagle (United States Mint)
Canadian Maple Leaf (Royal Canadian Mint)
Britannia (British Royal Mint)
Kookaburra and Koala (Perth Mint)
Krugerrand (South Africa)
Liberatads (Mexican Mint)
Austrian Silver Philharmonics
and more

2. Generic Rounds--these look like coins but are produced by private companies, so they are really Medallions. Not Legal Tender. The premium is lower than Sovereign Coins.

3. Silver Bars--also produced by private companies. These are made in numerous sizes including larger weights
1, 2, 5, 10, 50, 100, 1,000 oz. also grams and kilo sizes

I think the official Silver Bar for Futures Contracts is a 1,000 troy ounce 9.99 percent pure Silver Bar. That weighs about 68.57 pounds and today is worth about $16,000. The Futures Contract is for 5,000 troy ounces.

4. Junk Silver--these are the pre-1965 Silver Dimes, Quarters and Half Dollars. They also call this Constitutional Silver.

5. Semi-numismatic Coins--these are modern coins, and have a higher premium. They are more for Collectors.
Pandas (China)
Elephants (Somalia)
Armenia, Tuvalu, and many other countries

6. Numismatic Coins--rare old silver coins that are worth a lot more than their Silver content.

7. Poured Silver--people melt down silver and then cast it into sculptures. For some reason, a lot of it seems to be skulls.

8. Other--There are also things like Silver Bullets, Silver Statues, and more. These are not simply poured, but also machined.

From what I have seen, most people buy a variety of stuff, so they are collecting as well as investing. They keep a lot of their nicer coins in individual airtight cases so they remain in pristine condition.
Last edited by grayfox on Sun Dec 17, 2017 1:58 pm, edited 2 times in total.

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Re: Buying Real Silver and Gold (Not Bitcoin)

Post by GLState » Sun Dec 17, 2017 10:36 am

jadedfalcons wrote:
Sun Dec 17, 2017 10:17 am
Years ago, when gold was $280 an ounce, I wanted to buy some bullion but had no idea how to go about doing it. I appreciate the good information in this thread. I do have a question for the more knowledgeable people here. What is the difference between these two items?

https://www.jmbullion.com/2017-american-silver-eagle/
https://catalog.usmint.gov/american-eag ... 47&start=1

If they're both uncirculated, is the difference just the "added value" of the nicer packaging from the US Mint?
The first is a bullion coin. The second is geared toward collectors where grade/condition may increase or decrease its value.
https://catalog.usmint.gov/faqs-faqcate ... s-programs

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Re: Buying Real Silver and Gold (Not Bitcoin)

Post by Johnnie » Sun Dec 17, 2017 11:16 am

This may be the most convincing explanation I've found for why stock index funds (and real estate) are for winners, and shiny rocks not so much:

How to invest like a rich guy


That said, I also like just a few shinies buried in the orchard as insurance.
"I know nothing."

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Re: Buying Real Silver and Gold (Not Bitcoin)

Post by OnTrack » Sun Dec 17, 2017 2:32 pm

obgraham wrote:
Sun Dec 17, 2017 12:35 am
On our 25th anniversary, Mrs O bought me 250 ounces of silver, at $4.33 an ounce.

Now we're coming up on our 50th. It's true those big old bars are worth 4 times as much.

But I've lugged the damn things around for 25 years. They're heavy and bulky. I'm hoping she doesn't go out and buy me 500 more ounces. There's other assets I think are better!

I guess if I need to cross that bridge after the apocalypse, though, I'm in good shape.
A 25th anniversary is considered a "silver anniversary"; a 50th anniversary is considered a "golden anniversary".

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Re: Buying Real Silver and Gold (Not Bitcoin)

Post by Bastiat » Sun Dec 17, 2017 4:35 pm

Valuethinker wrote:
Sun Dec 17, 2017 8:05 am
Bastiat wrote:
Sat Dec 16, 2017 10:31 pm


As the OP stated, it doesn't have to be a zombie apocalypse, or anarchy.

