Showing posts with label gold. Show all posts
Showing posts with label gold. Show all posts

Wednesday, June 26, 2013

Writers Block, Purchasing Paralysis, Food Rotation and Random Thoughts

For whatever reason I am having a heck of a time writing anything these days. Suppose we all go through bouts of writers block now and again. This one is a whopper. Suppose like all things it will pass.

Prices are great these days so I bought some gold and silver. If you have a few bucks to spare without shorting the household budget think about turning some into precious metals. My fear is that we will need them in coming years when inflation inevitably rears its ugly head.

Also I need to order the rail to finish my rifle. Have the money but for some reason I simply cannot bring myself to order the rail. Just keep second guessing what I am doing and cannot decide on anything.

At home I am working on eating up our food stores. The primary goal here is to consume some of the bulkier everyday food before our upcoming move. Secondary goals are to save some money and learn a bit about how effective our food storage plan is, or is not. So far it's been easy but as I work my way through the fridge and freezer it will probably get boring interesting in a hurry. Will probably talk more about this later.

On the downside I hurt my leg recently. Good news is that nothing is seriously injured, bad news is I have to take it easy for awhile. Can do some running but nothing crazy, no rucking though. So that is sort of lame plus it's sore half the time. Will probably start doing more alternative cardio (bike, machine, etc) type stuff just to keep up a reasonable level of cardio.

Anyway that is all I can think of right now. Might have something good for tomorrow or not.






Tuesday, June 18, 2013

Random Tuesday Thoughts

-It might be time to re read the Matthew Bracken novels as they seem to be playing out in real life.

-This whole discussion about the NSA, Verizon, etc all data gathering is interesting. First that stuff called 'meta data' matters, modern computers using well designed programs combined with various other open source stuff can come up with huge amounts of information. Think pattern and link analysis that is largely automated based on huge amounts of information. Along these lines the idea that has been posed "it is legal under our law but may not be constitutional" says a lot about the current problems in our country.

-Silver is at 21.5ish right now. If you have a few dollars to spare that is definitely a buy. I cannot say why gold is down either but if you can afford it that is another fine place to park a few dollars.

-Ammo prices seem to be coming down (except .22lr which is going up) but availability is still spotty for sure.

-TEOTWAWKI Blog's post on Resupply Caches is worth checking out. 

Monday, May 27, 2013

Investing These Days

Lately I have been looking at where we seem to be going and questioning some things. How we can best prepare for the realistic range of potential scenarios in a balanced way. Of course I am not a financial adviser or a broker or anything like that. If you choose to do something I am doing or follow my thinking correctly or incorrectly any consequences are entirely on you. Consult appropriately licenses professionals or do your own research then make adult choices.

Between low earnings on secure investments (that are really negative after inflation) and my concerns for the stock market I am less and less sure that stocks, funds, etc are the way to go. I want to go a little outside of the box here. So in addition to things that you can reasonably expect to make money we will talk about ways to work it from the other side by saving money, which will give you more disposable income for other things.

Some survivalist type folks say you should have X amount of food, guns/ ammo, medical stuff, etc all before investing. Of these people some have a vested financial interest in you buying all of this stuff right away; they may even conveniently sell the stuff they recommend! Other people are well meaning, in fact they likely practice what they preach, but arguably are misguided.

The Dave Ramsey type approach lets you mass efforts putting a lot of money towards one goal. This can have an advantage for some people as they can see something getting done which is encouraging as well as rewarding. So the idea is that people are more likely to keep going. If you need that kind of reinforcement then stick with a massed type approach.

Financially we do things in a pretty compartmentalized way. Of course we have normal household expenses. A goes to fun stuff, B goes to precious metals or food, C goes to savings, D goes to retirement investing, etc. The downside of this approach is nothing happens that fast. The up side is that we are working on a lot of things at the same time in a balanced way. It can get a bit confusing but overall this approach has worked really well for us.

Along the lines of compartmentalization I think most people need to be saving for the long term NOW. At least 10% of take home with 15% being even better. The reason I say this is that it is always easier to save tomorrow, until tomorrow. First you are just starting out, then you want to have kids, after that it's about time to buy a home, the point is there is never a great time to get started. It will always be easier tomorrow so you might as well just start today. 

The biggest exception to starting long term savings now that I can think of is paying off high interest debt. Putting money away that might be making a 3-4% while paying Visa 19% does not make sense. Along these lines stop charging anything you will not pay off that month (we use a CC for airline mile, it works fine because we never carry a balance) then throw all available money at whipping those nasty high interest debts.

[Begin tangent. Debt is a self perpetuating cycle. First and foremost you are fundamentally paying more money (interest) to have a hamburger today and pay for it tomorrow. The idea of paying more for something you currently cannot afford is silly if you think about it. That whole credit industry is based on people thinking more in terms of instant gratification and how much money would need to be paid monthly, not the total amount an item will cost.

Even beyond interest debt promises your future earnings. Folks get so stretched out paying for all sorts of stuff that they cannot save up to pay cash for stuff. They cannot save up for a new car because they are still paying for the car that is in the driveway now. Why people are mentally unable to save $300 a month to pay cash for a car but can pay $300 a month on a car note baffles me but that is another discussion.

The only way for people to get out of this debt trap (albeit a trap largely of their own making) is to stop borrowing and start paying things off. Since you will still need to live and inevitably things will come up that you will pay cash for, the money to pay off this debt will have to come from increased earnings or living cheaper. Since most people cannot easily earn more money living cheaper is the way forward to get out of debt. End tangent]

Education that will increase your earning power or make your income/ job more secure is always a good place to put money. First nobody can take it away from you. A bunch of digital money could decrease in value or, in an extreme case, vanish tomorrow. On the other hand that same money put into a degree or certification is not going away.

Now I am not against studying Eastern European literature from the middle ages, gay panda bears, apprenticing yourself to a buggy whip maker or whatever. By all means do that stuff. We are however going to focus more on skills/ degrees/ certifications which will increase your earning power. As an added bonus if these skills could transfer to a collapse type scenario that is even better. For whatever it is worth if I had it to do over I would have studied something medical.

Skills that will save you money. This muddles with the last idea but to me it is to a smaller degree. You are not going to spend a decade becoming a journeyman plumber so you can fix the toilets in your house. Nor do you need to. Learning a little bit about plumbing so you can fix the toilet, a bit about carpentry so you can fix the porch, etc is a good option. This may be more of a skill thing and less of an investment thing parse. Though arguably you would be investing your time helping a buddy or spending Saturday morning in one of those home depot classes, etc.

Stuff to use your skills. I'm not so much talking about buying lots of tools, gear, equipment, etc in case you might need it at your home/ homestead. Of course having stuff you use regularly makes sense. Taking the DIY have the equipment mentality extremes can not make financial sense. Example a tool that costs $300 that you might use 1 day a year. You can probably rent that tool for $25 an afternoon. Considering there are many tools you might need occasionally that would be a lot of money.

What I am talking about is more along the lines of having the stuff to either do what you do at work as a side business or to transition your business in the event of a collapse scenario. A welder or mechanic getting enough tools/ wending gear/ etc to run a little side business makes sense. I would strongly suggest doing this over time, with cash, as deals come up.

(Guys borrowing money to get side businesses going often end up in a bad spot. They have to pay the loans as well as any fees or bonds even when they are not working. They cannot transition easily to doing the side gig full time, because it is not consistent, yet the side gig's development is stalled by their day job. Not a good spot to be in. Just pay cash that way if the equipment doesn't make any money it is OK. Also the hard truth is that most small businesses fail. You can have a lot of stuff fail if the costs are your time and $500 in ads, business cards and incidentals. However you cannot have many fail if starting them involves 20k in start up money or loans.)

