Written by

Guy Christopher

Best Strategy, Part II

DEAR GOLDBUGS,

What in the world would you ever want physical precious metals for?

That’s a personal question you ask yourself to help decide which type or form of metal to trade those paper dollars for.  In a previous post, linked here, I’ve written about understanding your own nature and being honest with yourself as the number one way to stay out of deadly situations.  But what’s the best strategy for building your wealth protection?   I’m not going to tell you what to buy–that’s your decision, but I can offer some pretty good ideas.

If you believe you are going to keep your gold or silver for years, as savings, as a store of wealth, perhaps even to pass on to your kids, then buy those forms of metal you personally find attractive and which you can get at the best dollar price today.  The larger the bar or coin, the less it will cost in premiums per ounce or gram, making it better as a pure store of wealth.  One of the joys of owning precious metals is to be able to admire those shiny coins or bars in your hands, and to know without question your wealth is not in someone else’s control — that you don’t have to depend on someone else’s promise in order for you to enjoy what’s yours.  I don’t see that as love of money.  I see that as taking personal responsibility over your own financial situation.

If you believe you will be using your precious metal in the future as wealth to spend, or to trade, or to give as gifts, then you’ll want smaller, not larger coins or bars.  That would mean a lot of your accumulated savings should be in nothing larger than a troy ounce, and not 100-ounce bars of silver or kilo bars of gold.

If you have limited storage space, such as a bank deposit box, then you might want larger bars, which are more compact and easier to stack than bulky bags.  If you have your own private storage, secure from prying eyes, then you might feel better having the smaller coins and bars.

If you like to trade your gold and silver coins and bars now and then for others you might find more appealing,  you’ll need smaller units.  If you plan to cash in some of your metal along the way to supplement your income, you’ll need smaller units or else you’ll have to sell huge chunks of your holdings at times when you don’t really want to.

If you find along the way that you enjoy aesthetic pleasure in owning many different types and sizes of precious metals just because of their history and beauty,  then Congratulations!  You’re becoming a collector.

If you find you are entranced with the history and beauty offered by coins, you may begin thinking of buying rare coins.  Before you take that step, you are strongly encouraged to spend months or years studying rare coins.  Rare coins are expensive because they are rare.  They depend on an entirely different market than the bullion coins you’d buy for wealth preservation.  Experts on rare coins are ‘numismatists,’ and even the most knowledgeable will tell you they still have a lot to learn.   Rare coins can be terrific investments, but only if you know what you’re doing.

If you believe there’s a very good chance you’ll be using your precious metals to survive, that you will have to spend your metal just to feed your family, then you’ll want the smallest of gold coins and ninety-percent silver, discussed in Best Strategy, Part III.

The smallest gold pieces readily available are coins like the Mexican Dos Pesos,  or gold bars in sizes of just one or five grams.  The smallest silver readily available is pre-1965 90% silver US coinage.  Ninety-percent, the common name for old US silver coins,  is very close to being the least expensive silver on the market.  It is the most easily divisible, is very recognizable, highly marketable and has not had counterfeiting problems.

An earlier article, linked here, details the horrors facing the Syrian people at this moment.  The Syrian experience proves that such needs for precious metal money are in play right now, today, as they have been hundreds or thousands of times in history.   Political ideology plays no role whatsoever when it’s time to feed the family.  Gold is gold and silver is silver and each will buy food and medicine anywhere on Earth, even as bullets are whizzing overhead, as any Syrian will tell you.  Such sad events are unfolding as you read this and will come again.  To believe otherwise is to doubt and ignore history.

Gold is the currency of Kings, Silver the currency of Gentlemen, and Debt the currency of Slaves. — Author Unknown, but he’s on the mark.

Another question you may have is whether to buy gold or to buy silver.

Let’s get something straight here.  Gold is gold because it’s better than silver.  It’s more rare in nature.   Gold is at the top of the precious metals food chain.  The credit card marketers peddle a gold card, not a silver card.  Things are compared to a gold standard, not a silver standard.  The old saying is “good as gold,” not “good as silver.”  James Bond battled Goldfinger, not Silverfinger.   The Three Wise Men did not follow the star to bring the Baby Jesus gifts of Silver, Frankincense and Myrrh.  You get the idea.

The modern day proof that gold is the currency of kings is that it is the one form of currency on this planet that the criminals now running governments across the globe can trust.  They don’t trust each other, they don’t trust their own citizens, and they don’t trust each others paper money.  But they do trust gold.  The truth is that in international dealings, gold is the only thing that is trusted.   Not speeches, not promises, not secret deals.  Only gold.

We haven’t heard much about this during our lifetimes because we weren’t supposed to.  They didn’t want us to think about it.  Gold has been their secret.  And they’ve been very successful keeping us in the dark.  Otherwise we might have stopped electing politicians we knew were lying to us.  Otherwise we might have taken more personal responsibility for our lives, leaving less power for governments to grab.   Otherwise, we might have stood firm and viciously fought back when our religion, our beliefs and our Constitution were trampled under the jack boot of political correctness.  Otherwise we might have demanded our government stop stealing from us with planned inflation.  Otherwise, we might have demanded honest money of gold and silver as the Founding Fathers demanded.  Otherwise, we might have used the hangman’s noose a little more often when our public officials were proven to be crooks.  Otherwise we might have heard the Founders’ warnings to remain vigilant.

