Best way to buy and store physical PM's

[DemonD]

Re: Best way to buy and store physical PM's

it should be easy to store small quantities of valuables in your home without resort to a safe [which attracts attention]. e.g. pull off baseboards or unscrew outlet covers to find pockets. you know your own residence, and a little thought should do the trick.

JK, good point. The one FAQ I read about buying gold noted an example of a grandmother that stored 12 1-oz. gold coins in a peanut butter jar in the back of her refrigerator.

Jim (and others), also good point... I live in an area where there is little home invasion crime, but a lot of transients and people from outside the neighborhood come to my area a lot. (Which is part of the appeal of living here for me - I love Sunset Strip.) On the other hand, I often leave my front door unlocked (closed, but unlocked). I've also left keys for maintenance guys when they need to do something in my apartment. Nothing stolen so far. I do have renters insurance though... the point I'm making is that relative safety of hiding less than 10 gold coins in my place shouldn't be too hard and as JK mentioned, a safe would be more of a target, especially seeing as how (living in an apartment), bolting a safe to the floor isn't a real option and could probably be defeated anyway.

Thanks for the advice everyone.

[Jim Nickerson]

Re: Best way to buy and store physical PM's

JK, good point. The one FAQ I read about buying gold noted an example of a grandmother that stored 12 1-oz. gold coins in a peanut butter jar in the back of her refrigerator.

Jim (and others), also good point... I live in an area where there is little home invasion crime, but a lot of transients and people from outside the neighborhood come to my area a lot. (Which is part of the appeal of living here for me - I love Sunset Strip.) On the other hand, I often leave my front door unlocked (closed, but unlocked). I've also left keys for maintenance guys when they need to do something in my apartment. Nothing stolen so far. I do have renters insurance though... the point I'm making is that relative safety of hiding less than 10 gold coins in my place shouldn't be too hard and as JK mentioned, a safe would be more of a target, especially seeing as how (living in an apartment), bolting a safe to the floor isn't a real option and could probably be defeated anyway.

Thanks for the advice everyone.

One more point, renter's or home owner's insurance may not cover cash and collectible coins, or possibly gold coins that aren't collectible. In case of a fire, perhaps you could find them, in case your apartment falls into a chasm, SOOL.

[drboyd]

Re: Best way to buy and store physical PM's

IMHO, probably the primary reason to hold PMs is the case of a SHTF scenario, where the dollar crashes in value to essentially zero and no one can afford 12 zillion dollars for a loaf of bread. There's also the complementary scenario where the DHS then comes by to "buy" your gold for thirty two worthless dollars an ounce.

In both cases, your physical possession of the PM is a must. While gold is cool, I prefer "junk" silver coins for their utility value - like buying a loaf of bread.

If you stay under the $10K reportable cash transaction limit (which I would strongly advise), there's no reason to have a traceable record of your PM purchase. Thus, the Federales won't know that you have the PM in question - or at least they will be so busy "buying" the PMs they can find that they won't bother coming to "buy" yours for a while. ;)

[Jim Nickerson]

Re: Best way to buy and store physical PM's

IMHO, probably the primary reason to hold PMs is the case of a SHTF scenario, where the dollar crashes in value to essentially zero and no one can afford 12 zillion dollars for a loaf of bread. There's also the complementary scenario where the DHS then comes by to "buy" your gold for thirty two worthless dollars an ounce.

In both cases, your physical possession of the PM is a must. While gold is cool, I prefer "junk" silver coins for their utility value - like buying a loaf of bread.

If you stay under the $10K reportable cash transaction limit (which I would strongly advise), there's no reason to have a traceable record of your PM purchase. Thus, the Federales won't know that you have the PM in question - or at least they will be so busy "buying" the PMs they can find that they won't bother coming to "buy" yours for a while. ;)

Regarding having real silver dimes, quarters, how do you know the local supermarket will recognize and accept them for the value of the metal vs. accepting them as worthless dimes and quarters?

