Experience with buying gold?

Thor

Jedi Master
I just read Pierre's very interesting article on the mechanics of the finance markets (http://www.sott.net/article/290835-2015-the-BRICS-checkmate-Western-finance). I highly recommend it as an overview presented in an easily understandable format.

Towards the ends he writes the following:

It's unlikely that all financial/economic activity will disappear overnight. Thus, there might be a window of opportunity in the beginning of the financial collapse when currencies drop while physical gold and silver start reaching their real value, and economic activity/commerce is still ongoing (albeit reduced).

In such a transition, physical gold and silver could present a very strong purchasing power as a means to buy useful assets before economic activity drops to virtually zero. Small silver/gold coins are preferable to big ones because they are easier to trade. Also, do not store coins in a bank vault. If the banks collapse, access to the vaults is not guaranteed. As of beginning of January 2015, a one ounce silver American Eagle coin is $19.80.

This got me thinking that now might be a good idea to buy some gold as an intermediary asset but I have no knowledge or experience with trading physical gold. I did a quick search on the forum and found this thread about buying gold in a credit card shaped form where you can break off 1 gram pieces which make it quite practical (http://cassiopaea.org/forum/index.php/topic,35049.0.html).

I was thinking that other people on the forum might have similar thoughts and if so this thread could be a repository of do's and don'ts.

It may be that things look different in the EU and in the US or other places.

Things to consider that come to mind (by no means an exhaustive list)

Price issues
Price per gram or ounce
Shipping/delivery costs
Import tax/VAT

Liquidity issues
If you want to sell the gold, how do you prove its worth - how is it certified
Do you sell it per gram or as a coin

Vendor issues
]Reputation and history of vendor
Who owns the company

Safety issues
Where and how to store gold

Feel free to add to the list.
 

hlat

The Living Force
FOTCM Member
For safety in preventing yourself from being ripped off, go in person into a coin store that sells gold or silver bullion coins. Buy with cash and walk out immediately with your gold or silver. If you want to be riskier, buy with a credit card from a very reputable online dealer such as APMEX and wait for shipping. It is a very bad idea to buy or sell through personal checks. Read up on Tulving if you want to see an example of a long established dealer going bankrupt and taking customers' money.

As for what to buy, sovereign bullion coins are the best bet, because of increased protections against counterfeiting official coins. Some of the most recognizable sovereign coins are the 1 ounce South African gold Krugerrand, 1 ounce American gold eagle or 1 ounce American silver eagle.

Storage should not be with any third party, and definitely should not be in a bank security box.
 

Nicholas

The Living Force
FOTCM Member
For the US, I found a reputable bullion dealer that works directly with the US Mint called Northwest Territorial Mint (which I have done business with).

They have a FAQ page which answers most of the questions you have listed:
_http://bullion.nwtmint.com/articles_faq.php
 

Mal7

Dagobah Resident
There are several pages on the use of gold during an economic collapse in Fernando Ferfal Aguirre's book The Modern Survival Manual: Surviving the Economic Collapse (published 2009). Aguirre lived through the economic collapse in Argentina in 2002.

Aguirre suggests that large 1 ounce gold coins aren't something you would actually be trading with during the worst period of collapse, but rather something that would be used for holding the value of your savings until a more stable economy returns. (Provided that your gold stash doesn't get looted during the collapse. Aguirre gives the example of a man who had to go to hospital, and when he returned to his house everything was gone, including the toilet, the doors, and the safe that had his gold in it.)

For everyday trading during a crisis, Aguirre suggests that using 14K or 18K gold jewelry is safer than carrying around gold coins. The gold should be marked as 14K or 18K, and avoid gold-plated jewellery which has a thin layer or gold only and is worthless. With a gold chain, a few links can be sold at a time for smaller amounts of money.

In Aguirre's experience, gold jewelry wouldn't be used directly in trading with a goods vendor, but many black or grey market money traders would spring up where you can trade gold or another currency for the local currency, and then spend that local currency quickly (e.g. the same day) before it depreciates.

