Showing posts with label precious metals. Show all posts
Showing posts with label precious metals. Show all posts

Tuesday, September 22, 2015

Foundational Precious Metals Post 2 of 2

Sunday, September 20, 2015

Foundational Precious Metals Post 1 of 2

Our friends Peter formerly Bayou Renaissance Man and Jamie of My Adventures in Self Reliance have both recently mentioned precious metals. I got to looking and realized I did not have (or could not readily find) a good foundation post on precious metals. So my intent is to write one.

Before getting started it should be noted I am  not a doctor, lawyer, accountant, financial adviser or anything like that. I speak solely of my own experiences, observations and beliefs. You should check with whatever sort of people, officially licenses or otherwise, then make your own decisions. Consider yourself officially disclaimed.

First we should narrow the scope of this post. My intent is to talk about the purchase of physical precious metals. So immediately I am excluding ETF's and various places that offer to store PM's for you in terms of purchase options. Next I intend to focus on bullion metals. Bullion being various bars, coins, etc that are purchased for the value of their physical metal content. This is different from 'numismatic' or collectible type coins. Numismatic coins carry a value based on their age/ history and condition; a rare 300 year old coin in excellent condition might have a bullion/ melt value (the actual value of the precious metals in the coin) of $300 but a collectible value of $5k. Numismatic coins are a whole different ball of wax and outside the scope of this discussion. We are also not really talking about jewelry. The primary reason we are not talking about jewelry is that it tends not to be a good deal in terms of bullion value and a lot of stuff floating around is fake. The one exception I can think of is for countries where the purchase of non jewelry precious metals is heavily restricted. At that point I would buy simple jewelry like plain wedding bands, bracelets and necklaces but I digress. So we have narrowed the scope of this discussion. Also I guess to further narrow things down I am talking about silver and gold. I am not talking platinum, palladium, copper or my favorite precious metal lead.

As to buying precious metals you can primarily go to a local dealer or an online one. Both have advantages and disadvantages. That is a long conversation. I will note that it is important to consider the complete out the door cost of a given item. Online guys charge for shipping, etc sometimes at high rates. Brick and mortar guys can be a real asset, especially if you want to make a big purchase today. Also the local PM guy can be a pretty handy 'grey market' asset. Their downside is often these folks do not treat smaller, normal Joe Everyday purchasers, very well. The premiums some of them charge are ridiculous. As to putting my money where my mouth is on buying PM's. For the last 3 years or so I have been buying from Montana Rarities and have no complaints though if a local dealer would treat me square he could earn my business in short order.

The pricing of precious metals is a little weird. They are traded on the open market like any other commodity such as wheat or pork bellies. This is called 'spot price'. That being said spot price does not tell the whole story in terms of precious metals for physical delivery. This is called a premium. It is probably a touch more complicated with a wide array of fees, long term contracts, etc all but we will keep it simple.

Theoretically an ounce of gold is worth spot price when it is a bunch of little flakes in a tiny container. The folks at the South African mint making Krugerrands or any other coin have costs to turn those flakes into the shiny coin we covet. Also they have this crazy desire to make money. Those folks sell the coin along with a bunch of its friends to a dealer. That guy also has costs and a desire to make a profit. Depending on the size of the operation there may be a couple progressively smaller dealers between production and the point of sale to Joe Everyday. In fairness to the people involved in this chain they obviously should be compensated for their efforts and they operate on razor thin margins.

These costs generally represent the premium between spot and the real physical price of a given item. Generally premiums are pretty level. Say it is spot plus 5-10% depending on the item involved. This baseline part of the premium is theoretically static or at least pretty consistent.

However sometimes premiums go crazy. At times we can see significant gaps between spot prices and the actual price of a coin in your hand. Why does this happen?

In general I can see two real reasons. One I know and one I think I have seen some evidence of and tend to believe. They both tend to flow together.

One piece is good old economics 99. The reasons large institutional investors buy (largely paper/ electronic) gold is different than the reasons people buy physical precious metals. If the indicators for institutional investors are down and the indicators for buying physical PMs are up you can get a gap. Think of it like this. The Jim Beam factory had a fire so they are having a rough week but it is Friday night and bottles of the stuff are flying off the shelves inn your town. Also physical PM's are a surprisingly small market. A modest increase in demand will mean shortages. Pretty quickly this new demand will get built into the market, maybe within a week or two.

The other piece is that arguably there is considerable evidence that big banking interests, specifically Goldman Sachs manipulating gold and silver prices. With those resources it would not be hard to do but this manipulation would not necessarily cross over to the physical PM market.

Why would a person choose to buy precious metals? In my mind there are four readily apparent reasons.

-First is some sort of speculation. Buy low/ sell high, that sort of thing. Though most people do this with ETF's or such maybe a person might want to physically hold the metals because they are a contrarian investor, have some sort of worst case concerns or something. I am neutral about this sort of plan. It has worked out well for some folks so I am not against it per se, just that it is outside the scope of this discussion.

-Second is some sort of tangible investment but in a more buy and hold kind off way than the first option. I generally like this plan. PM's do not grow via compound interest the way some other investments might. On the other hand when you look at compound interest and factor in inflation the tale is a bit less favorable to those 3-4 percentage points a year. It is said in the time of Shakespeare an ounce of gold would buy a fine men's suit and it still does. If you wanted to stash say a few grand (or more) for ten or twenty years especially if the local currency is unstable or you see bad times coming PM's would be a good way to go.

-Third is as a hedge against inflation or a currency collapse. We will get to it later but I really like PM's in this context. A situation with high inflation or maybe even a currency collapsing but where the fabric of society doesn't entirely break is where I think PM's thrive.

-Fourth is for some sort of mad max type scenario. I do think silver and gold would be traded in this type of scenario but that their value would pale in comparison to say fishing hooks, AA batteries, condoms, etc or especially .22lr, various 12 gauge ammo or guns (purchased for good prices and thoughtfully sold with a decent holster/ sling a few boxes of ammo and if applicable a few mags). In this scenario a person would be most prudent to be thinking past the immediate event a year or two to the recovery which of course implies you have put considerable energy and resources into getting to that point, then put some money into a big ole bag of silver or 5 and as much gold as they can afford.

Maybe we could say there are some other reasons but one could probably generalize them under one of the ones I mentioned at least for the purpose of this conversation.

Something The Money Changer said is worth mentioning here. I think he stays heavy on silver for longer than I would but still generally good advice to consider.

So we have talked a bit about precious metals and briefly described the reasons a person might choose to purchase them. Those reasons matter because different purposes are best suited by different kinds, or at least quantities of silver and gold.

Let us talk about the pro's and con's of silver and gold in general, before getting to specific products.

- Affordable. Right now spot is around $15 which puts a generic 1 ounce silver round a shade under $18 and pre 64 US Coinage 90% is at about 16x face. (This is slightly skipping ahead to specific products but my goal is to illustrate affordability here which necessitates it.) Assuming you are not a homeless junkie these are prices at much anyone can get into precious metals. Buy an ounce or two every payday and over time it will add up.

-Divisibility. The smaller dollar value per bar/ coin make silver the small bills of the PM world. If you wanted to trade for a weeks groceries either strait across or, more realistically, by selling some coins to a dealer then using the cash to buy the groceries a few ounces of silver are the ticket, not an ounce of gold.

-The small dollar amounts involved let you start off small. There is a reason a baseball player doesn't start with the NY Yankees, a lawyer doesn't argue his first case to the supreme court, etc. This way when you screw up, which you will (spending way too much on shipping, pay a silly premium to a local pawn shop, etc) the real dollar amounts involved are negligible. Ten percent screw up factor in a couple hundred bucks of silver purchased while you are learning is the cost of a pizza. 10% screw up on a 10k USD purchase after you unload those jet ski's hurts.

