Free Republic
Browse · Search
General/Chat
Topics · Post Article

Skip to comments.

Precious Metals: 10 Things To Know Before Jumping Into Gold And Silver (The good and the bad)
The Economic Collapse ^ | 01/27/2011 | Michael Snyder

Posted on 01/30/2011 8:21:27 AM PST by SeekAndFind

As the global economy became increasingly unstable during 2010, investors all over the world flocked to precious metals such as gold, silver, copper and platinum. The price of gold set an all-time record high last year, and gold investors were euphoric. Many analysts are projecting that prices for gold, silver and other precious metals will continue to soar throughout 2011. But does that mean that everyone should just suddenly jump into gold and silver? No, it does not. Precious metals are not for everyone. Just like any other kind of investing, it is absolutely crucial that you get educated before you get involved. Investing in precious metals is very different from other kinds of investments. There are significant hazards and pitfalls to watch out for. But if you take the time to do it right, investing in precious metals can be very rewarding, and it can potentially be a great way to protect your wealth against the tremendous inflation that is coming in the years ahead.

The following are ten key things that you should know before jumping into gold and silver....

#1 Precious Metals Markets Are Highly Manipulated

Big financial institutions, and even governments, openly manipulate the precious metals markets. This is an open secret that you should know if you plant to invest in precious metals. Those who think that they can jump in and out of gold or silver and make a killing usually end up learning a very painful lesson. Investing in precious metals should be done for the long-term unless you really, really know what you are doing.

So why is long-term investing safer? Well, as we have seen over the past few years, the short-term manipulation of gold and silver prices usually gets trumped by the long-term trends in the end.

But that doesn't mean that gold, silver and other precious metals won't take some very significant short-term tumbles.

The following "mini-documentary" does an excellent job of examining some of the strange things that we have seen in the precious metals markets recently....

#2 The Long-Term Trends Are Very Favorable For Precious Metals

As the U.S. dollar has declined, gold, silver and other precious metals have been going up, up, up over the past decade. Investors all over the globe have been flocking to the safety and stability that they provide.

Just check out the following chart which shows how the price of gold has risen dramatically over the past decade. In fact, this chart is a little out of date. At one point during 2010, the price of gold exceeded $1400 an ounce. As you can see, those who have been investing in gold for the long-term have been doing very, very well....

Many analysts are extremely bullish on gold right now. For example, Peter Schiff believes that the price of gold is going to eventually hit $5000.

So does that mean that what Schiff is saying is actually going to happen?

Nobody can tell you for sure what is going to happen.

But one thing is for sure - we are entering uncharted territory in world financial markets. At this point, just about anything is possible.

#3 Gold Holds Value Over Long Periods Of Time

In ancient Rome, an ounce of gold would buy you a nice suit. A hundred years ago, an ounce of gold would buy you a nice suit. Today, an ounce of gold will buy you a nice suit.

Meanwhile, the U.S. dollar has lost well over 95 percent of its value over the last 100 years.

So which is better to hold on to for the long-term - U.S. dollars or gold?

#4 The Value Of The Dollar Is Going Down

Usually (but not always) when the value of the dollar goes down, the value of gold goes up. As the U.S. government and the Federal Reserve have been flooding the system with new dollars, investors across the globe have been flocking to precious metals.

At some point in the years ahead we are going to be facing some very, very serious inflation. When that time arrives, U.S. dollars are not going to be worth a whole lot. But all of that gold and silver you have stored up still will be.

#5 Physical Gold Is Preferable To Paper Gold

When investing in gold, it is much more preferable to actually take possession of the physical gold than it is to have a piece of paper that says that you have invested in gold. Someday when the financial system crashes, you may find that your "piece of paper" is not going to do you much good.

#6 Diversification Is Key

When investing in precious metals, it is important to diversify. This spreads out your risk. Some investors accumulate as many different precious metals as they can. Others diversify by getting precious metals from a variety of dealers or by accumulating it in different forms - coins, bars, jewelry, etc.

It is always wise not to put all of your "eggs" in one basket.

