Metals, a Hedge or Investment Depending on Your Views... or a Sucker's Bet?

[Mary Stetler]

Not sure I'd buy one. Checking, it looks like dealers charge a premium as high as 80% on those 1/20 ounce gold coins!

I have one in a yuan set in a ring. I kind of like the panda.

 

[Mary Stetler]

People are scary.

I watched some videos from "backwoods" small dealers in preserved produce, seeds, whatnots, and gold and silver. One I saw today said that some customers have told them "I don't need gold or silver. I invest in lead and copper so I can take what I need."

Ouch.

I and MANY people I know have preps AND copper and lead.Hubby keeps his rough metals in a bedroom. I keep mine in the kitchen or with me at the farm. I may not hit a bullseye first thing any more but I can wound a few times first. The Supreme Court will be strengthening the Constitution against the idiots. Did you see what Kentucky just did? Made it a law to teach gun safety at all school levels!

 

[Jacob Petersheim]

People are getting weird but funny.

A coin shop guy tried to convince an older woman to buy a 1/2 ounce gold Eagle instead of 5 1/10 ounce coins. Much better deal, lower premiums.

She said "No. When relatives come begging after the Dollar crash, I'll give them 1/10 ounce and say 'That's all you get, go away!'"

 

[Jacob Petersheim]

Somebody pointed out that gold might be at $4000/ounce by year-end. If true, owning just a 1/4 ounce of gold would put your savings ahead of 59% of Americans today.

To me the shocking part of this is how many people can't afford a $1000 emergency expense. Just look at the cost of car repairs and towing. It wouldn't take much of a random chance incident to lead to $1000 in costs. A lot of newer cars don't even have a "baby spare" tire today. Before long this situation will move down through the used car market as well.

 

[Mary Stetler]

Somebody pointed out that gold might be at $4000/ounce by year-end. If true, owning just a 1/4 ounce of gold would put your savings ahead of 59% of Americans today.

To me the shocking part of this is how many people can't afford a $1000 emergency expense. Just look at the cost of car repairs and towing. It wouldn't take much of a random chance incident to lead to $1000 in costs. A lot of newer cars don't even have a "baby spare" tire today. Before long this situation will move down through the used car market as well.

I always told my kid to have enough saved up to pay cash for your next car (we don't buy new). She always has enough for 'emergencies'. I guess I should have told her to buy gold.

 

[Don Alaska]

I don't know if I have posted this before, but I tell people they should have enough cash in their home to get them through AT LEAST a week to cover all expenses; a month is better. You should have liquid assets available for AT LEAST 6 months if you receive no other income during that time. I remember the 1996 Federal government shutdown. I was considered an "essential employee" at the time, so I had to go to work ( a commute of over an hour if the weather was good) and I received no pay for that entire time. If I didn't have something in reserve, I don't know what we would have done. We had to feed six kids, livestock and a dog team as well and I was the only income for the family.

 

[Jacob Petersheim]

Just before and then during the 2020 lockdowns I started making side-trips to pull another $200 from the ATM whether needed or not, and stuck it away. We had limits imposed, and with so few out and about I looked over my shoulder a lot for snatch and grabbers. One ATM I tried refused to dispense cash after dark.

 

[Jacob Petersheim]

Egad:

Purity: 99.99% gold (24 karat)
Metal Weight: 0.01 Oz
Diameter: 0.375"
Thickness: 0.01"


$53.95 today.

 

[Jacob Petersheim]

Something different:

Why Is America's Most Patriotic Coin Being Made In Germany? The Making Of The Trades Of America Coin

Mike Rowe creates a coin to raise funds for his Foundation and honor American trades
workers.

 

[Jacob Petersheim]

This guy has never struck me as alarmist or one to push fringe notions.

Dollar Crisis — The World Is Dumping Dollars and Buying Gold

 

[Don Alaska]

This guy has never struck me as alarmist or one to push fringe notions.

Dollar Crisis — The World Is Dumping Dollars and Buying Gold

Yeah, this guy isn't alarmist at all. The inflated Dollar has been pushing people to other options for some time, but, as this guy said, when Biden confiscated Russian assets and "gave" them to Ukraine, it set off alarm bells around the world. The "rise" in the price of gold is not a price rise at all but a measure of the decline of the U.S. Dollar. Gold is a way to save wealth, not make money. The rising stock market is another indicator of the Dollar's decline. The rising stock prices are not all because the profits of the companies whose stock is being purchased are going up. Much of the rise in the stock market is due to the decline in the Dollar, just as the price of gold valued in Dollars is rising. For years, advocates of Modern Monetary Theory have held that a government can spend all the money it wants with no regard for income as long as the government involved has total; control of the currency. The U.S. government with its deficit spending has been exporting our inflation, i.e., the decline in the Dollar because it has been the world's reserve currency since the Breton Woods Conference after WWII. That seemed to work okay until Covid when the Biden Administration started borrowing "money" and giving it away to everybody. That damaged the Dollar badly, but when that same administration confiscated Russian assets and removed them from the SWIFT international payments system, that tipped the scales drastically and gave major nations around the world such as the BRICS Alliance to begin the process of de-Dollarization. It has to be a slow process because those nations still holding gold don't want to crash the value of the Dollars they still hold, so those nations and others are slowly selling all the Dollars they have. That in turn means that those Dollars are coming "home" as nobody wants Dollars anymore. That is part of the reason that China and other nations are buying U.S. real estate and companies. They have to give their Dollars back to the U.S. as nobody else really wants them as the value declines. They can be spent in the U.S. however, since we have to accept them. Biden and Covid did irreparable damage to the U.S. that most Americans have not yet come to terms with.

