"5. Do you think real wealth will be bypassed and relegated to worthless status because it will have no place in new system? What is the future of something if we never place a real value on it or it not allowed to be part of a new system?"

This is actually a much deeper question than it appears on the surface and can be applied to far more than just PMs.

Regarding PMs, I suspect they will continue to lose favor as a speculative hedge against inflation. The past decade's lackluster performance barely keeping pace with the dollar and rapidly losing real world purchasing power has traditional older investors losing interest and statistically nobody under 40yo cares about PMs and are instead into stocks and crypto which offer orders of magnitude better returns. With changing demographics interest in PMs real world purchasing power will trend downward towards a utility driven valuation which is a small fraction of even current prices.

On hand, physically held PMs have value in a .0001% TEOTWAWKI scenario, but outside of that almost everything is a better investment long term.

 

5. PMs will continue to lose favor as a speculative hedge against inflation. The past decade's lackluster performance barely keeping pace with the dollar and rapidly losing real world purchasing power has traditional older investors losing interest and statistically nobody under 40yo cares about PMs and are into stocks and crypto which offer orders of magnitude better returns. With changing demographics interest in PMs will trend downward towards a utility driven valuation which is a small fraction of even current prices.

On hand, physically held PMs have value in a .0001% TEOTWAWKI scenario, but outside of that almost everything is a better investment long term.

As the stock market becomes more and more tilted to favor those in power, more and more people lose money. It has essentially just become a way to siphon pump money from low means to rich now. Why on earth do you think people will continue to play a rigged game that the stakes will never be better? I do see what and why you say but I can't understand this way of thinking.

 

I imagine you will get all kinds of answers. I have chosen to make a portfolio allocation of 5 to 10% to PM, all gold at the moment. As a portfolio vehicle, it is useful in that it tends to be lightly correlated to other asset classes so it smooths the overall portfolio moves. As far as physical goes, I arbitrarily decided I wanted enough gold to make bail (4oz. at the moment) and "some" silver as a medium of potential exchange and general hedge. So I have about 80 oz. on hand at the moment. Enough to buy gas or groceries in a pinch. If prices drop I would opportunistically add to it. At the moment this is all tiddly winks to me and just part of preps against some bad outcomes.

 

Ok, so the question are......
1. Buy 1 ounce gold or 74.5 ounces of silver?
2. What ratio of gold silver do you recommend? State your ratio value or weight. For instance 1:1 ratio 1 gold to 1 silver in quantity or 1 Oz. to 75 Oz. of silver in value.
3. Stop with the percentages of wealth in PM's. How much do you recommend for an average family of 4 in ounces of gold or silver or combination of ounces.
4. Should hard asset people even consider the digital gold route as another wealth builder?
5. Do you think real wealth will be bypassed and relegated to worthless status because it will have no place in new system? What is the future of something if we never place a real value on it or it not allowed to be part of a new system?

You ask a lot of great questions. I do not try to stick with fixed boundaries but zones.
1. I buy silver but keep any gold that comes into my possession. I also keep precious stones but only buy for romantic gifts.
2. So based on the above I do not recommend a ratio. I have for more than 60 years collected US 90% sliver coins. So this is primarily a hobby. I not only collect every year but also all mint-marks for each year. I am rapidly achieving my goal of complete sets of US silver coins. I also keep US Silver Proof sets starting the first year state quarters were minted.
3. For a family of 4: I must admit from the birth of our first until college was almost paid for my accumulation was dead. I recommend you not worry about actively collecting gold or silver while raising your children. You can just casually keep what comes your way in gold and silver. Mine were inherited hand-me-downs.
4. I do not buy any PMs digitally. IMO PM are for collecting and keeping in a safe. So IMO PMs are more of a wealth protector than wealth builder.
5. Hard assets will always be part of wealth. Some of those assets' value in in the creation of profits. Other assets are in the form of wealth protection.

Sorry for not being as specific as you requested but PMs are not very liquid in today's economy. There is often a spot-plus for buying and a spot-minus when selling.

 

Anything is a brilliant investment if you time it right. That being said, metals are still a commodity. Despite the fact they are tangible, and clink in your hand, they are subject to pretty volatile price changes.

