Gold and Silver

[Alma the Younger]

How many of you put aside gold and/or silver?

I started doing this last year as a crub against the lower dollar and inflation. I also worry about the introduction of the Amero and the North American Union. I worry that if this happens we will be faced with sky rocketing inflation because we would be saddled with stabilizing the Mexican economy. If that happens, I can see the US Dollar being worth basically nothing.

So far my gold and silver has done well for me, as it has off set my losses in my 401(k) and IRA. Since gold is so expensive I haven't purchased any fractional coins (e.g., halves, quarters or tenths) as the premiums are too high. I've only purchased whole ounces. I stick with American Eagles in both gold and silver.

Eventually, I'd like to get a $1K face value bag of junk silver for a TEOTWAWKI situation.

What say you?

419!

[thor610]

Where do you buy your gold and silver?

[BackBlast]

As a matter of disclosure, I have sold my gold and most of my silver, but have a bit of silver left.

Here is my reasoning on the matter. Inflation has already occured in the massive housing bubble, but like a previous large speculative bubble (1920s come to mind) it has to deflate, which means all that bad money is leaving the economy. Fewer dollars chasing goods means deflation.

In the midst of this deflation we have the Fed grabbing up the bad loans (real estate, credit cards, auto loans) and putting it on their balance sheet with the treasury (you and me) on the hook to pay the bill... The Fed has swapped the trash for cold hard cash via the TAF window and other such mechanisms where the players and collateral are mostly unpublished. And it appears that the players who receive this newly created line of credit have thrown it in to commodities in an attempt to save their hides, prompting the current insane price gains seen by oil, food, and other commodities like gold and silver.

The other major market that affects gold is the dollar index vs other currencies. The Fed and treasury being mixed up in these shinanigans have been one of the principle detractors to the value of the dollar as opposed to other currencies.

Now, several things can happen that go against gold...

The money thrown at commodities could leave.

The fact that other countries are in real trouble financially could come to the fore, and they're monetary systems could tank too - before us. Which means the dollar index goes up and gold as the inverse dollar, goes down.

Deflation creates pressure against all commodities, this is seen especially in the real estate market right now which, last I heard, is depreciating at 28% annualized at present.

All this while the world goes down the tubes.

Anyway, IMHO, gold is more of a gamble than food, fuel, and other commodities you can actually use in your home. That's why I'm out of gold for the moment.

If I do buy more precious metals in the future, I will probably buy physical silver. Gold isn't a bad bet, but there is enough doubt there that I don't mind food and cash over gold at the moment.

Brandon

[Alma the Younger]

"Anyway, IMHO, gold is more of a gamble than food, fuel, and other commodities you can actually use in your home. That's why I'm out of gold for the moment."

I agree that one shouldn't purchase gold or silver until they've got their food storage in order, debt paid off and other supplies like guns and ammo in proper order.

Too often people get excited about one thing and over look the more essential items. I've thought of selling off a few ounces of gold that I purchased at $660 and ounce and buying a bag of junk silver. Who knows.

Right now, I'm getting a better return out of my metals than I am my stocks or my cash so I think I'll keep rolling the dice. With as low as the dollar is and with oil prices going through the overhead...metals are really the only thing making any financial sense.

419!

[Alma the Younger]

Where do you buy your gold and silver?

I tell people to find a bullion dealer in their hometown and get to know the owner. You'll save money on shipping/handling by purchasing locally. Also, check the tax laws in your state. Some states like Arizona (where I live) do not charge tax on purchases of bullion. Depending upon where you live that's a savings of around 8%.

Another good thing about buying locally is that your purchase can be done with cash and thus you protect your privacy. Once again, here in AZ the law says you don't even have to have a reciept so so absolutely no paper trail. I walk into my dealer, tell him what I want, give him cash and walk out. I don't sign anything and there's no record I've been there. That's appealing to me. Same thing goes for selling bullion. But like I said, check your local laws as everywhere seems to have different rules.

419!

[BackBlast]

"Anyway, IMHO, gold is more of a gamble than food, fuel, and other commodities you can actually use in your home. That's why I'm out of gold for the moment."

I agree that one shouldn't purchase gold or silver until they've got their food storage in order, debt paid off and other supplies like guns and ammo in proper order.

This is correct. Had you invested in wheat instead of gold when gold was $660/oz. An oz of gold would have purchased twice the wheat it purchases today, possibly more. So if you have more room to continue to pile up food, it's might be a good idea even if you have what you consider sufficient for your needs.


There is more security in wheat, than in all the political schemes of the world...


Right now, I'm getting a better return out of my metals than I am my stocks or my cash so I think I'll keep rolling the dice. With as low as the dollar is and with oil prices going through the overhead...metals are really the only thing making any financial sense.Past performance does guarantee future results :001_005:

For what it's worth, I think the fundamentals of silver are better than gold. But time will tell. Fundamentals of food wins out over everything.

