Gold and Silver Questions?

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waltman300
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Gold and Silver Questions?

Post by waltman300 »

So I always heard about people buying gold and silver but never read/learned much about it. I know the price of gold and silver is getting higher and higher as I read about this. And you look at it by the ounce. Again im a complete newbie to this.



I got to assume many people here have gold and silver right? I see gold is around l800 an ounce and silver is 25 dollars an ounce. Now my questions are



l. Where do you buy your gold and silver? Is it at a brick and mortar shop? Or is it online? I googled and see a site called jmbullion that seem to be the best site online for buying and selling gold and silver. Do most people do it this way? What about when you sell it? Seem interesting on the jmbullion site how it works where you speak to a rep and then set the agreed in price... then you ship it to them and after they verify everything, pay you out ach or wire or check which seem legit.



2. I see there are tons of different gold and silver bars and coins and many special edition coins etc. But do some of these coins cost more than the standard ounce as oppose to you getting a regular gold/silver coin or bar? Now if you going to buy gold or silver... do you just buy the basic gold/silver bar or coin or which one do you choose? There are like tons of coins and bars on the jmbullion site. Imagine a person want to buy an ounce of gold and l0 ounces of silver for example. What do you recommend?



3. Where do you store your gold/silver? What if you have a lot of it? If you store it at home and there is theft, well you lose that since that is like keeping cash in your house right? Now put it in security deposit box in bank... that probably is what most people do? But how many ounces can you even fit it in? I got to assume ppl buy the bigger safe deposit boxes if they have a ton of gold? Like how much money in usd worth would you say... okay you need to get a big deposit box at bank for it?



4. So there must be people that trade this way so to speak like with stock prices and crypto but do it with their gold/silver coins and bars? Like imagine it went to l900 an ounce and 28 dollars an ounce for gold and silver. And let that that person bought 5 ounces of gold and l00 ounces of silver when he bought it... so he spent around 9000 for gold and 2500 for silver so total of ll500 spent. Now its worth 9500 gold and 2800 silver so total of l2300 dollars. Now if he was to sell that, he would profit around 800 dollars or so minus the fees right? I know there is a buy and sell price but that shouldn't be that far off? I got to assume if you do this at a retail place... there is a huge spread right? But online, you going to get the best rate possible? But isn't this a much bigger hassle since if you do it online, well you still need to ship it to jmbullion website and wait for days until they inspect everything before they pay you out? Compare that to like stocks or crypto where the trades are on the spot?


5. I heard there are gold and silver dealers. Those are ppl that buy/sell a lot of it but do those people give good rates? I got to assume people who try to sell gold/silver at a pawn shop is probably the worst idea right since they give worst rate? Did saw on pawnstars someone selling ton of silver bars that was offered lot of money and he sold it.



6. Would you say its worth to invest money into gold/silver? Do most people who buy it plan to keep it for a long time like a store of value so to speak? Thus keep it for at least 5 or l0 years minimum or longer? Very few ppl try to trade it right when price goes up 5 percent or so and try to lock in profit? Also very hard to lock in profit because of the spread unlike stocks/crypto trading which i assume is a much smaller spread? Like i can't imagine you meeting a gold/silver dealer and getting good rate since that guy is using his time to meet you so its time consuming etc.
jajlrajrf
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Re: Gold and Silver Questions?

Post by jajlrajrf »

Imagine a person want to buy an ounce of gold and l0 ounces of silver for example. What do you recommend?
I'd recommend that they reconsider, and find a better investment.

With slightly less snark, all of the questions you raise are valid, and none of them (especially the "Where and how do I store it safely?" one) have particularly satisfactory answers.
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gwe67
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Re: Gold and Silver Questions?

Post by gwe67 »

You should hire a financial advisor. I don't care what it costs.
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dukeblue219
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Re: Gold and Silver Questions?

Post by dukeblue219 »

waltman300 wrote: Sun Apr 04, 2021 8:04 pm So I always heard about people buying gold and silver but never read/learned much about it. I know the price of gold and silver is getting higher and higher as I read about this.
I'll start and stop right here. Have you examined a long term silver chart? These aren't investments that have marched upwards in excess of inflation for centuries.

Here's silver for 100 years inflation adjusted:
Image

Maybe you have valid reasons to invest in Silver... But "the price is getting higher" ain't one.
Last edited by dukeblue219 on Sun Apr 04, 2021 8:22 pm, edited 2 times in total.
DesertDiva
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Re: Gold and Silver Questions?

Post by DesertDiva »

Past posts indicate that you are also interested in bitcoin and rental properties. Have you considered using a three-fund portfolio?

Before you make a move, read this link:
https://www.bogleheads.org/wiki/Investm ... _statement

The only place where “how” should come before “why” is the dictionary.
JBTX
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Re: Gold and Silver Questions?

Post by JBTX »

waltman300 wrote: Sun Apr 04, 2021 8:04 pm So I always heard about people buying gold and silver but never read/learned much about it. I know the price of gold and silver is getting higher and higher as I read about this. And you look at it by the ounce. Again im a complete newbie to this.



I got to assume many people here have gold and silver right? I see gold is around l800 an ounce and silver is 25 dollars an ounce. Now my questions are



l. Where do you buy your gold and silver? Is it at a brick and mortar shop? Or is it online? I googled and see a site called jmbullion that seem to be the best site online for buying and selling gold and silver. Do most people do it this way? What about when you sell it? Seem interesting on the jmbullion site how it works where you speak to a rep and then set the agreed in price... then you ship it to them and after they verify everything, pay you out ach or wire or check which seem legit.
Neither Gold nor silver are very good investments. Their long term return approximates inflation, but they are very volatile along the way. However, they may provide some diversification benefits.

A lot of people buy physical. I have no interest in owning physical gold. I have ETFS GLD and SLV approx 5% of portfolio. I don't have strong convictions on either. I'm not sure it's even worth the bother.

2. I see there are tons of different gold and silver bars and coins and many special edition coins etc. But do some of these coins cost more than the standard ounce as oppose to you getting a regular gold/silver coin or bar? Now if you going to buy gold or silver... do you just buy the basic gold/silver bar or coin or which one do you choose? There are like tons of coins and bars on the jmbullion site. Imagine a person want to buy an ounce of gold and l0 ounces of silver for example. What do you recommend?



