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Buying Gold and Silver

Dreamer

Regular Member
Joined
Sep 23, 2009
Messages
5,360
Location
Grennsboro NC
The purchasing power of gold NEVER changes.

The price of gold fluctuates, depending on the purchasing power of a given currency.

One ounce of gold has ALWAYS purchased the same amount of goods or services. ALWAYS.

In ancient Egypt, we have records that show one ounce of gold would buy a REALLY nice outfit for a priest or pharaoh.

In Elizabethan England, for one Gold Sovereign (a coin of about 1oz), you could engage a reputable tailor to produce a VERY spiffy set of slops and a doublet of fine material.

Today in NYC, you can walk into any reputable mens clothier and buy a pretty nice suit for the same amount of "dollars" as it takes to buy once ounce of gold...

Dollars go up and down in purchasing power. Ours has been going down for the last 100 years. A "dollar" today is worth less than 2% what is was when we went off the Gold Standard in 1933.

But the purchasing power (value) of gold NEVER changes. Period. End of discussion...

It will only change when they figure out how to make gold as easily as they can make paper money, and men have been chasing that ghost for millennia...

Silver is a different thing altogether. Silver is primarily used as an industrial metal these days (in technology). It's use as a store of wealth is relatively minor, compared to gold. Therefore, it is subject to market fluctuations of supply and demand as well as the purchasing power of currency for it's "price".

Also, silver has never been a reliable measure of, or store of, wealth because it is subject to oxidation (and therefore it can be "destroyed" by corrosion, tarnishing, or just poor storage), whereas gold does not oxidize...

All that said, I can neither confirm or deny that I have either Silver or Gold bullion in my personal possession as a hedge against inflation, or as a backup tender in the tragic occurence that the US$ should become worthless...

But I DO have a LOT of lead... :monkey
 
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END_THE_FED

Regular Member
Joined
Mar 19, 2010
Messages
925
Location
Seattle, Washington, USA
Prior to 1933 we were not really on a gold standard, we were actually on a silver standard with a fixed ratio of silver to gold.

Our true Dollar is defined as: 371.25 grains of silver in the form of a coin containing 90% silver and 10% alloy.

We then had a fixed ratio of dollars to gold at 20 dollars per ounce. When they demonetized silver in 1873 this put us on a de facto gold standard. Silver was re-monetized later. The fixed ratio of true dollars to gold created many problems. (The official ratio was rarely equal to the market ratio.)

I believe that the demonetization of silver was unconstitutional because the term Dollar is a constitutional term,(mentioned twice therein) congress cant unilaterally change a constitutional term.

When the constitution was written the main unit of currency was the Spanish Milled Dollar. After studying several samples of the Spanish Milled Dollar they determined it to be 371.25 grains of silver 90% silver and 10% alloy.

I would like us to return to The silver standard that was setup by the constitution and the first Coinage Act of congress. I would also like the mint to coin gold stamped with a weight and fineness but not a dollar amount. The gold coins can trade at the market rate as compared to the true Dollar.

And yes everyone, we can still have the convenience of paper currency and "debit cards".
 
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Citizen

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Nov 15, 2006
Messages
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Location
Fairfax Co., VA
SNIP

1. The price of gold fluctuates, depending on the purchasing power of a given currency...

2. Also, silver has never been a reliable measure of, or store of, wealth because it is subject to oxidation (and therefore it can be "destroyed" by corrosion, tarnishing, or just poor storage), whereas gold does not oxidize...

1. Not sure if you have come across this info, yet. Passing it along for your evaluation. The short story is that gold does not follow monetary inflation, but does seem to respond to price inflation above 10%. I've been reading stuff by this author for about 1-2 years. Seems a pretty level-headed guy. Plus, he likes Austrian economics. :)

http://www.garynorth.com/public/department32.cfm

2. Oh, silver is a pretty reasonable store of value, I think. The Caribbean is littered with Spanish Empire silver coins that didn't make it to Spain. We had silver coin and specie (high purity coin). I forget where I heard recently that a 1960 US quarter (90% silver or some such) was worth $8 silver content. Of course, that would have been based on the contemporary silver market. I think the trick is to not get soaked by industry-driven price spikes. Ditto market manipulators. The main idea being that market forces like industry and manipulators will affect how much value you store and recover (or lose), but that the storage-ability is still there.
 

END_THE_FED

Regular Member
Joined
Mar 19, 2010
Messages
925
Location
Seattle, Washington, USA
......... I forget where I heard recently that a 1960 US quarter (90% silver or some such) was worth $8 silver content.......



1964 and older Quarters, Dimes, Half-Dollars, and Dollars are 90% silver.
Current melt values in Federal Reserve Notes:

Dollar Coin - 27.79 FRNs
Half-Dollar - 12.99 FRNs
Quarter - 6.49 FRNs
Dime - 2.59 FRNs

1965-1970 Half-Dollars are 40% silver with a melt value of 5.31 FRNs.

As I mentioned above the 90% coin is our true Dollar, I like to call it the "Constitutional Dollar".



Oh, speaking of Gary North here is a nice collection of his articles for anyone who is interested. http://www.lewrockwell.com/north/north-arch.html
 

Nevada carrier

Regular Member
Joined
Mar 30, 2010
Messages
1,293
Location
The Epicenter of Freedom
Well It looks as if the Japanese are liquidating their gold and silver to raise capitol to rebuild. This is causing the prices to fall, I will be watching closely to see if I can spot the bottom of the market and buy in some more. I'm predicting the price of silver to be cut in half in a months time.
 

KansasMustang

Regular Member
Joined
Sep 9, 2008
Messages
1,005
Location
Herington, Kansas, USA
Dave Ramsey, christian finance adviser even says that Gold and even silver, is a feel good investment. If the SHTF we will be trading with bullets, not gold. I personally will keep putting my money in bullets... Just me sayin it.
 

marshaul

Campaign Veteran
Joined
Aug 13, 2007
Messages
11,188
Location
Fairfax County, Virginia
Stocking up on Silver and Gold for a SHTF scenario is not a good idea.

Silver is too hard to cast into bullets without special equipment, and can damage your barrel.

Gold CAN be easily cast into bullets, bit is too soft, and will foul your barrels even more than unjacketed lead bullets.

Lead will be the most precious metal when the SHTF, followed closely by brass and copper...

My thinking is basically along these lines.

Gold has no "inherent" value: it's essentially useless. We value it precisely because everybody else does. It's actually akin to paper money in this sense; it holds its value through shared agreement.

While I do favor the gold standard for our national currency (that's another issue), I seriously doubt people in a SHTF scenario (even a financial one) people are going to be concerned with the long-term buying power of commodities like gold. While gold may not "lose" value, in the sense that when the economy has re-stabilized it will buy what it used to, it also won't be very strongly desired by anybody during that interval. They'll be more concerned with making it through the winter than stockpiling pretty but utterly useless metals.

Ammo is probably a safe bet. I can think of a few other things. I'm not too sure about feminine hygiene products though. :p I can't see menstrual rags being of particularly greater value than clothes, considering their long history before the modern time.
 

Nevada carrier

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Joined
Mar 30, 2010
Messages
1,293
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The Epicenter of Freedom
I understand that during a crisis, precious metal isn't going to help me buy anything, but it will ensure that when we come out of the crisis, I'll have something that has preserved a some wealth. Those who have no tangible easily liquidated assets will come out of a crisis taking what they can get, and starting from nothing. Those who have assets that can be easily liquidated will get what they need.
 

Citizen

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Joined
Nov 15, 2006
Messages
18,269
Location
Fairfax Co., VA
I understand that during a crisis, precious metal isn't going to help me buy anything, but it will ensure that when we come out of the crisis, I'll have something that has preserved a some wealth. Those who have no tangible easily liquidated assets will come out of a crisis taking what they can get, and starting from nothing. Those who have assets that can be easily liquidated will get what they need.

I think that is the crux of the issue. Time. Circumstances changing across time.

During the first (weeks, months, years?) of a disaster, precious metals and gems may have little usefulness except perhaps doing business with surviving merchants or business-minded people who have an eye for the future.

As things settle down, however, manufacture and commerce will restart (if it ever really completely stopped). Then, money will have a use.

So, I guess the moral of the story is to have both short-term exchangeables (barter) and long-term.

Although, it occurs to me that real money could be used even short-term. The whole point of money being that I don't first have to hunt around for an item wanted by the guy who has the product I want. What if I want a tent, and the other guy already has plenty of ammo? Or, he's a bachelor?--there goes the usefulness of my feminine hygiene hoard, eh?
 
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1911er

Regular Member
Joined
Sep 9, 2009
Messages
833
Location
Port Orchard Wa. /Granite Oklahoma
There is gold in them thar hills

I have been a Prospector for several years and have sold much natural gold at spot price plus 40% for jewry size nuggets that is as little as 78 % pure so say it is a 1 oz nugget and gold is 1400.00 an oz I have gotten as much as 2000.00 plus. and some gold I have had since it was selling for 350.00 an oz.
 

Citizen

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Nov 15, 2006
Messages
18,269
Location
Fairfax Co., VA
The question I have is if gold and silver are such good investments, why are so many businesses so happy to trade your paper dollars for their gold and silver?

Because they take that cash and pay employees and business expenses and take a profit. They are treating it like any other commodity, which it is.

The correct question you would need to answer is how much gold or silver do the individual employees maintain for themselves apart from the company's business.

The ne plus ultra of this activity is a bank. Banks treat money as a commodity. Your question applied to banks would imply that money is not a good store of value because banks sell money (loans at interest).
 

1245A Defender

Regular Member
Joined
Jul 7, 2009
Messages
4,365
Location
north mason county, Washington, USA
Well,,,

When the U.S. Dollar tanks you will wish you had some silver or gold.

Dont be so sure about that!
News says huge deposits of gold were just uncovered at Sutters Mill California that will drive the value down!

Also giant veins of Silver were just discovered in Virginia City Nevada that are so rich that Silver
wont be as valuable as lead!
 
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