Brandon

[Equanimity]

True, you ahouldn't look in to metals until you have a solid year or two of food. JMHO

[Alma the Younger]

There's another reason I've purchased bullion. Unlike some, I choose to keep my emergency supply of cash on-hand and not in a bank account.

Following Katrina, I heard and read many accounts about people who'd evacuated only to find that once they arrived at the destination things had basically switched from an electric form of commerce (example: credit and debit cards) to a cash only system. This was because most phone and powerlines wer down in the southren part of the state so people couldn't verify funds or do credit card transactions.

There was such a demand for motel rooms, fuel and other items that the people with cash in hand always won out over the others. I want to have a supply of cash that I secure in my home safe that I can access immediately. I fear that a major disaster whether it be a natural one or manmade will lead to one of two things: 1) runs on banks or 2) infrastructure problems like discribed above.

The downside to storing money outside of a bank is that it will not gain any interest at all. Most financial gurus like Dave Ramsey suggest putting your emergency funds into a money market account that will provide interest, but also keep your money liquid.

Since I have chosen not to invest my money in a bank, I decided that I would invest part of it in metals. My money has grown much more than the 3% that an aggressive money market fund would have provided. Nevertheless, I can still easily trade it for cash almost whenever I deem neccessary. Of course I have to rely on the bullion store being open, but if it were in a money market account I'd have the same problem with a bank.

For me, it seems to be a good combination of growth and liquidity. Your desires may differ.

419!

[bokbadok]

Since I have chosen not to invest my money in a bank, I decided that I would invest part of it in metals. My money has grown much more than the 3% that an aggressive money market fund would have provided. Nevertheless, I can still easily trade it for cash almost whenever I deem neccessary. Of course I have to rely on the bullion store being open, but if it were in a money market account I'd have the same problem with a bank.

How much cash does the bullion store have on hand to buy gold with? I'm just wondering if in a situation where phone lines/computer communcation is down, if the bullion store would not have access to its bank account to withdraw the cash to buy your bullion.

[Earthling]

I think keeping some emergency cash is important . . . but not all your savings stuffed in your mattress so to speak. There are other dangers i.e. theft, fire, etc.

Just an interesting FYI - a friend of mine says the bank she works at told them in case of "emergency" they would only let people withdraw $300. The emergency seemed to be referring to a market crash, run on the bank, etc type of thing.

[DMGNUT]

I'm much less concerned with whether banks or other businesses might or might not be open. As should anyone who's set aside their food, water, and other needful things. The less you venture out, the safer you'll be in the earlier stages of a crisis. This tends to be a more chaotic time and the scum of society will rise to take advantage of it.

Back to the issue though... I keep both cash and metals in my safes, because which one tends to be preferred, will change with the duration of whatever calamity has befallen us. This is just my opinion, but I believe most people you come across, who might still have some item or service to sell (especially once a little time has passed), will probably be happier (or at least just as happy) taking your recognizable gold and silver coins, over cash.

Of course if you don't have a clear idea how long the crisis will last, you should only be offering services for sell or exchange, never a non renewable or replaceable consumable.

[Alma the Younger]

How much cash does the bullion store have on hand to buy gold with? I'm just wondering if in a situation where phone lines/computer communcation is down, if the bullion store would not have access to its bank account to withdraw the cash to buy your bullion.

That's a good question. I couldn't say for sure, but I know the guy I do business with has a huge safe and is always taking in thousands of dollars worth of cash.

I would hopw that I would be a bit more observant of what was happening and would be able to cash in some of my metals prior to a complete meltdown.

Still, barring some major drama I can still cash in some coins in order to produce the cash I'll need for evryday emergencies. Let's say I lose my job, I have cash on hand for a couple months of expenses. But if my job search goes on longer than a couple months, I can cash in a few coins to cover bills for another few months.

As I said before, my metals serve as a way for me to earn more money, while keeping my funds as liquid as possible. With regard to a house fire or break-in. My safe weights nearly 1K pounds and is fireproof for nearly an hour.

419!

[DMGNUT]

According to Fire Dept. "studies", the average house fire will maintain it's peak heat in any given area of the home for only 35 to 45 minutes. Alma, your safe is a "GO". :)

[mirkwood]

I'm not a fan of the metals, but I do keep some cash in the home in case I can't withdraw from the bank for whatever reason. As for the $300 limit, I'll just hit every ATM I can and make as mansy withdrawls as I can before they lock that out too, which I don't think is a likely scenario.