Gold and silver have value in any century on any continent, thus their appeal. Just know a $100 investment could be worth $60 or $160 in a hurry.

 

Anything is a brilliant investment if you time it right. That being said, metals are still a commodity. Despite the fact they are tangible, and clink in your hand, they are subject to pretty volatile price changes.

Gold and silver have value in any century on any continent, thus their appeal. Just know a $100 investment could be worth $60 or $160 in a hurry.

You summed it up very simply, agreed and well done.

 

OP buy the silver. It's cheaper and very easy to sell, or barter with at gun shows, flea markets, etc. I have plenty of friends who will buy it from me for cash if I need it. Buy it cheap, stack it deep. Same with ammo. My major investment in PMs began in 2001 and allowed my to retire at age 53. I'm 72 now.

Thomas

 

You bought at $2.50 an ounce! I remember those days, I wish I had bought more.

 

I personally I believe silver is under valued right now. A lot of electronics and electric cars need a bunch of it to be made. Silver also dropped more in value in the last few years than gold did. So silver has a greater odds of larger increase of value per dollar invested.

I am actually getting ready to buy a fair amount of silver in the near future. I have been considering get a few ounces of gold per person in my family but thats about it.

 

I personally I believe silver is under valued right now. A lot of electronics and electric cars need a bunch of it to be made. Silver also dropped more in value in the last few years than gold did. ...I am actually getting ready to buy a fair amount of silver in the near future

I think it would be wise to do that. There seems to be a lot of confusion around the PM's and it's nothing new either. When I was buying back in 2005 the price of silver was much lower than today and many on the survivalist boards then claimed it was nonsense to buy gold and silver because you can't eat it. Well I never intended to eat it, just sell it later to fund my retirement lol. It's a great tax-free inflation hedge.

That is the main point of confusion with many people, they think in terms of 'Gains' like in shares, but the PM's were never about that, they are an inflation hedge. They offer no returns other than their multi-decade pace-keeping with inflation. 1000 years ago people wore buying food and land and oxcarts for gold, 100 years ago the same, and in 100 years hence I feel confident they will be too. But where will shares in JPM be then? Where will dogecoin be then? Where will they be in 10 years when I want to sell some gold for a new electric car?

 

If you buy gold be sure to keep the receipt. When you sell it you'll owe tax on on the gain. If you have no receipt, you basis for calculating the gain may be zero or near that, which would really suck.

 

You can sell a certain amount gold or silver before you need to report anything to the IRS. I believe it is or was 10 ounces of gold and 1000 ounces of silver. American gold eagles are exempt from reporting or so I was told by a coin dealer.

Thomas

 

Therein is the reason to buy locally if that option is available. Cash with no paper trail is how many do it.

 

If you don't have a paper trail showing the price you bought it you could be facing a massive tax bill when you sell it. Maybe you can evade the tax now but who's to say about next year, or ten years from now?

 

why does it have always come down to an "either-or?" being a survivalist / prepper is easy if you know what you're prepping for , as that I don't, nor anyone I know have a crystal ball, it would seem wise to limit your scenarios only to your means. for example, you find yourself with a $1,000 to allow towards your preparedness, why be so close-minded as to assume that it must be spent on one or the other? Personally I pick up PMs the same way I pick up other veritably priced items, if I have a lack of say, garden shovels I look for a used well-made example at a yard sale, perhaps there's a coin collection, or some silverware available at that same venue.
my point is survivalism at least to me, seems to mostly involve developing a mind of preparedness and looking for opportunities to reinforce your ability to thrive. until somebody I know gets a crystal ball I will take advantage of every opportunity to hedge my family survival "Come What May". In short if I see a silver bullion coin for at or below spot at a flea market I buy it, if crypto takes a dive I buy it, keep in mind it's not about profitability it's much more about probability,so when staring at the uncertain, hedge accordingly.

 

There is an industrial demand for PM other than investment. Crypto's demand is entirely speculation. Once that speculation weakens there is nothing real to back it up. Now you could go into the psychology of speculation and why it's so volatile with huge swings and massive growth but that's a different topic. People are making money off of crypto by speculation, not real-world demand.