-Heavy/ bulky. You do not need to have too much money in silver for it to get heavy and to a lesser degree bulky in a hurry. A decent normal guy stash of 3-4 grand in silver is going to be heavy. Much more than that and it gets quickly into wheel barrow/ pick up truck territory. If your goal is to have a whole bunch of silver to trade for things over the long run this is a good thing. The downside is if you have to go somewhere.

I know a guy who has a lot of silver. He is well past wheel barrow territory and deeply into pickup truck territory. If he needed to move in a hurry, say to avoid a natural disaster or some sort of crime thing, a good chunk of the weight his truck could take would be silver. Obviously if he could only leave with a backpack the vast majority of that silver would have to be left behind. Now if he had half or two thirds of that value in gold it could fit in a small pouch in a day pack.

-Compact. An ounce of gold is worth about $1,200 bucks. A little tube holding 10 ounces of gold would be worth $12,000. You could fit that in a pants pocket.

-Recognizably.  Gold has a weird almost magical attraction. A fractional gold coin might just get you through a checkpoint you are not supposed to get through or convince a crooked official to look the other way.

-Compact. Think being in a store that only accepts bills under $20 with a hundred. In some scenarios making change could be very difficult so at a minimum your negotiating power is bad and at the worst the price of the thing could just become the coin in your hand.

You probably noted that the pros/ cons of silver and gold are polar opposites. Both have valid roles and they compliment each other well. For pretty much every scenario a person will end up with some mix of gold and silver.

As to the ratio between them.

On the lower end it favors silver. A guy who has a few hundred bucks to put into PM's should probably jut buy silver.

Long term trading favors silver.

If portability and extreme compactness are issues then gold is the way to go.

On the high end it favors gold. If a person had a bunch of money, either in one shot or over time, to put into PM's the compactness of gold is needed.

I am going to break this into a 2 part post because I am tired of writing and need to get something up since it has been a few days. In part 2 I am going to talk about specific types of gold and silver products and throw out some recommended ratios/ products that might fit different needs.

Sunday, September 6, 2015

Various Things

I am binge watching the Netflix series Narcos. Probably should have actually accomplished something today but this show is completely awesome. Highly recommended.

Commander Zero talks silver. My thoughts. Silver under $20 is a solid buy and under $16 a downright bargain.While I consider gold under $1,200 a decent, if not amazing, deal right now silver is where it is at. Granted gold's compactness has a role silver simply cannot fill however if you are like most survivalists and see a value in both (silver and gold) I would say to buy silver now while it is low. Ignore the delays, so what if it shows up at your door in a month. As to Zero's recommendation of a source for your PM needs I concur. While he is not my friend I have been buying PM's from Montana Rarities for awhile now. He is one of the few dealers out there who doesn't screw Average Joe buying a few one ounce rounds, $10 face or a fractional gold coin by charging a ridiculous premium. He also charges the real cost, or darn close, of shipping so there is no $10-20 mark up to put your purchase in a $5 flat rate box. I get nothing out of mentioning this, it is just a service I have been happy with and want you to know about.

After my last reading of Point of Impact I have been thinking about long distance rifles. I need to buy a scope in the not so distant future. Money is a significant consideration in this venture. As such I have been toying with the idea of a fixed 10X mil dot scope. The SWFA SS 10x42 has a good reputation and with a price around 3 bills it is something I could realistically swing in the not so distant future. Your personal experiences with 10X fixed scopes for a precision application or SWFA optics would be appreciated.

Peter no longer in the Bayou Renaissance Man wrote an excellent post titled

Bullet and cartridge effectiveness for self-defense 

My thoughts are as follows:

 1) Peter wrote a very well thought out piece.

 2) With modern defensive ammo the difference between realistic self defense calibers (9mm, .38 special, .357 mag, .40S&W and .45ACP) is statistically negligible. I say again the performance of these rounds with modern defensive ammo is similar to the point of differences being statistically negligible. Just let everything you read in gun rags from 1960 to the early 00's roll off of your back.

As a slight tangent I personally find it amusing that the people who cling to this tiny statistical difference completely ignore that, if by a small margin .357 magnum is king. Honestly if they would just come out and say "despite all scientific evidence I am going to carry a .45 acp no matter what" I could respect that. Some folks like vanilla and some like chocolate, it is OK.

 3) The FBI switched to 9mm for a few good reasons and explained their reasoning in a well thought out letter.  

 4) Peter brings up the valid point that in a scenario where modern defensive ammunition is unavailable the 9mm in it's generic FMJ (Fiochi 115 gr 1k/$206) form has a well deserved record as an anemic man stopper. Personally if I was in that sort of scenario I think I would stick with 9mm. Why you might ask? CAPACITY. Depending on the mag in my Glock I have 16-18 chances to get vital shots and put the goblin(s) down. With a .45 of any size to realistically conceal I would have 7-9 round 10 at the real top end. That is basically half the ammo and thus half the chances to get good hits. 

Now for many fights that is plenty but in the modern urban jungle 2-3 guys with guns is becoming increasingly common. The need for magazine capacity has long been noted as important in urban violence type situations. There is a reason that even when modern defensive ammo was in its infancy plenty of people were carrying Browning Hi Powers, CZ-75's and SIG 226's.

While I laid out my opinion if a person in this scenario due to legislative stupidity or limited supply availability decided to go to .45ACP I would understand. 

[I really hit the whole 9mm vs .45acp thing and skipped over .40S&W. Depending on ones viewpoint .40S&W is the best of both worlds or the worse. I will leave you to do your own research and make your own choices.]

 5) Personally the one real scenario that would drive me to leaving the 9mm and going to a larger round would be a magazine capacity ban. Lets say we were limited to 10 rounds and either old existing mags (hint buy PLENTY of those) were on shaky legal ground or just became so precious in terms of replacement value one did not want to use them. At that point I would get a pistol in .45acp. Plain old 230 grain .45acp FMJ is probably the way to go if you are limited to FMJ type ammunition.

 Anyway it is time for me to wrap this up.

 The comments section should be fun.

Monday, August 24, 2015

The Economy and You

The world economy has serious problems. China's stock market basically collapsed despite attempted government interventions. Their economy is cooling. Heck it is just not possible to have 10%+ growth a year for any length of time. They tried devaluing the Yuan but that just stinks of desperation.

 This means many peoples aspirations of a better life are not going to be met. Add that to the real estate market (in China) which is a disaster and there are significant issues. Fundamentally China's recipe of letting people make money in a quasi capitalist economy but restricting freedom of speech, etc all worked when the economy was awesome.

China has a bad case of the flu and all of Asia has gotten sick It is also affecting our markets, arguably pointing out their fundamental weaknesses.

Don't even get me started about the train wreck of the EU. Also slowly but surely the middle east is slipping into a regional war. A war that I can not realistically see a desirable end to. Things are bad there and are almost surely going to get worse.

The stock market had its worst day since 2008. This is bad.

So what can we do?

The standard survivalist advice to move away from a major urban center. Even if moving  to Elk Lake Montana POP 357 is out of the question at least move to a smaller town or bedroom community and for goodness sake get out of NY, LA, Chicago, ATL, Houston, etc.

Along other standard survivalist advice store some food, have guns and know how to use them.

Specifically for this situation.

Before we get started. Look I am not a CPA or a financial adviser.  I am a normal guy who makes what he thinks are the best choices and talks about it on the interwebz. Seriously if you choose to make significant financial choices based on the word of some random guy on the internet you are a fool and deserve everything that happens to you. Consult professionals or be a big boy/ girl and make your own decisions but regardless own your own decisions and don't bitch if they go bad. Consider yourself disclaimed. For whatever it is worth I do have skin in the game as things I talk about are generally in line with, if not exactly, what I am doing. 