[DMGNUT]

Mirk, I agree the closing of banks is probably unlikely. But if the limit goes into effect, $300 is all you'll get regardless of how many ATMs you visit. Also, I expect it would be more likely that a "run of the mill" power outage, will be a bigger problem in regards to not being able to access money in your bank accounts. I've been through some pretty lengthy power outages... up to 1 1/2 weeks duration. In this day and age of almost zero % interest in your checking and savings accounts, I don't see a problem with keeping a goodly amount of cash at home. Like Alma said, metals are a great hedge, I have a significant amount of silver on hand, most of which was about $7.00/oz when I got it.

[Alma the Younger]

Don't underestimate the ability of bank managers to simply turn off their ATM machines. If you go into any given bank most of the employees will be twenty somethings who pretty much do as they're told. In the event of an emergency the bank managers will tell these "kids" to shut things down and lock the doors behind them.

Once that happens there's nothing you can do. As you've al seen in the news lately, financial institutions are hurting and their cash reserves are the only thing keeping them afloat. Remember, a good portion of their assests were tied up in mortages and now many of them are upside down in value. when most of your assests are in less than desireable loans, the only thing you have to fall back on is cash. Once a banks cash is gone they're up the creek.

My personal risk management says earning less than 1% in a savings account isn't worth the risk.

419!

[KF7EEC]

My personal risk management says earning less than 1% in a savings account isn't worth the risk.

I have no gold/silver. I am trying to keep money in reserve. My everyday bank is Washington Mutual. If you open a free checking and savings account online, the savings account is (currently) earing 3.3%. And WaMu has a lot of branches here in Nevada and in Utah.

[DMGNUT]

I have no gold/silver. I am trying to keep money in reserve. My everyday bank is Washington Mutual. If you open a free checking and savings account online, the savings account is (currently) earing 3.3%. And WaMu has a lot of branches here in Nevada and in Utah.

That's a lot better than I expected, but if you deposit $100 and let it sit, it would take 22 years for it to become $200. :)

[KF7EEC]

That's a lot better than I expected, but if you deposit $100 and let it sit, it would take 22 years for it to become $200. :)


Sure. 3.3% is definately not great, but it is pretty safe. A few months ago, it was 5% but with Fed cuts, 3.3% is where its at now. Hopefully, when the Fed raises rates and when the Banking sector gets on a little better footing, we'll find savings accounts in the 5 and 6% again.

[BackBlast]

Mirk, I agree the closing of banks is probably unlikely.

Don't be so sure.

http://graphics8.nytimes.com/images/2008/06/19/business/19bank.600.gif

That looks oooogly.

How many big banks can fail before FDIC fails? If FDIC fails what happens to the banking system?

Brandon

[BackBlast]

I am trying to keep money in reserve. My everyday bank is Washington Mutual.

I know WaMu is sitting on a pile of financial toxic waste. I wouldn't touch them with a ten foot pole...

http://globaleconomicanalysis.blogspot.com/2008/04/wa-mu-alt-pool-deteriorates-further.html

The pool was originated in May 2007, 92.6% was originally rated AAA (top rating).

60 days delinquent

Jan - 19.3% (AAA loans that didn't survive, 6 months of payments?!?)
Feb - 22.7% (7 months..)
Mar - 25.3% (8 months)

Ouch.

Brandon

[DMGNUT]

Sure. 3.3% is definately not great, but it is pretty safe. A few months ago, it was 5% but with Fed cuts, 3.3% is where its at now. Hopefully, when the Fed raises rates and when the Banking sector gets on a little better footing, we'll find savings accounts in the 5 and 6% again.

That's not bad for money sitting around for the proverbial "rainy day". But as the above couple posts illustrate, how safe is it really? And also, even at 6%, your $100 dollars will still take 12 years to double to $200... and with inflation, it didn't really double at all, you actually lost money.
That's one of the reasons I like the idea of precious metals.

[ShowMeTheLaw]

I know WaMu is sitting on a pile of financial toxic waste. I wouldn't touch them with a ten foot pole...

http://globaleconomicanalysis.blogspot.com/2008/04/wa-mu-alt-pool-deteriorates-further.html

The pool was originated in May 2007, 92.6% was originally rated AAA (top rating).

60 days delinquent

Jan - 19.3% (AAA loans that didn't survive, 6 months of payments?!?)
Feb - 22.7% (7 months..)
Mar - 25.3% (8 months)

Ouch.

Brandon


I'm glad you posted this. There is a reason why Washington Mutual is paying a higher rate than normal in order to attract depositors and it isn't because they are trying to help you. *With the current banking situation, I think it is pretty foolish for anyone to keep more than "bill money" in a bank.*

[KF7EEC]

I'm glad you posted this. There is a reason why Washington Mutual is paying a higher rate than normal in order to attract depositors and it isn't because they are trying to help you. *With the current banking situation, I think it is pretty foolish for anyone to keep more than "bill money" in a bank.*

Perhaps. I guess I just don't believe that a large bank like WaMu could fail in 2008 and me actually lose any principle. I don't think that the banking sector is that bad. I know there are problems. I just don't think that is realistic.