 

[Jacob Petersheim]

Silver seems to hit the Magic Price, because many coin dealers report people out the door lining up to sell. Of course the silver buyer might be more likely to need money badly now, as opposed to gold buyers.

I'm a little shocked that it hasn't pulled down the price, but I suppose central banks and governments are scarfing it up. Most have long ago let their silver stockpiles diminish.

It's a weird situation. A silver shortage during a glut of sellers. But the retail market is probably tiny compared to other players in industries, governments, militaries, and of course the big banks.

 

[Jacob Petersheim]

Surprising how the gold price has ramped up since I started looking at this stuff a month and a half ago:


Ahh, if I had bought back then I could sell off today and make well over $300 per ounce!

Scary to think this really means our buying power has shrunk about 10% in a month though.

 

[Mary Stetler]

Surprising how the gold price has ramped up since I started looking at this stuff a month and a half ago:

View attachment 1115
Ahh, if I had bought back then I could sell off today and make well over $300 per ounce!

Scary to think this really means our buying power has shrunk about 10% in a month though.

Buying and selling can be tricky. I bought some in the 80's and like stocks, I held long enough to be a good investment but it went up and down along the way and dealers charge and subtract fees. In a month it might not have been such a good investment. But definitely better than money. But I am grateful for money.
The government once made holding gold illegal. That might crash it

 

[Jacob Petersheim]

Buying and selling can be tricky.

From what I can see that's an understatement!

There is so much talk right now around gold (and to some extent silver) and the strange way paper-gold investors are now asking for delivery of metal in great numbers. There also seems to be a lot of movement of the metals into the U.S. as well as vast purchases being made by nations and by central banks. China seems to be acquiring large volumes of gold mining concentrates (unrefined ore separated from most of the ruck) and doré (partially refined gold that contains silver, copper, and other "contaminants"). That seems to be, at least in part, to bypass IMF reporting required for refined precious metals.

Then you have such things as talk about issuing gold-backed Treasuries that will be sold off as well as used to back a U.S. Dollar replacement digital currency scheme.

So there is a ton of "buzz" around precious metals over the last few months. The Fed rate cuts expected today have only fueled things.

 

[Jacob Petersheim]

Secondary bullion mints produce a lot of ornamental "rounds." Some are painted or enameled in bright colors. Others are silver rounds with gilding:

 

[Jacob Petersheim]

Many coins have "security features" of various sorts to help thwart counterfeiting. Often the edge of the coin "reeded" (those lines around the coin edge) but in specific places the "reed" might be omitted. Others even "letter" the edge in a specific phrase or sequence of letters and markings.

This Britannia has two obvious security features and others that are more subtle.

The "ocean waves" in the background appear to move when one tilts the coin back and forth. Within the small circle at the lower-left two images alternate almost like a hologram.

These things make it more difficult to create fakes, though in reality such measure are almost obsolete in an era when laser-engraved dies can be created fairly cheaply (as such things go).

So while appearance comes first, you really need to test for the dimensions, weight, "ping" signature when struck, and finely-measured electrical resistance using equipment designed for the purpose. That might sound crazy but when a single coin can contain $3700 worth of gold (and climbing) nobody wants to get burned by buying a chunk of tungsten with a gold plating.

 

[Jacob Petersheim]

Cute video of a small farm-backed store/restaurant. This one accepts metals as payment.

Must be watched at YouTube though (click the link).

 

[Mary Stetler]

Cute video of a small farm-backed store/restaurant. This one accepts metals as payment.

Must be watched at YouTube though (click the link).

Before metals were going to be allowed as legal tender, it was going to be taxed as it surfaced. You would need proof of purchase or the gov't would pick a date. My dad left me a bit. No proof of purchase. I don't care.

 

[Jacob Petersheim]

Before metals were going to be allowed as legal tender, it was going to be taxed as it surfaced. You would need proof of purchase or the gov't would pick a date. My dad left me a bit. No proof of purchase. I don't care.

As far as I can tell bullion metals are treated as "collectibles" and taxed on sale as Capital Gains or Losses. Those held less than a year are Short Term and taxed as normal income, a year or more are Long Term and taxed at capital income rates.

At purchase you are supposed to keep a record of the date and "cost basis" (basically the purchase price plus storage costs, insurance, appraisal fees, etc.). If received as a gift you're supposed to record the date and the valuation at the time of receipt as well as various fees as for purchased bullion (holding costs).

I'm no tax pro, so none of that's advice and might even be wrong. I'm puzzled by things like how you spread out the cost of a safe over a pile of coins.

Say I buy a safe for $5000 and store 200 ounces of gold. Then I add 10 more ounces. Then I sell 5 later on. How much of that $5000 applied to that 5 ounce sale for tax purposes?