#7 Accumulate Different Denominations If You Can

In the future, if you actually need to spend your precious metals you don't want them all to be of the same denomination if possible. For example, if you need to buy a little bit of food, you don't want to only have high value coins. Variety is a good thing, and accumulating different coin denominations is another way that you can diversify.

#8 You Cannot Eat Precious Metals

Investing in precious metals should be done only after you have gathered together an adequate emergency food supply. If the global economy completely shatters, having gold and silver is not going to be good enough. You are going to need lots of food for you and your family. So be sure to take care of the necessities before you invest in precious metals.

#9 Do Not Advertise That You Are Accumulating Precious Metals

Don't go around telling everyone that you are storing up precious metals. That is just going to make you a target. Investing in precious metals is something to be done quietly.

#10 Get Educated

I cannot stress this point enough. If you want to invest in precious metals, you need to get educated. People that do not know what they are doing are at much greater risk of getting burned. Be smart enough to realize what you do not know. Don't be too proud to ask for advice. Seek out reputable dealers. If you take the time to do things right, then you will have the best chance for success.

The following video contains some more facts and figures about investing in gold. I do not know anything about the organization that put this video together, but this video is well produced and it presents a lot of important information about gold in an entertaining manner....

CLICK ABOVE LINK FOR THE VIDEO



TOPICS: Business/Economy; Society
KEYWORDS: gold; goldbugs; preciousmetals; preparedness; silver

1 posted on 01/30/2011 8:21:31 AM PST by SeekAndFind
[ Post Reply | Private Reply | View Replies]

To: SeekAndFind
Plant a Garden...you can't eat gold.


2 posted on 01/30/2011 8:28:49 AM PST by darkwing104 (Lets get dangerous)
[ Post Reply | Private Reply | To 1 | View Replies]

To: SeekAndFind
In ancient Rome, an ounce of gold would buy you a nice suit. A hundred years ago, an ounce of gold would buy you a nice suit. Today, an ounce of gold will buy you a nice suit.

I'll show you all. I'm investing in suits. Then, one day, (to paraphrase) all your gold are belong to me.

3 posted on 01/30/2011 8:40:22 AM PST by edpc (It's Kräusened)
[ Post Reply | Private Reply | To 1 | View Replies]

To: darkwing104
I believe that was mentioned:

#8 You Cannot Eat Precious Metals

A well-tilled garden plot and a cache of seeds is also recommended. Planting fruit trees and berry bushes can also be a nice long-term investment on staving off hunger...

4 posted on 01/30/2011 8:43:58 AM PST by Dubh_Ghlase (Therefore, send not to know For whom the bell tolls, It tolls for thee.)
[ Post Reply | Private Reply | To 2 | View Replies]

To: SeekAndFind

If I was planning on buying gold (which I am not) where should I keep it? Planted in my garden?


5 posted on 01/30/2011 8:52:47 AM PST by Ditter
[ Post Reply | Private Reply | To 1 | View Replies]

To: Ditter
Ditter wrote:
If I was planning on buying gold (which I am not) where should I keep it? Planted in my garden?
Hypothetically, all of your precious metals except silver could go in the same storage safe. Gold, lead, brass, etc. All in the gun safe.

Silver needs to be kept elsewhere. Silver + sulfur = tarnish and corrosion damage.

Not saying that I would actually own any silver, gold, lead, brass or guns.

6 posted on 01/30/2011 8:59:24 AM PST by cc2k (If having an "R" makes you conservative, does walking into a barn make you a horse?)
[ Post Reply | Private Reply | To 5 | View Replies]

To: cc2k

>>>not saying I would actually own any etc. etc. etc

Of course not, me neither. We are a gun free zone and our dogs are all pussy cats. snort*


7 posted on 01/30/2011 9:04:08 AM PST by Ditter
[ Post Reply | Private Reply | To 6 | View Replies]

To: SeekAndFind

bttt


8 posted on 01/30/2011 9:27:15 AM PST by RebelTex (Freedom!! It's not just another word.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: SeekAndFind

#8 You Cannot Eat Precious Metals

Investing in precious metals should be done only after you have gathered together an adequate emergency food supply. If the global economy completely shatters, having gold and silver is not going to be good enough. You are going to need lots of food for you and your family. So be sure to take care of the necessities before you invest in precious metals.