[NRA]

Perhaps. I guess I just don't believe that a large bank like WaMu could fail in 2008 and me actually lose any principle. I don't think that the banking sector is that bad. I know there are problems. I just don't think that is realistic.
I think that's walkin' on thin ice. :eek:

[KF7EEC]

I think that's walkin' on thin ice. :eek:

Perhaps its a danger, but I think that buying lots of gold & silver is just a big of gamble, if not more so. Gold is at 45% of its all time high, when you adjust for inflaction. What is the dollar at, compared to its all time high? Gold has been going up the last few years, as the dollar has gone down. Wants to cause gold (or silver) to start dropping tomorrow? Maybe its my inexperience, being that I'm only in my 20s. I just don't see massive bank failures happening. Small regional banks may fail, but large banks. I just don't see it.

[NRA]

I worked for a bank for a lot of years. Every bank operates on the edge. That's just the way they work. It wouldn't take much at all to have a massive bank failure. Even a small run on banks could be a catastrophe.

[ShowMeTheLaw]

Perhaps. I guess I just don't believe that a large bank like WaMu could fail in 2008 and me actually lose any principle. I don't think that the banking sector is that bad. I know there are problems. I just don't think that is realistic.

As soon as the banks are required to mark to market their level 3 assets you will see many large banks become insolvent immediately and the failures will begin. *Because banks are so interconnected these days this will have a domino effect throughout the financial world. *This is why Bank of America rushed in to buy Countrywide and why J.P.Morgan bank rushed in to buy Bear Stearns. *If these institutions are allowed to fail then whatever assets that are currently on the books are immediately sold for whatever they can fetch on the open market. *The problem is, these assets (level 3 assets especially) are no longer worth what they were when the loans were first initiated. *The further the housing bubble deflates the worse it gets for the banks. The only thing that has saved many of them thus far is being able to push all of their junk into level 3 assets.

[Alma the Younger]

I believe some have misunderstood my intentions. I do not buy metals soley for an end of the world type situation. I buy metals because given the very low returns banks are paying depositors, having metals make a lot of sense as a hedge against inflation and low returns. Let's be frank. Right now the dollar is sucking wind against the Pound, the Euro and almost every other major currency. Combine that with record high oil prices, the threat of additional conflicts in the Middle East (i.e., Israel attacking Iran), global food inflation and the uncertainty of an Obama presidency and it dosen't look like metals are going to tank anytime soon. I may not be a Nobel price winning economist, but I feel fairly confident I'm not entirely off track.

I have an IRA that is invested in gold and it has provided me with returns that have helped balance my stock losses. Making money is making money. I don't care if it's in the form of stocks, bonds or cash, if your money is growning...you're winning.

As far as my bullion is concerned, I use it as a strategy to provide growth for my emergency funds that I keep at home instead of in a money market account. I estimate that in the last couple years I'm averaging nearly twenty percent growth. That's a whole lot better than any money market, CD or stock return. So how would that be a bad thing?

Someone mentioned that they did not believe it would be a good idea to buy metal prior to having food storage and other prepardness supplies. I agree. But if you're in a position to invest in metals...why not?

419!

[BackBlast]

Perhaps its a danger, but I think that buying lots of gold & silver is just a big of gamble, if not more so. Gold is at 45% of its all time high, when you adjust for inflaction. What is the dollar at, compared to its all time high? Gold has been going up the last few years, as the dollar has gone down. Wants to cause gold (or silver) to start dropping tomorrow? Maybe its my inexperience, being that I'm only in my 20s. I just don't see massive bank failures happening. Small regional banks may fail, but large banks. I just don't see it.

Bear Stearns was the 5th largest investment bank in America, it folded several weeks ago. Is there just one cockroach? Lehman's is the 4th, and they lost a huge chunk of their value just the last week or two.

Many of the banks are dead men walking trying to play hide the salami with the financial toxic waste. All that needs to happen is a large rate hike to reduce liquidity OR a change in accounting practice to make it impossible to hide the toxic waste OR a requirement to "mark to market" and play by the rules like most everyone else OR for one of the large SIV insurers among the monolines to fold. It's a ticking time bomb and we will be looking at the end of the banking industry as we know it. Will some banks survive? Sure, it's possible that some could be healthy. The problem is, almost nobody can tell since they're allowed to hide it all. Bear Stearns was claiming "all is well" right up until they went pop. Does not give one any confidence in ANY OF THEM.

Brandon

[ShowMeTheLaw]

I believe some have misunderstood my intentions. I do not buy metals soley for an end of the world type situation. I buy metals because given the very low returns banks are paying depositors, having metals make a lot of sense as a hedge against inflation and low returns. Let's be frank. Right now the dollar is sucking wind against the Pound, the Euro and almost every other major currency. Combine that with record high oil prices, the threat of additional conflicts in the Middle East (i.e., Israel attacking Iran), global food inflation and the uncertainty of an Obama presidency and it dosen't look like metals are going to tank anytime soon. I may not be a Nobel price winning economist, but I feel fairly confident I'm not entirely off track.

