Last weekend I wrote an article about the metals. Yes, I still love them, yes I think they’re going higher, and I spelled out some of the reasons for that. Things like the Fed’s taking their balance sheet to 7 trillion in months, things like a new cold war with china, things like the incredible impact of Covid on the world’s economies.
Today it is all about what I think you should have and why. So first off, remember, I’m not a financial planner, I’m not a broker, I have NO license of any kind to tell you all what to do. I am however willing to give my opinion about things and tell you how I interpret things. So just understand that in ANY letter I write, I am not offering investment advice. I can’t do that. I can only share my opinions and what I think makes logical sense.
So let’s start with some basics. Why do we buy gold or silver. Surprisingly a LOT of people, when I ask this question at a seminar for example, will say they are looking for the price appreciation. In other words they want to buy gold at 1500 to see it go to 3000 and sell it for a fat profit.
That is NOT what the metals are for. I have no desire to sell a metal that has risen, for more of the same fiat crap money that forced me to buy gold in the first place!! To begin, let us separate out what is a metal and what is not. Buying shares of the GLD or the SLV is NOT, repeat until you puke, NOT buying metals. You are buying a paper contract with a ton of cross party liabilities. A lot of things have to go right for that lousy piece of paper to survive a true catastrophic situation.
I have NO issue with people using the GLD or SLV as a trading vehicle to try and make money on the ups and downs in the swing prices of the metals. Fine, go right ahead. Just understand you are trading, NOT investing. Same thing with the miners. I love to play with the miners. I’m in 3 of them right now in my short term account and I’m in even more in my long term account. They move well when they’re hot and they make us money. Excellent.
But consider this for just one second. Let’s suppose you think I’m fulla bullcrap. And you think that buying the GLD or SLV or a miner is an investment, a safe investment. And then, the lunatic Antifa crowd finds a way to take out the power grid for a few months. Explain to me exactly how you get to your GLD? How do you take ownership and use it to your advantage through a tough time?
So, buying metals means physical metal. Something that you wander into your local coin shop and exchange fiat currency for, and in return you get a coin, or a bar of “metal” in return. You take it home. It is yours. It has no counter party liability. No one has leans on it, options on it, futures on it. It is simply now, a fully owned commodity.
Let us return to the opening question. Why do we want this stuff? Well if it is NOT to hope it appreciates and then we can sell it for more worthless fiat dollars, what the hell is it for? It is for insurance. Insurance against what? Mostly inflation, destruction of currency value, and beyond that, war, conflict, civil disruptions, EMP’s, you name it.
Let’s talk inflation. Is there inflation? Plenty. Mostly in things like food, insurance, medical, etc. But the true hyper inflation has been kept in check. How? Velocity of money. By pulling this BS covid lockdown maneuver, they have been able to keep the velocity of money extremely low. It’s hard to have soaring inflation, when no one is outside their homes doing commerce. It’s hard to have inflation when tens of thousands of small businesses are locked down. Shut down. Doing essentially, no business.
When that bar is shut down, there’s no 50 people in there buying 8 dollar cocktails and 4.50 beers. There’s no orders of wings, and fried pickles. The bar owner is not taking in 5K that night, and using that money to order a new countertop. The countertop guy isn’t getting any work, and hence no money to buy his wife that new outfit she’s admiring. Money flow has slowed.
But with the trillions that the Feds have printed, inflation is building up like monsoon rains behind a dam. One day that dam will break, and all hell breaks loose.
So the most important part of the metals, is to protect us from the ravages of inflation. I’ve used the suit analogy so much it’s boring to hear. But, in 1915 a one ounce gold coin could buy you a hand tailored men’s suit. In 2020 a one ounce gold coin can still buy you a handmade suit despite the value of the US dollar going from “one dollar” to its present value of about 4 cents. Because as that dollar was eroding that one ounce 1915 coin was worth 20 bucks. Now it’s worth 1950 bucks. It offset the destruction of the dollar.
Okay, so we want physical. We want something we can hold in our hand. Something that we can put in our home safe and defend if necessary. Do we ONLY want gold? Do we ONLY want silver? Nope, we want both. Why?
Price disparity. Let’s suppose the Satanic scumbags get their way. Forced vaccinations and those Vaccines are loaded with nano particle “trackers”, basically inserted chips in you. They’ve integrated it into the monetary system, so that your bank accounts, health history, etc are all on that chip. (Don’t laugh, both Denmark and Norway have been experimenting with making that very system, tracking chips that also “speak” to your bank.) More on that in a minute.
You decide “Hell no” I’m not taking the mark of the beast. So, your overlords shut you down. Oh, you don’t have the vaccine chip? You can’t come in our store. But you need food! Sorry, no chip, no food. You can’t get on a bus, a train a plane. So you decide to go “underground.” You’ll use barter and your gold coins for buying what you need on the black market so to speak.
This is where having different denominations of coins comes in. One single gold maple leaf is worth 2K. Well what do you do when you just need a couple chickens, eggs, and veggies from farmer Brown? You don’t want to give him 2K worth of gold.
