Best low-end bullion investments for survival?

Very nice synopsis "John the Jute."

 

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Thank you for all that information, John.

 

Just think of this

The meek shall inherit the earth!

 

I think that John has it about right. Buy silver and gold. Do not keep dollars. I am getting rid of my dollars for metals.

 

I plan for the best

I plan on having the tools needed to survive when we have teotwawki.

 

TEOTWAWKI has already begun and is in full swing. Real "America Alone" by Mark Steyn. It's a waker-upper.

 

Another senario

Very well thought and written analysis John the Jute. But I think there's another senario that has only happened once in world history, the use of nuclear weopons.

There are many people in the world, perhaps millions, who want us to get nuked. These people are perfectly willing to die, and to cause their own children to die in pursuit of their evil ends.

Nukes are becoming more available every year, and I see nothing to lead me to believe that will change.

How can one not arrive at the conclusion that we will get nuked?

Many people find the subject so horrible that they would rather ignore it. I'd love it if it didn't happen in my lifetime, but I'll do what I can to prepare for it.

 

Unfortunately, Joe, you may be right. I do hope you aren't.

I think I would soften your conclusion from "we will get nuked" to "we may get nuked". That's because it is profoundly difficult for terrorist groups or rogue states to find a source of plutonium or uranium 235. If, however, they can find a source, then building a simple nuclear bomb is quite straightforward. Sited somewhere in the Bos-Wash megalopolis it could cause millions of deaths and continent-wide disruption.

How might holdings of precious metals help those left behind? Well, I believe that those on the West Coast would be in the position of the second-level gold bugs from my previous post, the rainy-day savers. Most large corporations will be functioning only limitedly for months if not years: stock prices will crash, dividend streams will dry up. A holding of either gold or silver (or platinum or palladium), which can be sold a chunk at a time, will make things much easier.

Those on the East Coast who survive the bomb will have to flee, just like the third-level gold bugs, the refugees, from my previous post. After the waves of shock, grief and rage have subsided, the folk out West will be very welcoming, but resources will be limited, and the refugess will have lost their real estate as well as having their savings disrupted. Gold (or platinum) makes it possible to carry substantial value for little weight and to have something with which to start life in the West.

I think that US society is quite robust enough to survive such a tragedy, though not without horrifying inflation. There will still be dealers where gold and silver can readily be traded. It would, however, be the wrong time to have one's precious metals in the vault of a bank in NYC!

(I chose the Bos-Wash megalopolis--rather than, say, the Blue Banana of Western Europe--because the geographer who first described the idea of that megalopolis was himself twice a refugee. Jean Gottman was born in the Ukraine to Jewish parents who were killed in the Russian Revolution; he fled to Paris ... and then fled to Princeton when the Nazis invaded France.)

Later,

John

 

teotwawki

John,

You make a very valid point. The last place I'd want to put my small stash of gold and silver is in a bank. The biggest advantage in holding gold and silver is the fact that it will hold value after an economic collapse. The current administration is most similar to FDR. Don't forget that FDR stole everyone's gold and closed the banks.

I agree, it is fairly difficult to construct a nuke, which is why we've survived this long. However, our enemy has money and determination. They could aquire nukes from Pakistan, N. Korea, or other sources. The only way I think the US could avoid being nuked at some time in the future is if we cease to exist before we get nuked. I can see that happening as well, we'll just become part of the UN, administered by the UN, which itself is composed mostly of non-democratic nations.

In the meantime, enjoy the pre-nuked time in America.

Joe

 

Speaking as someone who researches the mining industry in his line of work, I will say that there is a good reason why silver is lagging behind gold so much. As you noted, silver is an industrial metal (gold could be too, but it's just too expensive for many applications), and if the economy picks up, industrial demand for silver could, theoretically, also pick up. However, silver is usually mined as a by-product of other metals-- most notably lead, zinc, copper, and gold. There are very few "strictly silver" silver mines that will shut down if the silver price goes below a certain level. So there is always a lot of new silver that is reaching the market, regardless of the market price, because it is merely a by-product that brings in extra money for lots of copper/lead/zinc producers. Some of those base metal mining outfits have been cutting back on production, but if base metal mining increases because of an economic upturn , then the production of silver as a by-product will also increase.

What's more, silver's main industrial use had been in photography, but that is going into decline due to the advent of digital cameras that don't require film that contains silver compounds. So. I would not expect silver to do a repeat of January 1980 unless there is really bad inflation or this generation's version of the Hunt Brothers appear on the scene.

 

Gold / Silver ratio

Collector1966,

Based on what you're saying, it sounds like the gold / silver ratio will continue to grow forever, long term. Is that your conclusion? That would make gold a better long term investment of course, although its always good to diversify.