I have an IRA that is invested in gold and it has provided me with returns that have helped balance my stock losses. Making money is making money. I don't care if it's in the form of stocks, bonds or cash, if your money is growning...you're winning.

As far as my bullion is concerned, I use it as a strategy to provide growth for my emergency funds that I keep at home instead of in a money market account. I estimate that in the last couple years I'm averaging nearly twenty percent growth. That's a whole lot better than any money market, CD or stock return. So how would that be a bad thing?

Someone mentioned that they did not believe it would be a good idea to buy metal prior to having food storage and other prepardness supplies. I agree. But if you're in a position to invest in metals...why not?

419!
I agree with your thoughts on metals because the dollar has been trashed the last several years. *I have actually thought about buying metals recently to hedge against the falling dollar. The one reason I did not is because I fear that when the Fed raises rates next week -which I feel they will be forced to do because of out of control inflation- metals will begin their descent.

[BackBlast]

I believe some have misunderstood my intentions. I do not buy metals soley for an end of the world type situation. I buy metals ...

To give to me?
:party:

[BackBlast]

Another investment... Potentially much higher rate of return than gold. High capacity magazines.

http://www.ldsglo.com/forum/showthread.php?p=8758

Brandon

[Alma the Younger]

Another investment... Potentially much higher rate of return than gold. High capacity magazines.

http://www.ldsglo.com/forum/showthread.php?p=8758

Brandon

That's a good point. I remember during the last AWB Glock 23 magazines were selling for over $100 a piece. For this reason I have stocked up on Glock mags as well as AR-15 mags.

I am a firm believer that the weakest point in any magazine fed weapon is the magazine itself. Remember, most magazines were originally designed to be throw aways. So they're not overly robust. If you lose your magazine, your Uber-Guchi rifle or pistol transforms into a single shot weapon, and a bad one at that.

I believe each magazine fed weapon you own should have at least 50 magazines. Today, I can buy Glock and AR mags for around $10.00 a piece. Stock up while you can. If Obama wins in November another AWB will be on the top of his list.

419!

[KF7EEC]

I worked for a bank for a lot of years. Every bank operates on the edge. That's just the way they work. It wouldn't take much at all to have a massive bank failure. Even a small run on banks could be a catastrophe.

"We encourage Church members worldwide to prepare for adversity
in life by having a basic supply of food and water and some money in
savings." (emphasis added) -All Is Safely Gathered In: Family Home Storage (http://www.providentliving.org/fhs/pdf/WE_FamilyResourcesGuide_International_04008_000.pd f)

So perhaps I am just being silly, but I believe that if we were about to have massive bank failures, the 1st Presidency wouldn't have published a pamplet encouraging Church members to put some money in savings.

[NRA]

It says in savings, not necessarily in a bank.

[sunsinger]

Another investment... Potentially much higher rate of return than gold. High capacity magazines.

http://www.ldsglo.com/forum/showthread.php?p=8758

Brandon

Are there specific issues of magazines that are considered high capacity? Would the Ensign be one?

Oops! I get it. sporting magazines...

[Cowboy]

You get it but you are playing innocent. You know he is talking about gun magazines.:l0 (47):

[hiccups]

It says in savings, not necessarily in a bank.

Still, I'm pretty sure the First Presidency isn't giving guidance to us in riddles. Of course, personal revelation might be a handy dandy thing right about here.

[mirkwood]

That's a good point. I remember during the last AWB Glock 23 magazines were selling for over $100 a piece. For this reason I have stocked up on Glock mags as well as AR-15 mags.

I am a firm believer that the weakest point in any magazine fed weapon is the magazine itself. Remember, most magazines were originally designed to be throw aways. So they're not overly robust. If you lose your magazine, your Uber-Guchi rifle or pistol transforms into a single shot weapon, and a bad one at that.

I believe each magazine fed weapon you own should have at least 50 magazines. Today, I can buy Glock and AR mags for around $10.00 a piece. Stock up while you can. If Obama wins in November another AWB will be on the top of his list.
419!



All good points, especially this last one.

[ShowMeTheLaw]

Still, I'm pretty sure the First Presidency isn't giving guidance to us in riddles. Of course, personal revelation might be a handy dandy thing right about here.


Yeah, because the Lord never taught in parables did he?*:l0 (20):

The provident living pamphlet does show a picture of coins in a jar not a person giving money to a teller at a bank.

[KF7EEC]

Yeah, because the Lord never taught in parables did he?*:l0 (20):.

I could make some points about this also, but I'll just make 1 last point.

