I am familiar with futures trading and stock trading and option trading.

But I am not familiar with physically buying and selling gold.

One can buy gold coins everywhere, it seems. Its the selling when the price gets high that worries me.

How do you do it?

Buy low sell high.

You most likely well have to sell it back to a dealer.

Expect to sell it for about 10 percent under spot.

That's a good question and an important one.

I'm not sure where you're located but you can check with various local and major (national) sellers. Most of them have a buy/sell price listed, usually as price above or below spot. Good reputable (not an easy find) local coin dealers usually add a per cent or so on each end but sometimes you can buy them for less if you have built up a relationship with them.

The 2 obvious types of physical gold are bars or rounds (that is not coins) and bullion coins. I deal with NTR in Dallas (not open to general public so that won't help) and here is an example of their pricing for various common bullion items(the first number is their buy price, the second is their sell):

1 oz Buffalo +2% +4%
1 oz Eagle +2.5% +3.7%
1 oz Gold Bar – OPM Metals 99% +$14
1 oz Krugerrand +$18 +$42
1 oz Maple Leaf +$15 +2.35%
1 oz Panda (in plastic) +$24 +$58
1 oz Philharmonic +$15 +3%
1 oz Proof Eagle Certified +$155 +$210
10 oz Gold Bar -$8 +$16
Kilogram Gold Bar 99% +$9

Based on the above one of the cheapest gold coin on that list is the Maple Leaf (which is surprising to me) but this can change in relatively small amounts frequently.

If you want current gold quotes, and their buy/sells on various items, check out www.kitco.com.

Personally I would prefer not to buy 10 oz or kilo gold bars due to more problems selling them (higher dollar values per item).

Again, as a personal preference, I prefer Mex 50 pesos, or Brit Sovs. They are both recognized worldwide and have no IRS reporting requirements.

It's unlikely that you will want to get into this, but by far the cheapest way to buy gold is as scrap or by buying scrap from a dealer. I paid my dealers 95% of melt when I was doing that, when most purchasers were paying them 90%.
I could melt it for 99% minus a few fees at that time, so I had to be careful that what I was buying was, in fact, real karat gold, but that's not a big deal once you do it for a while. I usually held the scrap until I got rid of it in the last few years, but if you're doing it on any scale it's easy to melt the scrap and convert to coins or cash by setting up an account with a refiner (which is another place you can get screwed in a hurry).

AFA "successfully investing" is concerned, that will obviously depend on future gold prices. Right now, in the relative short term, I am and have been somewhat askance about gold. I'd prefer to sit on the sidelines AFA new buying goes at this time. But this is just a WAG on my part based on my perceptions of market actions and it could easily be the buying opportunity of a lifetime. Long term, I like gold but since I live in the short term, I'm not buying at this time. Just for general interests sake, at current prices of about 1600/toz gold, it would take about 521 Mex 50 pesos to be worth a million dollars. That would weigh about 48 pounds av.

p dog shooter:

If someone is selling their good gold(meaning not scrap, recognized coins or bars) for 10% under, then they are getting screwed.

I hereby make a standing offer of 5% under (subject to extreme market conditions or governmental actions) for any real gold bars or coins, and, while I'd be glad to buy it, that is not a particularly good deal for the seller. I'll also buy silver, sterling or coins, but I'd have to be about 12 1/2% under melt value on sterling and it would depend on the coins.

Gato

When I saw your reply the other day that you would have purchased that large gold nugget for cash money I was hoping that you would respond to my question because it appears that you are a guy that knows what he is talking about.

I think everyone has to take their own stand on what type of investments they want to own. I believe that sometime in the balance of my lifetime Gold will make a new high price. I don't know when that would be. But if I believe it then certainly I want to be buying a little bit of gold now and a little bit more as it goes down (if it goes down). Not a lot, just a little.

And as you say, there are people and businesses everywhere who will sell it to me. But I have to be sure that when it makes its new high somebody will buy it from me.

Thanks for the information. I appreciate it very much.

And congratulations on your success. Anyone who can pay cash money for a quarter million dollar nuggett has done alright for himself and his family.

I appreciate that, I've been more lucky than good, and that's a fact.

I don't know what that nugget sold for, but I suspect it was substantially above the price quoted in that article. Typically collectible nuggets, and so much depends on size, and beauty, sell for a minimum of 25 to 50% above gold value. I have a nice collection but nothing nearly that large. That nugget was not overly attractive but I feel sure it would bring at least 50% over based on size.

Not that it likely matters to anyone, but Ebay is RIFE with fake nuggets that are man made from lower karat gold. I would strongly advise against buying on ebay. If you have a minimum of knowledge about nuggets you can tell the real ones by crystalline structure that is usually visible. No crystals doesn't make it fake, but it means it could be a fake. Nuggets typically run about 85 to 96% pure. Alaskan nuggets are usually on the lower end and Aussie nuggets are usually higher purity. With experience, you can fairly accurate guess gold content by color.