Cash on hand. A couple hundred bucks is fine for 3-4 day power outage. Heck for most reasonably prepared people there is some margin in that to pick up a couple things for a neighbor who doesn't have any cash.

 My generic advice is to have at least a month cash expenses on hand at home.

We could define cash expenses as food, fuel, household consumables (trash bags, dishwasher soap, hygiene stuff, etc all), medical needs and the like. Basically the cash expense thing excludes stuff like rent/ mortgage, insurance, investments and other stuff and other such stuff that if need be you could A) send checks for or B) it would not matter immediately. Think about it like this. I have to put cash on the barrel head to get groceries or a tank of gas while, at least in the short term, if I send the land lord/ mortgage company a check they can't cash or not and I'm going to keep living there.

A months cash expenses in small bills (say $100 in ones, $100 in 5's and the rest in 20's up to say 2 grand then the balance in hundreds. ) is a good place to be at. Three months cash expenses physically on hand is a darn good spot to be in.

Saying a months cash expenses vs X dollars is significant because the right answer could vary widely. A single person or lower income family might need to stash $500 to meet a months cash expenses. On the other end of the spectrum a family of 6 in a very comfortable income bracket might need 3-4 grand to have the same level of stability.
More cash certainly wouldn't hurt. Depending on your risk level to suddenly need to take a months discrete vacation (Tony Soprano style) and your overall liquid cash situation more money doesn't hurt. I know a retired person who has ten grand stashed at their place. That would be 6 months cash expenses for them easy. Things were getting weird and banks didn't pay jack in interest anyway so they stashed a bunch of cash at home. Also folks who went through the Great Depression tend to have some strong feelings in this area. They inherently distrust banks and stash cash under the mattress.

Silver and Gold.

Jim the Greek who bought stocks and mutual funds is pretty much screwed right now. His cousin Joe the Greek who bought gold and silver, physically taking delivery, is doing good and has some options.

A guy in an economic collapse who has a few fractional ( sub 1 oz) coins and a decent bag of silver has some options. A guy who has a few ounces of gold and a 50 cal ammo can full of silver has a lot of options. You get the point.

Fuel and Alternative Energy Plans

A few cans full of gas will likely keep your vehicle running for while. A solar charger with some rechargeable batteries is  nice set up to have.

Anyway I guess in closing 1) Live outside of a major urban center. 2) Store your basic beans, bullets and bandaids and 3) It is prudent to stash some precious metals in case you need them later.

Hope you all get something out of this.


Wednesday, April 22, 2015

Pastor Joe Fox 'Before You Buy PM's'

On the ammo discussion:
10,000 rounds by Pastor Joe Fox
Cheaper than Dirt chimes in and thinks 2 cases per rifle is pretty reasonable
My thoughts on How Much Ammo is Enough

To recap my thoughts:
Fighting Rifle like an AK-47 3,000 rounds of 7.62x39. Ditto for 3 cases of 5.56 for the AR, etc all
Fighting Pistol- 1k of 9mm or whatever your flavor is.
Shotgun- 1k mixed between buckshot, slugs and small game loads. Depending on your area and firearms setup you might want more buckshot for say an urban scenario or more small game loads if you are set on defensive rifles and out in the sticks. Honestly I would probably go 300 buck, 200 slugs and 500 various small game loads like #6 and BB because I'm more likely to shoot 5 rounds a week at squirrels or birds than burglars.

In general:

I think there are a couple of ways to look at precious metals.

One could look at them as a part of a survivalist type plan. From this perspective on the low $$$ end you might have a bag of 90% silver dimes to barter with. This could be $20 face (14.2ish ounces, costing about $300 today) or a big $100 face bag. On the high end you might have a bit more silver and whatever the balance of your funds is in gold.

Personally I do not look at PM's as part of my survivalist plans. If I was headed to Ye Olde Barter Faire sure I would have a few dollars face in 90% but I would also have fifty rounds of .22 lr, a pack of sewing needles, some pins, etc. The way I look at PM's is not so much as  a survivalist thing but as the uuber conservative portion of my financial plans. Some folks put a bit of money into bonds or treasuries, I go with silver and gold instead.

Anyway I thought the video was worthwhile and thought provoking. I hope it is equally worthwhile to you.

Sunday, April 14, 2013

Time to Buy Silver

If you are in the market for Silver now would be a good time to buy. Relative to the price of gold and our overall economic situation I would say you get a lot of metal for your dollar today. Buy in dips whenever you can.

Sunday, March 31, 2013

PSA Easter Sale, Free Joshua Ebook and Gardening Fun

PSA is having a pretty awesome Easter Sale. They have a variety of mags in 10 packs for $11-14 a piece and some other stuff on sale too. Probably worth checking out if you are in the market for gun accessories. John Wilson wanted me to mention that his Ebook Joshua will be available free until the 3rd.

Unfortunately it seems some folks are counterfeiting 90% silver.  This is why I buy our silver and gold from trusted dealers like JM Bullion. Learning more about testing silver might not be a bad idea either.

Today I got a cherry tomato plant and put it into the upside down planter thing Wifey got for $1.50 on clearance. Didn't take a great look at the Strawberry one and it takes multiple seedlings so I'll have to pick up a few more. Think I'll try to do them in phases so we can stagger the harvest a bit.

The strawberry plants we have so far looked pretty dead at one point. However now that they are in some dirt and have gotten some water they are turning around. One is good to go and the other is probably going to make it.

Also started some seeds to sprout. Lettuce, spinach, green beans and carrots. Did the egg carton thing. I am cautiously optimistic that enough will go to be able to plant when the time is right. Since the house is empty I'm just keeping them in the sink. 

I am definitely enjoying this whole gardening thing. It is really calming for me. Hopefully next year we will be in a place where I can do something bigger and a bit more organized than my current gaggle of containers. Either in the ground or if the soil sucks a raised bed. That sort of effort would definitely make canning worthwhile. This year I will probably do it but mostly for it's own sake.

Hope you all had a good Easter. 

Tuesday, February 19, 2013

Inflation Coming and What Are You Doing About It

It has been more and more clear to me that we are in an inflationary situation. If you have been to the grocery store, gone clothes shopping or filled up the family auto you have probably seen it also. Maybe I am just really noticing it but it is here. Lots of hidden inflation in food products, smaller servings, etc but it is still apparent.

The scary thing is that our current slowly robbing you of purchasing power inflation can suddenly begin quickly robbing you of purchasing power. When the banking conglomerate market focuses on a country things can spiral out of control in a hurry. Not months but weeks if not days.

This week for whatever reason I am getting out of the problem admiration phase. Put up a close line earlier this week. Dug out the spare parts to fix Wifey's bike and will get it up and running probably tomorrow. Trying to find a deal on a bike for me.

Today I picked up some plants; herbs, yellow peppers and tomatoes. My brilliant plan is to grow them. I think the plants are going to be coming inside at night for a bit until the risk of frost is over, probably in 2-3 weeks but I have to do some more reading about it. Am going to get my stuff together, do some research, and try to grow a half dozen buckets (or pots as Wifey doesn't want our yard to look white trash fabulous) of different stuff. If I can make it work without a hassle it would be nice to do the heirloom thing and keep the seeds for next time.

With the exception of  getting the bike up and running and hopefully finding another one for cheap these are tiny steps. Growing some food would be nice, both to teach kiddo about taking care of things and have a fun activity to do with him and to save a few bucks. In fact I expect failure. I don't expect a whole ton to happen from these efforts. The reason I am doing it is to get the inevitable growing pains out of the way now when it doesn't matter. However the real point is to start building some skills. Skills we may need later. Skills that may be the difference between barely getting by on stored food and having some variety to go with it.