The Church. Are they stockpilling gold? Or do they use banks?

In case any are not sure, in last month's New Era, there was a story about Fast Offerings. It said "The bishopric then deposits all the donations in a bank account" (http://www.lds.org/ldsorg/v/index.jsp?vgnextoid=2354fccf2b7db010VgnVCM1000004d 82620aRCRD&locale=0&sourceId=5ae23bc909592110VgnVCM100000176f620a____&hideNav=1)

I'm sure someone will say "well, by bank, they didn't actually say a physical bank. Maybe they were talking about a safe at Church Headquarters." So, the way I see it, we all should just agree to disagree. Its been some good insights that you guys have shared, but I just don't see massive bank failures anytime soon.

[Alma the Younger]

Is it just me, or are some people taking things completely out of context?

I'm sorry if my lack of ability to express myself in writing has become a hinderance in getting my point across, as this has not been my desire. So I ask you to humor me one last time while I try to express myself better.

I am sure everyone has heard of diversification and its merits. That is all I'm talking about. After having listened to financial professionals, whom are much smarter than me, I have organized my finances into: savings and checking accounts, IRA's, Roth IRA's, 401(k)'s, insurance, cash and other tangible investments.

Having had the opportunity to be exposed to the church's finances, I know for a fact that this is the manner they invest the Lord's money.

Too often we tend to limit our thinking to those things we know and understand. It's often refered to as a comfort zone. When the church tells us that we should have savings they don't care what form it is in, just as long as we are saving a portion of our finances for the proverbial rainy day. In other words, it is adviseable to produce an excess verus living in a constant state of deficit.

I look at how my money can best work for me. That is as dynamic as the weather. Currently, some of the best returns are coming via metals. So currently that's where I am investing. In the future the dollar may regain its value and our current ression will be over and the best returns may be in the market. So be it. I go where the money is.

Nevertheless, although the market is down I still have stocks and bonds. Although real estate is down, I still own property. No one is saying that it's one thing and nothing else. I am only saying that currently, I make much more off of my metals than any of my other investments.

419!

[sunsinger]

I could make some points about this also, but I'll just make 1 last point.

The Church. Are they stockpilling gold? Or do they use banks?

In case any are not sure, in last month's New Era, there was a story about Fast Offerings. It said "The bishopric then deposits all the donations in a bank account" (http://www.lds.org/ldsorg/v/index.jsp?vgnextoid=2354fccf2b7db010VgnVCM1000004d 82620aRCRD&locale=0&sourceId=5ae23bc909592110VgnVCM100000176f620a____&hideNav=1)

I'm sure someone will say "well, by bank, they didn't actually say a physical bank. Maybe they were talking about a safe at Church Headquarters." So, the way I see it, we all should just agree to disagree. Its been some good insights that you guys have shared, but I just don't see massive bank failures anytime soon.

If you are basing your belief on the safety of banks because the Church uses one, then you are being very foolish. The Church needs to use the cultural institutions because that is the way our society works. Will there be a a massive failure of banks soon? I don't know, but this is illogical thinking to my way of mind. The Church is not always protected from the ills of society. The Church is prosperous right now, but it hasn't always been so. Every decision or action of the "Church" does not necessarily protect it from the calamities that will occur.

Our leaders are inspired, but the Lord does not eliminate all danger, risk, etc. We do not live in a protective bubble.

It is possible they are stockpiling wheat. I can't see that they are stockpiling gold, but if they were, I sure wouldn't know about it. If I were stockpiling gold myself (which I don't have the resources to do) I sure wouldn't be telling anyone about it. I don't think gold is the way the church would go, but my point is that we don't know everything the Church does. Not secrecy on their part, just discretion.

[BackBlast]

I could make some points about this also, but I'll just make 1 last point.

The Church. Are they stockpilling gold? Or do they use banks?

In case any are not sure, in last month's New Era, there was a story about Fast Offerings. It said "The bishopric then deposits all the donations in a bank account"

First, banks vs gold/silver is not mutually exclusive. I use banks too, my employer sends my paycheck to me straight into my checking account. I pay most of my bills straight from that same checking account. I also order stuff from Canada, Florida, California, and a host of other places with the aid of banks. I plan, however, for the short term and long term failure of banks.

The Church uses banks, but certainly their resources are not totally tied to banks - the Church has a host of resources it has invested in. I can only assume the Church also has such contingency plans in place - which may, or may not, include gold/silver.

To keep perspective, nobody has yet to lose their deposits, except the few unlucky ones who had uninsured deposits in the handful of local banks that have failed in the last year.