Buying gold or silver in amounts not reportable as purchases does not get around coin dealers having to report their purchases of your coins. If the government were to be paying $32 for 1 ounce gold coins, what would coin dealers likely be paying if they were even able to buy them? I just don't see where holding gold coins will do one any good if there were ever again to be confiscation, unless one could smuggle them out of the country. Personally I doubt the possibility of confiscation of gold again, but had I been alive in the '30's I guess I would have doubted it then too.

[Finster]

Re: Best way to buy and store physical PM's

Regarding having real silver dimes, quarters, how do you know the local supermarket will recognize and accept them for the value of the metal vs. accepting them as worthless dimes and quarters?

Buying gold or silver in amounts not reportable as purchases does not get around coin dealers having to report their purchases of your coins. If the government were to be paying $32 for 1 ounce gold coins, what would coin dealers likely be paying if they were even able to buy them? I just don't see where holding gold coins will do one any good if there were ever again to be confiscation, unless one could smuggle them out of the country. Personally I doubt the possibility of confiscation of gold again, but had I been alive in the '30's I guess I would have doubted it then too.

Remember the premise was a "SHTF" scenario. We could debate the likelihood of such a scenario, but the purpose of physical PM is insuring for it. If it really does hit the fan and paper money does what it did in precedences like Weimar, those hard money coins are very likely to be accepted by lots of people.

[DemonD]

Re: Best way to buy and store physical PM's

A thought just occurred to me. Even base metals have intrinsic value. I wonder, if we have a weimar-type hyperinflation, would we be able to use our regular coins (pennies, nickels, dimes, quarters) but not the paper money?

Only problem is that our society is so conditioned to using plastic nowadays. A hyperinflation scenario would be most scary I think for end-user consumers and retailers, because credit and debit cards have made transactions much faster and easier. And then how will all those people without savings be able to spend money if not by credit?

Incidentally, yes, buying these things is for a SHTF scenario. However, in talking with people in every day life, I have definitely found there are people out there that hold on to coins just for that type of insurance. It's not just the online-super-high-IQ tin-foil hat crowd.

It also helps that currently I have some extra bonars sitting doing nothing and don't really see any good "investing" opportunities outside of PM's.

[Finster]

Re: Best way to buy and store physical PM's

A thought just occurred to me. Even base metals have intrinsic value. I wonder, if we have a weimar-type hyperinflation, would we be able to use our regular coins (pennies, nickels, dimes, quarters) but not the paper money?

I'd even go so far as to argue the distinction between "precious" and "base" metals is somewhat artificial and in any event blurry. Gold is considered in the former class due to long history of use as money and jewelry, and copper in the latter class due to its industrial use. But copper has a long history of use as money and jewelry, too, and so does gold have industrial use. The difference is not of kind, but of degree.

Incidentally, yes, buying these things is for a SHTF scenario. However, in talking with people in every day life, I have definitely found there are people out there that hold on to coins just for that type of insurance. It's not just the online-super-high-IQ tin-foil hat crowd.

The chance of such a SHTF scenario may be small, but so too is the probability your house will burn down. And most people still buy homeowner's insurance!

[raja]

Re: Best way to buy and store physical PM's

I wonder, if we have a weimar-type hyperinflation, would we be able to use our regular coins (pennies, nickels, dimes, quarters) but not the paper money?

I wonder if physical gold would still be valuable after a SHTF event . . . .

Here’s my SHTF scenario. I have no idea of its worthiness, and I would appreciate hearing feedback from others:

In earlier times when there were runaway-inflation events, such as the Weimar Republic, there was a lot of farmland surrounding the cities, and food was customarily purchased in small local shops and markets. Many people had relatives who were farmers. Under these circumstances, most people got by — at least they didn’t starve.

Today it’s very different. Food in the US is flown in from elsewhere — vegetables from California, pork from North Carolina, etc. — there is very little local food production. Not only that, I understand there is something like a week’s worth of food on hand at one time in stores, because inventory is computerized and tightly controlled, and there is no long-term storage.

If there was runaway inflation, I don’t see thousands of people showing up at the local supermarket with wheelbarrows full of near-worthless dollars. Just waiting in line for cashiers to count the money would be unworkable. Also, getting food from farm to store requires a lot more money changing hands than in days past, and with inflation hitting every transaction, things would soon get way out of hand.