3. Where do you store your gold/silver? What if you have a lot of it? If you store it at home and there is theft, well you lose that since that is like keeping cash in your house right? Now put it in security deposit box in bank... that probably is what most people do? But how many ounces can you even fit it in? I got to assume ppl buy the bigger safe deposit boxes if they have a ton of gold? Like how much money in usd worth would you say... okay you need to get a big deposit box at bank for it?



4. So there must be people that trade this way so to speak like with stock prices and crypto but do it with their gold/silver coins and bars? Like imagine it went to l900 an ounce and 28 dollars an ounce for gold and silver. And let that that person bought 5 ounces of gold and l00 ounces of silver when he bought it... so he spent around 9000 for gold and 2500 for silver so total of ll500 spent. Now its worth 9500 gold and 2800 silver so total of l2300 dollars. Now if he was to sell that, he would profit around 800 dollars or so minus the fees right? I know there is a buy and sell price but that shouldn't be that far off? I got to assume if you do this at a retail place... there is a huge spread right? But online, you going to get the best rate possible? But isn't this a much bigger hassle since if you do it online, well you still need to ship it to jmbullion website and wait for days until they inspect everything before they pay you out? Compare that to like stocks or crypto where the trades are on the spot?


5. I heard there are gold and silver dealers. Those are ppl that buy/sell a lot of it but do those people give good rates? I got to assume people who try to sell gold/silver at a pawn shop is probably the worst idea right since they give worst rate? Did saw on pawnstars someone selling ton of silver bars that was offered lot of money and he sold it.



6. Would you say its worth to invest money into gold/silver? Do most people who buy it plan to keep it for a long time like a store of value so to speak? Thus keep it for at least 5 or l0 years minimum or longer? Very few ppl try to trade it right when price goes up 5 percent or so and try to lock in profit? Also very hard to lock in profit because of the spread unlike stocks/crypto trading which i assume is a much smaller spread? Like i can't imagine you meeting a gold/silver dealer and getting good rate since that guy is using his time to meet you so its time consuming etc.
Not questions I can answer.
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arcticpineapplecorp.
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Re: Gold and Silver Questions?

Post by arcticpineapplecorp. »

Image

Image
It's "Stay" the course, not Stray the Course. Buy and Hold works. You should really try it sometime. Get a plan: www.bogleheads.org/wiki/Investment_policy_statement
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Tyler9000
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Re: Gold and Silver Questions?

Post by Tyler9000 »

waltman300 wrote: Sun Apr 04, 2021 8:04 pm Where do you buy your gold and silver?
It seems most of your questions are concerned with the particulars of buying, storing, and selling physical coins. Unless you believe strongly in the importance of holding gold and silver in your own two hands (some people do) then the obvious solution to most of your questions is to purchase shares in a precious metals ETF like IAU or SLV. It's no more difficult than purchasing a stock.

I personally think gold be an excellent addition to diversified portfolio of stocks, bonds, and other real assets. But whether it's right for you is your own choice. Like any investing decision, I would definitely recommend understanding how it works and fits into your larger plan before diving in head-first.
sidwin516
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Re: Gold and Silver Questions?

Post by sidwin516 »

Jm good place to get your gold. You can also buy gold coins as well. The mint won’t sell them to you directly. If you buy coins you have to pay a premium. Right now bars are hard to come by. U can fit a lot on a box. Each car is only 2 postage stamp long. Store it wherever you want. I have some in case of disaster. The gold run has been slow. I bought some at $1350 5 years ago. If I was to sell it, I would sell it to a smelter. There are several out there that will buy it. Don’t open it if you buy bars. Make sure you have the certificate that comes with it. If you want to buy bulk you can also get a discount on the bigger bars. I stay away from them because they are harder to sell/barter. Note that all metals bought are tracked unless they are circulated coins.

Nothing wrong having some. Im actually thinking of buying more. Last year during the down turn I tried buying platinum bars but no one was willing to sell them because they knew the drop was Temporary. Kind of bs if u ask me. I could have bought the ticker on the market so take that in mind.
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Watty
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Re: Gold and Silver Questions?

Post by Watty »

When thinking of buying gold or silver one thing you should do is sit down and write down just why you are buying it. That might be things like;

1) Protection from hyperinflation(Hint, gold may hold its value but don't expect the purchasing power of a gold coin to soar a lot.)

2) To used in the "mad max" scenario

3) Diversification

etc

The research those goals to figure out if owning gold or silver is the best way to accomplish those goals. Usually it turns out that precious metal are really not all that good at it and there are better ways to accomplish those goals.

A few sort of random things that I have picked up over the years.

1) Don't underestimate how heavy and bulky physical silver and be. If the zombies are attacking(or whatever) it will be hard to flee with $20K worth of silver.

2) Counterfeit precious metal coins are a very real problem. If you buy something off of eBay or Craigslist then there is a significant risk that you will be ripped off.

3) I am very skeptical about the merits of owning precious metals for most reasons but people have posted stories of relatives using gold coins to bribe their way out of South Vietnam when it was collapsing and also Nazi Germany.

4) One drawback up keeping precious metals in a home safe is that if you are being robbed and someone has a gun to your head then you will open the safe. If you are not there and they try to get your spouse or kid to open the safe and they do not know the combination then things can get real bad. Most home safes are also not all that hard to open and with a sledgehammer many of them can quickly be opened. Check YouTube for videos.
Last edited by Watty on Mon Apr 05, 2021 1:18 am, edited 1 time in total.
Thesaints
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Re: Gold and Silver Questions?

Post by Thesaints »

waltman300 wrote: Sun Apr 04, 2021 8:04 pm I know the price of gold and silver is getting higher and higher as I read about this.
That’s actually not true.
smitcat
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Re: Gold and Silver Questions?

Post by smitcat »

Watty wrote: Mon Apr 05, 2021 1:17 am When thinking of buying gold or silver one thing you should do is sit down and write down just why you are buying it. That might be things like;

1) Protection from hyperinflation(Hint, gold may hold its value but don't expect the purchasing power of a gold coin to soar a lot.)

2) To used in the "mad max" scenario

3) Diversification

etc

The research those goals to figure out if owning gold or silver is the best way to accomplish those goals. Usually it turns out that precious metal are really not all that good at it and there are better ways to accomplish those goals.

A few sort of random things that I have picked up over the years.

1) Don't underestimate how heavy and bulky physical silver and be. If the zombies are attacking(or whatever) it will be hard to flee with $20K worth of silver.

2) Counterfeit precious metal coins are a very real problem. If you buy something off of eBay or Craigslist then there is a significant risk that you will be ripped off.