 

I don't know if the gold / silver ratio will continue to grow forever, but there are many factors that will continue to be a drag on the price of silver:

1) Constant production as a by-product of copper/lead/zinc mining that is not dependent on the silver price
2) Decreasing use in photography, its main traditional industrial use
3) Lack of buying on a large scale (central banks, IMF and other large players like China and India prefer to deal in gold)
4) Silver/gold price ratio of 70-1 means that approximately 70 ounces of silver would have to be bought to equal the value of 1 ounce of gold, which presents problems with storage and transport of silver
5) Ready supply of silver scrap hits the market when the price goes up

Working in silver's favor:
1) Its excellent properties as, for example, nature's best conductor of electricity and the best thermal conductor among the metals, make it attractive as an industrial metal
2) It is a tangible asset with a traditional role as a monetary metal and store of wealth
3) Its low price makes it attractive to investors who cannot afford gold

From my vantage point, the negatives currently outweigh the positives, and will continue to do so for the foreseeable future. I can't see anyone trying to run up the silver market, after seeing what happened to the Hunt Brothers. But with the US and other governments cranking up the presses to create even more unbacked paper money, it will eventually dilute the value of the fiat money currently in circulation and will undoubtedly lead to inflation down the road. If or when the general public becomes aware of inflation, then there will probably be more interest in silver.

 

Howdy,

if $3K is your stash, then $3K is your stash. Fine. I think it's prudent for everyone to have a small percentage of precious metals in their portfolio - just in case of whatever. By small, I'm talking 3-5%. More than that is speculation, which is fine, but be aware that it is speculating.

I think of a small stash like my grandkids stuffed animals which they refer to as their Bed Buddies. My stash is my Bed Buddy.

You want to get as much as possible for the least amount of mark up or premium. You also want to stay with fractional sizes as it's easier to get rid of. I'd start with 90% US silver coinage - dimes, quarters, halves. It's selling about 10 times face value, so for ~$1,000 you could buy $100 worth. Now even though the premium on American Eagles is enormous, they are easy to buy and sell. Maple Leafs and Krugs are cheaper, but might be harder to dispose. Much cheaper are plain vanilla ingots. It's tough but you need to balance fungibility vs. markup. However, a couple of 1 oz. gold eagles would finish your 3 k. and you'd be fine.

just some thoughts,

rono

 

You could call holding bullion speculation, but personally, I think holding cash is more speculative. Every fiat currency has eventually lost all its value, whereas gold and silver have never been worth zero.

Mercury dimes are cool, of course the valuable ones are all being counterfieted.

 

90% coin silver is the best of those bad options -

90% coin silver is the best of those bad options - Now this is just my opinion but I am afraid there are a ton of mom and pops buying this bullion and will dump it when it turns out not to be the hopeful panacea they were looking for, and dump it at the worst time. Like next August or November.
Folks it is easy to be scared and buy in to all the possibilities that could happen - but most won't, they never do. We so easily forget that 90% of what we fear never comes true.
Now I know I'm going to get a lot of people who disagree with me on this and that's fine - I do not mind at all.
People forget the world does not run on gold and silver. It runs on many, many things but not gold and silver anymore. Both gold and silver are not rare at all - something that is rare is hard to get, there is not ever enough to go around. I can go 10 minutes in any direction and get gold and silver right now and be back home in an hour. How is that rare?
I cannot go anywhere in this town and get an 1901-S Barber quarter in any grade for any price, of a 1912-S nickel in XF or VF, or Fine - now that's rare, really rare.
Many will say in defence of their gold and silver that I'm crazy and their right I am a little crazy, but lets just wait and see.
This economy will recover and the world sure ain't gonna end folks it's as simple as that but you know what? Instead of being mad at me for my unorthodox opinion maybe if more of us would think and believe in that opinion well, it might serve us well.

 

Commerative Gold

Commerative gold looks about as close to spot as you can get. A very slight bit under 1/4 oz. Any year that is proof uncirculated or MS-69 if you can buy it for the same Price.
Gold at 880 should get you four coins on ebay for about 940-950. Most come with all the trimmings. Many are very well struck and even cameo. Just no market so they sell like dealer bullion if you watch the completed listings to see which coins are the buys. Three grand and you can put it in you front pocket in sealed containers.
With the Government obfuscating the printing of more,much more money they had the citizens chasing around small change bonus money. While you were doing that they were setting the dollar up to be devalued. There appears to be nothing in the near future that will take down gold except dumping by the world Governments. I do not see that happening soon. Gold and silver maybe a savior for those who watch and buy right.
My opinion only ,free and worth what you paid for it.

 

At a local gun show this weekend, I was shocked to find that factory .38 ammo was selling on all tables for $38 to $41 a box. Used brass alone was $13 a box. Why was I shocked? It's been 12 years since I went to buy new ammo, and 12 years ago a box of the same new factory .38 ammo was right around $13. So, while gold and silver have doubled (and might or might not not be useful commodities in a pinch), ammunition has just about tripled across the board (except for shotgun ammo, thank goodness). Add to that the fact that ammo can be traded easily for just about anything else.

And, you can't even find .38 ammo in a gun shop these days.

Sum it up: I'm bummed that I didn't stash about 20,000 rounds back in '96!

 

In trying to determine a value for silver, how do you determine if silver is overvalued or undervalued?

 

Good God man why don't you join the army - they'll give you all

Good God man why don't you join the army - they'll give you all the ammo you want. Why would anyone want 20,000 rounds of ammo?
This is a coin forum not Guns and Ammo.

 

Depends what you are looking for. This moment silver is $12.38 per troy ounce. That's a little low compared to what it has been running.
The 2009 silver eagles are selling for $20 each at coin shows.
The last 1 ounce bar I bought was $17.00. So you can't go by the spot price. You have to look at what the sellers are getting.