Gato

I wished I knew you were interested in Mexican Centenarios. My wife's sister and her husband gave us one as a wedding gift that had belonged to my wife's mother years ago. In October my wife asked me if I minded if she sold it and sent them the money in Ecuador. (Our brother-in-law is on his last leg due to a lifetime of smoking.) I told her it was her mother's so go for it.

Numismatically it was compromised. My wife's father had made a broach of it sixty five years ago, with gold ribbon around the circumference and six small diamonds if I remember it correctly. It was very pretty, 22 karat, and 1.2+ oz. We took it to a gold dealer in Rockwall and one in University Park (in Dallas). The difference offered was about 18%. The UP dealer (rich part of town) tried to screw us. The man in Rockwall was very nice about it. We sold it to him for $2,100+.

The only thing I learned from this was to shop around; don't take the first offer.

Many years ago I started buying 1 oz. Krugerrands. I think my average price was around $400. In 1993 I offered them to my wife as part of a divorce settlement, and kept the stocks. I think I made the right choice, although your thread is making me re-think the deal. I hope she held on to them.

Kensco:

Considering your selling venue, I think you did quite well. The coin has just over 1.2 oz pure. Assuming 1700/oz that equals 2040 plus the value of the holder. Without doubt it was worth more than $60 but probably not that much more as melt. Everybody has to make a profit, or at least try to, so the buyer was probably thinking of selling it for $2500 to $3000 if he could find (or knew) the right buyer.

In many cases of jewelery with small diamonds in it, people think "Diamonds! Wow!" when, in fact getting them out often costs more (in time) than they are worth. I've melted a bunch of small diamonds just for that reason. By small, generally speaking, I mean 2 pointers or less, often single cuts.

A couple of the earlier years of 50 pesos have some numismatic value over melt IF they are in uncirculated condition, but I've never bought one for numismatic purposes and think it is MOSTLY a semi-scam, although they are a beautiful coin. Of course there are collectors for everything. It's just like MOST of the modern bullion issues that are sold for substantial prices above melt because they are in a MS69 or MS70 holder. Yeah, right, there's one born every minute. Now if you want to talk about Mex Republic Cap and Rays 8 Reales or Spanish Colonial 8 Escudos, I can start to wax eloquent.

Buying numismatic collectibles is another topic, one which I covered in some detail in a thread years ago, but suffice to say, it is like most other fields of endeavor, the more you know, the better, and if you don't know, you damn sure better use someone that does know AND, MOST IMPORTANTLY IS TRUSTWORTHY. As in most fields, the last quality is hard to come by and harder to evaluate (this is where learning your coins is critical, otherwise how can you evaluate what you are buying/have bought). As an ex-coin dealer, still serious collector, I can give good advice but, without tooting my horn, most people are collecting for semi-fun and don't have the resources to play in the level of collecting for profit that I would recommend. Let me hasten to add that I am not in any way knocking coin collectors that do it for fun and on a low budget, I am simply saying that we are playing on different levels of the game.

PS: To be clear, I am NOT a financial or some kind of paid numismatic advisor, nor do I charge for my advice unless someone wants me to travel, bid, etc and I'd probably tell them no unless it was a very interesting proposition. In the extremely unlikely event that someone reading this thread wants to invest really serious money in coins, and I'd say that would start at a minimum of a 1/4 million for US coins, probably half that for foreign, I'll be glad to put them in touch with a couple of my friends that are dead honest and widely respected, but they are dealers who make their living buying and selling coins, not hand holders, and the individual would need to have some modicum of knowledge about what they wanted to collect/invest in. These guys are busy and do not have the time or inclination to hold kindergarten classes for coin collectors.

PPS: If one can read between the lines, there is a TON of numismatic information available for free online at Heritage Auctions Archives. Highly recommended if one has some type of numismatic item to sell.

PPS: I'll gladly help someone out if they have some inherited coin or otherwise and don't have a clue as to value by giving them my opinion of current market value. However, even pics, unless of EXTREMELY high quality don't allow one to view the surfaces in the details that are essential to valuing a coin. UNLESS OF EXTREME RARITY, the GRADE of a coin makes many multiples of differences in the price. I am no longer actively collecting US coins and this is meant only to give someone a very general idea of value, not as an offer to purchase. If anybody takes me up on this, don't send me pics of worn out circulated silver dollars, barber quarters, etc. Do some research on your own and don't waste both of our times.