I also dug out FerFAL's book Surviving the Economic Collapse  and started going back through it. I briefly talked about his book years back but it turns out I never did a full review. Might have to fix that. In any case despite the relatively high cost of $25 I suggest buying and reading this book. If you are really cheap, read all his old forum posts, guest posts at Survival Blog and his blog it's probably OK to skip the book. That being said I did all that stuff, bought the book and was happy I did.

We are also putting money into food. Stuff like freeze dried emergency food and plain old canned staples like rice and beans. Depending on where your preps and finances are you might want to think about precious metals. If your financial situation is in decent shape (no credit card debt, some savings, etc), you have some gear and a few guns with ammo PM's are a good place to park a few bucks. In particular I think silver is a good buy right now with at $30ish.

I am not saying that you need to do what we are doing. Everybody has different strengths and weaknesses and working from them instead of blindly following me or anybody else makes sense. The point is that you should be doing something.

What have you been doing?

Saturday, February 9, 2013

Food and Fitness

Too many folks are doing a lot of reading and blogging and discussing but not enough DOING.

Food and fitness are the two primary areas people tend to fail in at the most basic level. For goodness sake do something to improve your situation.

Food is easy. We could go at it from a lot of angles but at the most basic level just buy a little bit more of the stuff you regularly eat on each shopping trip. I am talking about shelf stable stuff like dried pasta and sauce, beans, rice, pancake mix, Bisquick, peanut butter and jelly and various canned goods. We will touch on money later but if you can't manage to squeeze five or ten bucks of extra stuff into the budget per shopping trip I recommend looking at your life. If you have some more money and want to stash away some canned staples or emergency food then all the better. I care less how you do it so long as you are doing it. The point is simply that you need to be putting back food in case something happens that disrupts the supply chain.

Fitness is something way too many folks miss. I split off my fitness efforts into another blog because folks would rather talk about other things here. How folks think the world is going to collapse and they are going to be doing all this stuff but lack of fitness will not come into play baffles me. There are way more situations where you will need fitness than cool rifles and emergency food. Sort of like food getting started in any way is a good thing. Eat a bit better and do more exercise. Lift and run or do crossfit, man aerobics or whatever. Heck just go for walks. Doing anything will improve your situation.

In the context we are talking about finances are not that hard either. Avoid debt for obvious reasons. Do some thinking and educate yourself about what is happening and historical comparisons. The Modern Survival Manual: Surviving the Economic Collapse by FerFal is a bit pricey but has some great info. It's writer has actually lived through an economic collapse which is a lot more than most other folks can say. 
If you have some money that isn't doing anything right now you might want to think about what to do with it. Putting a portion of it into precious metals and emergency food could be a good way to go. 

It is easy to put too much money into firearms.  Most guys who are into preparedness like guns and it's easy to get canalized into stuff one likes. However if you are objectively short on .38 ammo for the nightstand revolver or buckshot for the scatter gun then do something about it. I like a lot of ammo but even the tightest budget will let you put back at least a couple hundred rounds per gun with a bit of dedication and some planning.

Get out and do something! Exercise and stash some food. Look at your money situation and if you need it some ammo. The bottom line is that unless your butt and gut are getting smaller and the pantry is getting filled you are not actually becoming more prepared. A little bit of knowledge put into action is a whole lot better than a bunch of knowledge which you do nothing with.

Wednesday, December 26, 2012

Please Welcome JM Bullion!

We are pleased to welcome our newest advertiser JM Bullion. They offer a wide variety of gold and silver at very competitive prices. Also they do not stick it to you with excessively high shipping costs. I encourage you to consider them for all your precious metals needs.

Saturday, October 13, 2012

RE: Advice on Military/ Banking/ Finances

Saw this post over at FerFal's place. After thinking on it for awhile I decided to do a post here instead of commenting over at his place. Nothing wrong with FerFal's ideas but let's just say I have probably thought about this scenario a bit more.

The basics of survivalism/ preparedness obviously apply. Have food to eat, water to drink and the means to purify more, medicine for when you are sick and arms and ammunition to protect your family. That statement is a mouthful we do not need to get bogged down as the specifics of each of those are another series of posts.

These folks have some cash in an IRA. I definitely wouldn't mess with what is already there. Maybe depending on what they are contributing in comparison to other savings they could slow IRA deposits but that is getting into the weeds. Remember folks, we do not know what is going to happen. Maybe my grand kids will be living on a hard scrabble little farm in the woods shooting small game with home made bows and defending their lives with ammo I have stored. Then again it is probably a lot more likely that things will keep on ticking and in 40 years when I'm bouncing grand kids on my knee it will be nice to have some money.

As FerFal suggested keeping a good portion of your liquid emergency fund in cash is prudent. I wouldn't keep it all at home as accidents can happen when you are away. However keeping at least 2-3 months essential cash expenses (food, fuel, medicine, etc) worth of money makes sense. You could make a good argument for keeping more beyond that up to say half of your liquid savings in cash.

The benefits of owning some precious metals were mentioned and are pretty obvious. They are a good hedge against inflation and currency failures. Don't go crazy here. Buy an ounce or two of silver when you can (or save it and make bigger orders to cut down shipping costs and take advantage of better deals) and over time it will add up.  If you have a bit more money buy some small (1/10th and 1/4 ounce ish) gold.

The topic of off shore accounts came up. Let's move forward assuming this money isn't best spent elsewhere and we want to keep it in some sort of currency. I wouldn't worry about off shore accounts unless you have serious money to stash. If you have a few grand I would put some in the gun safe and maybe hide the rest in a well thought out cache. The hassle wouldn't be worth it and the potential benefit's are iffy. Anywhere they will take a card cash will work, the opposite is not true. Now if you had fifty thousand dollars maybe it's worthwhile to take a trip to the Cayman Islands or someplace.

As FerFal noted the military and security folks like police are going to get paid unless things fall apart entirely and go totally Mad Max. I am going to get the exact amount of dollars and cents on the first and fifteenth. That does not however carry any guarantee that the money I receive will be able to purchase a given amount of goods and services.

Inflation is coming, heck it is here now. I fear that the best case is for it go get worse, like 10-20% real inflation for a few years. If things get crazy it might be worse than that. I don't see Zimbabwe/ 1920's Germany hyperinflation happening but 30-50% inflation would be ruinous. 

The one big thing I would add to FerFal's post is to decrease your standard of living now. Be balanced and don't do anything radical overnight. Try to pay off some debts and maybe eliminate bills by canceling various nonessential services. If you can start doing things for yourself [Guys buy a shaver and cut your hair at home. If I can do it you can. Gal's put a lot more stock in their hair so unless somebody is good at cutting it then get it done at a good but sanely priced place. That's just my .02 cents.] to eliminate bills. Buy stuff on sale and take advantage of coupons. The point here is to decrease your basic household expenses. Again be balanced with this and do it over a period of time so it is less uncomfortable.

Reallocating money you are used to spending on whatever is very hard. I know because have done it. Cutting twenty bucks from the grocery budget means you don't get Digorno pizza on Wednesday, the Mrs doesn't get the soda she likes  and you both have to drink less beer (or whatever). The point is that it sucks. Sorry, wish there was a better answer. Being smart and doing it over time helps. Also seeing the benefits of what else you can do with that money helps considerably. The savings account may grow as could cash and precious metals on hand as well as preps put away.

For military folks or anybody else with a fairly predictable salary schedule there is another option to use in conjunction with decreasing expenses. When you get a raise make some intentional choices with this money. Instead of letting it slip into your budget with a few small lifestyle increases save that money, put it into precious metals or preps or whatever else makes sense. Do that a few times and you will have a nice gap between what comes in and what you actually need.

This gap building we are has a couple benefits. First it lets you go into overtime paying down debts, putting away cash and precious metals, storing preps or whatever your goals are. Doing these things helps improve your situation even further. It is a positive feedback loop.