Some spare disposable stuff would be awful handy. Carpenters need nails, plumbers need pipes, glue, soldering stuff, fittings, etc. You get the idea

Gold- In general I like PM's as a hedge more than an investment. However these days gold under $1,400 is probably a deal with a solid upside.

Silver- Same disclaimer as gold (generally more of a hedge than an investment) but under $23 an ounce with coins/ rounds in the 24-27 range depending on make silver is an excellent deal these days. I think there is a real chance to make a profit (above inflation) in silver in the next couple years.

Land- Raw land is a fine hedge against inflation or economic shenanigans. Land that brings income via timber, rental or crops is a solid investment. For most situations the economics only make sense if you pay cash for the land. Most passive/ rental type uses of land aren't going to consistently make enough money for borrowing (which we aren't a big fan of anyway) to do it to make sense.

Real Estate- Folks who can pay cash are going to make a killing in real estate during this whole mess. There are some real deals out there. I said pay cash intentionally. The real estate rags to riches by borrowing money to get a ton of properties you rent out, each of which pays a tiny bit more than the loan and in time become rich as the property appreciates concept has shown to be utterly flawed. At best it is a real high risk/ high reward proposition. Your individual skills matter a lot but you are at the mercy of the market. Lots of people lost everything doing that.

A person who could get bargains on 2-3 modest rental properties in good neighborhoods could have their money in a safe place, earn a nice little income and be positioned to do well if/ when the market bounces back.

Homes- By this I mean the a home you live in or I guess a piece of land you live on vs something purchased for other than your dwelling. I do not really look at this an investment parse. The reason is that 1) A home as used by most of us does not bring in any money and 2) It fills our need for a place to live. If your home was suddenly worth more we would probably not sell it because we need someplace to live and other houses would probably have risen similarly in price. Also we would look at the traditional idea that homes increase in value and thus are a good investment very differently if inflation over that same time frame was considered.

I am however a big fan of getting a home as a step toward financial security. Since we need to live someplace it makes more sense to own that place than pay somebody else indefinitely for the privileged of living in their place.

Dave Ramsey talks about the "100% down" plan which is saving up till you can pay cash for a house. The issue with this plan is you need to live someplace while doing all of that saving. This plan would make sense if you are able to live very cheaply with family or in a very modest place. However if you are paying $750 rent instead of a $750 mortgage it is a bad plan. While I'm not in love with the idea of a mortgage the only thing less palatable is PAYING SOMEBODY ELSE'S MORTGAGE. Granted only a small amount of early mortgage payments really goes to principal but it's better than nothing.

The primary benefits of buying then ultimately paying off a home from my perspective are first that it locks in your biggest single expense. Rent could go up drastically (or really it would probably be the value of money going down) but a fixed rate mortgage is going to be the same. Ultimately when you pay off said mortgage your biggest single expense is gone.

Just as importantly it puts you in a very secure situation. This security is significant in my opinion. By eliminating that expense you can reassess overall family expenses. Maybe it means you can save like crazy. Maybe it means you can work a bit less and put that time into other things. Maybe you will decide to finally take the plunge to work for yourself. 

If something happens like a job loss or whatever you could live really cheap without worrying about becoming homeless. All you've got to do is come up with tax money once a year, fuel and food. If you have a home with a bit of land where you can grow some food that is even better.

Anyway there are probably some more useful things to mention. If I think of enough of them I'll do a part two. 

Going a bit Alpha Strategy and purchasing things you know you will use might not be a bad idea also.




Sunday, April 14, 2013

Time to Buy Silver

If you are in the market for Silver now would be a good time to buy. Relative to the price of gold and our overall economic situation I would say you get a lot of metal for your dollar today. Buy in dips whenever you can.

Wednesday, April 10, 2013

Reader Question- Silver and Gold 101

Ryan,
Didn't know where to post but I've seen on a few different posts lately you've brought up Gold and Silver. That is something I don't know much about between prices, where to go, what to get (rounds, coins, etc.), whats a safe amount, the works. If you have any knowledge, I'd love to hear about it! Of course, IF you have time! Thanks! I appreciate it!

Jack
 Jack, I will do my best. Please do not take this as gospel and do anything extreme solely because of something written here but I will try to answer your questions based on my experiences and observations.
First let's get a foundation on my thoughts about precious metals in general. I do not like PM's AS AN INVESTMENT. Making money buying and selling commodities requires buying low and selling high. If you have those skills that is great. Personally if I knew how to do that reliably I would be doing it for a living. That makes it basically gambling which probably is not smart.

I do like PM's as a conservative piece of my overall financial situation. Sort of like insurance or an alternative savings plan. I like them for protection against high inflation, currency debasement and even an outright economic collapse. They generally move opposite to more modern instruments like stocks and such which is nice. For most people assuming they are halfway financially squared away (no huge credit card balances, etc) putting some money into PM's makes sense.

1) Prices. Gold and silver (as well as other traded metals) prices go up and down based on the market and are tracked by so called "spot price". The closest thing to compare it to for an average lay person would be gas prices in that they change regularly and sometimes wildly.

The base for gold and silver prices is the day's "spot price" and above that there are various premiums. Spot is theoretically what a dirty lump of metal is worth fresh out of the mine. This premium represents the costs of refining the metal into whatever coin/ bar/ ingot it ends up in as well as the costs and profit of the distributor who sells it to the vendor and the vendor 's costs and profit also.To make it more complicated for different products the premium varies example Gold Eagles tend to always cost a little bit more than Canadian Maple Leafs. This is one of those things where you can either try to figure it out or just know this is a bit more expensive than that. 
When comparing products it is important to consider your total end cost. Saving a buck on a coin then paying $20 for delivery is not a win. You get the idea.
2) Reputable local brick and mortar stores or reputable online dealers like our advertiser JM Bullion.  I have also done business with Montana Rarities and APMEX (neither are advertisers though I wish they were). I talked a lot more about different options in a previous post. (Edited for brevity and clarity)
To recap from that post. Fundamentally there are three options. Brick and mortar dealers, online dealers and private  individuals. I will discuss the first two at length and then briefly hit the last.

Brick and mortar dealers are often coin shops that deal numismatic stuff and have bullion as a sort of side effort. Also pawn shops and some jewelry stores deal in bullion. Brick and mortar stores have some advantages. The first advantage is that they are convenient. Hard to beat picking up a silver round or a small gold coin every payday on the way home. Also if you decide to pay cash they have the factor of discretion. Personally I just can't see Cops kicking in the doors of everybody who bought a few silver rounds or a gold coin so this is not much of a concern for me. Another advantage is that some of these folks can help you learn about PM's. The old guy hanging out in his coin shop might be willing to help you learn about different types of coins and maybe eventesting silver and gold or grading coins. Also if it is a small shop and you are a good customer they may give you a call when products you like come in. Furthermore the coin/ pawn shop guy can be a good "grey world" contact who knows how to get stuff.

This is not to say that brick and mortar shops don't have disadvantages. The biggest disadvantage of brick and mortar dealers is often price. Some of them for whatever reason charge crazy prices. I once laughed in a coin shop guys face when he wanted $10 OVER SPOT for beaten up no name 1 ounce silver rounds. It varies shop to shop based on their business model, competition and how informed their customers seem to be. Heck it may even change based on how much they think they can get away with on a given customer. The next disadvantage is often availability. Especially with the folks who have bullion as a side business like numismatic coin or collectibles dealers and pawn shops they predominantly sell what they have bought. This means they may have 90% silver one week, 1 ounce rounds the next, a couple 1/4 ounce Eagles here and some Krudgerrands there. Since brick and mortar stores are a local thing I can't make any meaningful recommendations but I have had good dealings with a few in the past.