People invest in metals instead of other precious resources is because it's much easier to store and maintain ingots in a safe than, say barrels of uranium hexafluoride or acres of crushed stone.

The industrial demand protects these investments. The only thing keeping your crypto portfolio worth anything are the other people who are afraid of their crypto portfolio being not worth anything. And that is a scary place to invest money. It's more gambling than it is investment.

 

This is factually not true and displays a fundamental lack of understanding. The major utility driven use cases for crypto are censorship resistant store of value, frictionless payments & the removal of middle men/rent seekers, and efficiency gains with which smart contract platforms allow developers to build on top of an interconnected network. There's infinitely more to crypto than simply a peer to peer "currency" based transaction.

Claiming that "crypto will go to zero" is a whole lot like claiming "nobody will use TCP/IP" and other protocols in the early 90s. Crypto's success or failure hinges on it's protocols being useful enough for adoption, which historically has been the case to this point. Yes, 95% of projects may fail or trend to zero due to not providing the utility needed for adoption (or being outright scams), but the remaining 5% will go on to become a part of our daily lives just like the internet has.

Scaling has largely limited widespread adoption, but scaling efforts at the L1 and L2 levels are ramping up and interoperability standards are taking shape. I'm not trying to convince you or anyone else to buy crypto, I've never done that, but please don't speak of things you know nothing about and make claims that simple aren't based in reality.

Yes PMs have manufacturing demand, but don't kid yourself into thinking that the bulk of current valuation isn't speculative in nature.

 

Classic lefty behavior resorting to personal attack attempts in an effort to support your fragile e-peen.

I'm well aware of smart contracts and even hold a little eth myself. I still consider it gambling because the vast majority of people that put money into crypto aren't "using a service" they are gambling for a return. Smart contracts only have niche uses because most of the time it's more efficient to do things normally, both financially and temporally. 99% of the "value" of crypto is still speculation. Falling back on transactions-as-utility as the only security of crypto value is a pretty weak pillar to stand on and you're only illustrating my point further.

 

Classic lefty behavior resorting to personal attack attempts in an effort to support your fragile e-peen.

I'm well aware of smart contracts and even hold a little eth myself. I still consider it gambling because the vast majority of people that put money into crypto aren't "using a service" they are gambling for a return. Smart contracts only have niche uses because most of the time it's more efficient to do things normally, both financially and temporally. 99% of the "value" of crypto is still speculation. Falling back on transactions-as-utility as the only security of crypto value is a pretty weak pillar to stand on.

I must be doing something right if the right calls me a lefty and the left calls me a righty. I've never claimed that currently speculation doesn't dominate valuations, I've been consistent that over time utility will make up a much larger portion of the price, like we see with gold. Americans don't see the value (yet) in censorship resistant SOVs, but in time they will. It may take the government banning private ownership of PMs (yes it's coming), but sooner or later that utility will exist and a global safe haven will have massive value.

 

Most of your questions are relative to the individual. As to gold/silver ration, I feel gold should not even be considered util a decent supply of silver is attained. Silver has more room to grow, and as it is far more divisable, it is easily usable as currency.

 

Cripes! Are you sheep? How does anyone know what you have if it's not visible on a computer screen?

Thomas

 

Live and learn, Thomas:

For starters, Net Worth Audits, Income Audits, SAR's, etc etc etc

4.10.4 Examination of Income | Internal Revenue Service

www.irs.gov

 

Stock brokers have to report all stock sales to the IRS. IDK why gold brokers don't, but that situation can change with the stroke of a pen. In which case, with no receipt you can't prove your cost basis, be prepared to lose 28% of your sale price, after commission.

 

Collectible gains are taxed at your marginal rate... 28% would only apply if you are in a federal 22% bracket and state 6% bracket- or some similar combination. Most would pay less. But for anyone who does, or might, pay tax, save the damn receipt.

I do not get the gaping hole left by the IRS... I understand they don’t want to see 1099s on a 15 yo kid selling a Mercury Dime, but you can easially liquidate a $200,000 investment by mailing 5 packages in the mail. Not even that if you bought US gold. Just not typical government behavior.