Do you think someone in Puerto Rico (much of which is still without electricity,) at some point in the past three months, may have found use of a few silver or gold coins?
In a word. No. The US dollar would be just as good as it is now. As it was in Zimbabwe, or the fall of the USSR. Or just about any place with currency controls and risk of hyperinflation.
What about Greece during their banking crisis when online accounts were frozen (and nearly confiscated), and ATM transactions limited?
No. Euros. And VISA credit card balances soared. What people did was buy consumer durables (fridges, even cars).
Venezuela, Syria... there are countless examples.
US Dollars in the former. Syria? Not sure. Maybe Euros-- to buy the paperwork to get you into some other country. But, mostly, food, fuel, medical supplies, spare parts for cars and generators. All been in short supply.
I had a grandparent who only escaped the Iron Curtain because of a bribe of gold to a border guard. We never expect to find ourselves in such situations, but it is such inexpensive insurance in case we do.
Nice. But gold is heavy. The preferred way for a Jew out of pre WW2 Europe was diamonds via the Antwerp diamonds market (still probably the largest in the world).

With Nazi Germany it was in fact possible to buy your way out, officially, with Reichsmarks-- the German state ran a nice financial surplus on its asset confiscation services (read Philip Kerr/ (Bernie Gunter) or Alan Furst thrillers) . The problem was that no country wanted them-- there was that ship of Jews which bounced between American and Canadian ports, because no politician (not FDR and certainly not the Canadian PM, Mackenzie King) wanted to take the responsibility for them, even of setting up a temporary refugee camp in the US Carribean. The usual suspect newspapers and radio commentators were decrying getting involved in foreign problems, and taking in foreign Jews who were not Anglicized, would never fit into our culture etc. Remember we turned into the "good" guys ;-).
What exempts the US dollar from the risk of hyperinflation? I was unaware our currency is in a riskless realm separate from all others in history.

I don't disagree that the US dollar would be just as good in most situations. But medical supplies, car parts, generators, etc. (in short supply, no less) sound expensive. How many people have, say, $5,000 cash sitting around at home? Do you? And if you do, that cash is subject to inflation drag under the best of circumstances, and hyperinflation in the worst. Gold, at least, has outperformed the US dollar over time. I've never heard of people running around with wheelbarrow fulls of gold so that they might buy something... generally a coin or two would do.

To be clear, I don't believe gold or silver to be a superior investment choice, nor do I advocate a large allocation to it. But as I stated before, it is very cheap insurance for the less myopic among us.

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Re: Buying Real Silver and Gold (Not Bitcoin)

Post by grayfox » Sun Dec 17, 2017 8:36 pm

Another issue that I'm seeing with with collecting Silver coins: Counterfeits.

I've watched some YouTube videos about fake American Silver Eagles manufactured in China being sold on eBay. Some of them look very real. It might take an expert to tell it was fake. Also other fake coins like Morgan Silver Dollars. And fake generic rounds that are not silver. In fact, probably any silver coin, round, bar, whatever can be faked.

I would not buy through eBay or Craigslist. I would only buy from a reputable Local Dealer with a store, or from a big online dealer.

Edit: One guy reported getting a fake 1 oz round from a reputable Local Dealer. They probably didn't sell it knowingly, but it slipped through. When the guy brought it back to the local dealer, they immediately gave him a replacement.

:idea: I'm thinking that you have to become somewhat of an expert in whatever it is you are buying so that you can detect a fake. You might need to check the diameter, thickness, weight in grams, do the magnet test, inspect under eye loop for details. You have to know what you are buying.
Last edited by grayfox on Sun Dec 17, 2017 9:06 pm, edited 3 times in total.

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Re: Buying Real Silver and Gold (Not Bitcoin)

Post by bhsince87 » Sun Dec 17, 2017 9:00 pm

grayfox wrote:
Sun Dec 17, 2017 8:36 pm
Another issue that I'm seeing with with collecting Silver coins: Counterfeits.

I've watched some YouTube videos about fake American Silver Eagles manufactured in China being sold on eBay. Some of them look very real. It might take an expert to tell it was fake. Also other fake coins like Morgan Silver Dollars. And fake generic rounds that are not silver. In fact, probably any silver coin, round, bar, whatever can be faked.

I would not buy through eBay or Craigslist. I would only buy from a reputable Local Dealer with a store, or from a big online dealer.

Edit: One guy reported getting a fake 1 oz round from a reputable Local Dealer.

:idea: I'm thinking that you have to become somewhat of an expert in whatever it is you are buying so that you can detect a fake. You might need to check the diameter, thickness, weight in grams, do the magnet test, inspect under eye loop for details. You have to know what you are buying.
This is why sovereign coins and junk silver coins have a bit of an advantage. They are widely recognizable, and the penalties for counterfeiting them are harsh.
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Re: Buying Real Silver and Gold (Not Bitcoin)

Post by grayfox » Sun Dec 17, 2017 9:17 pm

bhsince87 wrote:
Sun Dec 17, 2017 9:00 pm

This is why sovereign coins and junk silver coins have a bit of an advantage. They are widely recognizable, and the penalties for counterfeiting them are harsh.
Right. I was going to make a post about which kind of silver I would buy. The issue of fakes narrows the choice down for me to Sovereign Coins and junk silver coins. Specifically, I would focus on owning one or two sovereign coins like American Eagles or Maple Leafs so I could become very familiar with what they look and feel like.

I might also want to get one of these that detects the diameter, thickness and weight: the Fisch $169

There is also a Ping Test for Silver Coins & Bars. I did this on my Silver Eagle and it passed. :dollar

Then I tried it on my Maple Leaf and it failed! :( But it turns out that the Maple Leaf makes a different ping sound. :oops: Canadian Silver Maple Leaf - Ping test

Added: I also learned that Maples Leafs starting in 2014 have two security features. One is radial lines in the background. The other is a Privy mark that is a tiny Maple Leaf below the big Maple Leaf. My 2013 doesn't have these features.

Image

There is a more to owning physical Silver than meets the eye.

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Re: Buying Real Silver and Gold (Not Bitcoin)

Post by grayfox » Sun Dec 17, 2017 10:11 pm

Anyone that is buying silver must be able to detect fakes. This article is excellent:

Fake Silver Coins: 14 Ways to Spot Counterfeits

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Re: Buying Real Silver and Gold (Not Bitcoin)

Post by linenfort » Sun Dec 17, 2017 10:11 pm

grayfox, there is a ring test for gold coins now that some fakes are passing the diameter, etc, metrics test. I think there’s even an app that listens to the ring.

Not sure about silver.
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Re: Buying Real Silver and Gold (Not Bitcoin)

Post by alfaspider » Mon Dec 18, 2017 9:34 am

Bastiat wrote:
Sun Dec 17, 2017 4:35 pm

What exempts the US dollar from the risk of hyperinflation? I was unaware our currency is in a riskless realm separate from all others in history.

I don't disagree that the US dollar would be just as good in most situations. But medical supplies, car parts, generators, etc. (in short supply, no less) sound expensive. How many people have, say, $5,000 cash sitting around at home? Do you? And if you do, that cash is subject to inflation drag under the best of circumstances, and hyperinflation in the worst.
Of course nothing is exempt from hyperinflation, but there are a few features of the U.S. dollar that make it MUCH lower risk than other currencies. Most importantly, the U.S. is able to borrow and pay for imports in Dollars- not in foreign currency. By contrast, Zimbabwe and Venezuela were forced to borrow and pay for goods in foreign currency. Effectively all cases of hyperinflation I am aware of involved a country with foreign creditors that had to pay the debts in a foreign currency (or in-kind). For the U.S. to suffer from hyperinflation, it would have to lose its status as a world reserve currency. The oil markets would have to go off the dollar, as well as many other commodity markets. That MAY happen one day, but you will have plenty of warning if it ever gets to that point. It would also mean that some OTHER country would have superseded the U.S. as the dominant superpower.

In a situation like Puerto Rico, cash would be FAR more effective than gold or silver coins. Without access to the internet, how do you have any idea what the current price of gold or silver is? During a disaster, there wouldn't be enough transactions in gold or silver for anybody on the street to establish a local market. Moreover, most people do not know how to verify whether a coin is a genuine gold/silver coin. By contrast, the U.S. dollar was and is the legal tender in Puerto Rico- because everyone earns their salary in dollars, everyone knows how much buying power a given amount of dollars should have.

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Re: Buying Real Silver and Gold (Not Bitcoin)

Post by grayfox » Mon Dec 18, 2017 10:58 am

OK, so upthread I showed the list of various Silver products that you could buy:

1. Sovereign Coins-Silver Eagles, Maple Leafs, etc
2. Generic Rounds
3. Silver Bars
4. Junk Silver-pre-1965 90% silver dimes, quarters, halves
5. Semi-numismatic Coins
6. Numismatic Coins
7. Poured Silver
8. Other--Silver Bullets, Silver Statues, etc.

So which ones should you buy? That's up to each Silver Stacker and depends on your reasons for stacking silver. If you like poured Silver Skulls, go for it!

Number 1, I would give liquidity top priority. How easy is it to convert your Silver into U.S. Dollars?

The sovereign coins are the most liquid, especially the Silver Eagle. You can walk into any Local Coin Store and get about Spot plus $1.00.

With Generic Rounds you will probably get Spot minus $0.75.

Larger Silver Bars are probably even less liquid. I would imagine that a 10-oz Silver Generic Bar (~$200) has fewer buyers than 1-oz Generic Rounds (~$20), so the dealer might want even more of a discount. Or maybe just not buy it from you at all if he doesn't think it will sell quickly. And a 100-ounce bar (~$2,000) would have even fewer potential buyers.

Imagine bringing one of those official 1,000 ounce bars (~$20,000) into a coin dealer. They will probably want to run an assay on it or some other tests to make sure it's real. Or maybe send you somewhere else that deals in big stuff.

Numismatics have a lot of their value in the collectibility. So it's more subjective. Less dependent on the spot price.
Semi-numismatics less so, but similar.

For poured silver, you probably have to sell it on eBay. A lot of trouble, so not liquid at all.

I would guess the Junk Silver is very liquid.

I have not done any of this, so I'm just guessing.

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Re: Buying Real Silver and Gold (Not Bitcoin)

Post by grayfox » Mon Dec 18, 2017 11:17 am

Second, I would consider security, i.e. how easy is it to fake.

As the poster above said, the Sovereign coins and Junk Silver Coins are probably the hardest to counterfeit.** E.g. it takes a higher level of manufacturing technology to copy Maple Leafs with its security features and the fine detail in American Eagles. And since they are Legal Tender, the high legal penalty would serve as a deterrent for many would-be thieves.

Generic rounds and bars look like they would be easier to fake. Most of them are a lot simpler than the sovereign coins.

Numismatics--people have been passing off phony collector coins for decades. You have to be an expert.

Forget about poured silver. Anyone could do that in their garage and could be easily have some base metal in the mix. How would you know?

Third, I would consider divisibility. I would rather have ten 1-oz coins than one 10-oz bar. Then you could liquidate 1/10 of your silver and not have to sell the whole thing.


**Unfortunately, Chinese factories have been working on making better and better fake Silver Eagles. This is the same place where all the fake Rolex's and fake everything else comes from. I've heard that many of these factories make high-quality genuine items for U.S. companies during the day shift and the night shift makes the cheap counterfeit item using inferior materials. They are expert at manufacturing fakes. So there are fake Silver Eagles, fake Chinese Koalas, etc. It's a serious risk.

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Re: Buying Real Silver and Gold (Not Bitcoin)

Post by grayfox » Mon Dec 18, 2017 11:35 am

So considering Liquidity, Security and Divisibility that pretty much narrows it down to Sovereign coins and Junk Silver.

Which Sovereign Coin?
Use the one issued by the government where you live.

In the U.S. that would be the American Silver Eagle.
In Great Britain, the Britannia.
In Canada, the Maple Leaf.

The ASE would probably also work in Canada. And probably anywhere else in the world, for that matter. The U.S. Dollar is recognized around the world.

:arrow: So there you go. If you live in the U.S. and want to hoard Physical Silver, buy 1-oz American Eagles. I don't see any reason to diversify into other forms of silver.

Image

Now I'm thinking of collecting one of each of the Sovereign Coins just to see what they look, feel and sound like.

The only other thing is Junk Silver. Why?
The only purpose it would serve is smaller divisibility than 1-oz.
That's basically the Zombie Apocalypse scenario. So if you are a Prepper stockpiling food water and ammo, I would probably also include Junk Silver.

Otherwise the American Silver Eagle is all that is needed.

Added: This YouTuber confirms what I said, that Silver Eagles and Maple Leafs are the most liquid , i.e. easiest to sell. He had a collection that included some generic Rounds and the dealers didn't want/trust some of them. The dealers told him they would take Eagles and Maples all day, every day.

Why is it better to buy Silver American Eagles over other types of silver?
Last edited by grayfox on Mon Dec 18, 2017 10:38 pm, edited 1 time in total.

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Re: Buying Real Silver and Gold (Not Bitcoin)

Post by psteinx » Mon Dec 18, 2017 2:29 pm

1) I appreciate grayfox's posts in this thread on the actual experiences of buying silver.