Here are a few quotes from Aguirre's book:

Gold is a wonderful way to store wealth, in a way it's easy to carry and is impervious to a fiat money collapse. Gold is like a time machine, it keeps value through time. For example, during Roman times, a gold coin would buy you a nice toga, a good belt and quality made leather shoes. Today that same gold coin will get you a smart looking outfit, shoes and a belt.
[. . .]
For the bulk of your tangible savings you are, of course, better off buying precious metal bars and well-known coins of reputable origin.

Minted South African Krugerrands, American Eagles, Canadian Maple Leafs and Chinese Pandas are the best way to preserve your savings - but be aware of the increase in counterfeit precious metals coins from China.
[. . .]
Many Vietnamese fled their country in 1975 with enough gold coins and jewelry sewn into their clothing to start new businesses in America and other nations.
In the USA there's another alternative for precious metal "small change." Pre-1965 dimes, quarters and half dollars are made of 90% silver.
[. . .]
Coins will cover most of the value of your precious metal savings, but what about daily transactions during dangerous times, such as when you are visiting gray or black markets? Do you really want to go to one of these places with a shiny gold coin, or even minted silver coins? Let me answer that for you. No, you don't!

I see people often selling jewelry at these places or on the street at jewelry stores. But I never saw anyone stupid enough to sell gold coin at a black or gray market store. Go to the "La Salada" gray market in Buenos Aires, and you'll know what I mean. Well, actually don't go, because it's kind of dangerous. For those who are a bit "doom inclined," yes, it pretty much looks like Mad Max's "Barter Town," only it's ten time bigger. I can only imagine what would happen to someone trying to use a gold coin in the "La Salada" market. You might as well paint an "I'm Rich, Please Kidnap Me!" sign and hang it around your neck.
[. . .]
Banks close, ATMs run dry, and absolutely no one accepts plastic or checks. This is a good time to lay low, stay at home to watch the news [. . .]
Sooner or later the banks reopen, but they have a new set of rules you may not like that much, like not returning your property, your hard earned money [. . .]
You'll soon find that it's very hard to pull through with a fifty or one hundred dollar cash withdrawal limit per week, and it may take days or weeks before even that is allowed.
But you have your emergency stash of cash and precious metals at home, right?
What happened here in Argentina was that soon enough "street brokers," or money dealers, started popping up on the busy boulevards and in the highly populated downtown areas. You would just walk by, and see a guy doing nothing but whispering "change, change." That's your man.
[. . .]
Why not go to the bank or official exchange houses? Well, for many months or even years, there was a limit to how much money you could change (100 USD, if I remember correctly). Even then you had to leave all of your personal information, and the exchange rate was better in the black market anyway, so that's why even today most people still prefer to use the black market.

You won't be buying what you need with gold coins or 100 Euro bills [this is referring to Argentina, so the Euro bills were a foreign currency]. Many folks will readily accept them, but you won't get a fair exchange rate. That why you'll usually prefer a money dealer, or sell your gold coins to a reputable precious metal broker.
1. Exchange small amounts of currency [. . .]
2. Try different dealers [. . .]
3. Spend the collapsed currency fast! [. . .]
4. Keep your Big Mouth Shut! [. . .]
5. Be careful and stay alert while doing business.
 

Angchop

Jedi Council Member
FOTCM Member
We have started buying silver instead of putting our money in the bank. We have purchased it online with a credit card and we haven't had any trouble.
 

hlat

The Living Force
FOTCM Member
Angela said:
We have started buying silver instead of putting our money in the bank. We have purchased it online with a credit card and we haven't had any trouble.
Credit card is ok as long as you preserve your rights to contest the charge if the dealer does not send the metal. In the US, we have 60 days within the statement date for the statement in which the charge appears to dispute the charge.
 

Mal7

Dagobah Resident
As a precaution, if you are buying gold or silver, and your identity on a public forum is not anonymous (i.e. someone could work out from your posts who you are or where you live), then you should not advertise the fact that you have gold or silver on a public forum.
 

Lindenlea

The Living Force
Buying gold and silver bullion in the Australian capitals is easy (at least Sydney is). The best way is to go direct to the bullion office in the city and do over the counter trading in cash. You can buy up to $5000 on the spot per day without any personal information being disclosed, you only have to sign off the piece of paper on collection, and even then you could sign any name you want as there is no proof of identity required.