3) I am very skeptical about the merits of owning precious metals for most reasons but people have posted stories of relatives using gold coins to bribe their way out of South Vietnam when it was collapsing and also Nazi Germany.

4) One drawback up keeping precious metals in a home safe is that if you are being robbed and someone has a gun to your head then you will open the safe. If you are not there and they try to get your spouse or kid to open the safe and they do not know the combination then things can get real bad. Most home safes are also not all that hard to open and with a sledgehammer many of them can quickly be opened. Check YouTube for videos.
"4) One drawback up keeping precious metals in a home safe is that if you are being robbed and someone has a gun to your head then you will open the safe. If you are not there and they try to get your spouse or kid to open the safe and they do not know the combination then things can get real bad. Most home safes are also not all that hard to open and with a sledgehammer many of them can quickly be opened. Check YouTube for videos."

Watching too much TV could distort the way folks view any type of robbery.
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Re: Gold and Silver Questions?

Post by Jack FFR1846 »

Recent silver prices are way down. About a dollar and a half an ounce since last month. The thing to have done with silver is seen the big runup and sold. I did exactly this, selling everything I had remaining from my disasters of buys over the last 8 years. The thing with silver compared to gold is that the spread is much larger so you pay more of a premium to buy and lose more on the spread to sell vs gold. I don't recommend buying gold....just pointing out that however horrible gold is as an investment, silver is much worse because of your cost to buy and sell.

I only bought bullion (junk) silver coins. Why? Clear value is easily found. Bars and numismatic coins are typically up for discretion by the dealer. You go to sell and the dealer downgrades a couple points and instantly, your small gain turns into a big loss.

Coins can be bought and sold by either weight (troy ounces, which are not real onces) or by times face value. You want to know how you're buying/selling in advance. For example, Mercury dimes were not coated, so they wear more than any other coin. The term "one thin dime" wasn't hyperbole. These dimes ARE thinner from wear and weigh less than Roosevelt dimes. If you're selling by face value, it won't matter but if by weight, you'll lose a measurable amount.

As to where I stored my silver, I kept it in a safe in my house. I am aware that safe deposit boxes have zero protection against theft or destruction. That said, you're welcome to come to my house and attempt to find the safe where the silver is (although I have maybe $10 worth left). I have other safes that are easier to find. I learned this from my bullion dealer back in the day. A thief gets a locked safe, wheels it out and doesn't realize that all it's got in it are hotel rewards program cards till they saw it open.
Last edited by Jack FFR1846 on Mon Apr 05, 2021 8:13 am, edited 2 times in total.
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smitcat
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Re: Gold and Silver Questions?

Post by smitcat »

Jack FFR1846 wrote: Mon Apr 05, 2021 8:05 am Recent silver prices are way down. About a dollar and a half an ounce since last month. The thing to have done with silver is seen the big runup and sold. I did exactly this, selling everything I had remaining from my disasters of buys over the last 8 years. The thing with silver compared to gold is that the spread is much larger so you pay more of a premium to buy and lose more on the spread to sell vs gold. I don't recommend buying gold....just pointing out that however horrible gold is as an investment, silver is much worse because of your cost to buy and sell.
We have also sold a large amount of silver lately - not sure the spread for silver was much more than gold or palladium in our case.
We will still be selling above $25 for a time...
nrkv
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Re: Gold and Silver Questions?

Post by nrkv »

Kitco.com and ajpm.com are two sites that I know people bought gold from. Kitco has something like kitco pool where I think you purchase and save it in their pool without physically shipping to home, you can sell from the pool later. If you purchase bars to be shipped home, then pay the insurance for shipping. If worried about robbery at home then store in bank vault and insure.
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Re: Gold and Silver Questions?

Post by suemarkp »

sidwin516 wrote: Sun Apr 04, 2021 10:47 pm Note that all metals bought are tracked unless they are circulated coins.
I don't believe this is true. Not all bars are serialized. Even if they are, I'm not so sure companies track them by number other than the original manufacturer or COMEX if it is a large enough bar for COMEX to deal in. I don't believe any of my uncirculated coins are tracked either. How would they be?

Some things have a higher premium when you buy them, like proof coins or some fancy commeratives. Similarly, graded coins command premiums as the grade increases. Recouping those premiums when selling can be difficult. It takes finding the right buyer and I'm not sure that is very easy.

So focus on low premium items (sites like JM Bullion have the gold spot price right on the website -- compare the costs of different items of the same weight and if they are all 1ozt there is no math to do). JM Bullion also often has buy back prices listed. That makes calculating the true street spread much easier to do. Also, who has the lowest prices on a given item on a given day can change, as can who is paying more for buy back. SO you need to shop around when buying and selling.

There may be sales taxes in your state on certain items. Some may tax bars and not coins. Some may tax everything but coins from your own country. Some tax everything. This really blows a hole in the value of holding physical metals, so it you want to hold it I hope you are in a state that doesn't tax it or choose the items that are not taxed in your state. If you're not holding it forever, or long periods of time (e.g. possibly 10 years or longer), it is probably better to focus on paper trades like the ETFs others mentioned.
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sidwin516
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Re: Gold and Silver Questions?

Post by sidwin516 »

suemarkp wrote: Mon Apr 05, 2021 11:17 am
sidwin516 wrote: Sun Apr 04, 2021 10:47 pm Note that all metals bought are tracked unless they are circulated coins.
I don't believe this is true. Not all bars are serialized. Even if they are, I'm not so sure companies track them by number other than the original manufacturer or COMEX if it is a large enough bar for COMEX to deal in. I don't believe any of my uncirculated coins are tracked either. How would they be?

Some things have a higher premium when you buy them, like proof coins or some fancy commeratives. Similarly, graded coins command premiums as the grade increases. Recouping those premiums when selling can be difficult. It takes finding the right buyer and I'm not sure that is very easy.

So focus on low premium items (sites like JM Bullion have the gold spot price right on the website -- compare the costs of different items of the same weight and if they are all 1ozt there is no math to do). JM Bullion also often has buy back prices listed. That makes calculating the true street spread much easier to do. Also, who has the lowest prices on a given item on a given day can change, as can who is paying more for buy back. SO you need to shop around when buying and selling.