2) I'm not experienced with this topic myself. Treat my comments as speculative.

3) One shouldn't expect to get rock bottom pricing/spreads from a physical storefront. If you walked into a physical Ed Jones, Schwab or whatever location and tried to buy a single share of some ~$16 company, your spread/fees would be pretty high too.

4) I'm also of the opinion that in most fiat of the discussed emergency situations in the last 20 years or so, US dollars or perhaps Euros (depending on the location) would be as useful or more so than silver or gold. Yes, one could envision scenarios where US dollars are greatly devalued or essentially worthless, but such scenarios are fairly remote, IMO, from the current situation in the US. The most likely scenarios (which, IMO, aren't too likely in my lifetime) would be foreshadowed by gradual decay on many levels. Sudden, catastrophic situations (broad nuclear war or some others) are possible, but again, not super likely in my lifetime, IMO, and even some of these might be foreshadowed to varying extents.

5) Currency does depreciate in value, but physical USD can be readily converted to and from other useful measures of value (digits in an electronic bank account, which in turn can pay off credit card debts, taxes, etc.

6) I think much of the appeal of silver and gold, in their various forms, is a sort of aesthetic appeal. Holding some cool coins or even ingots or whatever just seems cool. Visions of Scrooge McDuck diving into piles of gold coins and all that. To a reasonable extent, holding some gold or silver for such purposes won't really hurt you.

7) But I think the danger (financially, anyways) is when one's fascination with silver or gold leads one beyond a $20 coin on occasion, beyond a 1% allocation, or even 5%, to 10%, 25%, and beyond. High levels of long-term silver/gold holdings, for US investors with better alternatives, is in my opinion not likely to be good for one's long term financial health.

8) To some extent, I think there's a natural tendency to think gold and silver will hold their real value long term, 'cause "they ain't makin' it anymore". But they ARE. I don't know as much about silver, but take a look at a chart of long term gold supply - i.e. the estimated total amount of gold ever mined. It has skyrocketed in the last century or so. Here's one source: http://www.goldsheetlinks.com/production2.htm

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Re: Buying Real Silver and Gold (Not Bitcoin)

Post by rgs92 » Mon Dec 18, 2017 3:39 pm

I remember about 20+ years ago the standard common advice was to keep about 5% of your portfolio in precious metals. (Wall Street Week/Money Magazine/radio shows). I have not heard that lately, but I wonder if it made sense over the long term and what people here think of that.

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Re: Buying Real Silver and Gold (Not Bitcoin)

Post by dekecarver » Mon Dec 18, 2017 6:15 pm

Basically now days you have stackers e.g. bullion or junk and those who collect for numismatic value. Problem with silver bullion stackers is that it takes considerable amount of space to store a considerable dollar amount of silver. With numismatic collecting you have to know what you are doing especially with key date Morgans and more so with Trade Dollars because of counterfeits. This is where the TPG companies have made out because it gives the buyer a sense of confidence when they buy a graded slabbed coin vs grading themselves which is why many people avoid raw coins. Even when buying graded coins there is the problem of inflated grading and now they have graded coins re-graded to ensure the grade and given the green bean mark. In the end collect for fun and buy the coin not the slab.

bluerafters
Posts: 90
Joined: Mon Sep 18, 2017 7:14 pm

Re: Buying Real Silver and Gold (Not Bitcoin)

Post by bluerafters » Mon Dec 18, 2017 8:13 pm

Love gold bullion. Awhile ago the money I made from flipping Kruger's paid off my, small, student loans. I really, really want to find the capitol to grab a full set of American Gold Buffalo's but that's a way's away as my focus is on building a web of assets not PM related.

dekecarver
Posts: 297
Joined: Mon Feb 22, 2010 10:24 am

Re: Buying Real Silver and Gold (Not Bitcoin)

Post by dekecarver » Mon Dec 18, 2017 8:28 pm

That is a nice set to aim for, something about having such in hand.

1nv35t
Posts: 113
Joined: Wed Dec 13, 2017 3:37 pm

Re: Buying Real Silver and Gold (Not Bitcoin)

Post by 1nv35t » Tue Dec 19, 2017 2:52 am

Of the available legal tender gold coins does the Britannia have the highest gold-price/face-value ratio? Legal tender value £100/ounce (approx US$130/ounce) floor currency value/convertibility?

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