Online dealers like JM Bullion tend to have the best prices and greatest availability which are their biggest advantages. Also comparison shopping is easy and you can do it on a Sunday morning in a bathrobe. The first downside is that you have to pay shipping. One absolutely must consider this in their "is this a good deal" calculation. It also makes frequent small purchases cost prohibitive. Paying $5 or 8 to ship something worth $35 or $40 is cost prohibitive for sure. That it is difficult to impossible to be anonymous could be a disadvantage or turn off for some folks. Also if for whatever reason you needed to turn cash into metals TODAY an online dealer would not be a wise route.

One of the biggest benefits of established dealers who make their living selling metals is that their livelihood rests on their reputation. If through bad intentions or neglect they sell some fake stuff they are totally hosed. Due to this they are as a rule honest and above board in their dealings. This doesn't mean they they will always have competitive prices just that the products will be what they are sold as.

Personal transactions vary from boringly easy to the wide open wild west. I have purchased silver from a family member. I had some cash and they had some silver and we swapped. Online type purchases of PM's from private folks have, at least IMO an uncomfortably high likelihood of fraud. I have been burned in a small way on Ebay and will not make that mistake again. Also there is just so much fake gold floating around. In the last few years some really legit looking stuff has came out of China.

3) As to what to get. Again a selected and edited repost. 
"The Moneylender" said "Buy silver before gold, buy small gold before large gold." I think that is pretty darn good advice. Silver is a good way to start for a lot of reasons. First it is affordable. Right now spot is about $27 which puts a one ounce round probably at $30-32ish. Pretty much anybody can afford to pick one up a paycheck. If you can't free up a bit over $30 a paycheck I suggest seriously looking at your overall situation. Also you can make a mistake and overpay by a bit and it won't kill you.

Silver

Silver can be purchased in two basic products, pre '64 90% silver and 99% bullion. There are other options but we are keeping it simple here.Pre '64 90% silver is dimes, quarters, 50 cent pieces and silver dollars made before 1964. Yes our change was made of silver. The stuff I am talking about has no real numismatic (collector) value and typically dates from the early 1900's to 1964. The advantage of this stuff is that it is in small pieces. A dollars worth of silver is right about .77 of a troy ounce of silver. Thus a dime is about .07, etc. I am too lazy to look up and type all the exact weights but you can look them up here. The other option is  99% silver bullion. This is rounds or bars or ingotts made of as close to pure silver as one can easily get. Some like Eagles or Canadian Maple Leafs are minted by a country and many others are made by numerous private mints.These are made in all sorts of weights but 1, 5, 10 and 100 ounce are the most common.

Both have advantages and disadvantages. 90% silver is in small denominations. At today's prices even one ounce rounds are too large to make small transactions like a few groceries. Also they are readily recognizable at least to folks who know our change used to be made of silver. The biggest disadvantage is that many dealers charge almost crazy premiums if you buy this stuff in small (under $100 face value which is 70 some odd ounces and costs about $2,300 bucks) amounts. Montana Rarities treats small 90% silver customers well.

Bullion is generally a bit cheaper per ounce [Remember for these purposes you are buying METAL, not a coin or whatever. Thus the goal is to get as much METAL as possible for your dollars.] than 90% silver. Also it is typically in convenient weights. If the going trade is an ounce of silver for 5 pounds of beef or 20 pounds of wheat (or whatever) it is a lot easier to have nice round denominations. Also some folks say that it is good for a coin/ ingot to say it's content and purity ie "One ounce of .999 pure silver". These folks thing people who are less than knowledgeable about PM's may be more inclined to accept their value.

Whatever you decide to go with silver is a great place to start. First of all it is reasonably affordable. Second of all it is in small enough denominations to sell a coint or two to a dealer and buy groceries or a tank of gas or to barter a little bit at a time to get whatever. I would recommend purchasing a pretty good amount of silver before thinking about gold. If you are into round numbers maybe $100 face (70 some odd ounces) or 100 ounces of bullion could work but it all varies based on your situation.

Silvers biggest advantage is that it's affordable. The biggest disadvantage of silver is that at some point it gets HEAVY. I know a guy who needs to use a truck to move his silver, while that is a nice problem to have he would face some hard choices if he needed to evacuate in a hurry. This brings us to gold.

Gold

Gold is a lot more expensive than silver and could be a bit overpriced right now, at least in relation to silver which is probably a better deal at this time. It is sitting somewhere around $1,560 an ounce. Gold comes in two basic varieties. Old coins and bullion. Old coins are just that, old coins from back when Gold was money. Bullion and new coins such as Eagles, Maple Leafs and Krudgerrand's pretty much fall into the same group. Sometimes you can get good deals on the old coins, particularly European coins from aprox 1890-1917. Just be sure to stick to ones folks will recognize like Swiss and French Francs, British Sovereigns and the like. New coins/ bars are convenient because they are typically in nice round (1/10th, 1/4, 1/2 and 1 ounce) sizes and have the weight and purity clearly written on the coin. I don't find one vastly superior to the other. Even weights are nice but old coins are kind of cool too. One notable advantage of old coins (not numismatic/ collectable, just old very common coins in ok condition) is that they are typically the lowest premium way to buy small gold.

As we said before buy small gold before large gold. Small gold would be gold coins that are part of an ounce, typically 1/10th and 1/4 ounce and are also called fractional coins. As to how much of this stuff to buy before going to large gold (one ounce coins/ bars) I would say at least a couple ounces, maybe a few. For large gold I would purchase one ounce coins or ingots. I don't see a reason to get anything bigger than that. For large gold I would just be sure to get something common like Eagles, Maple Leafs, Krudgerrands or Credit Swiss ingots.

As we talked about Golds biggest advantage (already considering that it is durable, recognizable, divisible and there is consistent demand for it) is that it is a very compact store of value. For the price of a one ounce gold coin you could get a nice bag of silver or a lot of other stuff. One could toss 50k in gold into a daypack and evacuate or into a ruck to GOOD but silver would be problematically heavy. Also gold has a certain allure and enough folks have been able to use it to bribe/ buy their way out of a warzone or terrible situation that it bears considerations. 
To wrap up what to buy I would purchase 90% silver and a few one ounce rounds and then some small gold in the form of 1/10th and 1/4oz coins or common old European coins of comparable size like British Sovereigns or Swiss Francs. As to which type of gold it depends on what you find the best deals on.  Maybe buy silver when it dips, then gold when it's down, you get the idea.

4) What is a safe amount? It is best to look at this in terms of total amount in relation to your liquid net worth. I would say 10-30% (of your liquid worth) is probably a good range. To provide an alternative perspective if I recall correctly FerFal says 50%.

I hope this helps. As always input, questions or thoughts are welcome.  


Sunday, April 7, 2013

Cyprus Preps

Ferfal did a great post on the topic. Seeing as he has actually lived through an economic collapse it's worth listening to him. It goes something like this:
-Basic Preps: Food, medical, guns, ammo, etc
-Cash in hand
-Silver and Gold
-A safe or two
-Offshore banking. I'm not so sure on this one but if you have no debt, plenty of preps and PM's as well as a decent paid off home/ retreat and still have enough extra money to merit the hassle look into it. Here is the video if you have 20 minutes to spare.
I would add that you should take care of medical/ dental stuff that you've been putting off as well as vehicle repairs, new tires, etc all. Get stuff you know is going to have to happen done now while the cost is still sane.