I'm adding this as an afterthought. If you come into possession of some old coins that might have some value, WHATEVER YOU DO, DON'T CLEAN, POLISH, WIPE, OR DO ANYTHING TO THE SURFACES. If the coin has any numismatic value you'll be destroying giant percentages of it if you do any of the above. Even if the coin is old and well worn, UNLESS YOU ARE ABSOLUTELY CERTAIN IT IS OF MINIMAL VALUE, don't mess with the surfaces. If you're going to take or send a coin to someone, wrap it in something like a soft cloth, tissue paper, or a paper envelope to protect the surfaces. Remember small scratches can take GIANT chunks off the value.

One final bit of advice, if you're collecting for profit, then buy the absolute best coins of any particular issue. It is FAR better to have 2 or 3 of the FK (finest known) or condition census than 50 or 100 average condition coins that might cost the same amount of money.

PPPS: I keep thinking of things as I proof read this. Just like oil, diamond or gold mines, penny stocks, etc etc. if someone calls you on the phone cold, DO NOT BUY ANYTHING they are attempting to sell you. Good deals sell themselves and don't need cold phone calls, bad deals need suckers and if you are on one end of a cold phone call, that would be you if you elect to believe the "wonderful" offer you have just heard.

If anybody is interested, I can discuss "slabs" at length, but take this to the bank, not all coins in slabs with the same numismatic grade are worth the same amounts, and a significant amount of coins in slabs, especially gold have been "fixed" to get a higher grade. A heinous practice IMO, but very common because if the fixing gets a higher numeric grade, then they can sell the coin for more money to the unknowing.

Finally, my style of writing is obviously not polished, and I often use the second person "you" when I mean it generically, so to speak, not personally and should be using third person.

Gato

you know what they (whoever they are) say:

"Luck favors a prepared mind."

I suspect that knowledge, skill, and a bit of hard work had far more to do with your success than luck did.

By the way, even though I don't get down to Texas much I have also enjoyed your writing on Texas Q joints. Perhaps your vocation should be that of a food writer. Maybe a second career on Food Network!!!

quote:

Originally posted by silvertip1:
I am familiar with futures trading and stock trading and option trading.

But I am not familiar with physically buying and selling gold.

One can buy gold coins everywhere, it seems. Its the selling when the price gets high that worries me.

How do you do it?

Be judicious about choosing a dealer; I made a wrong judgement once that cost me $2300 (and that's a relatively cheap lesson in that business).

The first rule of investing (as opposed to speculating) is to not buy anything you can't afford to lose the full cost of. Then you can sit on it as long as you live if need be, to get the price you expected to get from its eventual sale when you first bought it.

The second rule is to never buy after the boom has begun to age. You may make some money if you violate this rule, but not near as much as you'd make by putting your money elsewhere. You might also break even, but the odds are that as with everything else that has been a speculator's fad for more than a year or two, prices will go down and you will lose money when you sell. Remember what they tell you on all stock market sales, "Past performance is no indication of future yields".

The longer it has been a highly popular fad, the greater the liklihood of its decreasing in sale value. And the "gold bubble" is definitely aging and edging toward collapse.

So caveat emptor if you go near there.

Several things to remember when buying gold and making it through what is coming.

1. Only buy gold with numismatic value (like MS 64 St. Gaudens double eagles) as if an FDR style gold confiscation is enacted, these are exempt.

2. Nusmismatic gold has value as gold and also as a collectors item, so there are two potentials for appreciation.

3. Develope a relationship with a firm that does NOT advertise on TV. I use Blanchard. Store the gold in your own secure location (not in your home)

4. Gold is basically an inflation hedge not a money maker.

5. There is no "gold bubble" at this time. The irresponsible actions of all free world governments is heading us toward an economic collapse. Then there is the strong possibility of a war in the Middle East which could quickly become WW III.

6. If you are dependent on modern medicine to stay alive, forget it as you will not survive the coming collapse.

7. Priorities are:
-Live farther from any major city than a tank of gas will take the mobs that will come when the food runs out (a week at most).
-Good water and durable food are essential.
-Guns and ammo are essential. Lots of 22RF is essential.
-EMP proof transportation will give you a leg up as long as fuel lasts. Horses/Mules are also excellent.

8. Anyone not well known to you is not to be trusted. A low profile and avoiding any government agencies is best. (Remember Katrina).

9. Limit gold to 25% of your investment portfolio as things may not go to hell in a handbasket.

quote:

. Nusmismatic gold has value as gold and also as a collectors item, so there are two potentials for appreciation.

I've already discussed this with you under your prior handle of 45-70 Shooter, but suffice to say that the "double" potential may not always be to your advantage. A person would have made approximately 30% more money investing equal amounts in straight gold bullion or coins as opposed to Saints in 64 in the last 10 years. The reason is simple, as the price of gold rises, the premium over gold on not rare (there are well over 1/2 million Saints in 64 graded by NGC and PCGS, so as a grade, they are common as dirt) "numismatic" coins declines. It would likely work in your favor if gold was falling.