Purchasing online or by credit card leaves an information trail, and as one article I read on this forum mentioned that when they've emptied your bank account they'll come looking for the gold if they know you've got some.

Here's a link to the ABC Bullion Company in Sydney showing their merchandise and current market prices.

_https://www.abcbullion.com.au/store/gold

_https://www.abcbullion.com.au/store/silver
 
Do you know there is a sound test to recognize pure silver ? You can find several videos about it on Youtube. One of them is

_https://www.youtube.com/watch?v=ZYmj-e621Ss

I would say it is a better idea to buy silver than gold because its price (silver) is going to increase relatively, to get closer to the price of gold. The fact is that throughout history, the gold/silver price ratio was 1/7 to 1/12. It is currently higher than 1/60, which is an anomaly that will sooner or later be corrected. When this happens, your relative purchasing power will rocket up if you have silver.

One should be careful with precious stones. They may crumble if they are overmanipulated.
 

hlat

The Living Force
FOTCM Member
Shinzenbi said:
I would say it is a better idea to buy silver than gold because its price (silver) is going to increase relatively, to get closer to the price of gold.
The experience of Weimar Germany was the opposite. Gold became many magnitudes of order more valuable than silver in that hyperinflation, more than 1000:1, as basically people needed to carry with them their entire lifetime of wealth.
 

hlat

The Living Force
FOTCM Member
hlat said:
Shinzenbi said:
I would say it is a better idea to buy silver than gold because its price (silver) is going to increase relatively, to get closer to the price of gold.
The experience of Weimar Germany was the opposite. Gold became many magnitudes of order more valuable than silver in that hyperinflation, more than 1000:1, as basically people needed to carry with them their entire lifetime of wealth.
It looks like the gold silver ratio went to about 160:1 in 1923, so I was wrong in remembering that it went to more than 1000:1.
 

Divide by Zero

The Living Force
hlat said:
Shinzenbi said:
I would say it is a better idea to buy silver than gold because its price (silver) is going to increase relatively, to get closer to the price of gold.
The experience of Weimar Germany was the opposite. Gold became many magnitudes of order more valuable than silver in that hyperinflation, more than 1000:1, as basically people needed to carry with them their entire lifetime of wealth.

I agree with hlat here. The silver has value due to industrial processes, but gold has value due to some long time "superstition". I was really wondering why platinum or other valuable metals weren't used, but even in ancient myths it seems the "gods" were obsessed with gold too. Something about it's appearance, perhaps??

Figure if the ratio were the more conservative 160:1, that means to match the value of 1 oz gold, you would need 10 lbs of silver (16oz to a lb)!

BTW, 2 years ago I have bought from APMEX with a personal check and there is no issue there. Using a credit card costs much more per coin. They have an invoice that they send you with the address to mail to. They email you when they get the check, then there is a 5 day waiting period for the check to clear. Then they mail you the metal with registered and insured mail.
 

Dirgni

The Living Force
FOTCM Member
Some say that you may want to buy gold or silver anonymous with cash as there were instances in history when ownership was forbidden: e.g. gold in 1933 in US but also other countries and other times. For these times you may not want to leave a paper trail.

_https://en.m.wikipedia.org/wiki/Executive_Order_6102
_https://de.m.wikipedia.org/wiki/Goldverbot (German)
 

michaelrc

Jedi Council Member
FOTCM Member
Mal7, you nailed it... thanks!


Mal7 said:
There are several pages on the use of gold during an economic collapse in Fernando Ferfal Aguirre's book The Modern Survival Manual: Surviving the Economic Collapse (published 2009). Aguirre lived through the economic collapse in Argentina in 2002.

Aguirre suggests that large 1 ounce gold coins aren't something you would actually be trading with during the worst period of collapse, but rather something that would be used for holding the value of your savings until a more stable economy returns. (Provided that your gold stash doesn't get looted during the collapse. Aguirre gives the example of a man who had to go to hospital, and when he returned to his house everything was gone, including the toilet, the doors, and the safe that had his gold in it.)

For everyday trading during a crisis, Aguirre suggests that using 14K or 18K gold jewelry is safer than carrying around gold coins. The gold should be marked as 14K or 18K, and avoid gold-plated jewellery which has a thin layer or gold only and is worthless. With a gold chain, a few links can be sold at a time for smaller amounts of money.