As Thomas Sowell noted this is arguably happening now in the US via inflation. It took me a long time to really understand inflation. Reading The Alpha Strategy and "Economics in One Lesson" let me understand inflation for the sinister regressive tax that it truly is.

We could debate how bad things are going to get in the US or the probability of certain results. The bottom line is that something less than optimal will certainly happen and something bad is probably going to happen. Start doing something about it while you still can. 


Sunday, March 31, 2013

PSA Easter Sale, Free Joshua Ebook and Gardening Fun

PSA is having a pretty awesome Easter Sale. They have a variety of mags in 10 packs for $11-14 a piece and some other stuff on sale too. Probably worth checking out if you are in the market for gun accessories. John Wilson wanted me to mention that his Ebook Joshua will be available free until the 3rd.

Unfortunately it seems some folks are counterfeiting 90% silver.  This is why I buy our silver and gold from trusted dealers like JM Bullion. Learning more about testing silver might not be a bad idea either.

Today I got a cherry tomato plant and put it into the upside down planter thing Wifey got for $1.50 on clearance. Didn't take a great look at the Strawberry one and it takes multiple seedlings so I'll have to pick up a few more. Think I'll try to do them in phases so we can stagger the harvest a bit.

The strawberry plants we have so far looked pretty dead at one point. However now that they are in some dirt and have gotten some water they are turning around. One is good to go and the other is probably going to make it.

Also started some seeds to sprout. Lettuce, spinach, green beans and carrots. Did the egg carton thing. I am cautiously optimistic that enough will go to be able to plant when the time is right. Since the house is empty I'm just keeping them in the sink. 

I am definitely enjoying this whole gardening thing. It is really calming for me. Hopefully next year we will be in a place where I can do something bigger and a bit more organized than my current gaggle of containers. Either in the ground or if the soil sucks a raised bed. That sort of effort would definitely make canning worthwhile. This year I will probably do it but mostly for it's own sake.

Hope you all had a good Easter. 


Tuesday, January 1, 2013

Ruminating Thoughts On The Coming Year

The Sun will continue to rise and set. Basically I expect a slightly worse version of this year.

Taxes- Taxes will go up. Part of this will be strait forward rate increases but most of it will be increases in 'fees', eliminations of various loopholes and such. The bottom line is that more money will flow from your pocket to multiple levels of government.

The Economy- I am not sure about our economy. My initial thought is that the lost decade our current jobless, non housing inflation and cheap money fueled recovery will continue. In this regard I expect a bit worse version of 2012. Then again who knows.

The European Sovereign Debt issue could well reemerge. With China's unsustainable growth rates turning to inflation and the economy slowing the US may well be one of the better looking horses in the glue factory this coming year.

I suspect artificial manipulation of gold and silver prices to continue. Silver will probably continue to be a pretty good buy over the coming year. Once our food storage goals are met we will put away some more PM's for sure.

Inflation- Hidden inflation will continue. The current CPI calculation seems manipulated to suit political aims inaccurate on how inflation affects normal folks. Most of this inflation will be covered up by smaller packages, less food by weight and the usual tricks. Expect your income to purchase fewer goods and services than before. 

Gun Control- I think that gun control could go many ways.  Were I forced to take a guess something will probably happen next year. The Dem's will do something, potentially via executive order if needed, to get a symbolic victory. It could be as benign as mandatory reporting of certain behaviors by medical professionals and maybe import limitations on certain guns like Siaga 12 shotguns and AK's or could be worse.

Crime- It ain't gonna get better. The flat lined economy will push some marginal folks towards crime. Also as state and county agencies try to make budgets work they are going to continue or increase prisoner releases. Yes these folks will generally have been arrested for nonviolent offenses but that is just what they were caught for. Plenty of violent criminals are incarcerated for various minor offenses and some of them will inevitably be released.

Down here in the South West I think the Reconquista downward spiral of drug/ cartel violence and unchecked illegal immigration will continue.

I wish that it wasn't my opinion that the partisan nature of politics in the US will get worse. Identity politics and hate mongering to suit various agendas will continue. There is potential for short flashes of localized violence being orchestrated to suit specific purposes. Think twitter flash mobs against political opponents.

Afghanistan- It isn't going to get better. The writing is on the wall that we are leaving. Expect limited conflict to support political goals. Think 'Nam in about 1971.

Wellthose are, for whatever they are worth, my thoughts on what is coming in 2013. Hopefully they give you something to think about. Again in closing I expect it to be a lot like last year but a bit worse.  Good luck,

What are your thoughts on the coming year?

Ryan




Wednesday, December 26, 2012

Please Welcome JM Bullion!

We are pleased to welcome our newest advertiser JM Bullion. They offer a wide variety of gold and silver at very competitive prices. Also they do not stick it to you with excessively high shipping costs. I encourage you to consider them for all your precious metals needs.

Wednesday, October 3, 2012

Recent Conversations

I have had a couple conversations with close family members lately. One about precious metals and another about rifles. We will talk about them as part of the need for a quarterly rehashing of all basic topics.

A relative asked what I thought about silver and gold as an investment:

For the sake of avoiding repetition check out this post on getting into precious metals. I told him that I do not like PM's AS AN INVESTMENT. Making money buying and selling commodities requires buying low and selling high. If you have those skills that is great. Personally if I knew how to do that reliably I would be doing it for a living. That makes it basically gambling which probably is not smart.

I do like PM's as a conservative piece of my overall financial situation. Sort of like insurance or an alternative savings plan. I like them for protection against high inflation, currency debasement and even an outright economic collapse. They generally move opposite to more modern instruments like stocks and such which is nice. For most people assuming they are halfway financially squared away (no huge credit card balances, etc) putting some money into PM's makes sense.

We talked the qualities of both silver and gold. To recap silver is affordable and valued appropriately for day to day type transactions but it gets heavy fast while gold is very compact for it's value which would be useful if you have to move it. For his situation I said it would not be a bad idea to buy a big bag of silver then put the balance into gold, mostly 1 ounce bars/ rounds.

As to total amounts I recommended not to go crazy but maybe to put a certain % of your liquid assets into PM's. Depending on your situation and where you think the doom thermometer is this could be lower like 5% or more like 25%. Like most things somewhere in the middle is probably the way to go.

Another relative asked if I would recommend that he purchase an AR-15 or an AK-47. I told him to go with an AR. This is for a variety of reasons. First the price gap between the two weapons, which was part of the AK's advantage has closed drastically in recent years. Second given his military experience muscle memory lies with the AR. Third the logistics of potential resupply are probably better for the AR. John Mosby makes a case that the AR is a better weapon which is hard to argue with. That being said (and this is how I closed the talk) both are good guns that should serve you well.

There was also a separate thread of the conversation about specific builds for AR's and barrel twist rates. The answer was that considering that his intended uses of casual plinking and potential SHTF I suggested not to bother. If so inclined he could do a lot of research and spend a bunch of money. However my recommendation was that a good basic carbine like a S&W MP would do everything he wants for a lot less money.

Maybe these questions give a bit of insight into what normal non whacko survivalist folks are thinking about these days.

Wednesday, September 19, 2012

Tab Clearing

Lizard Farmer links to an interesting CALL article it gives the weight of a bunch of different military gear.

John Mosby weigh's in on the 'Combat Light' discussion. As with most things John writes I find little to disagree with. It is pretty obvious to me that the gear needed for a specific mission can vary widely. An afternoon or an overnight is different from 2 weeks (or indefinitely), summer is different than winter (especially in the mountains or way up north) and vehicle based operations, though they have their own issues, are different than hoofing it.

Fake gold bars have showed up in NYC. 

