Will my friends ever buy?

for those who "cannot afford"... pre '64 silver coinage is the way to go.
when i was younger and money was tight i found a way to save, too bad i didnt know about junk silver at the time. lessons learned over the years and living below one's means no matter the income should be par for the course. if others choose not to 'follow' than so be it.

 

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Back when I worked at Sony Music Studios in the late 90's there was a Mastering Engineer who asked me one day what coins he should invest in. I told him to buy a couple of certified Saint Gaudens and sit on them for awhile. He bought 10 NGC MS63 Saints.

Nice guy and needless to say, he's pretty happy these days.

 

One of the problems with a comparison to the Weimar Republic is that it was localized. Commodities retained worldwide value because the rest of the world's economies were strong. If the Dollar inflates, and I think it has to, then it will inflate many currencies tied to it and thus make it a global inflation.

At some point, you realize that precious metals are not edible nor particularly helpful for personal defense like more common base metals and would lose almost all of their value in a worldwide economic collapse.

 

Ok So to the friend, Neighbor , and such. What should I do with my few hundred dollars I have to invest today? And What should I do with the 40 or so pre 70 coins I have found in rolls?
I do not have much @ all but am lost also, Last spring I came into $75.00 or so and invested in 4 ounces of silver art bars from ebay. I fell that was good but what about now?
THANKS JON

 

In every investment, one must always look at the ultimate sale. Circulated Silver coins I think are the most easily sold PM having many buyers who will not rip you off.

 

That is a good observation. And is one of the major differences this time around is that our currency is the world reserve currency. The "world" has never been in a situation of this magnitude before. For all the printing of FRN's, helipcopter Ben may only look like a dimwit, but really knows the real effects. Other world leaders and gov'ts have the power to decide for themselves what they want to do to counteract our printing. This viscous cycle just can't keep continuing it is not sustainable......

Well I was in high school in the 90's so needless to say no one told me one thing about PM's. I would have LOVED for someone to have given me a lesson on currencies/PM's, printing, I honestly think I would have heeded their warning. And back then PM's were extremely affordable.....

Frugal is me, not cheap. As everyone here probably knows the difference. I think our downfall is that we were frugal, but saved with U.S. dollars. We executed correctly, just saved our money in the wrong form. It almost seems like a "you can't win" game. If frugal individuals like us got bitten, can you imagine the paycheck to paycheck people?

I kept the promotion very very minimal. That promotion is now over. To my closer friends, I've shown them youtube video clips explaining inflation and what the Fed is doing and they were outright scared. But it seems as though that "scare" tactic lasted as soon as they walked out my house...... =/

I actually don't take comfort in seeing these gold and now silver commercials because it makes me think if I'm the one getting jipped. When they had those gold for cash commercials there was no way I was going to sell gold....so it makes me think a little, now they have "buy gold" commercials should I be buying?

I think in this case, yes!!! Just not from them....

If I didn't have a day job (and I am very very appreciative of that in today's climate) I would have researched Weimar Republic a bit more as well as Zimbabwe and Argentina. To go years before the crisis happened and to possibly see if there were people who cried wolf, but society didn't listen. So this is exactly why I created this thread. Perhaps with the more brains in this forum, someone can jump in and talk about the culture and mindset at the time. Someone who has done some formal research and can speak on history....

I don't expect our 4th branch of the gov't(MSM) to warn us in in anyway. They are in bed with our gov't and are just as late to the party when it comes to telling you that your house is on fire. Of course they won't show any video clips or bring anyone onto their shows that were crying about the devaluing of our dollar. They will just ask simply, "How did this happen, but more importantly, how can we get out of it?"

Notice what I said, they will quickly want to just jump to how we can get out of the mess....because no one wants to take the blame for not doing their journalistic duties!!!

For some reason this came into my mind just now....

"Do you hear what I hear?" you know that Christmas song? LOL....

Talking about gold/silver is indeed up there with sex,religion and politics. For some reason, we are willing to talk about 401K's a little bit more at holiday parties but it usually stops there. My two best friends we talk about everything. I know what they make, I know their goals, plans, we are all on the same page so there is no hiding anything. Beyond my closest friends, are your regular "friends"....you know, the ones you can email or call just to chat but they aren't really close. The ones you see more often at parties and holiday gatherings. I look at them at the boundary of friendship. Those are the ones that are just a complete loss cause, no offense to them.

My closest friends I'm a little shocked I can't convince them to buy any PM's. Now, to be fair, I'm a single guy. My decisions are my own. They are both married with kids. So it's not as if they can just go out and purchase it either because I told them to. Not to say wives don't understand either because Lucy you clearly are interested. But I think, and no offense to women, the majority, just like males, aren't all that interested in a gold coin sitting in their sock drawer.