In my opinion, in the event of runaway inflation, the government would have to step in and run the food distribution system. That would be the only way to keep the population from starving. The means of exchange would be ration cards distributed to each family that could be exchanged for food.

Another consideration . . . how would people buy gas to get to the food stores, since many people live some distance from the local supermarket. There would have to be ration cards for gas, too. Heating and electricity would also be taken over by the government and probably provided free (and intermittently) to each home.

At least in the beginning, ration cards would become the new currency. It would be impossible to use gold or silver to buy food from the government outlets.

I imagine that life would be pretty simple for a long time. Food choices and travel would be very limited. I can’t imagine that many people would have work. Without a functional currency in place, how could people get paid? Who could afford restaurants, new clothes, etc.? I don’t see many people going into clothing stores or other shops and using gold coins. Many businesses would simply close down.

As things began to recover, a new fiat currency would be created supplanting ration cards. People would have to use it for food and gas purchases, because the government would still be running those systems. At that point, I wonder if people would still want gold.

Yes, I know that gold has been used as currency for thousands of years, but gold has not been a means of exchange in the US for decades. Would it still be accepted alongside the new fiat currency, especially if it couldn’t be used to buy food or gas? Something is only worth what someone else is willing to pay or trade for it. I would certainly be hesitant to trade a cow for some gold coins, unless I knew that I could turn around and use that gold to trade for something else . . . or buy food and gas.

[jk]

Re: Best way to buy and store physical PM's

I wonder if physical gold would still be valuable after a SHTF event . . . .

Here’s my SHTF scenario. I have no idea of its worthiness, and I would appreciate hearing feedback from others:

In earlier times when there were runaway-inflation events, such as the Weimar Republic, there was a lot of farmland surrounding the cities, and food was customarily purchased in small local shops and markets. Many people had relatives who were farmers. Under these circumstances, most people got by — at least they didn’t starve.

Today it’s very different. Food in the US is flown in from elsewhere — vegetables from California, pork from North Carolina, etc. — there is very little local food production. Not only that, I understand there is something like a week’s worth of food on hand at one time in stores, because inventory is computerized and tightly controlled, and there is no long-term storage.

If there was runaway inflation, I don’t see thousands of people showing up at the local supermarket with wheelbarrows full of near-worthless dollars. Just waiting in line for cashiers to count the money would be unworkable. Also, getting food from farm to store requires a lot more money changing hands than in days past, and with inflation hitting every transaction, things would soon get way out of hand.

In my opinion, in the event of runaway inflation, the government would have to step in and run the food distribution system. That would be the only way to keep the population from starving. The means of exchange would be ration cards distributed to each family that could be exchanged for food.

Another consideration . . . how would people buy gas to get to the food stores, since many people live some distance from the local supermarket. There would have to be ration cards for gas, too. Heating and electricity would also be taken over by the government and probably provided free (and intermittently) to each home.

At least in the beginning, ration cards would become the new currency. It would be impossible to use gold or silver to buy food from the government outlets.

I imagine that life would be pretty simple for a long time. Food choices and travel would be very limited. I can’t imagine that many people would have work. Without a functional currency in place, how could people get paid? Who could afford restaurants, new clothes, etc.? I don’t see many people going into clothing stores or other shops and using gold coins. Many businesses would simply close down.

As things began to recover, a new fiat currency would be created supplanting ration cards. People would have to use it for food and gas purchases, because the government would still be running those systems. At that point, I wonder if people would still want gold.

Yes, I know that gold has been used as currency for thousands of years, but gold has not been a means of exchange in the US for decades. Would it still be accepted alongside the new fiat currency, especially if it couldn’t be used to buy food or gas? Something is only worth what someone else is willing to pay or trade for it. I would certainly be hesitant to trade a cow for some gold coins, unless I knew that I could turn around and use that gold to trade for something else . . . or buy food and gas.

part of what i like about this board is that occasionally someone posts something so bleak that it makes me feel like an optimist.

[raja]

Re: Best way to buy and store physical PM's

I should have mentioned in my SHTF post above that I give my scenario a less than 5% probability of occurring . . . .