It seems that President Obama said "I actually believe in redistribution, at least at a certain level to make sure that everybody's got a shot." No comment here.

Mitt Romney said "There are 47 percent of the people who will vote for the president no matter what," Romney could be heard saying in the clip, referring to those who don't pay federal income tax. "There are 47 percent who are with him, who are dependent upon government, who believe that they are victims, who believe that government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you name it." I am ambivalent about this. It is an oversimplification as there are rich and poor on both sides of the political spectrum. However it is probably not totally inaccurate. 

It turns out that the miraculously lucky spontaneous attack on our consulate in Libya by average citizens during a riot wasn't actually so spontaneous and involved some hard core Al Qaeda types. Imagine my face showing great shock at this recent revelation.

Along these lines there is a whole mess of rioting all over the Middle East, North Africa and elsewhere. The whole thing is really ridiculous. I don't care what the guy next door thinks about my religion; let alone somebody in a country I need a couple minutes to find on a map. Things like this make the whole 'Islam is a religion of peace' argument an uphill battle.



Saturday, August 25, 2012

No Silver or Gold, Just Food

With our upcoming move back to the states there are a lot of things I want to do in life and survivalism. One of the biggest things in survivalism is really getting a serious food storage program in place. I talked about it with Wifey today. Instead of buying PM's we are going to put that money towards food for awhile.

I do not really plan to open up a discussion about the strengths or weaknesses of PM's. Some folks say you should have you 'beans, bullets and bandaids' squared away before putting a dime into PM's. I am not sure I agree with that. I look at PM's as being useful for a certain range of situations (and the same for food storage). For a long time we bought food and PM's. I think proportion is they key. If you have 3 months worth of food, some guns, ammo and fuel and a couple dozen one ounce silver rounds that is cool. If you have hundreds of ounces of silver and a few ounces of gold but no firearms, ammo or food storage that is a bad plan.

The reason we are doing this is that due to repeated moves we are starting over in food storage. By putting additional resources into food storage we can jump start that area and get it to where we want it to be. Relatively speaking our PM situation is pretty good. PM's are the area where I am willing to accept some tactical risk. Far more so than say ammo or fuel or gear. Holding off on PM purchases (and putting the money to food) for awhile will help us get things back on track. I expect this will last for roughly a year.

Also this time Wifey is going to be more involved with our food storage plan. This will help us buy the right stuff at the best possible prices and use it. All lessons learned from our past and recent experiences.

Anyway that is what is new with us.

Enjoy your weekend, unplug from all the electronic junk, go out and spend some time with actual people in meatspace. If that time can be out in the wild all the better.


Monday, July 30, 2012

What Did You Do To Prepare This Week?

We got some silver rounds and a very small gold coin. Also I hit the weight pile twice and ran 8 miles. This coming week I am going to run/ ruck at least 10 miles.

What did you do to prepare this week?

Ryan

Thursday, June 7, 2012

Preps or Investing?

Our longtime invisible friend Rourke wrote a post that got me onto this topic. Taking a topic somebody else came up with and giving my spin on it is a pretty good way to have a hitting from the tee kind of blogger day. Anyway this topic comes up all the time.

In some circles you can't be a real survivalist unless you have cashed our every investment you have to buy a bunch of buckets full of wheat and extra pants. Clearly every dollar you have will just burn up in a hyperinflationary disaster so the only reasonable thing to do is to get it all out right now, fees be damned and turn it into good tangible's like buckets full of wheat and lots of extra pants.

If you haven't picked it up I am really not a fan of this strategy. There are so many reasons for this. First if you can't see a reasonable (heck probably likely) chance that eventually you may get old and not be able to work consider the possibility that you are a fool. We could debate investment strategies (and will get there later) but fundamentally you need to be saving for your future. Buckets of wheat will not put gas in your car or pay property taxes in 40 years when you can't work.

The thing about experts is that they tend to be a bit fixated on whatever they are an expert in. This makes sense as people don't tend to get really good or attain significant status in areas they are ambivalent about. The amount of time a championship marathoner or powerlifter thinks is reasonable to spend exercising probably differs from most people. A guy who writes for Car and Driver probably puts more of his money into vehicles than most. An uuber gunnie might think a super custom pistol that costs 2k and a tricked out uuber AR that costs 3k and wears another 3k in accessories are totally reasonable. The point I am getting at is that as a sort of jack of all trades (vs just a gunnie or whatever) we need to look at the big picture. Looking at the big picture means we cannot always shoot the same guns as a guy who just does 3 gun tourneys or whatever. It should be pretty obvious that letting the guy from Car and Driver choose your carry piece is about as smart as letting some preparedness guru choose your investing strategy or the champion marathoner pick your next family vehicle.

Maybe more to the point a definite this or that mentality comes up here which I think is ridiculous. There are almost infinite ways you could spend your money so it certainly does not just come down to preps or investing. It is better to look at the big picture. You could invest $500 a month or have a boat with a payment. You could spend $300 a month on preps or have the big cable package and go out to eat a few times a month. The options are endless which is why this whole argument is kind of foolish to me.

Note that I am talking about taking money that was allocated toward longterm savings (in whatever form) and putting it into food storage or whatever kind of survivalist stuff. Folks who decide to go all contrarian/ hard money are a different sort of discussion. They may be right or wrong but this makes much more sense as they are still saving for the future but in a different way. I know some folks who are seriously contrarian in their investment plans. They keep liquid savings in PM's and put the rest of their money into various things like specialized equipment for businesses or real estate or small businesses that earn money. It is worth noting that lots of "contrarian's" mess up on the part where the point of getting something is that it makes you money. A NIB .44 magnum or gold coin tucked away in a safe does not get you interest or pay a profit. A lot that you rent out to somebody or a share of a local business can make a profit.

However tempting it is to raid your investments to get a jump start on preps I think it is dangerously short sighted. The world MAY end but assuming you do not take an untimely dirt nap you WILL get old. I cringe every time some survivalist blogger/ author/ expert recommends this approach.Taking a couple grand from your liquid savings to buy some basic stuff is not a terrible idea but cashing everything you have saved in your entire life out to buy some stuff you may never need is just not a smart thing to do. A far preferable alternative option is to leave your retirement money alone, cut some stuff you don't need anyway from your budget/lifestyle and use that money towards your preparedness goals. It isn't as fast or easy but you end up in a much better place. Personally I look at the two as entirely different streams of money for different purposes. My retirement account is for if things go just fine and our preps and stores are for if they don't.

Anyway those are my thoughts on that. I am interested in hearing yours.

Monday, June 4, 2012

A Week in Preps, Free Downloads, Kits and Other Stuff

I couldn't quite decide what to write today. I didn't want to skip a week in preps/ what did you do to prepare this week but there is other stuff floating around my head also. Anyway you are going to get all sorts of stuff today.

This week I finished up the kit/ bag that I have been working on. That meant buying the last few things like plastic bags and granola bars, digging around closets and storage to find things and just taking the time to get it all put together. We will revisit this later. Also we put some more money into our emergency fund. In the last couple months we have increased it by about 40%. Mostly this was needed for the fund to keep up with our family and life situation.

Today I noticed that John Galt's The Day The Dollar Died blovel is being offered as a free PDF download. I really enjoyed reading it the first time. Being able to read it at my own pace, not all broken up, will be nice. I strongly recommend it. Now onto kits.

So like I said I got done building the kit I have been working on. It started out to be a get home bag. I am not exactly sure what it turned into. Maybe there was a sort of mission creep but it definitely got bigger, heavier and more comprehensive than I planned. While it fit into my Tactical Tailor assault bag it was too heavy for such a bag and carried badly. I put the contents into one of the smallish packs I got from REI awhhile back. What I have is sort of straddling the fence between what I would consider a pretty comprehensive and relatively heavy get home bag and a slightly minimalist bug out bag. It has stuff to purify water, change clothes, sleep in reasonable (spring/summer, winter would need a different module) comfort, treat a variety of injuries and all of that good stuff.