Second and more on topic this is your inflation protection. Living on 50-60% of what you make means there is some room to absorb inflation. Of course you would want to change your standard of living to still save, etc but you would have time to figure that out in an orderly manner. Not a fun option but I fear it is very realistic.

Think about it like this. If Fate left a message saying that your income would drop by 30% on a given date you would start doing things to get ready for it. If that date was in 6 months or a year you could pay off that credit card and ease out of $5 coffee every day, mani/pedi's or whatever, and other luxuries. Might even trade in a car for an older model, eliminating another payment. You would darn sure save some money. Now if that date was a week away all it would do is be depressing. By getting in front of this problem you have the luxury of time to make things as pleasant as they can be.

Anyway those are my thoughts on the matter.

Wednesday, October 3, 2012

Recent Conversations

I have had a couple conversations with close family members lately. One about precious metals and another about rifles. We will talk about them as part of the need for a quarterly rehashing of all basic topics.

A relative asked what I thought about silver and gold as an investment:

For the sake of avoiding repetition check out this post on getting into precious metals. I told him that I do not like PM's AS AN INVESTMENT. Making money buying and selling commodities requires buying low and selling high. If you have those skills that is great. Personally if I knew how to do that reliably I would be doing it for a living. That makes it basically gambling which probably is not smart.

I do like PM's as a conservative piece of my overall financial situation. Sort of like insurance or an alternative savings plan. I like them for protection against high inflation, currency debasement and even an outright economic collapse. They generally move opposite to more modern instruments like stocks and such which is nice. For most people assuming they are halfway financially squared away (no huge credit card balances, etc) putting some money into PM's makes sense.

We talked the qualities of both silver and gold. To recap silver is affordable and valued appropriately for day to day type transactions but it gets heavy fast while gold is very compact for it's value which would be useful if you have to move it. For his situation I said it would not be a bad idea to buy a big bag of silver then put the balance into gold, mostly 1 ounce bars/ rounds.

As to total amounts I recommended not to go crazy but maybe to put a certain % of your liquid assets into PM's. Depending on your situation and where you think the doom thermometer is this could be lower like 5% or more like 25%. Like most things somewhere in the middle is probably the way to go.

Another relative asked if I would recommend that he purchase an AR-15 or an AK-47. I told him to go with an AR. This is for a variety of reasons. First the price gap between the two weapons, which was part of the AK's advantage has closed drastically in recent years. Second given his military experience muscle memory lies with the AR. Third the logistics of potential resupply are probably better for the AR. John Mosby makes a case that the AR is a better weapon which is hard to argue with. That being said (and this is how I closed the talk) both are good guns that should serve you well.

There was also a separate thread of the conversation about specific builds for AR's and barrel twist rates. The answer was that considering that his intended uses of casual plinking and potential SHTF I suggested not to bother. If so inclined he could do a lot of research and spend a bunch of money. However my recommendation was that a good basic carbine like a S&W MP would do everything he wants for a lot less money.

Maybe these questions give a bit of insight into what normal non whacko survivalist folks are thinking about these days.

Monday, May 21, 2012

What Did You Do To Prepare This Week?

Some weeks you end up buying a bunch of stuff and this was sure one of them. Prices seemed right so we bought silver and gold. I got a bunch of stuff to finish off the get home bag which I am pretty psyched about. I ordered a Nalgene bottle  with matching steel cup, another knife sharpener, some more water purification tablets, one of those heavy duty emergency blankets, too much stuff to remember or list. I will probably talk about it at some point once things arrive.

Also  we seem to be fiddling some with alternative transportation. I got a bike, though sadly not a sweet Harley. Also I found a small wagon, like to pull the kid around in. It is pretty cool. It has little seats and a place for him to put a sippy cup. We took it out this weekend and he really liked it. Being able to move him and a bit of stuff in a way that he is happy with is significant. Also the wagon led to a slew of Oregon Trails jokes which was big fun. These little steps may just take us somewhere.

Anyway that is what we were up to this week. I hope you all did some good stuff. Remember it isn't just about buying things. Exercise, learn and practice new skills, network and build relationships, work on your tribe. Just do something that makes you more prepared than you were last week.

Friday, May 18, 2012

Blah, Life and Sickness

Well I have pneumonia. It wasn't a huge suprise as I have had a wickedly nasty cough for almost 3 weeks. It has been sort of a weird thing because aside from a wicked cough (with the caviate that I have done next to nothing physically straining since being sick) and being kind of physically and mentally tired all the time but overall I pretty decent. Turns out it is kind of an odd strain so it was hard to diagnose but eventually they figured it out. So now I am on some drugs to treat it and they seem to be working.

When I had double pneumonia back in Fall 2010 our medical folks were moderately concerned I was going to die. I was the sickest I have been in my entire life. I was barely coherant and weak as could be. Maybe I am somehow weak in the lungs or something. Who knows. Anyway.

As to the recent video and talk about 1911's and the comment on snubbies that seems to have gotten folks all bent out of shape. I have a post basically written in my head that will explain my opinions on a lot of background and conceptual stuff but just don't feel like writing it today. I am mentally just too tired to bother. My desire to argue is minimal and my desire to argue with people who aren't talking about actual facts or data is nonexistent.

I am coming to wonder if guns are a topic that cannot be talked about rationally. If I even mention that a gun is anything less than absolutely perfect folks get seriously bent out of shape. It sort of makes sense why gun rags write that every gun is just completely awesome. Then again it sort of makes sense that I think their reviews and articles are complete shite and I haven't bought a gun rag in years.

I may have called a good time to buy a couple days back but last night I finally bought PM's. Silver was at about $28.09 and Gold at about $1570. They had been slipping back up and it seemed like a good time. Who knows anyway. Tomorrow I am probably going to go bike shopping. Not sure I will get anything but I do want to see what is available here in the $300-400 price range.

For awhile I was listening to the news online at work. I listened to some Dave Ramsey too but I think I am good for that once a week or month at the most. I love his stuff but it is aweful repetetive. Over the last couple days I have stopped that and started listening to rock music instead. I read or at least skim the drudge every day and if I have time check out the BBC but music lets me drone out and be productive which is a good thing. Also the news has been making me mad lately and music gets me going so the decision is easy.

Anyway I hope you all have a good day and maybe I will put together something more on point tomorrow.


Monday, May 7, 2012

Monday Randomness

So France elected a Socialist president. I am pretty ambivalent about this as I do not live there or have any meaningful ties to the place. This could be interesting because it would push back against Germany's austerity measures when it comes to their broke, dysfunctional and still running a deficit southern neighbor Greece as well as not far behind Portugal and Spain. Right now Germany is the only one that can really try to bankroll continued enabling temporary aid. As their smaller, poorer, weaker and generally far less masculine next largest European partner France has really helped this be a united front instead of mean old Germany. This could be fun to watch.

The thing that lots of folks don't seem to get is for governments spending  and income as measured by taxes or growth as measured by GDP are related. Spending affects the economy through jobs, buying things, etc. Increasing revenues via taxes can also hurt the economy. The typical IMF style austerity plan is really a downward spiral. Imagine a company deciding to save by cutting out the advertising that brings in customers or in a more extreme case a dairy farmer cutting expenses by feeding his cows less. Obviously not a good plan. I don't know the answer is. You can tell the debtors to shove it (if you owe the bank 10k they own you but if you owe them 10 billion then you own them) which Greece is not big enough to do; or to not get into the situation in the first place.

Mexico is still a mess. Their government can't or won't stop the cartels from acting with total impunity and doing things like hanging a bunch of bodies from bridges or decapitating people. If there is anything good in the future there I am not aware of it and in fact the place seems to be in a downward spiral. I would not be suprised if I get a paid vacation there at some point in the next few years.
Metals are down a bit but I am not sure it is buying time. I feel a dip coming.