There's certainly nothing wrong with buying Saints, and you can have fun collecting a set of the common ones while basically buying gold but as numismatic investment, I'd say pick another area or buy one or two of the really rare Saints if one has the buying power.

As far as using Blanchard goes, they would not necessarily be the LAST firm I would use, but they'd be pretty far down the list. If someone chooses to use them, be very careful and check their prices/premiums against other sellers.

I'd suggest that a good place to START exploring numismatic gold coin investing would be to join NGC (free) and access the back issues of their newsletter which have some very good articles by Jeff Garret, among them excellent analysis of St. 10s and 20s series.

Personally I prefer NGC because they are dominant in world coin grading, but they are a close but distinct second in US coin grading. All things being equal, which they almost never are in numismatics, US PCGS coins of the same grade will USUALLY bring a bit more than NGC slabs. OTOH, PCGS's world coin grading is a semi-joke which means that there are bargains and disasters awaiting the person who buys the slab, not the coin. REMEMBER, NEVER BUY THE PLASTIC, BUY THE COIN.

For the one or two who might be interested, here is a link to my thread of about 4 years ago. I say many of the same things I've said in this thread (at least I'm consistent) but there might be an acorn among the leaves in there.
coin investing thread

Alberta Canuck

Good to see you posting. Very good!

I have no interest in coin collecting. I don't have the capital for it.

So, from my probably inadequate research I am seeing that in order to come out ahead on buying gold the round trip for each ounce is going to cost about $40-$50, or possibly a bit more as the cost of gold rises and a bit less as the cost of gold goes down.

I think I can reasonably expect about 15-25 more years of life (hopefully but one never knows) and within that time period would expect that one world crises might happen to shoot gold up to new record highs. (or China continuing to buy up massive amounts of theworld's gold reserves at an alarming rate)

For gold I plan on being a very small time investor, mainly as a very small insurance against rampant inflation.

So the plan is to buy 1 oz. now, and only buy further ounces in $50 downward increments. That way I won't make hardly anything if gold goes up from here, but I might make a few bucks if gold goes down and then goes back up.

And as has been said, if there is a major world disaster where gold becomes king, I will at least have an ounce or two to buy some soup. (I did see The Postman)

As I said buying gold is not an investment for growth or income. It is only a hedge against run away inflation (see Germany in the 1920s).
Again, as I stated collector coins are exempt from an FDR style confiscation.
As for Blanchard my late father and I have bought from them since the lates 70s. We have never had a problem with their pricing, grading or reselling. Since you provide no evidence of shady dealing to support your comments, I can only assume it's Internet chatter.
I think those of us who have over $100K in gold have some qualifications to speak to the rewards/risks ...... but remember you cannot eat it and it won't chamber in an AR.

Gato and Artshaw

No need to see whose ______ is bigger.

Lets talk about gold rather than personalities.

artshaw or whatever your future handle is going to be:

I don't care who you buy from or what you buy. As a matter of fact, you should use Blanchard, you deserve each other.

I told you that I wouldn't use Blanchard unless absolutely forced to. I KNOW why I said that and it certainly wasn't internet chatter.....Use who you want, and I'll do the same.

You're certainly entitled to your opinion, but $100K worth of gold or Saints doesn't mean it counts for much weight in the gold business.

There are probably hundreds if not thousands of people around who are smarter about and know more about buying and selling gold and numismatic coins than I do, but I can tell you for a fact, you're not one of them.

Gato, I've been following this and find your advice interesting.

Now, I know absolutely NOTHING about investing in gold. I'll admit that up front, but I am interested in at least exploring the idea. So a few questions, if you've the time to fool with them.

First, what about the current timing? And I base that on reading recently in the WSJ that big hedge funds and other investors are reducing their shares in things like the state street spdr gold etf. Meaning this all may have gotten too high, and could just like the stock market, fall "of its own weight".

I also read that gold has recently been somewhat contrary to its usual position. Meaning usually gold rises when stocks drop. But in recent times they've BOTH been rising. Which supposedly could be cause for not diving in at this point with both feet or whatever.

In other words, do you think maybe it's too late to try and play this game?

Anyway, I found really interesting your suggestions of Mexican 50 pesos and British sovs. Which leads to another question. Are these new or old coins with intrinsic collector value you're referring to? And should we be looking for collecting old gold coins?

Like the ones I saw advertised recently in the NRA magazine? 1 oz. Gold Buffaloes maybe? I think they're marketed as old U.S. gold coins, but I forget the details. Maybe you know what I'm talking about. Any helpful advice would be appreciated.

[There is no "gold bubble" at this time. [/QUOTE]

Right. And there wasn't a "dot.com" bubble, or a "housing" bubble, nor a "derivatives" bubble either. All were safe investments in things that the forseen future would not allow to lose value, let alone lose big time.