I am not sure if I am thrilled with it or unhappy. In any case it definitely did not fit the intended purpose. If I commuted 50 miles one way to work every day it would probably live in my vehicle. However I do not do that. I do like the setup but am not entirely sure what I will do with it. Maybe it will stay the same or change or get parted out. For the time being it will be my bugout bag. Down the road I think it might get slightly tweeked and become Wifey's bag.

After putting that bag together and realizing the problem we just talked about I immediately set out to making the sort of get home bag that I actually need. So I put together a pretty light get home bag.  One that fits my life. I was determined not to let it suffer from any sort of creep. Basically I took my TT assault pack, tossed in a pair of boots, socks, some water and a bunch of various bars to munch on.  Of course the usual suspects like a knife, compass, fire making stuff, etc are present. Much more geared toward a 25 mile walk than a multi day treck.

Thoughts or ideas would be appreciated.

I may get around to doing posts on these. However I want to mull recent developments and maybe fill some gaps first. It might be awhile as I am lazy when it comes to that sort of posts.

Gas prices are down some here. About 30 cents from the high if memory serves me correctly. I noticed that gold shot up a bit recently but silver is still well under $30 which is a pretty good deal. It may stay there and may not, I can't say.

Anyway that is about all I have for now. Hope Monday wasn't too painful for anybody.



Monday, May 21, 2012

What Did You Do To Prepare This Week?

Some weeks you end up buying a bunch of stuff and this was sure one of them. Prices seemed right so we bought silver and gold. I got a bunch of stuff to finish off the get home bag which I am pretty psyched about. I ordered a Nalgene bottle  with matching steel cup, another knife sharpener, some more water purification tablets, one of those heavy duty emergency blankets, too much stuff to remember or list. I will probably talk about it at some point once things arrive.

Also  we seem to be fiddling some with alternative transportation. I got a bike, though sadly not a sweet Harley. Also I found a small wagon, like to pull the kid around in. It is pretty cool. It has little seats and a place for him to put a sippy cup. We took it out this weekend and he really liked it. Being able to move him and a bit of stuff in a way that he is happy with is significant. Also the wagon led to a slew of Oregon Trails jokes which was big fun. These little steps may just take us somewhere.

Anyway that is what we were up to this week. I hope you all did some good stuff. Remember it isn't just about buying things. Exercise, learn and practice new skills, network and build relationships, work on your tribe. Just do something that makes you more prepared than you were last week.

Friday, May 18, 2012

Blah, Life and Sickness

Well I have pneumonia. It wasn't a huge suprise as I have had a wickedly nasty cough for almost 3 weeks. It has been sort of a weird thing because aside from a wicked cough (with the caviate that I have done next to nothing physically straining since being sick) and being kind of physically and mentally tired all the time but overall I pretty decent. Turns out it is kind of an odd strain so it was hard to diagnose but eventually they figured it out. So now I am on some drugs to treat it and they seem to be working.

When I had double pneumonia back in Fall 2010 our medical folks were moderately concerned I was going to die. I was the sickest I have been in my entire life. I was barely coherant and weak as could be. Maybe I am somehow weak in the lungs or something. Who knows. Anyway.

As to the recent video and talk about 1911's and the comment on snubbies that seems to have gotten folks all bent out of shape. I have a post basically written in my head that will explain my opinions on a lot of background and conceptual stuff but just don't feel like writing it today. I am mentally just too tired to bother. My desire to argue is minimal and my desire to argue with people who aren't talking about actual facts or data is nonexistent.

I am coming to wonder if guns are a topic that cannot be talked about rationally. If I even mention that a gun is anything less than absolutely perfect folks get seriously bent out of shape. It sort of makes sense why gun rags write that every gun is just completely awesome. Then again it sort of makes sense that I think their reviews and articles are complete shite and I haven't bought a gun rag in years.

I may have called a good time to buy a couple days back but last night I finally bought PM's. Silver was at about $28.09 and Gold at about $1570. They had been slipping back up and it seemed like a good time. Who knows anyway. Tomorrow I am probably going to go bike shopping. Not sure I will get anything but I do want to see what is available here in the $300-400 price range.

For awhile I was listening to the news online at work. I listened to some Dave Ramsey too but I think I am good for that once a week or month at the most. I love his stuff but it is aweful repetetive. Over the last couple days I have stopped that and started listening to rock music instead. I read or at least skim the drudge every day and if I have time check out the BBC but music lets me drone out and be productive which is a good thing. Also the news has been making me mad lately and music gets me going so the decision is easy.

Anyway I hope you all have a good day and maybe I will put together something more on point tomorrow.

Later,

Wednesday, March 28, 2012

Getting Into Precious Metals

When I was home for leave my very good friend and nominal coauthor Ryan were able to catch up. He mentioned that he was somewhat interested in precious metals but wasn't quite sure where to start. I meant to send him some info but whoops, it never happened. Anyway it popped back into my head recently. I thought this might be a worthwhile blog post to boot. So anyway.
A lot of big names in survivalism say that you should not get into precious metals until you have your beans, bullets and bandaids squared away. One big name defines that as a years worth of food. I am not going to say they are wrong but I look at it differently. To me precious metals are not part of my preps parse, they are the ultra conservative portion of my financial planning. To me a dollar that is going to silver isn't a dollar that would be going to beans or bullets, it is a dollar that would be going into savings or investments. You could look at it either way or some other way.
[I realized in writing this that it is important to define some terms for newbs. When talking about pre -64 90% silver the term face value is used. Face value is the value of the coins at the time of minting, back when they were just money. A dime is a dime face value, 10 dimes are a dollar face, etc. 90% silver is often sold this way in $5 or $10 rolls and $50, $100 and $1,000 face bags.  It is important to note that these bags are not weighed but sold by face value. Typically with newish or normally circulated coins the difference between the actual weight and the theoretical weight at manufacture is tiny. However in large quantities when dealing with seriously worn coins it matters. Either negotiate a significant discount for or pass on big bags of heavily worn dimes.  Bullion is just that, metal that is made into a bar, ingot, coin or round that is sold essentially as metal. To me this includes the new American Eagles, Canadian Maple Leafs and such. They may or may not have a nominal monetary value but the cost of the metal is the real value. Precious metals are traded as commodities like oil, corn or whatever. Numismatic is a phrase that means collectible. Basically these are coins or whatever that are rare and or in particularly good condition and thus have significant value beyond their metal content. This is a totally different game than bullion with its own rules. It is one I don't fully understand and do not involve myself in. If you want to collect coins that is great but I would consider it a hobby not part of your financial or preparedness efforts. Spot price is the value of an ounce of silver or gold (or copper, platinum or whatever but they are outside of the scope of this post) strait out of the ground. Obviously it costs money to make that metal into a coin or bar and those folks have expenses and want to make a profit. Also the guy selling it has expenses and wants to make a profit. The difference between spot price and the actual purchase price is called a Premium. For various market reasons some products have higher premiums than others. For example an American Eagle gold coin always costs a few bucks more than a Canadian Maple Leaf or a Krudgerrand. In silver big names like Englehard can carry a premium of a buck or so. Feel free to ask if you have questions about anything.]