I have been trimming up some lately. I switched to light beer and have been paying more attention to what I eat as well as to portion sized. It seems to be working. Nothing huge really but I didn't need a massive course correction anyway. Hopefully in the next few days I finally kick this bug and can get back to doing some good PT. Don't worry I am still lifting heavy things in order to continue to be awesome. I don't believe in big changes in routines (powerlift for 3 months to "bulk" then do cardio and bodyweight to "tone" or whatever) but running, rucking and biking or whatever more during the spring and summer then hitting the gym a bit more in the winter when it is nasty outside seems like a pretty natural rhythm.
Anyway I hope you all have a decent Monday. Mine was pretty chill and I got to hit the gym so I will call it a win.

Wednesday, March 28, 2012

Getting Into Precious Metals

When I was home for leave my very good friend and nominal coauthor Ryan were able to catch up. He mentioned that he was somewhat interested in precious metals but wasn't quite sure where to start. I meant to send him some info but whoops, it never happened. Anyway it popped back into my head recently. I thought this might be a worthwhile blog post to boot. So anyway.
A lot of big names in survivalism say that you should not get into precious metals until you have your beans, bullets and bandaids squared away. One big name defines that as a years worth of food. I am not going to say they are wrong but I look at it differently. To me precious metals are not part of my preps parse, they are the ultra conservative portion of my financial planning. To me a dollar that is going to silver isn't a dollar that would be going to beans or bullets, it is a dollar that would be going into savings or investments. You could look at it either way or some other way.
[I realized in writing this that it is important to define some terms for newbs. When talking about pre -64 90% silver the term face value is used. Face value is the value of the coins at the time of minting, back when they were just money. A dime is a dime face value, 10 dimes are a dollar face, etc. 90% silver is often sold this way in $5 or $10 rolls and $50, $100 and $1,000 face bags.  It is important to note that these bags are not weighed but sold by face value. Typically with newish or normally circulated coins the difference between the actual weight and the theoretical weight at manufacture is tiny. However in large quantities when dealing with seriously worn coins it matters. Either negotiate a significant discount for or pass on big bags of heavily worn dimes.  Bullion is just that, metal that is made into a bar, ingot, coin or round that is sold essentially as metal. To me this includes the new American Eagles, Canadian Maple Leafs and such. They may or may not have a nominal monetary value but the cost of the metal is the real value. Precious metals are traded as commodities like oil, corn or whatever. Numismatic is a phrase that means collectible. Basically these are coins or whatever that are rare and or in particularly good condition and thus have significant value beyond their metal content. This is a totally different game than bullion with its own rules. It is one I don't fully understand and do not involve myself in. If you want to collect coins that is great but I would consider it a hobby not part of your financial or preparedness efforts. Spot price is the value of an ounce of silver or gold (or copper, platinum or whatever but they are outside of the scope of this post) strait out of the ground. Obviously it costs money to make that metal into a coin or bar and those folks have expenses and want to make a profit. Also the guy selling it has expenses and wants to make a profit. The difference between spot price and the actual purchase price is called a Premium. For various market reasons some products have higher premiums than others. For example an American Eagle gold coin always costs a few bucks more than a Canadian Maple Leaf or a Krudgerrand. In silver big names like Englehard can carry a premium of a buck or so. Feel free to ask if you have questions about anything.]

Are you ready to invest in precious metals?
By the theory I do not subscribe to you should have a bunch of beans, bullets and bandaids. (Certainly you should at least have a functional weapon with some bullets, and enough food, etc to deal with a snow storm or a hurricane.) If you look at it more as a financial thing like I do one would want to take care of any nasty debt like credit cards or anything above say 8% interest rate and have some cash savings. If you do not have some basic survival stuff like a pistol or a shotgun, some food, a way to cook it, etc and have an outstanding balance with Visa at 18% then it might be wise to throw your resources at those issues. Lets just say that you have some basic preps and no nasty debt before jumping into PMs.

How To Buy?

It depends on your overall situation. If you have a good amount of money sitting around you could go order a big bag of silver and or some gold and be done with it. The stockbroker seeing the writing on the wall and ordering a hundred thousand dollars in gold is kind of an urban legend in contrarian investing and precious metals circles. For most folks we don't have a lot of money lying around so we will be making purchases as our income allows. The concept of dollar cost averaging is worthwhile to consider here. However like any financial plan I recommend that you pay yourself first. Maybe you buy a one ounce round every payday or whatever you can afford. Figure it out and stick to it unless your situation changes significantly. This doesn't need to be a big thing just come up with a reasonable plan and execute it regularly instead of waiting till the end of the pay period and hoping there is something left. You may or may not want to go full on Dave Ramsey and allocate every dollar before you get it. We don't have a complete budget but we plan our saving and investments and execute them consistently. However our financial situation as bills relate to income is pretty comfortable. If we had credit cards with big balances, car loans and whatever we would go full on OCD. Typically like diets I would say the worse your situation is the more you need to be strict about it.

What to buy?

"The Moneylender" said "Buy silver before gold, buy small gold before large gold." I think that is pretty darn good advice. Silver is a good way to start for a lot of reasons. First it is affordable. Right now spot is about $32 which puts a one ounce round probably at $35-36ish. Pretty much anybody can afford to pick one up a paycheck. If you can't free up a bit under $40 a paycheck I suggest seriously looking at your overall situation. Also you can make a mistake and overpay by a bit and it won't kill you.

Silver can be purchased in two basic products, pre '64 90% silver and 99% bullion. There are other options but we are keeping it simple here.Pre '64 90% silver is dimes, quarters, 50 cent pieces and silver dollars made before 1964. Yes our change was made of silver. The stuff I am talking about has no real numismatic (collector) value and typically dates from the early 1900's to 1964. The advantage of this stuff is that it is in small pieces. A dollars worth of silver is right about .77 of a troy ounce of silver. Thus a dime is about .07, etc. I am too lazy to look up and type all the exact weights but you can look them up here. The other option is  99% silver bullion. This is rounds or bars or ingotts made of as close to pure silver as one can easily get. Some like Eagles or Canadian Maple Leafs are minted by a country and many others are made by numerous private mints.These are made in all sorts of weights but 1, 5, 10 and 100 ounce are the most common.

Both have advantages and disadvantages. 90% silver is in small denominations. At today's prices even one ounce rounds are too large to make small transactions like a few groceries. Also they are readily recognizable at least to folks who know our change used to be made of silver. The biggest disadvantage is that many dealers charge almost crazy premiums if you buy this stuff in small (under $100 face value which is 70 some odd ounces and costs about $2,500 bucks) amounts. We will revisit this when we talk about where to buy the stuff.

Bullion is generally a bit cheaper per ounce [Remember for these purposes you are buying METAL, not a coin or whatever. Thus the goal is to get as much METAL as possible for your dollars.] than 90% silver. Also it is typically in convenient weights. If the going trade is an ounce of silver for 5 pounds of beef or 20 pounds of wheat (or whatever) it is a lot easier to have nice round denominations. Also some folks say that it is good for a coin/ ingot to say it's content and purity ie "One ounce of .999 pure silver". These folks thing people who are less than knowledgable about PM's may be more inclined to accept their value.

Whatever you decide to go with silver is a great place to start. First of all it is reasonably affordable. Second of all it is in small enough denominations to sell a coint or two to a dealer and buy groceries or a tank of gas or to barter a little bit at a time to get whatever. I would recommend purchasing a pretty good amount of silver before thinking about gold. If you are into round numbers maybe $100 face (70 some odd ounces) or 100 ounces of bullion could work but it all varies based on your situation.
Silvers biggest advantage is that anybody not living on the street (heck even a wino could cut down their Thunderbird consumption or panhandle a bit more agressively and pick up a 90% dime or quarter from time to time) can afford to buy it, if slowly and in small incriments. The biggest disadvantage of silver is that at some point it gets HEAVY. I know a guy who needs to use a truck to move his silver, while that is a nice problem to have he would face some hard choices if he needed to evacuate in a hurry. This brings us to gold.

Gold is a lot more expensive than silver and could be a bit overpriced right now, at least in relation to silver which is probably a better deal at this time. It is sitting somewhere around $1,660 an ounce. Gold comes in two basic varieties. Old coins and bullion. Old coins are just that, old coins from back when Gold was money. Bullion and new coins such as Eagles, Maple Leafs and Krudgerrand's pretty much fall into the same group. Sometimes you can get good deals on the old coins, particularly European coins from aprox 1890-1917. Just be sure to stick to ones folks will recognize like Swiss and French Francs, British Sovereigns and the like. New coins/ bars are convenient because they are typically in nice round (1/10th, 1/4, 1/2 and 1 ounce) sizes and have the weight and purity clearly written on the coin. I don't find one vastly superior to the other. Even weights are nice but old coins are kind of cool too. One noteable advantage of old coins (not numismatic/ collectable, just old very common coins in ok condition) is that they are typically the lowest premium way to buy small gold.
As we said before buy small gold before large gold. Small gold would be gold coins that are part of an ounce, typically 1/10th, 1/4 and 1/2 ounce and are also called fractional coins. As to how much of this stuff to buy before going to large gold (one ounce coins/ bars) I would say at least a couple ounces, maybe a few. For large gold I would purchase one ounce coins or ingots. I don't see a reason to get anything bigger than that. For large gold I would just be sure to get something common like Eagles, Maple Leafs, Krudgerrands or Credit Swiss ingots.

As we talked about Golds biggest advantage (already considering that it is durable, recognizable, divisible and there is consistent demand for it) is that it is a very compact store of value. For the price of a one ounce gold coin you could get a nice bag of silver or a lot of other stuff. One could toss 50k in gold into a daypack and evacuate or into a ruck to GOOD but silver would be problematicly heavy. Also gold has a certain allure and enough folks have been able to use it to bribe/ buy their way out of a warzone or terrible situation that it bears considerations.

Where to buy?

Fundamentally there are three options. Brick and mortar dealers, online dealers and private  individuals. I will discuss the first two at length and then briefely hit the last.
It is important to note that you really need to be a smart consumer when it comes to PM's. Check on Spot Price and know what sort of premiums a given product typically carries. Also be sure to consider the full cost of getting a product to your door. This means your time and travel to a shop or shipping from an online dealer.

Brick and mortar dealers are often coin shops that deal numismatic stuff and have bullion as a sort of side effort. Also pawn shops and I have heard some jewelry stores deal in bullion. Brick and mortar stores have some advantages. The first advantage is that they are convenient. Hard to beat picking up a silver round or a small gold coin every payday on the way home. Also if you decide to pay cash they have the factor of discretion. Personally I just can't see Cops kicking in the doors of everybody who bought a few silver rounds or a gold coin so this is not much of a concern for me. However if you have some other issues going on this could be useful. Another advantage is that some of these folks can help you learn about PM's. The old guy hanging out in his coin shop might be willing to help you learn about testing silver and gold or grading coins if you have the gift of gab and are a decent customer (or offer to help clean up or whatever). Also if it is a small shop and you are a good customer they may give you a call when products you like come in. Furthermore the coin/ pawn shop guy can be a good "grey world" contact who knows how to get stuff.

This is not to say that brick and mortar shops don't have disadvantages. The biggest disadvantage of brick and mortar dealers is often price. Some of them for whatever reason charge crazy prices. I once laughed in a coin shop guys face when he wanted $10 OVER SPOT for beaten up no name 1 ounce silver rounds. It varies shop to shop based on their business model, competition and how informed their customers seem to be. Heck it may even change based on how much they think they can get away with on a given customer. The next disadvantage is often availability. Especially with the folks who have bullion as a side business like numismatic coin or collectibles dealers and pawn shops they predominantly sell what they have bought. This means they may have 90% silver one week, 1 ounce rounds the next, a couple 1/4 ounce Eagles here and some Krudgerrands there. With these guys you need to either be patient or flexible. Since brick and mortar stores are a local thing I can't make any meaningful recommendations but I have had good dealings with a few in the past.
Online dealers tend to have the best prices and greatest availability which are their biggest advantages. Also comparison shopping is easy and you can do it on a Sunday morning in a bathrobe. The first downside is that you have to pay shipping. One absolutely must consider this in their "is this a good deal" calculation. It also makes frequent small purchases cost prohibitive. Paying $5 or 8 to ship something worth $35 or $40 is cost prohibitive for sure. That it is difficult to impossible to be anonymous could be a disadvantage or turn off for some folks. Also if for whatever reason you needed to turn cash into metals TODAY an online dealer would not be a wise route.

One of the biggest benefits of established dealers who make their living selling metals is that their livelihood rests on their reputation. If through bad intentions or neglect they sell some fake stuff they are totally hosed. Due to this they are as a rule honest and above board in their dealings. This doesn't mean they they will always have competive prices just that the products will be what they are sold as.
Personally I used APMEX for a long time and have heard good things from Zero about Montana Rarities.
Personal transactions vary from boringly easy to the wide open wild west. I have purchased silver from a family member. I had some cash and they had some silver and we swapped. Online type purchases of PM's from private folks have, at least IMO an uncomfortably high likelihood of fraud. I have been burned in a small way on Ebay and will not make that mistake again. Also there is just so much fake gold floating around. In the last few years some really legit looking stuff has came out of China.

Face to face transactions would have the same risk of counterfeits. I would need to be a lot more competent at testing gold, have calipers to take measurements and a scale to consider doing this. To make matters worse there are also security concerns. Remember that Marine who got shot trying to sell a gold necklace? If conducting such a transaction would meet somebody in a pretty public place, ideally with obvious cameras and carry a gun. If it was a significant transaction I would wear soft body armor and bring a couple friends with their own guns. No need to show up like gangsters, two guys at the next table sipping coffee would go unnoticed but could be very helpful if things went sideways.
Unless somebody you know and trust  is selling what you want to buy I am not a big fan of personal transactions there are just too many issues involved for the couple bucks you might save.

Well I hope this gives some insight on my thoughts about getting into PM's and helps you make some informed choices about purchasing PM's.

Sunday, March 11, 2012

Pre 33 US Gold Coins and Pre 1899 Guns

Commander Zero wrote a great post on Pre 33 US Gold Coins and Pre 1899 Guns.
My thoughts are as follows:

A guy recommending pre 33 gold coins who conveniently happens to sell pre 33 gold coins viously has a obvested interest. The people who suggest going this route for gold almost without exception have some sort of financial interests in the mix. Also it comes at a sharp premium as much of this gold falls more into the collector area (particularly the slabed and graded coins in decent condition) than the bullion side. In other words the prices are far beyond a coins metal content.

My personal opinion is that the whole thing is a lot of worrying for nothing. Let us just say that a totalitarian government appears and decided to get gold grabby to say hedge an unstable fiat currency. Seizing gold in big commercial vaults like the ones in New York would be practical. However finding the records from every company that sells precious metals seems like a bit of a stretch. I can't see a SWAT style search and confiscation mission to find every single Krudgerrand or gold Eagle that has been sold. More to the point gold is, at least in my observation such a nitche thing that it is really not an issue. Even if it happened I can't see a bunch of goons who are looking for gold coins seeing your pile of gold coins and accepting the explanation that they are collectible and thus exempt from confiscation.