So, you use silver. You use the Silver one ounce Eagles. But in my history, I’ve broken it down even further. See, right now Silver’s moving well, and hey, it could once again see 50 bucks an ounce. If that happens, you’ve got the same situation as gold, your coin is worth more than some bread, milk and eggs. So, over the years I’ve mentioned buying fractional coins in both gold and silver.
Fractional coins in silver, were pretty much laughed at for years. ¼ and ½ ounce silver buffalo’s were so cheap, and the premiums so high, no one wanted them. But if Silver runs to 70 bucks, and it certainly could one day, I’d like to have a few dozen ¼ ounce silver coins along with my one ounce coins. Today they’re virtually sold out. I don’t know any dealers that have any. Imagine that.
Okay, so you need gold and silver. How much of it? There’s no way to quantify that. Analysts tell you 10% of your portfolio, Preppers say 90% of all you own, etc. That’s a personal decision you have to make for yourself. But in my opinion, everyone should have some Gold Eagles or Maple Leafs, Some half ounces, some quarter ounces. I think you should have some Silver Eagles, half ounces, and quarters if you can find them.
What about bullion bars. That depends on your wealth status and your ability to store things. A ten ounce gold bar from a reputable mint is over 20K dollars right now. The beauty of them is that you can buy two or three and they take up absolutely no space in your safe. If you buy 60K worth of silver coins, you have a storage issue problem. So, for people that truly believe Gold is where they want to store their savings, gold Bars makes a ton of sense.
For the person that only has 20K in all his savings, I don’t think bars are the way to go. 10 Maple leafs or Eagles are an easier sell one at a time at the local coin dealer/pawn shop than a bar. But for the person that’s got 500K in a bank that one day could say “we’ve gone belly up and had to implement a bail in” meaning they can use your money to bail them out, Putting 100K of that in 5 bars, or 200K into 10 at home makes sense to me.
What about “rounds?” Well, rounds are coins made by various mints around the world, and they can be commemorative coins, nature coins, pirate ship coins, Viking coins, you name it. They’ve made gold and especially silver into a ton of different picture coins. They should all be one ounce pure, of either metal. But there’s a problem. While you might love your one ounce “nightmares of the fall” coin, not every dealer is going to recognize it. Nor trust it as pure. So rounds, while available and awful fun to collect, have a bit of a liquidity problem if you need to sell them. Often you’ll pay a fat premium to get them, but have to sell them considerably lower.
The two that don’t have that issue, is 1) anything out of the Canadian mint. Gold Maple leaf’s are the most recognizable one ounce coin on earth. The Gold Eagle is second. Same with the Silvers. So as far as absolute safety and best return, those are the two to have.
Moving along, – storage. What do you do with your gold and silver coins? Well it depends on how much you have. If you’re talking a couple million dollars worth, you should probably be considering a commercial gold vault like https://www.silverbullion.com.sg/ in Singapore.
At the home level, there’s many ways to skin that cat. Hiding a few coins around your house is fairly easy to do and you can come up with all manner of really ingenious ways to do it. That said, I generally have differing opinions than a lot of folks so let me say this: Most of you are probably gun owners. Many of you probably have 10, 20, 30 grand worth of fire arms. Hell, one good Benelli shotgun, a few good 308’s, a few 22 long rifles, and a handful of handguns can easily be 15 – 20K worth. Do you have a safe to store them in?
90% of the time the answer is no. I constantly ask “why?” Why would you spend years and thousands of dollars and not have them in a safe? I can give you first hand experience about what happens without one. When we lived in the Pocono Mountains our house was robbed during a weekend when we were at the bay house in NJ. 11 long guns, and 5 hand guns, gone. It was sickening.
Well why not kill two birds with one stone? If you’ve got some guns and now you’ve got several thousand dollars worth of metals, why not buy a gun safe and keep your stuff in it? Most will say it’s too expensive. Right, so lose 8K in metals and 20K in weapons because you didn’t want to pay for a safe.
I’m going to help you out here. There’s a hundred places to buy a safe, and a million prices. But if you’re like me, you want the most value for the money you spend. Agreed. I did the homework folks. The people at Steelwater gun safes will give you the best product at the best price. Really. They have a really nice heavy duty safe, fireproof for one hour at up to 1875 degrees, holds long guns comfortably, 20 if you pack them in. It has cubbies for handguns, ammo, etc. They will deliver it to you for free.
In fact, if your driveway is relatively flat, paved and not terribly long, they will deliver it into your garage. Free. How much? 900 bucks. It’s a bargain folks.
PS I have no deal with them, I’m not getting paid to recommend them. I just like their product.
Get one of those (Or its smaller brother for 829) and store your weapons and your metals with safety. It just makes sense.
So to wrap up, use SLV, GLD, and the mining stocks to make some money. Take a portion of that money and buy gold and silver. Vary the denominations of the coins you buy. Don’t buy more than you can sleep well with. Yes gold and silver can go DOWN. Gold hit 1900 in 2011 and fell to 1100. Some People that bought at 1900 are actually selling into this latest gold rally, and happy to get their investment back. So if you have so much in the metal that you’re scared of a 25% decline, lighten up. Only hold what you don’t have to worry about.
Source: Gold Stuff