Are you ready to invest in precious metals?
By the theory I do not subscribe to you should have a bunch of beans, bullets and bandaids. (Certainly you should at least have a functional weapon with some bullets, and enough food, etc to deal with a snow storm or a hurricane.) If you look at it more as a financial thing like I do one would want to take care of any nasty debt like credit cards or anything above say 8% interest rate and have some cash savings. If you do not have some basic survival stuff like a pistol or a shotgun, some food, a way to cook it, etc and have an outstanding balance with Visa at 18% then it might be wise to throw your resources at those issues. Lets just say that you have some basic preps and no nasty debt before jumping into PMs.

How To Buy?

It depends on your overall situation. If you have a good amount of money sitting around you could go order a big bag of silver and or some gold and be done with it. The stockbroker seeing the writing on the wall and ordering a hundred thousand dollars in gold is kind of an urban legend in contrarian investing and precious metals circles. For most folks we don't have a lot of money lying around so we will be making purchases as our income allows. The concept of dollar cost averaging is worthwhile to consider here. However like any financial plan I recommend that you pay yourself first. Maybe you buy a one ounce round every payday or whatever you can afford. Figure it out and stick to it unless your situation changes significantly. This doesn't need to be a big thing just come up with a reasonable plan and execute it regularly instead of waiting till the end of the pay period and hoping there is something left. You may or may not want to go full on Dave Ramsey and allocate every dollar before you get it. We don't have a complete budget but we plan our saving and investments and execute them consistently. However our financial situation as bills relate to income is pretty comfortable. If we had credit cards with big balances, car loans and whatever we would go full on OCD. Typically like diets I would say the worse your situation is the more you need to be strict about it.

What to buy?

"The Moneylender" said "Buy silver before gold, buy small gold before large gold." I think that is pretty darn good advice. Silver is a good way to start for a lot of reasons. First it is affordable. Right now spot is about $32 which puts a one ounce round probably at $35-36ish. Pretty much anybody can afford to pick one up a paycheck. If you can't free up a bit under $40 a paycheck I suggest seriously looking at your overall situation. Also you can make a mistake and overpay by a bit and it won't kill you.
Silver

Silver can be purchased in two basic products, pre '64 90% silver and 99% bullion. There are other options but we are keeping it simple here.Pre '64 90% silver is dimes, quarters, 50 cent pieces and silver dollars made before 1964. Yes our change was made of silver. The stuff I am talking about has no real numismatic (collector) value and typically dates from the early 1900's to 1964. The advantage of this stuff is that it is in small pieces. A dollars worth of silver is right about .77 of a troy ounce of silver. Thus a dime is about .07, etc. I am too lazy to look up and type all the exact weights but you can look them up here. The other option is  99% silver bullion. This is rounds or bars or ingotts made of as close to pure silver as one can easily get. Some like Eagles or Canadian Maple Leafs are minted by a country and many others are made by numerous private mints.These are made in all sorts of weights but 1, 5, 10 and 100 ounce are the most common.

Both have advantages and disadvantages. 90% silver is in small denominations. At today's prices even one ounce rounds are too large to make small transactions like a few groceries. Also they are readily recognizable at least to folks who know our change used to be made of silver. The biggest disadvantage is that many dealers charge almost crazy premiums if you buy this stuff in small (under $100 face value which is 70 some odd ounces and costs about $2,500 bucks) amounts. We will revisit this when we talk about where to buy the stuff.

Bullion is generally a bit cheaper per ounce [Remember for these purposes you are buying METAL, not a coin or whatever. Thus the goal is to get as much METAL as possible for your dollars.] than 90% silver. Also it is typically in convenient weights. If the going trade is an ounce of silver for 5 pounds of beef or 20 pounds of wheat (or whatever) it is a lot easier to have nice round denominations. Also some folks say that it is good for a coin/ ingot to say it's content and purity ie "One ounce of .999 pure silver". These folks thing people who are less than knowledgable about PM's may be more inclined to accept their value.

Whatever you decide to go with silver is a great place to start. First of all it is reasonably affordable. Second of all it is in small enough denominations to sell a coint or two to a dealer and buy groceries or a tank of gas or to barter a little bit at a time to get whatever. I would recommend purchasing a pretty good amount of silver before thinking about gold. If you are into round numbers maybe $100 face (70 some odd ounces) or 100 ounces of bullion could work but it all varies based on your situation.
Silvers biggest advantage is that anybody not living on the street (heck even a wino could cut down their Thunderbird consumption or panhandle a bit more agressively and pick up a 90% dime or quarter from time to time) can afford to buy it, if slowly and in small incriments. The biggest disadvantage of silver is that at some point it gets HEAVY. I know a guy who needs to use a truck to move his silver, while that is a nice problem to have he would face some hard choices if he needed to evacuate in a hurry. This brings us to gold.
Gold

Gold is a lot more expensive than silver and could be a bit overpriced right now, at least in relation to silver which is probably a better deal at this time. It is sitting somewhere around $1,660 an ounce. Gold comes in two basic varieties. Old coins and bullion. Old coins are just that, old coins from back when Gold was money. Bullion and new coins such as Eagles, Maple Leafs and Krudgerrand's pretty much fall into the same group. Sometimes you can get good deals on the old coins, particularly European coins from aprox 1890-1917. Just be sure to stick to ones folks will recognize like Swiss and French Francs, British Sovereigns and the like. New coins/ bars are convenient because they are typically in nice round (1/10th, 1/4, 1/2 and 1 ounce) sizes and have the weight and purity clearly written on the coin. I don't find one vastly superior to the other. Even weights are nice but old coins are kind of cool too. One noteable advantage of old coins (not numismatic/ collectable, just old very common coins in ok condition) is that they are typically the lowest premium way to buy small gold.
As we said before buy small gold before large gold. Small gold would be gold coins that are part of an ounce, typically 1/10th, 1/4 and 1/2 ounce and are also called fractional coins. As to how much of this stuff to buy before going to large gold (one ounce coins/ bars) I would say at least a couple ounces, maybe a few. For large gold I would purchase one ounce coins or ingots. I don't see a reason to get anything bigger than that. For large gold I would just be sure to get something common like Eagles, Maple Leafs, Krudgerrands or Credit Swiss ingots.

As we talked about Golds biggest advantage (already considering that it is durable, recognizable, divisible and there is consistent demand for it) is that it is a very compact store of value. For the price of a one ounce gold coin you could get a nice bag of silver or a lot of other stuff. One could toss 50k in gold into a daypack and evacuate or into a ruck to GOOD but silver would be problematicly heavy. Also gold has a certain allure and enough folks have been able to use it to bribe/ buy their way out of a warzone or terrible situation that it bears considerations.

Where to buy?

Fundamentally there are three options. Brick and mortar dealers, online dealers and private  individuals. I will discuss the first two at length and then briefely hit the last.
It is important to note that you really need to be a smart consumer when it comes to PM's. Check on Spot Price and know what sort of premiums a given product typically carries. Also be sure to consider the full cost of getting a product to your door. This means your time and travel to a shop or shipping from an online dealer.

Brick and mortar dealers are often coin shops that deal numismatic stuff and have bullion as a sort of side effort. Also pawn shops and I have heard some jewelry stores deal in bullion. Brick and mortar stores have some advantages. The first advantage is that they are convenient. Hard to beat picking up a silver round or a small gold coin every payday on the way home. Also if you decide to pay cash they have the factor of discretion. Personally I just can't see Cops kicking in the doors of everybody who bought a few silver rounds or a gold coin so this is not much of a concern for me. However if you have some other issues going on this could be useful. Another advantage is that some of these folks can help you learn about PM's. The old guy hanging out in his coin shop might be willing to help you learn about testing silver and gold or grading coins if you have the gift of gab and are a decent customer (or offer to help clean up or whatever). Also if it is a small shop and you are a good customer they may give you a call when products you like come in. Furthermore the coin/ pawn shop guy can be a good "grey world" contact who knows how to get stuff.