Shack and Silvertip:

Here is part of a post that I made on Jan 4, 2013.

quote:

AFA as gold goes, this is really just a WAG on my part, but I think we may have a pop to the $2500 area in the next couple of years BUT we could see $1100 to $1300 during the process. I currently have very little gold, I sold most of it last year.

As relates to my investing in gold, I will nibble back in below $1600, would be more aggressive below $1500, and would be a strong buyer in the $1300 or less area. If it goes straight up from here, I've just missed the boat. Short term, I can foresee a pop to the $1800 level when the "sequestration" talks go belly up, as they almost assuredly will.

Wanna SPECULATE, buy silver at current levels, then sell it or trade for gold if it pops back up into the 40s again. Using rough numbers, current gold-silver ration is about 55:1. I'd switch to gold below 45 and switch gold to silver above 60.

As in all precious metals dealings, the REAL KEY is to buy with low transaction costs. Keep that in mind. If it costs you 10% to buy and 10% to sell then the metal has to go up roughly 22% to break even. A sucker's bet.

If one had followed my advice, he would be about $125 ahead by NOT buying gold then and would be approximately even on the gold/silver trade but losing money. By even I mean the ratio is still about 55:1.

I'm going to try to answer your questions briefly, but they are not questions which have a brief answer.

Let me start with a disclaimer, all of my OPINIONS about gold, etc are just that OPINIONS and while I think they are better than a WAG (wild ass guess) they are still basically that.

A wise man told me about investing in anything, "Don't tell me what, tell me when."

The short answer is, I don't know when. I KNOW that gold will go up SOMETIME, I KNOW that the finest speculation in the world right now is shorting US Treasuries but this is not something I would consider suggesting to anyone who could not do it with money they absolutely could afford to lose. It is not for widows and orphans.

Timing on gold: Based on your earlier posts, I am not sure if you're trying to buy gold to make money, or as a inflation hedge, or as some type of survivalist financial instrument. Since except for fun expenditures, necessities and consumables, I almost never buy anything without at least thinking that I am going to make money on that expenditure. I buy gold both to make money and as a possible inflation hedge. That said, there are BETTER things as an inflation hedge IF you have the money. Good recreational land, good farm land (but that bubble has gotten too high right now for me, YMMV), a ranch with a home, etc. are better than gold. However, the authorities do have taxing power on land, and it can be a problem. Since in my case, by far the largest chunk of my net worth is in land (some of which I paid for by selling some US sets I had put together), I "play" with gold, but almost completely as a long term asset "sink". I pretty much have inflation covered, one way or the other.

I could go into greater detail, but one of the many things I learned from my trips to Argentina over the years is that inflation DESTROYS the middle class's assets. Keep this in mind when you are holding dollars.

All that said, IF I was going to buy gold in the small amounts you have indicated, I'd FIRST buy an ounce or so's worth of US 90% silver coins in dimes and quarters. That is your survivalist stash and has just about as much if not more potential than gold. Currently a 90% dime has around $2.07 worth of silver in it and you could trade that (those) for food, work, weapons, ammo, etc a helluva lot easier than trying to cut up an ounce of gold. In addition, if you think about the worst case scenarios, juggling a few silver dimes to trade would be less appealing than if you flashed or had to go get an ounce of gold. Many a venturer was killed for MUCH less back when the law and laws ended at the edge of town. Extremely unlikely, but not impossible.

I think your idea of buying ONE ounce of gold and only buying more if it goes down is not a good way to invest. Just like in stocks if you're going to average your costs by buying over time, I think you should set up a schedule and buy an ounce or half ounce on a time frame that fits your ability to spend that amount of money and put it back. Things happen but don't invest in gold (or anything) that you know you're going to have to have the money in the near future. All this is not to suggest you should invest in gold, but just a better way of doing it if you decide to. Using round numbers a sov has just under a 1/4 ounce of gold, if you can buy them reasonable, you might consider buying a sov more often to smooth the swings out. REMEMBER this is long term stash money, and MUST not be something you're considering as available if the house needs painting.

There are old Brit sovereigns and new ones. Actually the same thing applies to 50 Pesos. In both cases their gold content is the same but the old sov (especially) and old 50 P have better acceptance worldwide. There are collectable sov. but there are millions around that are worth only gold content. The only way you can tell on 50 P is the surfaces. They have been using 1948 re-strikes ever since but the new ones in the last few years have a slightly brassy coppery look, hard to describe but pretty obvious if you have one of each in hand. Actually the sovs are similar, they just have a different "look". There is nothing wrong with the newer ones, anyway.

Nothing personal, but with the amount of money you are discussing investing, just flat forget numismatic values UNLESS you want to buy something like a Saint or a $20 Lib just to have one. They have .9675 of an oz (from memory) of pure and are 90%.

Sometimes those mag ads have a "loss" leader that MIGHT get you a bit of gold or silver for a FRACTION less than you might pay elsewhere, you'd have to figure it. Of course the downside to buying from them is you're going to be getting "deal" calls forevermore.

To not answer your question , I don't know if gold is a good buy at these levels or not. If I hadn't of just WAY overspent my budget on rare coins I would be NIBBLING at these levels, as is, I'm scrambling figuring out how I'm going to pay my coin debt. I don't like owing money to anyone and very rarely do so. Gold could go down and almost certainly would if I took a major position. Long term, we're all dead, but the dollar has to crater SOMETIME because people aren't going to believe in our fiat currency unless we get spending under control. In spite of the sequestration which is a start, although not a smart one, we're not going to do it until disaster strikes because pols won't lose their jobs voluntarily. In addition, the ONLY reasonable way the US is going to get out of the debt trap we've created is to inflate. It is a helluva lot easier to pay off 16 trillion dollars with NEW dollars that are only worth 5% of the old. Europe is going to crater, and in the short term there will likely be a flight to the dollar, which will, along with Bernanke, keep interest rates low, but it is like a sealed container full of water that is being heated, eventually something has to give.

I don't know your financial position, and I am not a financial adviser, but for a long term outlook, with your emergency cash needs covered, I'd strongly consider a selection of 3 or 5 stocks which have raised their dividends every year for the last 25 years or more with product pricing power and dollar average them. Only buy gold with "play" money, not retirement money. That's all folks, until I think of something else on the topic.

Good discussion here.

My main concern here is our national debt. What is it. 16.7 Trillion dollars. and the sequester is suppose to take care of what, $500 Billion or so.

The truth of the matter is that there is no conceivable way that this country has the political will to do what would be necessary to pay off that debt. Its just not relalistic.
And therefore, IMO, the only way its going to get paid off is to keep printing money, which of course makes dollars less valuable against hard assets, of which precious metals are just one, as has been pointed out. It may not happen tommorow, and it may not happen next year, or the year after that. But sometime down the road all of those countries that have bought our bonds are going to say screw it and they aren't going to buy anymore.

What they are going to do is start buying Chinese bonds, IMO. China is going to beat the shit out of us.

quote:

I am not sure if you're trying to buy gold to make money, or as a inflation hedge, or as some type of survivalist financial instrument.

I was thinking mainly as a place to park money and secondly for future appreciation. It would be money not required elsewhere. And thirdly (are you sitting down) just because...I think gold's cool looking.

I really, really like your advice about land. I just bought some. And my advice on that is, what, where and how much depends on your goals and means. For my purposes, it's first, because it was there and I always wanted it (bragging rights, yeah, I know how that sounds), second, to hunt on so that I'm not forever dependent on the whims of others, third, for the grandkids, fourth, for the hobby of having something to fool with in my retirement and sixth, for appreciation. And seventh, another place to park money. And eighth, use good sense about what and where, and you're not likely to lose on it. Afterall and like they say, land is the one thing they ain't making more of.

But you do have to have a pretty good idea of what the place will be in demand for 20 years from now. Highly desired land for big expensive estates or shopping malls. Or, behind this door, a rundown part of the Hood with boarded up buildings. I've watched it go either way. Something that became valuable, or that wound up being donated to charity for the write-off.

Anywho, when you get down to particulars, I like raw land. More bang for your buck. And far but not too far from town. More value for the dollar. And pick a county with few school age kids and the taxes shouldn't be too bad. Go for the greenbelt exceptions to get them down even less, and plant some pines and apply for crp or wrp.

So much for that and sorry about the O/T. Now I'm trying hard to remember that gold in the NRA ad. Seems like they mentioned 2 1/2 dollar pieces. Does that ring a bell? Sorry I know so little about gold coins.

Oh, how do you feel about old "real silver" quarters, assuming you already had a bunch from the old days. Buy more, or hold, or sell?

90% silver quarters are mentioned in my blurb above. Each is currently worth just over $5 for the silver content. Personally I think it doesn't hurt and might help if things got really bad to have at least a $1000 (current value, not face) and $2000 worth would be even better of 90% dimes and quarters. A $1000 face bag is certainly worth considering but they are bulky and heavy. I'd slightly prefer a mixture but all of one or the other is no big deal. So that translates loosely into about $50 face value. These are easily purchased on ebay for pretty close to melt with patience.

Since silver is down from a high of the mid-$40/oz range to currently $28.50, I'd think buying silver MIGHT not be a bad move. But, keep in mind that it is an industrial metal and if things really go to hell, so will the value of silver.