As to pre 1899 guns to me it is much of the same. The kind of legal loophole they seem to exist in is not one I would be comfortable relying on as my only protection. That could be benefitial during current times in places that are not firearm friendly like New York City but I am not so sure about it. Cops and prosecutors tend to be pretty good at knowing obscure laws that work in their favor but not so good at knowing or following ones which do not work in their favor. Also it is important to note that these guns do not exist under FEDERAL LAW. While I am unsure of it I suspect just about anything more dangerous than a super soaker probably counts as a gun in New York. If there is any relatively recent case law on this I would be interested in seeing it. Maybe some felonious gangbanger in NYC was caught carrying an old Colt Peacemaker and got a pass because of this legal loophole but I really doubt it. Also we have ignored that these guns are very old and finding functional ones at reasonable prices might be problematic. Additionally the logistics involved would probably be a nightmare. If collecting old guns is a hobby you enjoy then pursue it.

However if one has some sort of dark scenario in their head about gun confiscation or whatever I would recommend that instead of getting some pre 1899 guns they move to someplace that doesn't suck and buy some modern guns from private parties. A guy who lives in Alabama or Wyoming and bought an AR or an AK at a gun show is without a doubt better off than one who owns a revolver from 1892 and lives in New York City or Washington DC. Also revisiting the point from gold I can't see gun confiscating thugs who are searching your home passing by a pre 1899 Mosin Nagant rifle, a Winchester 1897 shotgun and a Smith and Wesson 44 special revolver of the same era based on your articulate explanation of their unique legal status.

In closing I think that acquiring old gold coins (at collector, not bullion prices) doesn't make sense and is really only hyped by those with a vested financial interest. As to pre 1899 guns as a way to discretely own viable firearms seems to have a lot of inherant problems and thus likely isn't worth the hassle.


Tuesday, February 28, 2012

It Isn’t Useful For X

This is something that has bothered me in the past. I will be talking about how it is a good idea to have some cash around and someone will inevitably say “that cash would be worthless in a hyperinflationary economic collapse” or talking about PM’s and they would say “you can’t barter with PM’s during the Mad Max end of the world scenario I envision”. The implication is that since a given thing is not useful during that one specific event it isn’t useful at all. I am just coming to see this train of though clearly today.

The issue is simple. That something is not useful for X scenario does not mean it isn’t useful overall which is the implication of the above mentioned paraphrased quotes. Look at it like this. A Glock 17 is a poor substitute for toilet paper but that doesn’t mean it is not useful. Does the ridiculousness of that sentence explain the foolishness of this train of thought? You get a thing or learn a skill not for what it doesn’t do, but what it does.

Part of the problem is folks getting tunnel vision on one scenario. For some reason it is usually a very specific one and unlikely one. The guy who is worried that $500 in small bills would lose their value if hyperinflation hit is so fixated on that one thing that he discounts numerous, far more likely, scenarios where having some cash would be useful. Also he fails to see that there is a far higher chance that he will be able to use that cash to buy goods and services in numerous other situations than that it will go up in proverbial hyperinflationary smoke.

My point isn’t that you need to think or do like I do. Different folks have different concerns and at the end of the day we all pays our money and takes our chances. My point is that you need to look at the big picture, not just one possible scenario.

Don’t get tunnel vision.

Tuesday, October 18, 2011

Random Thoughts- Common Caliber Ammo, groups, friends and mediums of exchange

I have done some reading lately and have posts on that ready for you to read shortly. I have been thinking about a few things.

Somebody once said that America has a century worth of guns and a couple years worth of bullets. I am not sure if that is true exactly or quite how to measure it. However the vast majority of Americans do not have a "buy by the case and stock it deep" kind of survivalist mentality. I once broke gun owners into 3 groups when it comes to ammo a) a box or less per gun b) a couple/ few hundred rounds or less and c) my kind of people.

I would wager that the vast majority of Americans fall somewhere between a and b. In all but the shortest term disaster if things go less than ideally folks will start to run out of bullets. This is an issue because some of these folks will be in your family, tribe or neighborhod. A gun with a person behind it that could be actively on your side, pulling guard and fighting if need be for want of bullets.

I think pistol ammunition, ammunition in gaming rifle calibers and shotgun shells would be aweful useful and .22 for practice and gaming is always useful. My observation is that folks who have semi auto rifles tend to have at least a few hundred rounds of ammo and thus I am less inclined to worry about them (unless we are talking about a longer darker scenario but that is another discussion) and I keep decent amounts of that stuff around anyway.

I take this into account in my ammunition stockage. I went to Walmart the other day to stock up on ammunition which I know some folks might need. Picked up a couple hundred rounds of .38 and a few boxes of 30-30 to put away for this type of situation and to help meet my own happy levels.

Knowing your friends and family helps here. I know a bunch of folks with .38 wheel guns and not a lot of bullets so that is a real consideration of mine.

Also you always want to have something folks want. Of course you try to have things squared away so there is no need to get anything but life never works quite that way. Best case you are trying to get something to help out a friend or develop a new group project to fill an unanticipated need. Personally I do not know what somebody might want. Having a wide variety of possible curriencies (cash, gold, silver, ammo, food, etc) gives me some options. Personally I always want the ability to do some swapping. Just some food for thought.

Wednesday, April 20, 2011

Quotes, Inflation and Hyperinflation

I underlined and bent the pages in The Ascent of Money for these quotes. They interested me and may interest you.
"Inflation is a monetary phenomenon, as Milton Friedman said. But hyperinflation is always and everywhere a political phenomenon, in a sense that it cannot occur without a fundamental malfunction of a country's political economy."
"Only entrepeneurs were in a position to insulate themselves by adjusting prices upwards, hoarding dollars (TOR adds they were talking about Germany post WWI so the dollar was a safe currency, comparisons could be made to the Canadian dollar or Swiss franc today), investing in real assets (such as houses and factories) and paying off debt in depreciating banknotes."
Inflation is on my mid term worry calender. At some point a couple to several years from now employment will start rising and we will finally have worked the glut of housing inventory out of the system. Things will start to get better and consumer confidence will rise which leads to more spending. When those dollars banks, businesses and people have been hording under the mattress in case of emergencies start moving it will eventually become noticable that there are lots of dollars chasing the same amount of goods and prices will rise. Our benevolent banking friends the Federal Reserve will raise interest rates to try and slow the inflation. I am less than confident it will work.
On one hand I am not that worried about inflation because our income is secure and we live well below it with no debt. Remember that while inflation makes debts cheaper in real dollars and thus easier to pay off, it also hurts the economy and leads to layoffs and failed businesses. It doesn't matter if your mortgage or bills cost 20% less if you are laid off/ business goes under and you make 100% less. In this respect we are in a good spot as we don't owe anything.
However I do have some worried because we couldn't raise my wages/ prices 20% tomorrow like a small business or whatever could. Since I am pretty happy with my job this is not going to change any time soon. That leaves us managing it. We don't have any debt, let alone variable interest rate debt or a frickin ARM mortgage but if we did I would be trying to get those accounts settled in a hurry.
We own some precious metals which would hold their value and be very useful if inflation became truly ruinous. We also store some food which would help us get through issues with JIT inventories. In this sort of situation (high but not hyper inflation) most likely our biggest savior would be that our normal lifestyle is well below our means. It would mean saving less and our travel budget (destined to drop 50% or more anyway when we return stateside anyway) would drop significantly but our day to day existance would be the same.
Obviously that sort of plan would not work well in hyperinflation. For that sort of scenario I have less of a warm and fuzzy but since it is so unlikely my underoos aren't all twisted up about it. As soon as practical we are going to start growing some of our own food which will help. Of course stored food and pm's would help in emergencies or as a short term stop gap measure.
What are your preparations for inflation? What are your preparations for hyperinflation?
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