This thread is to inform you of general dangers and points of view in regards to banking, money, valuation, and hedging against devaluation. There are risks in all chosen paths, and you have to decide what is right for you, choosing wisely will aid you. It is best if you accurately and throughly understand the risks associated with your vehicles - and I think this thread helps. These are the last days, and it may well turn out that the best store of wealth turns out to be barley. But, are you gonna get kicked out of the celestial kingdom because you didn't have your core holdings in barley? I think we can laugh at that idea :001_005:

The general council is to save, essentially to live on less than you make. The mechanics are an exercise for the obedient. The general council will always be of benefit to you, even if you make out poorly with your savings vehicle.

I think there's been some good information presented in the thread. Alma presents his case and I think he has a very good position, he has but does not depend on his gold/silver.

This morning there was a large dip in the spot price of gold and silver. Rumor is it was the forced liquidation of a hedge fund. They sold the gold and kept the oil. Food for thought.

Brandon

[phylm]

Mirkwood--I've used my debit card to withdraw money from an ATM only a couple of times over the years, but had to do it in an emergency the other day. To my dismay, all I could withdraw was $200...bank policy. I went to another ATM and found that I had withdrawn my limit for the day. It was a Saturday, so I couldn't call my home bank and get them to over-ride the limit for me. I would expect that ATMs will be useless when things get sticky.

[Alma the Younger]

Mirkwood--I've used my debit card to withdraw money from an ATM only a couple of times over the years, but had to do it in an emergency the other day. To my dismay, all I could withdraw was $200...bank policy. I went to another ATM and found that I had withdrawn my limit for the day. It was a Saturday, so I couldn't call my home bank and get them to over-ride the limit for me. I would expect that ATMs will be useless when things get sticky.

This is a very good point, and another reason why I encourage people to keep a portion of their emergency funds at home.

Imagine if you had to withdraw funds in the aftermath or immediately proceeding a widely announced emergency. There would be lots of desperate people surrounding banks/ATMs. The combination of deperation and money almost always equals violence.

Another question would be how long do you think the funds in any given ATM would last when lines of people are taking out their maxium daily amount? Do you really want to be driving around, wasting gasoline, while looking for an ATM that isn't either out of cash or surrounded by crazy people?

Last question. If you were a criminal and wanted to find victims to rob, where would you go?

Believe me, unless you have no self-control, there's nothing to lose by keeping a percentage of your emergency funds at home.

419!

[Adam]

has anyone here researched alternative currencies? I have studied these in the past and I think overall they could benefit the local community for a few reasons.
1st- they support the local economy, the currencies can only be used at local companys like farmers markets and local businesses as the currency can only be used in the community it was created for(ie. Ithaca Hours, Toronto Dollars, WIR Bank, Berkshares, Clagary Dollars, ect.). This would put "money" in circulation that people would not be able to use at say a wal-mart or Target, and instead the currency would increase demand for local goods to create self-sufficiency. Currently the United States imports to much in my opinion
http://research.stlouisfed.org/fred2/data/IMPGS_Max_630_378.png
2nd- since it is not Dollars the currency is tax exempt and interest rates with these currencies either don't exist or are extremley low.
3rd- gives a local community insulation from the manipulation of interest rates and the money supply (inflation).
4th- in the case of a depression, the local community can turn to the local currency as a way to try and keep things moving for a while Argentina tried to do this in the 90s and the currencies helped alleviate some of the problems in that country when the government collasped. I think if a country had these in place before a collapse things would be better.
5th- they are at least as stable as the dollar, the WIR Bank has existed since 1934.
6th- since they are democratically controlled, the people running the system live in the same region the currency is used giving them more of an incentive to keep inflation ect. under control.

A gold or silver standard would be ideal however the liberty doallar which was also a alternative currency was shut down because of legal issues using silver. Anyway I was originally going to major in economics and I though it would be a cool field experience project to start a alternative currency in the Salt Lake City area, however at this point it would be a daunting task and I would have to find other people interested in starting one of these here. The Ithaca Hours has actually grown to the point of offering health insurance using the alternative currency. In a way this could buy people time in a recession and keep the local economy going. Anyway I highly reccomend the slideshows at reinventingmoney.com to explain the idea much better than I could.

[Alma the Younger]

Here's an interesting excercise that will demonstrate the non-diminishing value of precious metals, in this case silver.

There's a little math involved, so humor me...I believe you'll find this very eye opening.

On July 2, 2008, Silver closed at $18.39 an ounce.

On the same day, a gallon of unleaded regular gasoline was approximately $4.10 a gallon (based on my area: Phoenix, AZ)

For this excerise we'll go back to 1965, the last year that our coins were minted in 90% silver. In 1965 the national average for a gallon of gasoline was $.31. Look it up at the following link. (http://www.eia.doe.gov/emeu/aer/txt/ptb0524.html)

So basically, depending upon where you lived you could almost buy a gallon of gasoline for a quarter. Let's examine that 1965 quarter. It contained 90% silver and weighed 96.6 grains. If we convert that into ounces, a quarter would weight .22 ounces.