I am mildly positive on silver at this point. As briefly mentioned above, I think switching from silver to gold and the reverse over the years as the ratio changes is a great way to increase your total ounces of precious metals. However, transaction costs must be minimal to make it worth switching back and forth. At the current level of roughly 55:1 I'd lean towards owning silver rather than gold but it is kind of in that high middling area where I wouldn't necessarily switch at this ratio. I'd go for silver in the range of 60:1 and gold at 40:1. I hope this isn't complicated, it simply means that if you can get 1 ounce of gold for 40 ounces of silver (value) then gold is probably a better play, the opposite holds true if you can trade one ounce of gold for 60 ounces of silver. These ratios don't change significantly overnight, but they do change. They were at 58:1 a few months back.

I don't recall the NRA ad exactly, but, I'd research what you're getting vs value VERY carefully before doing it. In general, these "hot offers" are not to a buyer's advantage. US $2 1/2s simply contain 1/8 of the gold content of a US $20, or 1/8 x .9675 oz and, while they can be very rare, there are plenty of them around that aren't.

BTW, gold is definitely cool looking. AFA "parking" money goes, I would think twice about your time frame because you going to have roughly a 3 to 5% transaction cost. If gold has gone down that makes it hurt a bit more. Unlike what true gold bugs tell you, it can and does happen. It took over 20 years for gold to EQUAL it's highest price in the early 80s and was down as low as roughly 75% from those levels in the interim. It can happen again. I think it's unlikely but that is an opinion and I think it is quite possible for it to decline 25% from here. Quien sabe?

With careful shopping, you can put together a fun collection of different world gold coins, either real or bullion (there are literally thousands and thousands of them), for very little over melt. Ebay has hundreds of examples for sale all the time. Just remember, it's only gold, not a numismatic venture and you'll do fine. Buy them accordingly.

Since I've already got a substantial position, I'll disclose my current not-so-secret collecting directions. I collect both Milled Spanish Colonial 8 Escudos and Mexican Republic 8 Reales. My reasons are that I think they are both an EXTREMELY undervalued set of coins compared to US coin values and there are so many of both that the challenge is always there. Frequently 8 escudos sell for less than $25,000 of such rarity that, if they were a US coin, they would easily be worth $500,000. I don't expect the foreign to come up to the US levels because of the number of collectors but I do expect them to close the gap over time. One can buy MANY quite rare coins in very nice grades for $2500 or less and they have roughly $1200 worth of gold in each 8 Esc.

I have only been collecting the 8R for a little over a year, but thanks to having a good contact/dealer/friend and some lucky timing, I have already assembled a world class collection that would be very difficult to beat. However, I still have many coins to go since there are over a 1000 of them in the series and some are basically unobtainable so it keeps your interest up. It is an extremely challenging series and takes large chunks of money if you're serious but a fine representative collection can be put together for very reasonable money. But, as I've said before, the best and rarest coins in the finest known grades are where the greatest appreciation is.

Spanish Colonial gold is, in a way, even more interesting because you have so many countries and mints involved and it takes patience, knowledge, and nerve to step out when the time comes. Basically milled Spanish Colonial coins came into existence in the 1830s in the Mexico City Mint, the longest operating mint in the Western Hemisphere, since 1536. Before coins were milled they were made individually using a hammer and stamps, producing what we call cobs, both gold and silver. Not counting Spain, there are something over 1000 different milled coins available to collect from among others, Argentina, Bolivia, Chile, Colombia, Cent. Am. Rep, Ecuador, Guatemala, Mexico, and Peru. I don't really collect cobs because one has to know his limitations.

I used this same thought process 25 or so years ago while starting to put together two of the finer sets of US branch mint gold coins ever assembled at that time. First, Carson City, and then New Orleans. When I first started doing it, the branch mints were underrated and undervalued in the market. I sold them over the years to help pay for some of my ranches and did quite well.

The money had gotten so large in US coins that I could no longer afford to compete for the very best so I looked for greener and cheaper pastures. And that's about all I know about coins.

Thanks Gato

Definitely going to buy some silver coins along the way. That I can handle.

We didn't owe 17 trillion dollars in the 80s.

Three more questions if you don't mind -

On those "old coins" how in the world do you avoid forgeries? Seems like they'd be rather easy to do.

Also, what do you think of galleon shipwreck silver, coins or bars? Assuming you know it's authentic. Would the collector value on it not be your great, almost world class "hedge" against flucuations in the underlying metal value? In other words, you're pretty safe on it holding up and maybe even slowly appreciating for a long time to come.

And, how about collecting old paper money, especially foreign and especially from unusual places. For instance, Cayman Islands. Or, New Caledonia. Or, Liechtenstein. And so on.

The downside would be you couldn't spend it here. You'd have to go there. But that's OK. And the trade-off is, that would be a big deterrent to theft. A thief couldn't spend it. Another plus is no IRS reporting requirements, that I know of anyway, unlike actual foreign bank accounts.

