I'm thinking about investing but have some questions... 1. What are the advantages and disadvantages of purchasing platinum coins instead of gold coins? 2. What are the advantages and disadvantages of Canadian Maple Leafs vs American Eagles? 3. Is buying & selling precious metals completely anonymous or confidential? 4. Are gold coins considered collectors items or currency? Is the value or liquidty of the coin affected by its age or condition? 5. Are gold/platinum coins worth more than their weight in gold/platinum? 6. Whats the best place to buy & sell precious metals? 7. How much gold or money can you be in possession of before the police are able to take it? You can legally travel on planes with $10,000 in cash, but how much if you are driving? Investing in precious metals seems just like the stock market. In Feb. 1996 gold was worth $414 and in Jul 1999 it was worth $250. Its now worth around $340. It seems as though gold always makes a come back (it has to because its gold right?) and that buying low and waiting to sell high and make a profit would be easy.
In memory of Thomas Hart Benton ("Old Bullion") I'm thinking about investing but have some questions... There is a TON of information out there on this, starting with the first Harry Browne book, "You Can Profit from the Coming Devaluation" (1968) and beyond. (I think his 1972 "How to Profit from a Monetary Crisis" was the best of them all. ) For a more academic look, try the Von Mises Institute: www.mises.org and for a more popular rightwing look try The American Patriotic Friends Networld gold pages http://www.apfn.org/apfn/gold.htm 1. What are the advantages and disadvantages of purchasing platinum coins instead of gold coins? Different metals move in different markets for different purposes. Platinum looks a lot like Nickel to me, so I prefer gold. But as a numismatist, I appreciate putting the Czarist platinum coins in their context. Platinum is mined in few places. Gold is ubiquitous. To a coin dealer, all coins are coins. 2. What are the advantages and disadvantages of Canadian Maple Leafs vs American Eagles? Americans prefer American coins. Other than that, there is not much difference. You can pay a greater or lesser premium for one or the other and you will/will not find that you can/cannot get that back when you sell. 3. Is buying & selling precious metals completely anonymous or confidential? Depends. Some states regulate coin dealers like pawn shops and they make you show ID when you buy and/or sell. It depends. Usually, it is like buying bread at the grocery, but sometimes not. When you shop online, you never know who you are dealing with and you are always leaving a record. 4. Are gold coins considered collectors items or currency? Is the value or liquidty of the coin affected by its age or condition? Depends. Half Eagles, US$5 gold coins 1932-earlier can be very numismatic collectibles. Saints Liberty or Double Eagles (1932-earlier) are much less numismatic than they once were and margins have fallen on these. British Sovereigns, French Roosters and Angels and other 19th century gold coins can be numismatic. If you have a truly numismatic coin, such as No Motto Half Eagle (early 1800s) and you need to dump it quickly, it will be sold as bullion, not as a rare coin. Generally rare coins and bullion are two different things, even when transacted in the same place. The only gold coins that are "currency" are "US Gold Eagles" (so-called: the modern US Gold coins 1986-later) which have ridiculous dollar values stamped on them. You would never spend an ounce of gold for $50 or whatever it says. 5. Are gold/platinum coins worth more than their weight in gold/platinum? Only as numismatic collectibles for those coins that are truly rare. You can buy beautiful 19th century French, German, British gold coins for a small margin over spot. They are not numismatic items really but that margin (however small) says that they are. The far-out test case would be an ancient Roman aureus of Nero, worth about $100 in gold and about $1000 as a rare coin... given that you had a buyer for it... on the other hand, the Austrian Philharmonics, the Canadian Maple Leafs, the Krugerrand and the other modern gold coins are just gold and nothing more. 6. Whats the best place to buy & sell precious metals? A coin store. You can get good buy prices at pawn shops and places like that if you have serious cash in hand. Do not look to buy one 1/10 ounce eagle for spot. But if you want to buy four or five ounces and have $1500 or so on you, the owners can be reasonable. Selling to a pawnshop is always a bad idea. Usually, you are better off no matter what with an ANA coin dealer. 7. How much gold or money can you be in possession of before the police are able to take it? You can legally travel on planes with $10,000 in cash, but how much if you are driving? None. The police everywhere and anywhere always have the power to seize all of your immediate assets. Make any kind of "legal" case when (and if) you get to a lawyer. 8. Investing in precious metals seems just like the stock market. In Feb. 1996 gold was worth $414 and in Jul 1999 it was worth $250. Its now worth around $340. It seems as though gold always makes a come back (it has to because its gold right?) and that buying low and waiting to sell high and make a profit would be easy. Well, it depends on what you think is "money." For some people the "price" of gold (so-called) can no more change than the number of inches in a yard. What changes is the price of dollars, yen, etc. we in America have been very fortunate to have a good economic climate with a government more or less living within its means. Relative to the Yen, the Won, the Euro, gold has seen much greater swings and is really generally Up Up Up against many (if not most) other paper moneys. You can speculate in any commodity if you know what you are doing and paper inflationary fiat FRNs can accumulate faster than the inflation that drives them if you are smarter, faster, and luckier than the next guy. The best wisdom of all the hard money libertarian patriots is to have about 10% of your assets in gold (and/or silver). Right now, you are probably just as well off hoarding (saving) American paper money. The dollar will always be strong as long as the Democrats cannot overpower the Republicans.
Very good post, thank you. How are the online companies like http://www.kitco.com/ for buying and selling bullion? I never even thought about going to a coin store to purchase bullion like American Eagles. I figured coin stores were for rare collectibles and places like Kitco were for investing. I guess it makes sense though because i read yesterday about how the line between collectors and investors was becoming increasingly blurred. I'll definitely stop by some coin stores tomorrow. I just hope i can stay on the investor side of this because if theres one thing i learned from collecting baseball cards, its that collecting can become a pretty addicting hobby.
I think it would also depend on what volume you're buying or selling. If I were just buying a roll of Silver Eagles, I'd go to a coin show. There's always a couple of guys with rolls, and you just figure out who has the best price, then buy (or sell). If you're buying or selling tens of thousands of dollars worth, it would be more important for you to call around the bigger companies and see what you can get. With bullion purchases, the price they quote you is usually good for that moment in time only. Come back next week expecting the same deal and you probably will find that the price has changed.