Most important point in the whole article.

9 posted on 01/30/2011 9:28:41 AM PST by Free Vulcan (Vote conservative! You can vote Democrat when you're dead.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Free Vulcan

You can’t eat savings bonds or stock certificates either. That’s just about the dumbest thing anyone can say about gold, with honorable mention going to “it’s heavy” or possibly “assay is required.”

Without regard to whether owning gold makes sense, gold is not an “investment”. By definition an investment is something other than money, and something that provides a return or dividend on that investment. Stocks are an investment. Gold is a form of currency speculation, sort of like buying swiss francs or australian dollars.

Nowhere did the article mention taxes - which are currently 28% on gold and silver. That’s not a good way to “invest” - the underlying measurement in currency loses value, one has merely preserved purchasing power, and the government comes along and wants nearly a third of the “gains”. Nice.


10 posted on 01/30/2011 9:46:12 AM PST by Freedom4US
[ Post Reply | Private Reply | To 9 | View Replies]

To: darkwing104
Plant a garden..."

Amen!

And for the record, I buy gold - just to tick off the local LDS pawn shop broker ...cause he only pays a fraction of its worth.

Right now I'm paying 28% more than him, and still make money.

11 posted on 01/30/2011 9:58:33 AM PST by investigateworld (Buy Ammo! - unless you believe in 'Free Trade', then just buy food & water & clothes & gasoline))
[ Post Reply | Private Reply | To 2 | View Replies]

To: SeekAndFind

mark


12 posted on 01/30/2011 10:17:48 AM PST by DarthVader (That which supports Barack Hussein Obama must be sterilized and there are NO exceptions!)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Freedom4US

It’s a relevant point when you’re talking about severe economic disruption to the point of degrading to a barter economy. Gold or silver won’t help you much in that situation. If you have extra cash after getting yourself to the level of being able to survive, then as a store of value gold or silver makes sense.


13 posted on 01/30/2011 10:25:10 AM PST by Free Vulcan (Vote conservative! You can vote Democrat when you're dead.)
[ Post Reply | Private Reply | To 10 | View Replies]

To: Ditter

Preferably in the back of a well secured gun safe.

Ever try to access your safe deposit box after the bank has been closed?


14 posted on 01/30/2011 10:31:06 AM PST by G Larry
[ Post Reply | Private Reply | To 5 | View Replies]

To: SeekAndFind
..At some point in the years ahead we are going to be facing some very, very serious inflation...


15 posted on 01/30/2011 10:31:22 AM PST by Koracan
[ Post Reply | Private Reply | To 1 | View Replies]

To: Free Vulcan

In those extremes, maybe gold and silver would be priceless. Historically in third world countries, hard currencies were utilized in lieu of the local money, typically US dollars, German marks, Swiss francs.


16 posted on 01/30/2011 10:43:20 AM PST by Freedom4US
[ Post Reply | Private Reply | To 13 | View Replies]

To: Freedom4US

In terms of paper currency yes, they will be. More accurately, paper currency will be worthless.

If you have a local network that’s willing to take gold and/or silver, more than likely in terms of real goods, gold and silver will settle down to a certain value, probably not all that different than what it has been historically.

In severe economic disruption, people may not be willing to take precious metal and will stick to barter if they don’t feel they can exchange gold/silver for goods with the next guy.

Even so, it’s better to not let the value of extra cash waste away. Once you can survive, convert the rest to precious metal and wait for better times.


17 posted on 01/30/2011 11:06:33 AM PST by Free Vulcan (Vote conservative! You can vote Democrat when you're dead.)
[ Post Reply | Private Reply | To 16 | View Replies]

To: Free Vulcan

Provided we’re discussing a “barter economy” - No, I mean in absolute terms, practically speaking. Set aside for the moment the likelihood of that scenario.

Anything that needs to be imported would be pretty much unobtanium without an accepted medium of exchange. “Imported” would take on a new meaning, but particularly things not grown or produced in the US.
It seems unlikely that if paper currencies aren’t for some reason accepted
locally then forget things like coffee and chocolate, which can’t be grown here. My view is that such a scenario seems pretty unlikely but if that were to happen, that’s what we’d be looking at, no way around it. Thankfully most of our wealth outside the house is held in T-bills and Savings Bonds. Hm.