So even if I could convince the males, they would have to in turn, convince their counterpart. And I could clearly see this situation play out where the Mrs says, "Well, if we're going to pay $1400 for an ounce of gold, why not just get me gold earrings worth that much? At least I can wear it no?"

Again, not bashing females in any way, but you know what I'm getting at right?

To your point, who am I to tell them what's right? We are all so used to MSM and gov't telling us what's right so if MSM isn't panicing about gold, then maybe "I" am wrong? Which comes back full circle to society as whole needs to be told what to do?

Was there a small group in Weimar Republic that protected themselves with PM's? How about Zimbabwe? Or Argentina? No one really talks about that small group if there even was one...

Just to make a point, some of these friends have been taking vacations all year. Great for them and the economy, but all that money could have went into PM's....the bigger picture is protecting yourself down the road....or maybe I'm just a party pooper.....They clearly have the money to spend....PM's just isn't on their radar and I hate talking about them that way....

 

Well I'm a simple man. I don't like to get caught up in numismatics. What a coin is graded at....to me, I don't want to keep track of negotiating a coins worth. So I only purchase simple, straight up American Silver Eagles and Gold Eagles. That's it. No fuss, nada. What the spot price is, is what it's worth. No arguing it's worth. It's well known and recognized.

To answer your question, let's go back one year from now just to hear me out. You mentioned a few hundred dollars. Let's just say $300 for arguments sake.

Last year around this time silver was hovering $16-17. Let's just go with $16.50, right in the middle...


So at $300 you could have bought roughly 18 ASE's right? (I'm rounding out here)

So say you did that.

Now you have another $300 today. Well at today's prices, you are looking at around 10-11 now, not 18.

You are almost cut in half of what you could have bought!!!

If you bought 18 last year your $300 is now worth $486.....

Your CURRENT $300 is still $300 but buys less. It's "real" value is practically half!

And I think that's what people get caught up on. Seeing the $300 in their account and thinking, "wow that looks nice...." But the real value isn't much!!!

It goes back to what I have been trying to understand pyschologically about society. That looking at their $50,000 in their bank account makes them feel nice and safe. But the real value is worthless....

Ask yourself this, if someone gave you a $1trillion zimbabwe dollar, does that really make you feel happy safe and a trillionaire? Technically you are a trillionaire because you hold that dollar but it is worthless!!!!

 

I think you may be over thinking a little. Just because PM prices are rising does not mean the dollar is worthless. Technically maybe there is a chance for failure, but even though you may only be able to buy 60% of the silver you could last year, a McDouble at McD's is still a buck. Best I can tell most if not all the food I buy every day is roughly the same cost as last year if not actually cheaper.
The Fed is printing money in an attempt to create inflation where there is little or none. In my opinion Pm's are rising because people don't trust the gov. But even though that 64 kennedy is worth $9 in silver I cant spend it for that at the store.

 

Supply and demand will always determine value . . unless the game is fixed. We all have our own subjective perceptions of value for various things. For me . . still being able to run hills in the morning sun with critters on the trail is priceless. The Fed and Friends will constantly be looking for ways to screw the little guy without him being aware. After all . . it's their banker buddies they're really concerned about. Restoring a decent level of employment for the masses is secondary. The most meaningful and valuable things in life for me ( most of us ? ) don't come with a price tag. - We are all aware of The Fed's game plan to re-inflate the economy, and reinvigorate economic activity and consumer demand. Only problem is,
I already have everything I want or need . . and my immediate spending plans are virtually nil. If gasoline reaches $4.00 a gallon once again . . I won't be buying it.

 

The dollar menu deals are a good point. "If" we know that nothing has changed in the quality of the ingredients they put in them. So say in 10 years you can still buy a $1 McDouble, but for some reason it doesn't taste as good, it could be cheaper ingredients to keep that $1 amount....

For example, using high fructose corn syrup because it is cheaper than real sugar. Stuff like that....

In my area, getting a decent Nathan's Hotdog meal is about $7. There's no way it was $7 ten years ago, probably $5?

 

If only we were all in your shoes. I too enjoy the finer things. Being able to do a nice jog on a trail in the morning while people are still getting up is nice. By the time your day really gets into full gear, it will already feel like early afternoon but it's just the morning for everyone else.

If I could own a farm land I would. I'd rather spend my days cutting grass and taking care of my 2-5 acre property than deal with loud and noisy neighbors in your McMansion that happen to live 10 feet away from you...