In Aguirre's experience, gold jewelry wouldn't be used directly in trading with a goods vendor, but many black or grey market money traders would spring up where you can trade gold or another currency for the local currency, and then spend that local currency quickly (e.g. the same day) before it depreciates.

Here are a few quotes from Aguirre's book:

Gold is a wonderful way to store wealth, in a way it's easy to carry and is impervious to a fiat money collapse. Gold is like a time machine, it keeps value through time. For example, during Roman times, a gold coin would buy you a nice toga, a good belt and quality made leather shoes. Today that same gold coin will get you a smart looking outfit, shoes and a belt.
[. . .]
For the bulk of your tangible savings you are, of course, better off buying precious metal bars and well-known coins of reputable origin.

Minted South African Krugerrands, American Eagles, Canadian Maple Leafs and Chinese Pandas are the best way to preserve your savings - but be aware of the increase in counterfeit precious metals coins from China.
[. . .]
Many Vietnamese fled their country in 1975 with enough gold coins and jewelry sewn into their clothing to start new businesses in America and other nations.
In the USA there's another alternative for precious metal "small change." Pre-1965 dimes, quarters and half dollars are made of 90% silver.
[. . .]
Coins will cover most of the value of your precious metal savings, but what about daily transactions during dangerous times, such as when you are visiting gray or black markets? Do you really want to go to one of these places with a shiny gold coin, or even minted silver coins? Let me answer that for you. No, you don't!

I see people often selling jewelry at these places or on the street at jewelry stores. But I never saw anyone stupid enough to sell gold coin at a black or gray market store. Go to the "La Salada" gray market in Buenos Aires, and you'll know what I mean. Well, actually don't go, because it's kind of dangerous. For those who are a bit "doom inclined," yes, it pretty much looks like Mad Max's "Barter Town," only it's ten time bigger. I can only imagine what would happen to someone trying to use a gold coin in the "La Salada" market. You might as well paint an "I'm Rich, Please Kidnap Me!" sign and hang it around your neck.
[. . .]
Banks close, ATMs run dry, and absolutely no one accepts plastic or checks. This is a good time to lay low, stay at home to watch the news [. . .]
Sooner or later the banks reopen, but they have a new set of rules you may not like that much, like not returning your property, your hard earned money [. . .]
You'll soon find that it's very hard to pull through with a fifty or one hundred dollar cash withdrawal limit per week, and it may take days or weeks before even that is allowed.
But you have your emergency stash of cash and precious metals at home, right?
What happened here in Argentina was that soon enough "street brokers," or money dealers, started popping up on the busy boulevards and in the highly populated downtown areas. You would just walk by, and see a guy doing nothing but whispering "change, change." That's your man.
[. . .]
Why not go to the bank or official exchange houses? Well, for many months or even years, there was a limit to how much money you could change (100 USD, if I remember correctly). Even then you had to leave all of your personal information, and the exchange rate was better in the black market anyway, so that's why even today most people still prefer to use the black market.

You won't be buying what you need with gold coins or 100 Euro bills [this is referring to Argentina, so the Euro bills were a foreign currency]. Many folks will readily accept them, but you won't get a fair exchange rate. That why you'll usually prefer a money dealer, or sell your gold coins to a reputable precious metal broker.
1. Exchange small amounts of currency [. . .]
2. Try different dealers [. . .]
3. Spend the collapsed currency fast! [. . .]
4. Keep your Big Mouth Shut! [. . .]
5. Be careful and stay alert while doing business.
 

Jenn

Ambassador
Ambassador
FOTCM Member
Re: Time to stock up?

Hey after reading this article- http://www.sott.net/article/295696-Anticipating-financial-collapse-JP-Morgan-accumulating-largest-stockpile-of-silver-in-history

What struck me was the recent drop in both gold and silver prices, according to this site: https://www.bullionbypost.co.uk/ silver is selling at £10.3602 per troy ounce, which looks like the lowest it's been all week, bar friday. Gold has also come down. I don't know anything about buying precious metals, but wondered if this was an opportune time?
 
Top Bottom