18 posted on 01/30/2011 12:41:52 PM PST by Freedom4US
[ Post Reply | Private Reply | To 17 | View Replies]

To: RebelTex

bookmark


19 posted on 01/31/2011 8:52:53 PM PST by RebelTex (Freedom!! It's not just another word.)
[ Post Reply | Private Reply | To 8 | View Replies]

To: darkwing104

Plant a Garden...you can’t eat gold.


But assuming you have money left over after planting that garden and doing a few other things, gold can be a viable store of your spare wealth.


20 posted on 02/01/2011 8:34:31 AM PST by Atlas Sneezed ("If you touch my junk, I'm gonna have you arrested.")
[ Post Reply | Private Reply | To 2 | View Replies]

To: Ditter

If I was planning on buying gold (which I am not) where should I keep it? Planted in my garden?


If you’re afraid of government confiscation, don’t put it in a bank safety deposit box.

If you’re afraid of fraud in the markets, don’t put it in a ETF (paper gold).

If you are afraid of well-informed home invaders, don’t put it in your gun safe.

If you are afraid of dying and not having your heirs receive it, don’t stash it in secret hiding places.

If you are afraid of societal collapse, don’t keep it with a trusted private custodian.

The answer is that you need to address your own fears, and strongly consider diversifying. Perhaps some in the gunsafe (enough to satisfy the invaders when they put a gun against your wife’s head), some stashes in secret spots in your house (there are books about this, and be sure a trusted person like the lawyer who has your will has a sealed envelope with the locations noted), some in your bank box, some with a trusted custodian.


21 posted on 02/01/2011 8:43:36 AM PST by Atlas Sneezed ("If you touch my junk, I'm gonna have you arrested.")
[ Post Reply | Private Reply | To 5 | View Replies]

To: cc2k

Silver needs to be kept elsewhere. Silver + sulfur = tarnish and corrosion damage.


I’d keep the ammo outside the safe. And frankly, bullion silver (or coins) isn’t the same alloy as sterling, which is hard and durable, but tarnishes at a harsh word. Not that tarnish really affects the value of your silver coins or bullion.

You can also remove the tarnish in an instant (without removing any silver atoms) by dipping the silver in a pot of hot water with a sheet of aluminum foil on the bottom, and salt and baking soda dissolved (you’ll smell the sulfur steaming away).


22 posted on 02/01/2011 8:47:42 AM PST by Atlas Sneezed ("If you touch my junk, I'm gonna have you arrested.")
[ Post Reply | Private Reply | To 6 | View Replies]

To: Beelzebubba

That is some excellent advice.......... some of which I have already thought of myself!


23 posted on 02/01/2011 8:57:50 AM PST by Ditter
[ Post Reply | Private Reply | To 21 | View Replies]

To: Beelzebubba
Beelzebubba wrote:
I’d keep the ammo outside the safe.
Yes, but would you completely clean the guns after every trip to the range or out hunting? If there's any powder residue, that's going to have sulfur and tarnish any silver in the gun safe.
Beelzebubba wrote:
And frankly, bullion silver (or coins) isn’t the same alloy as sterling, which is hard and durable, but tarnishes at a harsh word.
Silver alloys vary.

Bullion pieces are "fine silver" aka 0.999 fine silver, >99.9% pure silver. Fine silver does tarnish fairly easily in the presence of sulfur. It does not oxidize, but it turns black from any exposure to sulfur.

Sterling silver is .925 fine silver. Usually, the balance is copper. Several issues with sterling silver. First, it's usually plated in bright fine silver (.999 fine plating) so it will be shiny and bright. That does something positive and something negative for tarnishing. It covers the copper, so you don't get any green copper oxides in the tarnish. On the other hand, it presents a bright fine silver finish which will tarnish with sulfur.

There are a few other "Sterling Silver" alloys, some using germanium and/or zinc in place of the copper. Silcon and boron are also sometimes mixed in the alloy. All "Sterling Silver" alloys are 92.5% silver by weight, the differences are in the mix of the other 7.5%

Unplated sterling silver is subject to corrosion of the silver, as well as the other alloying metals.