There may be sales taxes in your state on certain items. Some may tax bars and not coins. Some may tax everything but coins from your own country. Some tax everything. This really blows a hole in the value of holding physical metals, so it you want to hold it I hope you are in a state that doesn't tax it or choose the items that are not taxed in your state. If you're not holding it forever, or long periods of time (e.g. possibly 10 years or longer), it is probably better to focus on paper trades like the ETFs others mentioned.
I know a guy who bought gold and silver. When the feds came knocking they said he had to hand them over when he was arrested for certain things. They gave him the receipt of purchase.

When I purchased my gold bars I had to fill out the same paperwork like opening an account with a brokerage. When my bars were sent, their serial numbers were on the invoice. Now you could melt them and make jewelry out of them there by removing the serial numbers but they are definitely tracked to a certain degree. I don’t know how long they hold my info nor do I care since I’m planning on holding them forever. But after knowing someone who got theirs seized definitely made me think twice.

I’ve bought double eagle from coin shops. They let you buy $50 over spot and no serial or paper work needed to be filled out.

There is an old fed statute that allows precious metals to be seized unless it has been circulated coin. https://www.jmbullion.com/investing-gui ... ng-metals/

I didn’t know until recently that they were still being minted. I thought that was pretty cool.
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willthrill81
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Re: Gold and Silver Questions?

Post by willthrill81 »

waltman300 wrote: Sun Apr 04, 2021 8:04 pm l. Where do you buy your gold and silver?
I've bought from both JM Bullion and SD Bullion and can highly recommend both.
waltman300 wrote: Sun Apr 04, 2021 8:04 pm What about when you sell it?
I've never sold physical precious metals and wouldn't in 'normal' circumstances. I hold physical precious metals as 'insurance against the unknown'.
waltman300 wrote: Sun Apr 04, 2021 8:04 pm 2. I see there are tons of different gold and silver bars and coins and many special edition coins etc.
IMHO, there are two basic products with gold and silver: Eagles produced by the U.S. Mint and everything else (e.g., bars, rounds, etc.). When it comes to gold, there isn't a big premium for Eagles vs. everything else, so I would opt for Eagles. With silver, the premium can be significant, so it may be worthwhile to hold Eagles and other forms.
waltman300 wrote: Sun Apr 04, 2021 8:04 pm 3. Where do you store your gold/silver?
I could tell you, but then I'd have to kill you. :mrgreen:

Arguments can be made for safe deposit boxes and for home storage. Floor safes encased in concrete and hidden under heavy objects can be extremely secure.
waltman300 wrote: Sun Apr 04, 2021 8:04 pm 4. So there must be people that trade this way so to speak like with stock prices and crypto but do it with their gold/silver coins and bars?
I would not recommend 'trading' physical precious metals. The trading costs are much too high. Those that want to do that should use ETFs.
waltman300 wrote: Sun Apr 04, 2021 8:04 pm 5. I heard there are gold and silver dealers. Those are ppl that buy/sell a lot of it but do those people give good rates? I got to assume people who try to sell gold/silver at a pawn shop is probably the worst idea right since they give worst rate? Did saw on pawnstars someone selling ton of silver bars that was offered lot of money and he sold it.
Dealers who specialize in precious metals are probably going to give you a better price than a pawn shop. There are online dealers who will buy as well.
waltman300 wrote: Sun Apr 04, 2021 8:04 pm 6. Would you say its worth to invest money into gold/silver?
It depends on what your goals are. As a long-term hedge against the unknown, I think that a strong argument can be made for at least a small allocation to precious metals. Ours probably represents about 2% of our net worth. If you want it for the purpose of helping you stabilize your portfolio, you probably need at least 10% of your portfolio in precious metals. I wouldn't recommend going higher than 25% though.
“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
index2max
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Re: Gold and Silver Questions?

Post by index2max »

If you want to buy gold or silver, stick to high purity bullion bars or "rounds" (rounds are coin-shaped, but not legal tender because they were not minted and issued by any government. My state of MN charges sales tax when you buy precious metals coins that are legal tender (doesn't matter if they're minted by the American, Canadian etc. governments). To get around this, I buy high-purity (99.9% pure or higher) rounds or bullion bars since MN doesn't charge sales tax on those.

Check on the rules for your state:

https://www.apmex.com/state-sales-taxes

I prefer buying in person where I can physically hold the merchandise myself. I have bought gold bullion from a gold refiner in my area. Their shop specializes in melting down dental fooling scrap for dentists, but sell investment-grade stuff on the side too. Or you could go to a precious metals dealer (don't go to some pawn shop on the corner that isn't reputable). I don't trust buying anything online at this time. Find something in-person in your area. The precious metals dealer I have used was nice enough to show me their handheld radio frequency device that can test for purity of flat objects. They had rare-earth metal magnets on the desk too if you wanted to see whether the gold or silver they were selling was magnetic (i.e. a dud). Fun to try out!

Remember that there is a premium charged above spot price for precious metals. When you sell, at best you'll probably just get spot price. Also the taxation of the sale of precious metals by the IRS is unfavorable. Buy and hold forever is my recommendation. Otherwise you're just speculating on price, which isn't much different than gambling. If you use your stimulus checks to buy precious metals, you can say that you're not price sensitive because the government is just printing a bunch of money that won't have much spending power in the future.

You don't want to go buying collectible coins if all you're after is the precious metal content itself. I assume you understand this, but holding precious metals provides no after-inflation returns. You shouldn't buy precious metals as an alternative to stocks or bonds or rental estate. You buy precious metals to convert some of your fiat currency to something that isn't mined at the same rate currency is being printed across the world.

For storage, you could put your stuff in a safe if you don't blab to everyone around you that valuables are at home. You could also use a safe deposit box. I like getting a larger, wider box because you can also put important documents in there (such as invoices or receipts of your precious metal purchases for cost-basis tracking) without bending them. Obviously you don't want to tell your financial institution what's in there.

Good luck getting your precious metals insured though! Safe deposit boxes are not insured by your credit union or bank. You have to find insurance elsewhere. My insurance broker told me none of the companies they do business with will touch insuring PAMP bars etc. Kind of sucks, but I guess it's to punish you for not running in the hampster wheel of fiat...

Another option is to "lose" your gold in a boating accident at the bottom of a lake or river for safe keeping, heh

Let me know if you have any more questions!
suemarkp
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Re: Gold and Silver Questions?

Post by suemarkp »

sidwin516 wrote: Mon Apr 05, 2021 4:32 pm I know a guy who bought gold and silver. When the feds came knocking they said he had to hand them over when he was arrested for certain things. They gave him the receipt of purchase.