This is not to say that brick and mortar shops don't have disadvantages. The biggest disadvantage of brick and mortar dealers is often price. Some of them for whatever reason charge crazy prices. I once laughed in a coin shop guys face when he wanted $10 OVER SPOT for beaten up no name 1 ounce silver rounds. It varies shop to shop based on their business model, competition and how informed their customers seem to be. Heck it may even change based on how much they think they can get away with on a given customer. The next disadvantage is often availability. Especially with the folks who have bullion as a side business like numismatic coin or collectibles dealers and pawn shops they predominantly sell what they have bought. This means they may have 90% silver one week, 1 ounce rounds the next, a couple 1/4 ounce Eagles here and some Krudgerrands there. With these guys you need to either be patient or flexible. Since brick and mortar stores are a local thing I can't make any meaningful recommendations but I have had good dealings with a few in the past.
Online dealers tend to have the best prices and greatest availability which are their biggest advantages. Also comparison shopping is easy and you can do it on a Sunday morning in a bathrobe. The first downside is that you have to pay shipping. One absolutely must consider this in their "is this a good deal" calculation. It also makes frequent small purchases cost prohibitive. Paying $5 or 8 to ship something worth $35 or $40 is cost prohibitive for sure. That it is difficult to impossible to be anonymous could be a disadvantage or turn off for some folks. Also if for whatever reason you needed to turn cash into metals TODAY an online dealer would not be a wise route.

One of the biggest benefits of established dealers who make their living selling metals is that their livelihood rests on their reputation. If through bad intentions or neglect they sell some fake stuff they are totally hosed. Due to this they are as a rule honest and above board in their dealings. This doesn't mean they they will always have competive prices just that the products will be what they are sold as.
Personally I used APMEX for a long time and have heard good things from Zero about Montana Rarities.
Personal transactions vary from boringly easy to the wide open wild west. I have purchased silver from a family member. I had some cash and they had some silver and we swapped. Online type purchases of PM's from private folks have, at least IMO an uncomfortably high likelihood of fraud. I have been burned in a small way on Ebay and will not make that mistake again. Also there is just so much fake gold floating around. In the last few years some really legit looking stuff has came out of China.

Face to face transactions would have the same risk of counterfeits. I would need to be a lot more competent at testing gold, have calipers to take measurements and a scale to consider doing this. To make matters worse there are also security concerns. Remember that Marine who got shot trying to sell a gold necklace? If conducting such a transaction would meet somebody in a pretty public place, ideally with obvious cameras and carry a gun. If it was a significant transaction I would wear soft body armor and bring a couple friends with their own guns. No need to show up like gangsters, two guys at the next table sipping coffee would go unnoticed but could be very helpful if things went sideways.
Unless somebody you know and trust  is selling what you want to buy I am not a big fan of personal transactions there are just too many issues involved for the couple bucks you might save.

Well I hope this gives some insight on my thoughts about getting into PM's and helps you make some informed choices about purchasing PM's.

Sunday, March 11, 2012

Pre 33 US Gold Coins and Pre 1899 Guns

Commander Zero wrote a great post on Pre 33 US Gold Coins and Pre 1899 Guns.
My thoughts are as follows:

A guy recommending pre 33 gold coins who conveniently happens to sell pre 33 gold coins viously has a obvested interest. The people who suggest going this route for gold almost without exception have some sort of financial interests in the mix. Also it comes at a sharp premium as much of this gold falls more into the collector area (particularly the slabed and graded coins in decent condition) than the bullion side. In other words the prices are far beyond a coins metal content.

My personal opinion is that the whole thing is a lot of worrying for nothing. Let us just say that a totalitarian government appears and decided to get gold grabby to say hedge an unstable fiat currency. Seizing gold in big commercial vaults like the ones in New York would be practical. However finding the records from every company that sells precious metals seems like a bit of a stretch. I can't see a SWAT style search and confiscation mission to find every single Krudgerrand or gold Eagle that has been sold. More to the point gold is, at least in my observation such a nitche thing that it is really not an issue. Even if it happened I can't see a bunch of goons who are looking for gold coins seeing your pile of gold coins and accepting the explanation that they are collectible and thus exempt from confiscation.

As to pre 1899 guns to me it is much of the same. The kind of legal loophole they seem to exist in is not one I would be comfortable relying on as my only protection. That could be benefitial during current times in places that are not firearm friendly like New York City but I am not so sure about it. Cops and prosecutors tend to be pretty good at knowing obscure laws that work in their favor but not so good at knowing or following ones which do not work in their favor. Also it is important to note that these guns do not exist under FEDERAL LAW. While I am unsure of it I suspect just about anything more dangerous than a super soaker probably counts as a gun in New York. If there is any relatively recent case law on this I would be interested in seeing it. Maybe some felonious gangbanger in NYC was caught carrying an old Colt Peacemaker and got a pass because of this legal loophole but I really doubt it. Also we have ignored that these guns are very old and finding functional ones at reasonable prices might be problematic. Additionally the logistics involved would probably be a nightmare. If collecting old guns is a hobby you enjoy then pursue it.

However if one has some sort of dark scenario in their head about gun confiscation or whatever I would recommend that instead of getting some pre 1899 guns they move to someplace that doesn't suck and buy some modern guns from private parties. A guy who lives in Alabama or Wyoming and bought an AR or an AK at a gun show is without a doubt better off than one who owns a revolver from 1892 and lives in New York City or Washington DC. Also revisiting the point from gold I can't see gun confiscating thugs who are searching your home passing by a pre 1899 Mosin Nagant rifle, a Winchester 1897 shotgun and a Smith and Wesson 44 special revolver of the same era based on your articulate explanation of their unique legal status.

In closing I think that acquiring old gold coins (at collector, not bullion prices) doesn't make sense and is really only hyped by those with a vested financial interest. As to pre 1899 guns as a way to discretely own viable firearms seems to have a lot of inherant problems and thus likely isn't worth the hassle.

Thoughts?

Sunday, February 26, 2012

Wyoming House advances doomsday bill

House Bill 85 passed on first reading by a voice vote. It would create a state-run government continuity task force, which would study and prepare Wyoming for potential catastrophes, from disruptions in food and energy supplies to a complete meltdown of the federal government.


The task force would look at the feasibility of:


Wyoming issuing its own alternative currency, if needed. And House members approved an amendment Friday by state Rep. Kermit Brown, R-Laramie, to have the task force also examine conditions under which Wyoming would need to implement its own military draft, raise a standing army, and acquire strike aircraft and an aircraft carrier.


The bill’s sponsor, state Rep. David Miller, R-Riverton, has said he doesn’t anticipate any major crises hitting America anytime soon. But with the national debt exceeding $15 trillion and protest movements growing around the country, Miller said Wyoming — which has a comparatively good economy and sound state finances — needs to make sure it’s protected should any unexpected emergency hit the U.S.
Several House members spoke in favor of the legislation, saying there was no harm in preparing for the worst.


“I don’t think there’s anyone in this room today what would come up here and say that this country is in good shape, that the world is stable and in good shape — because that is clearly not the case,” state Rep. Lorraine Quarberg, R-Thermopolis, said. “To put your head in the sand and think that nothing bad’s going to happen, and that we have no obligation to the citizens of the state of Wyoming to at least have the discussion, is not healthy.”

Read more here.
 
It seems like a pretty solid plan. My only question is what would Wyoming, which unless my state geography is seriously off is landlocked, would do with an aircraft carrier.

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