You mentioned you won't pay for $4 gas, but how will you get around? That's not something any of us I beleive can just say they won't purchase.....

 

Ok I am still confused!! Really Coinfused I guess. Ha ha Ha!!! So do I sit on my coins?
Do I sell them at $27.00 a ounce figure the proffit and buy more @ $27.00 with the profits? I guess I really do not understand investing 101. lol
(All I have been told that sunk in was never invest what you can not afford to loose)

But then again if I went and bought $500.00 worth of Half's returned $498.50 and kept the 3 40% silvers, How much did I invest Does that mean that silver cost me $1.50 an ounce and keep turning it over??

Or do I do as my wife suggests and just keep searching and do not buy anything thats not @ a bank?
JON

 

Good point. Yes, a weakening dollar can and does raise precious metal prices. Supply and demand plays an even more important, but usually more short term role in the price. Market manipulation can also elevate market prices, as it did about thirty years ago with silver, but that could fall into the "supply" category technically. With confidence rather low right now in almost every aspect of our economy, people are turning to PMs in record numbers, because even real estate, which used to be considered a fairly safe place to invest during most recessions, is still pretty stagnant with all the forclosures. While I do not believe we will ever see $10 silver again, I don't see the market holding $27+ indefinately.

 

Well I can't tell you NOT to sell your silver at $27. If you are looking to profit, you can do that if you feel the profit is worth it. But the question is, what will you do with that profit? If nothing more than holding on to USD with it, I don't think silver will stop at $27. So if you just hold onto your "profit" you would just be taking yourself out of the game when you don't have to.

Your wife is half right. You should keep searching to make sure you are comfortable in your investments. But I see no value whatsoever in purchasing any services at your bank. Why? What are CD's giving you? 1%? That's a joke. What's your savings account giving you? 1% as well? What's our inflation rate? It sure is a heck of a lot more than 1%. So let's say it's 2%. Right off the bat, you are already -1% in your "services" that you purchased at the bank.
The President is 100% right when he says your money is safe at the bank. If you have $100,000 in your account. You will still have that $100,000 because of the FDIC. But our President is the slight of hand master as well as helicopter Ben.
What they don't tell you is that your $100,000 might be worthless or valued much lower in real money.
Let's say hypothetically a stamp cost $1,000 in the distant future. Well, then a bottled water will probably cost $20,000. Do you still feel great with that $100,000 in your account that the President said was safe?

I can't stand what is happening with real estate. Listen, I own a home and honestly, it's not worth what it's valued at right now. I feel it is over-valued!!

There are so many homes that the banks are holding onto. Supply and demand. More supply the lower the value...just let these homes get on the damn market already so those that want to buy can purchase at a reasonable price.....

 

A question and a comment, in that order.

Does anyone know a way to buy other currencies via an ETF or something similar, something that doesn't involve options/margin accounts or FOREX trading outright? I'm particularly interested in the Swiss franc, Aussie and Canadian dollars.

If your silver has doubled, you can always sell half of it and your cost basis in what you have left is zero (less commissions etc.). Food for thought.

 

Actually for the time to sell... watch real interest rates for when they turn positive. Right now "real" interest rates are negative. Using 90 day T-bills paying about .3% and subtracting inflation of say 1.5%, the real interest rate is a negative 1.2%. If, in this example, inflation turns to deflation and is greater than negative .3% and the interest rate stays the same, consider selling, and the corollary , if the interest rate rises to greater then the rate of inflation (where the 90 day T-bill would pay greater than 1.5%) consider selling. I say "consider selling", only because the Fed's published rate of inflation is too low. Their rate excludes food and Oil. How ridiculous. You must monitor "real" interest rates yourself.

 

Just Google currency eft or try

http://etf.stock-encyclopedia.com/category/european-currency-etfs.html

If you're trying to play against the US dollar there's also UUP and UDN for, respectively, dollar bull and dollar bear.

 

Thank you kind sir!

 

Two pieces of advice on ETFs
1. Read the Prospectus, especially for tax implications
2. Avoid ETFs that are thinly traded i.e. have low daily trading volume compared to other similar ETFs. For example TBT is 20 year Treasury Bear with good volume. TYO is 10 year Treasury Bear with poor volume

 

Thanks again. I read some interesting articles also on Morningstar.com which I use as my constant investment advisor. They point out that currency trading is a zero sum game. More importantly, if you own considerable amounts of foreign stocks (which I do, Rio Tinto and BHP Billiton at top of the list), you already have considerable foreign currency exposure, and your gains in dollars are actually the result of both stock gains in the local currency plus potential appreciation in the conversion to dollars. Words to the wise.