Anyway, I've also developed an interest in very old paper stock certificates. Railroad stocks were the first to attract my attention. But I haven't yet researched in a serious way their ascending or decreasing value line, if any. But, they haven't yet gotten real pricey to acquire. You can find them reasonably priced at flea markets and toy train shows and railroad museums. So there is possible future up side, and maybe not likely to drop in value from where at now.

And it's something for the history buff and no end of challenge in trying to "collect them all" and in fact many of the early engraved certificates rival gold in how cool looking...

quote:

Originally posted by Shack:
Three more questions if you don't mind -

On those "old coins" how in the world do you avoid forgeries? Seems like they'd be rather easy to do.
Not nearly as easy as you'd think. There are rarely counterfeits of coins that sell basically for melt. There are and were quite a few US coin, esp. $20s, that used to come out of Asia years ago when the coins had a significant premium over gold content. If you're really concerned buy slabbed coins by NGC or PCGS, but they will usually cost more.


Also, what do you think of galleon shipwreck silver, coins or bars? Assuming you know it's authentic. Would the collector value on it not be your great, almost world class "hedge" against flucuations in the underlying metal value? In other words, you're pretty safe on it holding up and maybe even slowly appreciating for a long time to come.
I think they are usually grossly overpriced and not worth nearly what they often cost. I'd avoid them. Sometimes they can be had at auction near what they're worth. If you choose to buy them, be SURE they are either encapsulated by one of the 2 major companies or have an original COA by, say, Mel Fisher. In general, I consider them to be a very poor investment choice. There are exceptions, like some of the Rip Plata Luz wreck that contained some really rare gold 8 escudos, etc. Most of the 8 reales they are selling today would be considered junk unless they had the "wreck" attached to them. Do your homework first. All that said, there is a small subset of collectors who specialize in shipwreck coins, I think the buying support is wide and shallow myself, but there is certainly nothing wrong with collecting them if you make informed purchases at reasonable prices. Sedgwick's (sp?) in Florda has auctions with quite a bit of this type of material fairly often. Consider buying there and study past price results.


And, how about collecting old paper money, especially foreign and especially from unusual places. For instance, Cayman Islands. Or, New Caledonia. Or, Liechtenstein. And so on.

Not my area of expertise, but an item that is VERY difficult to sell for anything like what they usually cost. Many of the examples are no longer accepted currency. Can be fun, but not an area I know much about, nor one that I would recommend for appreciation. Like anything, with enough knowledge, there is probably money to be made in the area somewhere, but I don't know enough about it to make an informed rec. Usually high overhead to buy examples. Avoid except for fun IMO.

The downside would be you couldn't spend it here. You'd have to go there. But that's OK. And the trade-off is, that would be a big deterrent to theft. A thief couldn't spend it. Another plus is no IRS reporting requirements, that I know of anyway, unlike actual foreign bank accounts.

Anyway, I've also developed an interest in very old paper stock certificates. Railroad stocks were the first to attract my attention. But I haven't yet researched in a serious way their ascending or decreasing value line, if any. But, they haven't yet gotten real pricey to acquire. You can find them reasonably priced at flea markets and toy train shows and railroad museums. So there is possible future up side, and maybe not likely to drop in value from where at now.

And it's something for the history buff and no end of challenge in trying to "collect them all" and in fact many of the early engraved certificates rival gold in how cool looking...

More formally known as scripophily, a neat area of collecting about which I know very little. I think entry and exit costs might be high unless you have a world class collection that you might be able to sell at auction. An interesting area of collecting but really nothing I can comment on with any real knowledge. You would really need to do your homework and find a trustworthy dealer if you get serious in this area.

Let me give you an example related to both of the last two questions above. Stamp dealers often buy stamps for 10 cents on the listed dollar value, then they sell/advertise them for 1/2 off the listed value. Needless to say, the chances of the ordinary collector making money with these kind of margins is nearly zero. To be fair, the stamp dealer may have to hold some of these stamps for a LOOONG time to sell them, if ever, so it isn't the gold mine to them it would appear. Same kind of things apply to the last two areas above. You have to REALLY study what the area you're interested in and KNOW the buy/sell of what you are purchasing. That way you know what kind of appreciation you require just to break even. Proceed with caution. Auctions are one area where you can purchase things closer to true value, such as ebay if you use your knowledge and study prior results.

Just a note to anyone else listening in here who's an NRA member. Do you have the issue of Amer. Rifleman and can tell us what the details were on the 2.50 gold dollar offer. Just curious.

I can't recall if it was "old rare coins" or modern reproduction or what the exact type was.

But, what I'm learning here is, the only things that really matter are it's value in terms of the content, and where the market is going for gold.

Having taken now a long, cool look at the market I probably wouldn't buy any gold right now. But, I COULD be wrong...

I'm more into trading stocks and stock options and I'm having ENOUGH trouble trying to out guess that one, especially when we may well be on another bubble.

Looks like we are going to get a really good opportunity to start buying gold here pretty quick.