Not too hard to understand seeing that the US mint creates 1 ounce silver dollars and a quarter is approximately .25 of and ounce.

Here's where it gets good.

If we multiply $18.39 (the closing price of silver on 7/2/08) by .22 we get, $4.045. So basically, a quarter ounce of silver will purchase the same amount of gasoline today as it would in 1965.

So the question is, is gasoline going up in price or is the dollar devaluating? Of course, the answer is that the dollar, as we know it today, is a fiat currency with no REAL value backing it up. It is a Federal Reserve Note that only has a promise backing it's value.

Gold and silver are real currencies that have REAL value.

419!

[Adam]

Thank you for showing the stats for silver, it is the same when you look at the value of gold. I commented on another post that figures such as the CPI are not accurate as they don't use goods considered to be volatile, which by volatile they mean increasing in price faster then other goods. Real inflation right now is in double digits if you consider "volatile" products not included in the CPI.

[BackBlast]

So the question is, is gasoline going up in price or is the dollar devaluating? Of course, the answer is that the dollar, as we know it today, is a fiat currency with no REAL value backing it up. It is a Federal Reserve Note that only has a promise backing it's value.

Gold and silver are real currencies that have REAL value.



Here's where you get it wrong. Value is in the eye of the beholder, there is nothing "intrinsic" about gold or silver. It requires human thought and action to use as money or industrial uses, as does paper.

There are advantages and disadvantages to metal currencies over paper currencies. Metals are preferred as more resistant to abuse.

Brandon

[Alma the Younger]

You're correct, in order for something to have value both the buyer and seller must agree that the item has worth.

Having said that, both buyers and sellers have argeed, for more than 5000 years, that gold and silver have value. That's a pretty good track record.

419!

[BackBlast]

You're correct, in order for something to have value both the buyer and seller must agree that the item has worth.

Having said that, both buyers and sellers have argeed, for more than 5000 years, that gold and silver have value. That's a pretty good track record.

419!

Yes, it is a good track record - but not perfect, it hasn't always been used.. It hasn't for the last 75 years. Which means very few Americans have actually ever used the stuff themselves. I expect it's adoption to be very very slow and only come after the banking system has throughly collapsed and the economy adopts new methods. And maybe not until we have order restored - which could be years after it's collapse.

Brandon

[Alma the Younger]

"Yes, it is a good track record - but not perfect, it hasn't always been used.. It hasn't for the last 75 years."


If you're talking about purchasing day-to-day goods, then I'd agree. But, gold and silver have always been traded and continue to be today. I go to a bullion store and buy and sell gold and silver all the time. Futhermore, it's done globally on markets around the world.

I do not expect to immediately start trading either gold or silver for goods after a local, regional or national crisis. For that purpose I have an emergency fund of federal reserve notes. I also have food storage.

Having said that, I do not see where anyone can ignore the fact that gold and silver are actually making money, whereas traditional stocks and bonds are in the financial toilet. Have you examined your portfolio latey? I have and it's pretty ugly.

I'm not saying that everyone should divest their portfolios and invest entirely in metals. What I am saying is that regardless of the naysayers, gold and silver are legitimate investments. If you speak with any financial advisor he/she will tell you that between 10% and 20% of your portfolio should be invested in physical metals.

I just don't understand why people are so reluctant to buy gold and/or silver? All you have to do is watch the markets and it becomes very clear what is making money and what isn't. Maybe I have some kind of stupid disease or something, but I believe that part of being financially secure is making your money work for you.

419!

[DMGNUT]

I seem to have that stupid disease too... :)
If things go to the birds (which they eventually will), metals will still have value (and they will elsewhere too), but federal reserve notes and most stocks will be very rough and uncomfortable, to use as toilet paper.

[BackBlast]

I'm not saying that everyone should divest their portfolios and invest entirely in metals. What I am saying is that regardless of the naysayers, gold and silver are legitimate investments. If you speak with any financial advisor he/she will tell you that between 10% and 20% of your portfolio should be invested in physical metals.

I just don't understand why people are so reluctant to buy gold and/or silver? All you have to do is watch the markets and it becomes very clear what is making money and what isn't. Maybe I have some kind of stupid disease or something, but I believe that part of being financially secure is making your money work for you.

Well, I've caught the stupid disease too now :cool (3):. I think I'm becoming more convinced that we're not headed into deflation for a while yet, the US just keeps throwing money at the problems and that's just killing the dollar.

So... I've moved some of our cash/savings into metals. Boy, doesn't seem the money goes very far!

I think we're pretty close to the bottom of this commodity dip. Guess we'll find out!

Brandon

[DMGNUT]

Going back 8 years on this ancient thread... but its a really good read.
And there's a lot of really good information in here, but my favorite post was actually my own (not trying to blow my own horn... it was just funny to me is all) ... post #55.