Now those criminals are losing their control, because they’ve had to print too many paper dollars in order to buy the votes and pay the bribes to stay in power.  The chemo is killing the patient.  When they do lose control, and when confusion takes over as society begins to fall apart, they are counting on our fears to save them,  that we’ll be asking them, begging them, to once again take control of our lives.  They are convinced that we never learned how to take care of ourselves.  They think we’re easy.

These government criminals know their trillions and trillions of paper funny-money are about to join the trash heap of history.  That heap is piled high with the worthless, debased currencies and the lives of those whose wealth was destroyed since recorded time began, and this time will be no different.  If they are to survive, the criminals now wrecking this world’s economic system understand the one chance they have to stay in power is to possess and control gold.  When one king needs to beat up another king, he will need the power of gold.  The currency of kings.

And if it’s good enough for them, then it’s good enough for me.

Gold’s price today is 58 times the price of silver, meaning silver is far less expensive.  But it’s still a precious metal and it’s not all that cheap.  Silver has been used as money in more places over more centuries than has gold.  The word for ‘silver’ is the same as the word for ‘money’ in a dozen or more languages.   So, as silver plays second banana to gold, it’s still precious, it’s still valuable, and it’s still a better way to protect and store wealth than having cash in a bank account.

This means that of the two, gold and silver, folks always turn to the cheaper silver sooner, faster and more often than they will turn to the more expensive gold.   That, in turn, will drive silver values higher right alongside gold prices.

We are seeing silver take center stage this moment in India.  For Indians, gold has been deeply imbedded in the religious and social culture for centuries.  Gold is part of the Indian DNA.  Because of high gold prices, Indians are now turning to silver as an alternate store of wealth.  Read more on that from this fresh report of the World Gold Council, with a summary linked here.   That new report also points out that the world’s central banks – the big players – are still gobbling up gold a rate double that of last year.  The currency of Kings.

Sticker shock on an ounce of gold has always been and will always be the best salesman silver ever had.  Most Americans still do not understand the financial dangers facing them.  When even a small percentage of those folks suddenly come to realize they need the wealth protection of precious metals, they will then join the vast, frightened masses clamoring to protect their wealth.  But they will still prefer to spend tens of dollars for an ounce of  silver long before they shell out hundreds for an ounce of gold.    History has taught us that those who have ignored the need to protect their wealth in gold and silver today will clamor in droves, with no second thoughts, to buy precious metals tomorrow at much higher prices.

We have seen many times in history, at the height of economic fear or disaster, buyers who had never considered gold and silver find themselves standing in lines, around the corner, in the rain, to buy gold and silver.  And that is happening at this moment around the world (Syria is just the latest) and it is going to happen over and over again and again throughout the rest of history, as long as governments and economies and paper currencies are hardwired to fail.

The author of this article, for one, does not stand in line.  I do not follow crowds.  I prefer to get where everyone else is going before they know they need to be there.  I, for one, understand that paper money is not wealth at all but is government-mandated debt.  The currency of slaves.  I, for one, understand that the only true measure and the only true protection of financial wealth from the ravages of corrupt government is found in gold and silver.

The Best Strategy

Your best strategy, whether you form that strategy today or five years from now, will be to get in that line as soon as you can, so you can then get out of it as soon as you can.  Or you will find yourself standing in the crowd at the end of the line.

The best strategy includes spreading your purchases all around over all sizes of bars and coins, and to spread those purchases over time.  Buy precious metals with more than one goal in mind and you will have covered many future eventualities.  You will have protected your wealth, while having coins or bars to convert back into dollars if need be.  You’ll have the right precious metal to sell, trade or barter in the event the US dollar disappears in a cloud of hyper-inflationary smoke, as the Syrian people are learning the hard way about their paper money at this moment.   As many societies throughout history have learned.

The best strategy would include putting some of your paper dollars into metals on a regular basis, either weekly, or monthly, or on some schedule you choose.  That strategy is known in the investing world as ‘dollar cost averaging.’   With averaging, you won’t always buy at the highest price, and you won’t always buy at the lowest price.  The average price you pay will even out over time.  You would be wise to buy when prices have dropped for awhile, but that’s a lot to ask, since most folks wait until prices seem to be rising to jump in.  That’s true for all sorts of ‘investments.’

Either way, your best strategy is to build a savings account in precious metals without breaking the bank with one huge budget-busting conversion of your dollars.

If you missed it, Best Strategy, Part I is found at this link.  For those with already sharpened financial survival instincts, see the companion article covering the one form of precious metal you should consider in Best Strategy, Part III, online at Dan’s Depot now and linked here.