Before coming up with the above scenario, I had allocated a small portion of my portfolio to physical gold because I gave a SHTF outcome such a small probability. But after thinking more about how things might unfold -- with government taking over many aspects of society -- I am considering reducing my physical gold allocation even more, yet still keep some in the event that it might have some yet-unacticipated use.

[DemonD]

Re: Best way to buy and store physical PM's

raja, good points.

I see gold as a "store" of value, mostly an insurance type thing. Let's say I have 20k in dollars, and 2k in gold. The dollar goes to zero. I still have my gold... so whatever new currency is put out there, i can redeem my gold for the nuevo dolare.

Also, finster, from post #21, I completely agree with exactly what you are saying, right on the same wavelength there.

[Finster]

Re: Best way to buy and store physical PM's

In my opinion, in the event of runaway inflation, the government would have to step in and run the food distribution system. That would be the only way to keep the population from starving.

It would practically guarantee it.

Given the efficiency with which the government runs other things, it's unfathomable how the government could take over the food distribution system and somehow prevent the population from starving. The Soviet Union tried that, and reported seven decades of "bad weather".

In contrast, consider the WalMart distribution system. There is no way politicians and bureaucrats could, in their wildest fantasies, ever run a system with a fraction of its efficiency.

[grapejelly]

Re: Best way to buy and store physical PM's

I think physical is important in greater quantities than y'all seem to.

Trading can break down in paper and you don't want to be dependent on it.

The government, banks and brokerages can easily throttle redemption of paper, convert it at an arbitrary government-mandated rate, and any other shenanigans.

Here is a scenario. Let's say there are bank runs. There were large bank runs in recent history, actually, so this isn't farfetched.

But let's say that due to this enormous worldwide asset bubble bursting, there are bigtime bank runs.

At the same time, "everyone" is selling securities and withdrawing cash.

The government is gonna clamp down on how much cash you can withdraw.

If you try to sell your gold or securities, there could be high taxes imposed on the sales proceeds in order to discourage "disorderly markets" or "speculators".

OTOH, if you have physical, you can easily bartar for stuff. You can pick up assets outside the banking and brokerage system. Including of course food. But also land, houses, all kinds of stuff. Dirt cheap.

That's how I see it.

[spunky]

Re: Best way to buy and store physical PM's

I think physical is important in greater quantities than y'all seem to.

Trading can break down in paper and you don't want to be dependent on it.

The government, banks and brokerages can easily throttle redemption of paper, convert it at an arbitrary government-mandated rate, and any other shenanigans.

Here is a scenario. Let's say there are bank runs. There were large bank runs in recent history, actually, so this isn't farfetched.

But let's say that due to this enormous worldwide asset bubble bursting, there are bigtime bank runs.

At the same time, "everyone" is selling securities and withdrawing cash.

The government is gonna clamp down on how much cash you can withdraw.

If you try to sell your gold or securities, there could be high taxes imposed on the sales proceeds in order to discourage "disorderly markets" or "speculators".

OTOH, if you have physical, you can easily bartar for stuff. You can pick up assets outside the banking and brokerage system. Including of course food. But also land, houses, all kinds of stuff. Dirt cheap.

That's how I see it.

Yes, and you can wait and see what level the new currency will float to and then get back in.
This friggin gov, cant even wipe their own cracks, let alone run a distribution system for food that could supply the whole nation. Ah Walmart Chavez, it has a nice ring to it.

look to the gulf coast; what a shame

[grapejelly]

Re: Best way to buy and store physical PM's

look no further than e-gold for Exhibit A as to what can happen to paper gold.

copy of the US government's indictment and seizure of e-gold

The government seized all of e-gold and is forcing liquidation into a government account.

This is in the name of preventing investment fraud, child porn, and identity theft.

I have a good friend who was getting paid through e-gold for work on behalf of an offshore firm. She wasn't in any of the above categories.

The real sin is doing any financial transaction that can be beyond the US government's long arm.

We all read this stuff and say "that wouldn't apply to me. I pay my taxes. Etc." but let's say that you want some degree of financial privacy and protection and you are an American citizen. Couldn't your activities be construed in some way that the US government decides isn't legitimate?
Who knows.

This is another reason to have a significant amount of one's net worth off the grid.