Sterling coin silver, (used in early British coins, and in a few American coin eras, and some other foreign coins). Same thing as sterling, but generally not plated or finished. This coin silver is nearly always 92.5% silver, 7.5% copper.

Coin silver. Generally this is an alloy of silver and copper. The copper is for strength and wear resistance. Fineness varies by country (and sometimes over time). United States coins 1964 and older are generally .900 fine silver (90%). Canada used .800 fine silver for their silver coins before about 1968. Other places used different amounts. Some British coins are .500 fine silver.

Beelzebubba wrote:
Not that tarnish really affects the value of your silver coins or bullion.
Bullion for bullion is not affected by the tarnish. Bullion for "collectors" can have slightly added value if it remains bright and untarnished or untoned.

"Junk coins" (circulated common dates, very worn examples) aren't affected much by toning or tarnish. Numismatic coins (rare, uncirculated proofs or very lightly worn examples of older rare coins) can be greatly devalued by tarnish or toning. In some cases, a light patina, especially if it has coloration and luster, can enhance the value of a numismatic coin.

And I'll keep your chemical solution in mind for cleaning some of the sterling flatware that I have. Very interesting.

24 posted on 02/01/2011 10:56:14 AM PST by cc2k (If having an "R" makes you conservative, does walking into a barn make you a horse?)
[ Post Reply | Private Reply | To 22 | View Replies]

To: Beelzebubba

“If I was planning on buying gold (which I am not) where should I keep it?”

I never worried about that until you brought it up. I own tons of that stuff, and I hid it really well. I knew that one day I might start forgettin’ stuff, so I drew up a map so I could find it again.

Well that day’s come and I can’t remember where I hid the gold. I’ve got my half of the map, but I hid the other half.

Do ya think Obama might let me borrow the President’s desk for a little while? It’s not like I want to steal it or anything. I don’t even need to remove it from the Oval Office. I just want to sit at it alone for about 15 minutes.

Maybe I could sneak in while he’s on vacation, or maybe sneak into one of those big parties he’s always throwin’.

Anyone up for a little raid on the White House for half?

;^D


25 posted on 02/01/2011 9:44:00 PM PST by RebelTex (Freedom!! It's not just another word.)
[ Post Reply | Private Reply | To 21 | View Replies]

To: cc2k

You know, instead of stockpiling gold as a hedge against inflation, stockpiling quality guns and rifles might be an even better idea. They hold their value and protect themselves at the same time. Plus, they are readily marketable. Sure, guns and rifles take up more space than gold coins but at least they can be used to get food.


26 posted on 02/01/2011 10:09:30 PM PST by Lancey Howard
[ Post Reply | Private Reply | To 6 | View Replies]

To: Lancey Howard

You know, instead of stockpiling gold as a hedge against inflation, stockpiling quality guns and rifles might be an even better idea. They hold their value and protect themselves at the same time. Plus, they are readily marketable.


An excellent idea if you have a spare thousand or ten thousand. But if you have a spare hundred thousand, they are more of a challenge to liquidate.


27 posted on 02/02/2011 8:27:32 AM PST by Atlas Sneezed ("If you touch my junk, I'm gonna have you arrested.")
[ Post Reply | Private Reply | To 26 | View Replies]

To: Lancey Howard
Lancey Howard wrote:
You know, instead of stockpiling gold as a hedge against inflation, stockpiling quality guns and rifles might be an even better idea. They hold their value and protect themselves at the same time. Plus, they are readily marketable. Sure, guns and rifles take up more space than gold coins but at least they can be used to get food.
If you leave out the word "instead," I'm 100% with you.

I consider a "well rounded" precious metals insurance portfolio to include gold, silver, lead, brass and machined steel(possibly with some wood attached, possibly plated). This is one area where diversity is good.

28 posted on 02/02/2011 3:45:58 PM PST by cc2k (If having an "R" makes you conservative, does walking into a barn make you a horse?)
[ Post Reply | Private Reply | To 26 | View Replies]

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
General/Chat
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson