Anyone here buys precious metal bullion?

[Waitone]

Anyone out there buy bullion?  If so, do you take delivery, what forms does it come in, what kind of metal, and most important. . . why buy precious metals when all the enlightened economic minds say it is a barbarous relic.

[Cromlech]

A 'barbarous relic'? There's nothing wrong with cold, hard, solid currency.

[280plus]

I don't buy bullion but mostly because I like coins better. Silver totally outpaced gold last year BTW. Here's hoping it holds.

[The Rabbi]

I buy it as a bottom line insurance policy.  My FIL was forced to flee Germany in 1940 with his parents (he was 4).  They were middle class there but here had nothing.  A pocket ful of gold would have made a difference.

[Art Eatman]

I don't buy heaps, gobs or bunches of bullion coins like the Krugerrand/Maple Leaf/US 1-oz, but I've "trickled in" for a fair amount over these last couple of decades.

Why buy?  Well, gold's gone from around $300 an ounce to over $600 in a fairly short time.  That  it would rise was fairly obvious for a number of years.

Art

[cordex]

Waitone,
Keep in mind that there's a difference between using precious metals as the basis of a national currency and their value as an investment.

[The Rabbi]

I don't buy heaps, gobs or bunches of bullion coins like the Krugerrand/Maple Leaf/US 1-oz, but I've "trickled in" for a fair amount over these last couple of decades.

Why buy?  Well, gold's gone from around $300 an ounce to over $600 in a fairly short time.  That  it would rise was fairly obvious for a number of years.

Art

And at $600 it still has not reached the price it was in 1979.

[wingnutx]

I'd like to see silver tank for a while so I can buy some.

Then of course it should go right back up again. 

[Matthew Carberry]

What we do is buy up all the silver and then irradiate the supply of silver in Fort Knox.  Our silver will then immediately rise in value.

Random Task, get the car!

[The Rabbi]

What we do is buy up all the silver and then irradiate the supply of silver in Fort Knox.  Our silver will then immediately rise in value.

Random Task, get the car!

That was the plot of Goldfinger.  But I guess you knew that already.

[Matthew Carberry]

Goldwhatsis? 

Never heard of it.

My other master plan is to create a computer program that will transfer all the micro-amounts rounded off of bank calculations into my own account.  It will take a little while, but soon I'll be very wealthy, very wealthy indeed....

[Perd Hapley]

That was the plot of Office Space, but you probably...

[Matthew Carberry]

"Office Spa....?"

Damn!

Random Task!  Back to the lair, there's more planning to be done!

[ilbob]

Anyone out there buy bullion?  If so, do you take delivery, what forms does it come in, what kind of metal, and most important. . . why buy precious metals when all the enlightened economic minds say it is a barbarous relic.

I am not much of a bullion lover. If you want to participate in the bullion market, it is much better to buy into the commodities market than physical bullion. Storing the stuff takes room and security, and makes it difficult to sell when that time comes.

For relatively small amounts, you can always buy US minted bullion coins. One ounce US gold bullion coins can be had for 5% over spot, silver for maybe $2 over spot.

For those of you who think this is a good idea in case TSHTF, keep in mind an ounce of gold is about $600 these days, and the market for such things will be non-existent in the event of some Katrina like catastrophe, at least in the area of the catastrophe. Even if someone was willing to sell you stuff in exchange for gold there is a serious problem of making change. Its not like you can go to WalMart and give them your gold piece and get change back in the form of smaller bits of gold.

They are pretty so I have an assorted few, but it is not a big part of my investment portfolio (not that I have a big investment portfolio in the first place), more a part of my small coin collection.

Your best bet for buying them is to attend a local coin show, especially for small quantities. It is also more anonymous if that issue bothers you any. For larger orders, the Internet works well, but shipping is expensive unless you buy enough to make the shipping a relatively small part of the whole price. Local coin dealers can be good sources too, as they often buy from people coming in off the street and will sometimes quickly sell to raise cash at a few percent over what they paid. They usually sell larger assortments of bullion to wholesalers for a quick profit, because they do not want the risk of the price going down if they hold the metal for any length of time. They may well sell to you at not a lot more than what they would sell to the wholesaler. They avoid shipping expenses that way. But don't expect any deals for buying in small quantity. It is not unusual for a coin dealer to buy at just under spot off the street, and sell for 5-10% over spot to people coming in to buy. If they can make 5-10% net on a transaction they are into for only for a few days, the risk is very low, so they are often willing to accept what appears to be a low profit margin. But 10% of a $5000 transaction where you are only out the $5000 for a few hours or days is not bad money.

[Art Eatman]

Messing around in the bullion market as a vest-pocket dealer was a real hoot.  I was one of the very few gunshow tables with coins and guns, with high quality stuff.

Back in 1979 when the Hunt brothers were trying to corner the world silver market, their antics was running up the price of gold as well as silver.  Nobody could figure out why this was happening.  But, this was the time of the Carter-era inflation, so most folks just figured that it was all about an inflation hedge.

I was short-term buying in and then selling, making fair money on the rise.  Lots of leg work around town, looking for collections of coins and guns that I could buy, cherry-pick, and sell the "offs" at a good profit.  I held back the best stuff for my own collection, or for resale at a better profit later on.

There was a gunshow in Austin in January, 1980, on the weekend after gold closed at $800 an ounce, and silver at around $50.  Friday evening and Saturday, I bought everything I could find in the show.  I'd periodically have a buddy watch my table while I went up the street to a coin store and sold what I'd bought.  By the end of Saturday, I owned no bullion of any sort.

On Sunday, I bought no bullion at all.  All sorts of disappointed folks, wanting to sell to me, but I wasn't buying.

And then came Black Monday, when the roof caved in.  Within not many days, gold and silver were way, way, way down.

Until a few years back, I hadn't seen any reason to buy any bullion.  I guess the present "hoard" was mostly bought in this century, and for well under $350 an ounce...Only if you can buy in during the "down" times is it worth hanging on to.

I'm no believer in SHTF.  Gold and silver, to me, are commodities on which I've always made a profit.  But one thing for sure, if SHTF ever does come, gold coins and silver coins will be usable as money.  I ain't gonna argue with several thousand years of human nature.

Art

[Matthew Carberry]

How will the value of, say, an ounce of gold be determined in that situation?

If the SHTF paper currency becomes meaningless right?  So saying "1 oz. = $600 dollars" will be nonsense.  Especially if the SHTF occurs after a period of hyperinflation or something.

Won't there be a reestablishing of value based on an actual useable amount of something?  1 oz. = 1000 rounds, or 100 pounds of food, or a fertile woman or something?

I guess I'm equally asking how the value of gold was determined before there were actual currency amounts to peg it to?

[280plus]

I don't know. I think if the SHTF guns, ammunition and food will become more valuable to most folks than gold. I'm always reminded of the history of Australia where, before the arrival of the Europeans, gold laid about on the ground untouched/ It was considered useless because it was too soft to make tools or weapons out of. Meanwhile, a scrap of iron, once introduced, became almost priceless to the people who, up until that point, were still using stone for everything. Including circumcisions. 

 

[The Rabbi]

How will the value of, say, an ounce of gold be determined in that situation?

If the SHTF paper currency becomes meaningless right?  So saying "1 oz. = $600 dollars" will be nonsense.  Especially if the SHTF occurs after a period of hyperinflation or something.

Won't there be a reestablishing of value based on an actual useable amount of something?  1 oz. = 1000 rounds, or 100 pounds of food, or a fertile woman or something?

I guess I'm equally asking how the value of gold was determined before there were actual currency amounts to peg it to?

One of the best ads I ever saw had copy that ran:  200 years ago one ounce of gold could buy a fancy man's suit.  Today one ounce of gold will still buy a fancy man's suit.
The relationship between most things is relatively constant.  As to what the gold will buy, that is a market decision.  In the concentration camps gold didnt buy that much because everyone had some.  Bread on the other hand was valuable.  My father told me that in Europe in 1946 you could buy all sorts of things for a pack of American cigarettes.

[280plus]

My father told me that in Europe in 1946 you could buy all sorts of things for a pack of American cigarettes.

Same same in the PI and other Asian coutries in the 70s. Probably today too. Apples were real big. Imagine an apple being a black market item and worth a bundle, in relative terms anyways.

[Perd Hapley]

Won't there be a reestablishing of value based on an actual useable amount of something?  1 oz. = 1000 rounds, or 100 pounds of food, or a fertile woman or something?

Watch out.  Those fertile women always cost you more than the initial outlay. 

[richyoung]

ONe of the best ways to get started is "junk silver" - pre-1964 U.S dimes, quarteers, half-dollars and dollars, worm so that they have little collector value.  The nice thing about them is even if the bottom falls out of the silver market, they will still be worth face value.

[ilbob]

That is an interesting assertion but it is blatantly false.

It was not all that long ago that gold was $800 an ounce, then $250, now $600. Are you claiming the price of a suit changed up and down to match the price of gold? It was just random chance that at the time the statement was made that a suit cost about what an ounce of gold did. The fact is that different grades of suits cost more or less than an ounce of gold does today.

Despite what the gold bugs would have you believe, there is no credible link between the price of gold and inflation either. In times of rising prices, it is not unusual for the price of gold to go up, but mostly that is due to the hype from the gold bugs. It is not unusual for the price of gold to increase many times what the inflation rate is over some short period of time, only to fall back to where it started a year or two later.

One might be inclined to think that some other commodity might match up with the price of gold as it changes. But, alas, there is no such beast, nor does even a so called market basket rise and fall in lock step with the price of precious metals.

How will the value of, say, an ounce of gold be determined in that situation?

If the SHTF paper currency becomes meaningless right?  So saying "1 oz. = $600 dollars" will be nonsense.  Especially if the SHTF occurs after a period of hyperinflation or something.

Won't there be a reestablishing of value based on an actual useable amount of something?  1 oz. = 1000 rounds, or 100 pounds of food, or a fertile woman or something?

I guess I'm equally asking how the value of gold was determined before there were actual currency amounts to peg it to?

One of the best ads I ever saw had copy that ran:  200 years ago one ounce of gold could buy a fancy man's suit.  Today one ounce of gold will still buy a fancy man's suit.
The relationship between most things is relatively constant.  As to what the gold will buy, that is a market decision.  In the concentration camps gold didnt buy that much because everyone had some.  Bread on the other hand was valuable.  My father told me that in Europe in 1946 you could buy all sorts of things for a pack of American cigarettes.

[The Rabbi]

It was true at the time.  It is true today.  If you average out probably any 20 year period it will be true.
Is there an exact correlation?  No.  But in general prices for things in absolute terms (as opposed to dollar terms) tend to remain constant.

[K Frame]

I like bullion.

Chicken, mainly.

With buttered wheat toast.

[Waitone]

So is there a consensus that bullion (metal, not liquid) is bad and coinage is good?