When I purchased my gold bars I had to fill out the same paperwork like opening an account with a brokerage. When my bars were sent, their serial numbers were on the invoice. Now you could melt them and make jewelry out of them there by removing the serial numbers but they are definitely tracked to a certain degree. I don’t know how long they hold my info nor do I care since I’m planning on holding them forever. But after knowing someone who got theirs seized definitely made me think twice.

I’ve bought double eagle from coin shops. They let you buy $50 over spot and no serial or paper work needed to be filled out.

There is an old fed statute that allows precious metals to be seized unless it has been circulated coin. https://www.jmbullion.com/investing-gui ... ng-metals/

I didn’t know until recently that they were still being minted. I thought that was pretty cool.
I think the Feds can find all kinds of things you have purchased, especially if you used a credit card. They can get your bank records and see who you wrote checks to or did ACH transfers with. The only way to have complete anonymity is to buy with cash. But I don't believe there is a federal register of gold or silver bars, especially the little 1oz ones. I only have 10oz silver bars, and they don't have serial numbers. All of my gold is in coin form, some is circulated pre-33 and others are uncirculated Eagles and Maple Leaves. I'm sure all places I bought from have sales records, the difficulty would be finding all the places I bought from and some are out of business.

I did not have to fill out anything unusual to buy gold or silver. Just send a check and provide a shipping address. Maybe bars can be registered with the manufacturer in case they are stolen. But gold bars are usually one of the least expensive forms to buy gold, and registering them seems like extra work that should cost more money.

I could sell all of my gold person to person and am not required to keep any records. That's why a lot of gold and gun owners have frequent "boating accidents" :wink: and have no official inventory.

I think that federal statute you are referring to is Roosevelt's Executive Order which was rescinded by President Ford. That gold wasn't seized unless you didn't turn it in (if you turned it in, you were compensated at face value). Very few people actually had their gold sized (I've read there were a few people with large bars they wanted to make sure they could get). We live in different times. Gold is no longer monitized and the dollar is constantly devalued since it isn't tied to anything tangible. Roosevelt had to take it all out of circulation in order to devalue the dollar.
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Re: Gold and Silver Questions?

Post by jpmorganfunds »

Physical gold premiums are a rip off. Stick with paper gold or even crypto gold https://gold.tether.to/
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Re: Gold and Silver Questions?

Post by HanSolo »

Jack FFR1846 wrote: Mon Apr 05, 2021 8:05 am Coins can be bought and sold by either weight (troy ounces, which are not real onces) or by times face value.
Perhaps you meant to say that troy ounces are not avoirdupois ounces. Both are real, they just happen to be different weights, and the troy ounce is the heavier of the two (perhaps we can say, troy is 'real' and then some).

To the OP: I hold a gold fund, AAAU from Goldman Sachs (formerly Perth Mint), and a gold/silver fund, CEF from Sprott (formerly Central Fund of Canada). I like the idea of keeping metals within an allocation band, like 5% to 8% of total portfolio (see also the link to "Investment Policy Statement", posted above by DesertDiva).
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Re: Gold and Silver Questions?

Post by racy »

waltman300 wrote: Sun Apr 04, 2021 8:04 pm ...6. Would you say its worth to invest money into gold/silver?...
I wouldn't use the word "invest", but rather "speculate" when considering gold/silver.
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Re: Gold and Silver Questions?

Post by HanSolo »

racy wrote: Tue Apr 06, 2021 6:44 am
waltman300 wrote: Sun Apr 04, 2021 8:04 pm ...6. Would you say its worth to invest money into gold/silver?...
I wouldn't use the word "invest", but rather "speculate" when considering gold/silver.
Stocks have a shorter history than gold. Is that speculation as well?

Consider that non-dividend-paying stocks, if they go to zero, leave the investor (speculator) with nothing. We've seen it happen. Gold, at least, continues to have non-zero value due to industrial and other uses.
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Re: Gold and Silver Questions?

Post by willthrill81 »

jpmorganfunds wrote: Tue Apr 06, 2021 12:27 am Physical gold premiums are a rip off. Stick with paper gold or even crypto gold https://gold.tether.to/
It's not a ripoff; it's a different product, one with higher value in the minds of many, which is why it goes for more money.
“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: Gold and Silver Questions?

Post by willthrill81 »

HanSolo wrote: Tue Apr 06, 2021 4:42 pm
racy wrote: Tue Apr 06, 2021 6:44 am
waltman300 wrote: Sun Apr 04, 2021 8:04 pm ...6. Would you say its worth to invest money into gold/silver?...
I wouldn't use the word "invest", but rather "speculate" when considering gold/silver.
Stocks have a shorter history than gold. Is that speculation as well?
Many believe that since gold doesn't directly produce anything (e.g., dividends, interest) that it's expected return is unknown, thereby making it a speculation. If the expected return is negative, it's gambling, and if it's positive, then it's investing.

In reality, I'm not convinced that such labels matter much.
“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: Gold and Silver Questions?

Post by HanSolo »

willthrill81 wrote: Tue Apr 06, 2021 5:03 pm
HanSolo wrote: Tue Apr 06, 2021 4:42 pm
racy wrote: Tue Apr 06, 2021 6:44 am
waltman300 wrote: Sun Apr 04, 2021 8:04 pm ...6. Would you say its worth to invest money into gold/silver?...
I wouldn't use the word "invest", but rather "speculate" when considering gold/silver.
Stocks have a shorter history than gold. Is that speculation as well?
Many believe that since gold doesn't directly produce anything (e.g., dividends, interest) that it's expected return is unknown, thereby making it a speculation. If the expected return is negative, it's gambling, and if it's positive, then it's investing.
Yes, of course. That's why I called out non-dividend-paying stocks. One speculates that the price will be higher when they sell, with no investment returns in between.
In reality, I'm not convinced that such labels matter much.
Sounds like we're in agreement.
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Re: Gold and Silver Questions?

Post by willthrill81 »

HanSolo wrote: Tue Apr 06, 2021 5:18 pm
willthrill81 wrote: Tue Apr 06, 2021 5:03 pm
HanSolo wrote: Tue Apr 06, 2021 4:42 pm
racy wrote: Tue Apr 06, 2021 6:44 am
waltman300 wrote: Sun Apr 04, 2021 8:04 pm ...6. Would you say its worth to invest money into gold/silver?...
I wouldn't use the word "invest", but rather "speculate" when considering gold/silver.
Stocks have a shorter history than gold. Is that speculation as well?
Many believe that since gold doesn't directly produce anything (e.g., dividends, interest) that it's expected return is unknown, thereby making it a speculation. If the expected return is negative, it's gambling, and if it's positive, then it's investing.
Yes, of course. That's why I called out non-dividend-paying stocks. One speculates that the price will be higher when they sell, with no investment returns in between.
But non-dividend paying stocks are still producing earnings, which presumably will result in capital appreciation over time. Gold doesn't do that.
“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: Gold and Silver Questions?