 

My financial advice is probably worth nothing. I am 60 years old and just started saving for retirement this year. I started a 401 k at work. Other than that, I buy silver.
I had bought silver when it was at 15$ an ounce. My conspiracy theory friend wanted to stock up, so I sold all of it to him at an 12$ an ounce profit. Regretting selling it. But your questions touch on how I'm buying this time.
So, to maybe answer a few of those. It would depend on why. I don't see it as "investment". I just see it as something in case I get fired or other such event where I need money. Also possible barter, even before shtf. And "off the books". Seen too many older friends lose everything due to sickness or resthomes.The first time I was buying metals, I had absolutely no plans or goals. It was very haphazard and a storage mess really. This time I have a plan.
I mainly am aiming at 6 months income. I bought four 1 kilo bars. Now I will mostly concentrate on 1 oz coins. I bought 1 tube of silver eagles that are yet to be delivered. Trying to gradually fill a monster box with recognizables, such as eagles, maple leafs, krugerands and sunshine mint. I am also buying 10% junk silver. Aiming for around 150$ face value. After all that, a few ounces gold. I will reevaluate goals when I reach that one.

To me its hidden wealth, so I would not go into gold accounts or digital. To have and to hold. I don't know if a house I still owe on is considered "portfolio", but it doubled in assessed value in 5 years.
To answer number 3 and 5. I'm trying to do 6 months income with the ratio being pretty silver heavy. I don't think "real wealth" will ever be obsolete. In today's world its an insurance policy. In shtf, its wealth and barter. But barter items besides silver will be valuable also

 

For all the silver I've bought over the past few decades I wish I had bought gold instead.

 

Well, I did not read all the posts in the thread.

I have some very strong opinions on Precious Metals, but they are tied in with my also strong opinions on several other aspects of a prepper's financial setup. While I have been able to accomplish some of the things that are in the attachments, I have not been able to accomplish all that many. I accomplished some and then had to dispose of them to pay for medical services, devices, and supplies. Which is one of the reasons I had some of them.

I probably point it out in the set of articles, but my main thrust about PMs is that they are in no way an investment for me. They can certainly be used for that, just like any other commodity. To me they are a hedge and a store of wealth. It does not matter what I paid for any given PM item. It does not matter what any given PM item is worth in FRNs at the moment. What matters to me is what they might (or might not, certainly) get me when no one is accepting FRNs, or any of the trade goods I happen to have, and there are no services I can provide that the person that has what I want/need might want.

A second caveat is that even with the last paragraph, I think it is important to compare all the financial elements with the same set of criteria. No stating that "If you bought gold on such and such a date at $2,000 per ounce and it is only $1,700 now, you have lost all that money."

Go back to the same dates. Or periods. And compare what an ounce of gold would buy at the time to what an ounce of gold will buy now. Might be surprised at how close the lists are.

However, every other financial instrument goes through the same ups and downs. You cannot say that "I bought XYZ stock for $12 a share. Look at it now. It is $45 a share. Not when it was $80 a share a few months before it was $12 a share, and then $120 a share a bit later, but no 'only' $45 a share. Things go up and down. The long haul is what is important when it comes to valuing things.

Even more importantly is: "What will that asset get me during and after the disaster? Can I convert it to the things I need? Who might be willing to give me what I need for it?" Those are the questions I think Preppers should ask themselves about any financial instrument.

I definitely do get into diversification in the articles. It bears being stressed, I think. I figure no more than 30% to 35% of my prepping assets should be in PMs.

One last thing before I add the attachments. This is about prepping financial situations. Making a living, no matter what method is used, from speculating with stocks, PMs, pork bellies, crypto, land, and everything else is that. Making a living for day-to-day life. Also planning for retirement. Having an emergency fund for auto or house repairs. A growing fund to replace a vehicle or send a child to college. All the other things that non-preppers do, almost all preppers also do. I simply keep separate the assets that I want to have during and after some major catastrophic event from my daily living expenses like rent, utilities, etc.

On to the attachments.

Which, like the above, are:

Just my opinion.

 

I've been a member on this GIM2 site since 2007 which was founded in 2003. Lots of great minds have contributed to the forum over the years. Proud to be a partner with them and exchange experiences and successes in investing.

GoldisMoney, The Premier Gold and Silver Discussion Forum (goldismoney2.com)


Thomas