Post by HanSolo »

willthrill81 wrote: Tue Apr 06, 2021 5:20 pm
HanSolo wrote: Tue Apr 06, 2021 5:18 pm
willthrill81 wrote: Tue Apr 06, 2021 5:03 pm
HanSolo wrote: Tue Apr 06, 2021 4:42 pm
racy wrote: Tue Apr 06, 2021 6:44 am
I wouldn't use the word "invest", but rather "speculate" when considering gold/silver.
Stocks have a shorter history than gold. Is that speculation as well?
Many believe that since gold doesn't directly produce anything (e.g., dividends, interest) that it's expected return is unknown, thereby making it a speculation. If the expected return is negative, it's gambling, and if it's positive, then it's investing.
Yes, of course. That's why I called out non-dividend-paying stocks. One speculates that the price will be higher when they sell, with no investment returns in between.
But non-dividend paying stocks are still producing earnings, which presumably will result in capital appreciation over time. Gold doesn't do that.
Sounds like "capital appreciation" means "a higher price". As with gold, and unlike dividend stocks, there's no benefit to the investor (speculator) until the position is sold.
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Re: Gold and Silver Questions?

Post by willthrill81 »

HanSolo wrote: Tue Apr 06, 2021 5:24 pm
willthrill81 wrote: Tue Apr 06, 2021 5:20 pm
HanSolo wrote: Tue Apr 06, 2021 5:18 pm
willthrill81 wrote: Tue Apr 06, 2021 5:03 pm
HanSolo wrote: Tue Apr 06, 2021 4:42 pm

Stocks have a shorter history than gold. Is that speculation as well?
Many believe that since gold doesn't directly produce anything (e.g., dividends, interest) that it's expected return is unknown, thereby making it a speculation. If the expected return is negative, it's gambling, and if it's positive, then it's investing.
Yes, of course. That's why I called out non-dividend-paying stocks. One speculates that the price will be higher when they sell, with no investment returns in between.
But non-dividend paying stocks are still producing earnings, which presumably will result in capital appreciation over time. Gold doesn't do that.
Sounds like "capital appreciation" means "a higher price". As with gold, and unlike dividend stocks, there's no benefit to the investor (speculator) until the position is sold.
Yes, capturing capital appreciation requires selling. But the point is that stocks are expected to produce earnings, while gold isn't expected to produce anything.
“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: Gold and Silver Questions?

Post by HanSolo »

willthrill81 wrote: Tue Apr 06, 2021 5:30 pm
HanSolo wrote: Tue Apr 06, 2021 5:24 pm
willthrill81 wrote: Tue Apr 06, 2021 5:20 pm
HanSolo wrote: Tue Apr 06, 2021 5:18 pm
willthrill81 wrote: Tue Apr 06, 2021 5:03 pm

Many believe that since gold doesn't directly produce anything (e.g., dividends, interest) that it's expected return is unknown, thereby making it a speculation. If the expected return is negative, it's gambling, and if it's positive, then it's investing.
Yes, of course. That's why I called out non-dividend-paying stocks. One speculates that the price will be higher when they sell, with no investment returns in between.
But non-dividend paying stocks are still producing earnings, which presumably will result in capital appreciation over time. Gold doesn't do that.
Sounds like "capital appreciation" means "a higher price". As with gold, and unlike dividend stocks, there's no benefit to the investor (speculator) until the position is sold.
Yes, capturing capital appreciation requires selling. But the point is that stocks are expected to produce earnings, while gold isn't expected to produce anything.
Different people expect different things. Some people expect gold to keep pace with inflation over longer-term periods (while knowing they might not get what they expect). And some people expect corporations to succeed and grow (while knowing they might not get what they expect).

Some people consider it important that they own something that doesn't go to zero, and expect (speculate) that gold has a lower chance of that than the common stock of a given corporation.

I'm not saying "investing good, speculation bad" (as some people might imply). To me, it's all good.
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Re: Gold and Silver Questions?

Post by willthrill81 »

HanSolo wrote: Tue Apr 06, 2021 5:37 pm
willthrill81 wrote: Tue Apr 06, 2021 5:30 pm
HanSolo wrote: Tue Apr 06, 2021 5:24 pm
willthrill81 wrote: Tue Apr 06, 2021 5:20 pm
HanSolo wrote: Tue Apr 06, 2021 5:18 pm
Yes, of course. That's why I called out non-dividend-paying stocks. One speculates that the price will be higher when they sell, with no investment returns in between.
But non-dividend paying stocks are still producing earnings, which presumably will result in capital appreciation over time. Gold doesn't do that.
Sounds like "capital appreciation" means "a higher price". As with gold, and unlike dividend stocks, there's no benefit to the investor (speculator) until the position is sold.
Yes, capturing capital appreciation requires selling. But the point is that stocks are expected to produce earnings, while gold isn't expected to produce anything.
Different people expect different things. Some people expect gold to keep pace with inflation over longer-term periods (while knowing they might not get what they expect). And some people expect corporations to succeed and grow (while knowing they might not get what they expect).

Some people consider it important that they own something that doesn't go to zero, and expect (speculate) that gold has a lower chance of that than the common stock of a given corporation.

I'm not saying "investing good, speculation bad" (as some people might imply). To me, it's all good.
I agree that the investor's expectations are important here. And I agree that some 'speculation' in a portfolio is fine. I have no problem with up to a 25% allocation to gold, such as is the case with the PP.
“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: Gold and Silver Questions?

Post by jpmorganfunds »

willthrill81 wrote: Tue Apr 06, 2021 5:30 pm
HanSolo wrote: Tue Apr 06, 2021 5:24 pm
willthrill81 wrote: Tue Apr 06, 2021 5:20 pm
HanSolo wrote: Tue Apr 06, 2021 5:18 pm
willthrill81 wrote: Tue Apr 06, 2021 5:03 pm

Many believe that since gold doesn't directly produce anything (e.g., dividends, interest) that it's expected return is unknown, thereby making it a speculation. If the expected return is negative, it's gambling, and if it's positive, then it's investing.
Yes, of course. That's why I called out non-dividend-paying stocks. One speculates that the price will be higher when they sell, with no investment returns in between.
But non-dividend paying stocks are still producing earnings, which presumably will result in capital appreciation over time. Gold doesn't do that.
Sounds like "capital appreciation" means "a higher price". As with gold, and unlike dividend stocks, there's no benefit to the investor (speculator) until the position is sold.
Yes, capturing capital appreciation requires selling. But the point is that stocks are expected to produce earnings, while gold isn't expected to produce anything.
People don't just sit on gold, they lease it out for interest.
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Re: Gold and Silver Questions?

Post by willthrill81 »

jpmorganfunds wrote: Tue Apr 06, 2021 5:46 pm
willthrill81 wrote: Tue Apr 06, 2021 5:30 pm
HanSolo wrote: Tue Apr 06, 2021 5:24 pm
willthrill81 wrote: Tue Apr 06, 2021 5:20 pm
HanSolo wrote: Tue Apr 06, 2021 5:18 pm
Yes, of course. That's why I called out non-dividend-paying stocks. One speculates that the price will be higher when they sell, with no investment returns in between.
But non-dividend paying stocks are still producing earnings, which presumably will result in capital appreciation over time. Gold doesn't do that.
Sounds like "capital appreciation" means "a higher price". As with gold, and unlike dividend stocks, there's no benefit to the investor (speculator) until the position is sold.
Yes, capturing capital appreciation requires selling. But the point is that stocks are expected to produce earnings, while gold isn't expected to produce anything.
People don't just sit on gold, they lease it out for interest.
I've heard of people trying to do that, but that's definitely not true for the average retail investor.
“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: Gold and Silver Questions?

Post by smitcat »

willthrill81 wrote: Mon Apr 05, 2021 5:43 pm
waltman300 wrote: Sun Apr 04, 2021 8:04 pm l. Where do you buy your gold and silver?
I've bought from both JM Bullion and SD Bullion and can highly recommend both.
waltman300 wrote: Sun Apr 04, 2021 8:04 pm What about when you sell it?
I've never sold physical precious metals and wouldn't in 'normal' circumstances. I hold physical precious metals as 'insurance against the unknown'.
waltman300 wrote: Sun Apr 04, 2021 8:04 pm 2. I see there are tons of different gold and silver bars and coins and many special edition coins etc.
IMHO, there are two basic products with gold and silver: Eagles produced by the U.S. Mint and everything else (e.g., bars, rounds, etc.). When it comes to gold, there isn't a big premium for Eagles vs. everything else, so I would opt for Eagles. With silver, the premium can be significant, so it may be worthwhile to hold Eagles and other forms.
waltman300 wrote: Sun Apr 04, 2021 8:04 pm 3. Where do you store your gold/silver?
I could tell you, but then I'd have to kill you. :mrgreen:

Arguments can be made for safe deposit boxes and for home storage. Floor safes encased in concrete and hidden under heavy objects can be extremely secure.
waltman300 wrote: Sun Apr 04, 2021 8:04 pm 4. So there must be people that trade this way so to speak like with stock prices and crypto but do it with their gold/silver coins and bars?
I would not recommend 'trading' physical precious metals. The trading costs are much too high. Those that want to do that should use ETFs.
waltman300 wrote: Sun Apr 04, 2021 8:04 pm 5. I heard there are gold and silver dealers. Those are ppl that buy/sell a lot of it but do those people give good rates? I got to assume people who try to sell gold/silver at a pawn shop is probably the worst idea right since they give worst rate? Did saw on pawnstars someone selling ton of silver bars that was offered lot of money and he sold it.
Dealers who specialize in precious metals are probably going to give you a better price than a pawn shop. There are online dealers who will buy as well.
waltman300 wrote: Sun Apr 04, 2021 8:04 pm 6. Would you say its worth to invest money into gold/silver?
It depends on what your goals are. As a long-term hedge against the unknown, I think that a strong argument can be made for at least a small allocation to precious metals. Ours probably represents about 2% of our net worth. If you want it for the purpose of helping you stabilize your portfolio, you probably need at least 10% of your portfolio in precious metals. I wouldn't recommend going higher than 25% though.
"I've never sold physical precious metals and wouldn't in 'normal' circumstances. I hold physical precious metals as 'insurance against the unknown'.
FWIW - its pretty easy to sell as well, really no problem at all with JM or others.
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Re: Gold and Silver Questions?

Post by willthrill81 »

smitcat wrote: Tue Apr 06, 2021 7:34 pm "I've never sold physical precious metals and wouldn't in 'normal' circumstances. I hold physical precious metals as 'insurance against the unknown'.
FWIW - its pretty easy to sell as well, really no problem at all with JM or others.
Good to know. Thanks.
“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: Gold and Silver Questions?

Post by smitcat »

willthrill81 wrote: Tue Apr 06, 2021 7:40 pm
smitcat wrote: Tue Apr 06, 2021 7:34 pm "I've never sold physical precious metals and wouldn't in 'normal' circumstances. I hold physical precious metals as 'insurance against the unknown'.
FWIW - its pretty easy to sell as well, really no problem at all with JM or others.
Good to know. Thanks.
No problems - your posts are always so valuable I am glad to pass some knowledge the other way.
On the JM site when looking at specific rounds or bars you can see an icon below the prices that says something like "buy it back price".
When you call and/or email it is always within a couple % one way or the other of that price to lock in your sale.
They then send you shipping instructions and a label and you ship within a couple of days to retain the price.
Have had no issues so far selling a dozen times or so.
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Re: Gold and Silver Questions?

Post by index2max »

In response to everyone here, look at Benjamin Graham’s definition of investing:

“An investment operation is one which, upon thorough analysis, promises safety of principal and a satisfactory return. Operations not meeting these requirements are speculative."

That being said, I buy gold to convert my paper currency into something else physical of limited quantity. Fiat currency is easy to print. The definition of inflation is an increase in the money supply. Price inflation is a consequence of that.

I don’t buy precious metals, which just sit there, as an alternative to an investment with a return such stocks or real estate. It’s there as a hedge in case my money gets devalued.
HanSolo wrote: Tue Apr 06, 2021 3:43 am
Jack FFR1846 wrote: Mon Apr 05, 2021 8:05 am Coins can be bought and sold by either weight (troy ounces, which are not real onces) or by times face value.
Perhaps you meant to say that troy ounces are not avoirdupois ounces. Both are real, they just happen to be different weights, and the troy ounce is the heavier of the two (perhaps we can say, troy is 'real' and then some).
I just learned a new word today: Avoirdupois!

The history of metrology is actually pretty interesting. Love learning about how all these measurement standards were developed.
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Re: Gold and Silver Questions?

Post by willthrill81 »

index2max wrote: Tue Apr 06, 2021 10:20 pmThe definition of inflation is an increase in the money supply. Price inflation is a consequence of that.
The money supply can increase without causing inflation (i.e., in prices). The velocity of money is another key variable in determining whether inflation will result from an increased money supply, as discussed in this thread.
“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: Gold and Silver Questions?

Post by index2max »

willthrill81 wrote: Tue Apr 06, 2021 10:43 pm
index2max wrote: Tue Apr 06, 2021 10:20 pmThe definition of inflation is an increase in the money supply. Price inflation is a consequence of that.
The money supply can increase without causing inflation (i.e., in prices). The velocity of money is another key variable in determining whether inflation will result from an increased money supply, as discussed in this thread.
During the recession, the federal reserve printed money that it gave to the banks (“quantitative easing”). The banks were even paid a small amount of interest by the fed on that money each month. This gave them enough capital to stay afloat, but not cause price inflation, because they were being paid to sit on those dollars.

That’s one way they’ve increased the money supply without a corresponding rise in prices of goods. Just remember though that real estate, college tuition, stocks and medial expenses have soared way past the CPI. That’s where the inflation went... into assets.

“The poor have expenses, the middle class buy liabilities they think are assets and the rich buy assets...”

I am not anti-data, but those “money supply” metrics the fed provides such as M1 etc. as overly complicated. Probably not by accident either.

Where’s the single metric that says how many dollars are floating in circulation as physical currency or as digits on a computer?
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Re: Gold and Silver Questions?

Post by stimulacra »

My gold allocation has dropped relative to other assets. This post prompted me to rebalance into gold this week :)
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Re: Gold and Silver Questions?

Post by willthrill81 »

index2max wrote: Wed Apr 07, 2021 12:53 pm That’s one way they’ve increased the money supply without a corresponding rise in prices of goods. Just remember though that real estate, college tuition, stocks and medial expenses have soared way past the CPI. That’s where the inflation went... into assets.
As noted in the thread I linked to above, college expenses in totality have not significantly outpaced inflation over the last decade. Real estate has, but real estate prices had recently plummeted a decade ago, so it shouldn't be surprising that they've rebounded since then. It's true that medical expenses have outpaced inflation, but it's also true that the prices of many goods and services have significantly lagged inflation. They just don't get as much headline attention.

Many have theorized that the increased money supply did lift the prices of stocks and real estate, but that's not inflation in the typical sense of the word (i.e., higher nominal prices for goods and services).

Further, the consistent reduction in the velocity of money, which dropped precipitously last year, has also worked to keep inflation at bay. If money isn't changing hands, an increased money supply cannot lead to inflated prices.
“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: Gold and Silver Questions?

Post by index2max »

willthrill81 wrote: Wed Apr 07, 2021 1:01 pm
index2max wrote: Wed Apr 07, 2021 12:53 pm That’s one way they’ve increased the money supply without a corresponding rise in prices of goods. Just remember though that real estate, college tuition, stocks and medial expenses have soared way past the CPI. That’s where the inflation went... into assets.
As noted in the thread I linked to above, college expenses in totality have not significantly outpaced inflation over the last decade. Real estate has, but real estate prices had recently plummeted a decade ago, so it shouldn't be surprising that they've rebounded since then. It's true that medical expenses have outpaced inflation, but it's also true that the prices of many goods and services have significantly lagged inflation. They just don't get as much headline attention.

Many have theorized that the increased money supply did lift the prices of stocks and real estate, but that's not inflation in the typical sense of the word (i.e., higher nominal prices for goods and services).

Further, the consistent reduction in the velocity of money, which dropped precipitously last year, has also worked to keep inflation at bay. If money isn't changing hands, an increased money supply cannot lead to inflated prices.
Like you said, an increase in prices of goods and services is an easy way for people to spot inflation, but the real definition of inflation is an increase in the money supply, if you subscribe to the Austrian School of Economics :)

https://wiki.mises.org/wiki/Inflation
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Re: Gold and Silver Questions?

Post by willthrill81 »

index2max wrote: Wed Apr 07, 2021 2:14 pm
willthrill81 wrote: Wed Apr 07, 2021 1:01 pm
index2max wrote: Wed Apr 07, 2021 12:53 pm That’s one way they’ve increased the money supply without a corresponding rise in prices of goods. Just remember though that real estate, college tuition, stocks and medial expenses have soared way past the CPI. That’s where the inflation went... into assets.
As noted in the thread I linked to above, college expenses in totality have not significantly outpaced inflation over the last decade. Real estate has, but real estate prices had recently plummeted a decade ago, so it shouldn't be surprising that they've rebounded since then. It's true that medical expenses have outpaced inflation, but it's also true that the prices of many goods and services have significantly lagged inflation. They just don't get as much headline attention.

Many have theorized that the increased money supply did lift the prices of stocks and real estate, but that's not inflation in the typical sense of the word (i.e., higher nominal prices for goods and services).

Further, the consistent reduction in the velocity of money, which dropped precipitously last year, has also worked to keep inflation at bay. If money isn't changing hands, an increased money supply cannot lead to inflated prices.
Like you said, an increase in prices of goods and services is an easy way for people to spot inflation, but the real definition of inflation is an increase in the money supply, if you subscribe to the Austrian School of Economics :)

https://wiki.mises.org/wiki/Inflation
When most consider inflation, they mean price inflation, and a larger money supply does not automatically lead to price inflation. And no, I don't subscribe to the Austrian school.
“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: Gold and Silver Questions?

Post by HanSolo »

index2max wrote: Wed Apr 07, 2021 2:14 pm Like you said, an increase in prices of goods and services is an easy way for people to spot inflation, but the real definition of inflation is an increase in the money supply, if you subscribe to the Austrian School of Economics
I'll make a similar comment as I made upthread about troy ounces (and whether they're "real")...

The terms "monetary inflation" and "price inflation" are both real, and the word "inflation" can legitimately mean either. Webster defines "inflation" as being price inflation, so, in the absence of disambiguation, it's reasonable to take that as the intended meaning.

In other words, it's real.
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