We live in a crazy, crazy world and one that doesn’t seem ready to return to normal any time soon. In fact, we may never see “normal” again. We’re told to pay off debt and save money at a time when unemployment is at historic highs in many parts of the country. On top of that, Americans are being advised to venture into the previously unknown worlds of food storage and buying silver and gold.
I hope my blog and webinars will assist you in getting a handle on food storage, but when it comes to precious metals, I turned to Chris Slife, an expert in precious metals, for answers. At one point, Chris was a high school teacher of history and economics, but ten years ago his interest in precious metals took a more serious turn. He came to the conclusion that financial security lay in investments in silver and gold, specifically in the physical ownership of these metals. Now he’s in the precious metals business full-time.
Several days ago, some of my Facebook readers posted questions for Chris to answer. I’ll let him answer those questions in his own words. Watch for his answers to additional questions coming up in Part 2.
Q: How do I know what a real gold or silver coin looks like?
A: My best advice is to visit a local coin shop and purchase a 90% silver dime, quarter, and half dollar. Compare those to their more modern counterparts. Immediately, you will notice a difference. Study the real coins, their appearance, and weight, and you’ll be ready to distinguish real silver coins from something less.
Weight is key for both gold and silver coins; they “feel” heavy. It’s important to know the weight of the coin(s) that you are interested in. Easy to download the info from the web.
Here is some information about specific silver coins that may be helpful.
Silver Rounds: Look for .999 and one troy ounce on the coin. The advantage to these coins is that they have a cheaper premium but are less recognizable than other silver coins.
Silver Eagle: Look for the date on the obverse (front), and look for “1 oz fine silver – One Dollar” on the reverse (back). Silver Eagles are US currency and very recognizable, but they come with a high premium. All pure 1 oz silver coins should weigh 31.1g, or 1 oz.
Silver Coins: also known as 90% silver. The advantage to these coins is that they are U.S. currency, have a low premium, and are very recognizable. These coins include pre-1965 quarters and dimes. Their main disadvantage is that they are bulky, but then again, so is silver in general. Other silver coins that I like are Silver Maples, Silver Philharmonics, and Perth Mint products.
Old Silver Dollars: These are 90% silver. I like them because they have a face value, and the Morgan dollar in particular, is easy to recognize. They are .7734 oz. of silver. I recommend buying only common date dollars. 1921 Morgans are very common. There are many other common dates so do some research. Go buy a common silver dollar and have them “ring” the coin for you. A Morgan or Peace dollar has a distinctive “ring” to it.
Q: What about purchasing gold coins?
A: Three common gold coins you’ll find in most coin shops are the Gold Eagle, the Krugerrand, and the Maple Leaf. Each has advantages and disadvantages for the buyer.
Gold Eagle: 22k, comes in 1, ½, ¼, and 1/10 oz. sizes. Its main advantage is that it’s easily recognizable, but these come with very high premiums.
Krugerrand: 22k, usually seen in 1 oz size. This coin usually has a low premium but isn’t as recognizable as an Eagle.
Maple Leaf: 24K, usually seen in 1 oz size. Again, this coin usually has a low premium, but it’s not as recognizable as an Eagle, and it scratches easily.
Other commonly seen gold coins are the Chinese Pandas, Austrian Philharmonics, Australian Nuggets; name brands gold bars are good as well (JM, Engelhard, Sunshine, Credit Suisse, RCM, Perth Mint, and Pamp)
Buy a Blue, or better yet, a Red Book of U.S. Coins. Get the larger edition because you can see what the coins look like.
Q: Will gold be confiscated again?
A: The government can do anything it wants. Or at least try! We strongly feel that the “confiscation” fear is a red herring for unscrupulous dealers to sell over-priced coins.
By the way, during the 1930s, people who had their coins confiscated kept them in bank “safety” deposit boxes!!!!! (Read that one again and again…..)
Q: Is gold and silver an investment, or insurance, or both?
A: I recommend buying gold to people who have a large amount of “paper” assets that need to be hedged. If you have all your assets denominated in dollars, Euros, etc. and the currencies get devalued, so do your “assets”. Gold will keep your purchasing power stable in the event of a currency crisis.
(Disclaimer: I am unable to give specific advice as to any specific dollar amounts since I am not a registered financial advisor.) Conclusion, gold is an insurance policy against currency devaluation and general economic malaise. If the economy breaks down, like I said before, I would prefer 90% silver.
Now, if I were looking at gold and silver as an investment, I would lean towards silver or gold and silver stocks. I think the upside for silver and gold and silver stocks is great.
By the way, when I talk about gold and silver, I am referring to physical gold or silver unless stated otherwise.
Finally, here’s a piece of good advice. Go out and buy Michael Maloney’s Guide to Investing in Precious Metals. It is a great place to start your education.
DISCLAIMER: I am not a registered financial or investment advisor. Please do your due diligence because I do not share in your gains, or your losses! Research, research, research!
A note from Survival Mom: Silver can also be used to make an ancient, antimicrobial medicine.
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17 thoughts on “The Basics of Precious Metals”
A good way to see if a coin is silver is to "flip it" and let it land on a table or other hard surface. The silver coin will have a sharp "peel" to it. When compared to the '65 and later coins it's easy to hear the difference, even for a half deaf guy like me.
It is likely that gold would be confiscated, perhaps silver too, if we have an economic collapse. While you may think you can get away without complying with the law on this in fact the penalties would be stiff. Who would trade with you for your gold if they could also be put in jail? So then what do you do with your gold?
Chris was right when he said that the government can do anything. Six months ago, who among us would have thought the TSA would be groping and molesting innocent passengers? On the other hand, the dollar is losing value, and that's a fact, while precious metals have intrinsic value. They always have. Ferfal, who writes at SurvivingArgentina.com comments often about the importance of having gold, in particular. He says that even gold wedding bands are useful as a currency.
we are holding our silver coins for after the economic collapse – not during it. imagine people in weimar germany changing marks into silver coins. they could have rebuilt their lives much better when things stabilized than the people who stayed in the mark and lost everything. a government that starts confiscating precious metals is bound to collapse within years anyways.
Very good point. The gov could make gold and silver worthless for all intents and purposes by making it illegal to sell or exchange. They can make it a requirement for jewlers etc to report people who try to sell them gold or silver. I wouldn't even put it past them to setup some high profile "stings" with police posing as metal sellers and arresting jewlers and dealers who don't report the transaction.
"The gov could make gold and silver worthless for all intents and purposes by making it illegal to sell or exchange."
Oh, like drugs? That's not a very profitable business to be in. It's akin to saying illegal drugs are worthless because they are illegal. Alcohol during the Prohibition (another phony edict)? Value of alcohol went way up and into the black market.
If our so called government purports to make gold illegal, it's value will skyrocket on a black market, and like drugs, there will always be people who buy and sell it.
"They can make it a requirement for jewlers etc to report people who try to sell them gold or silver." This already exists. In Philadelphia, at least, gold buyers are taking ID and fingerprints along with a description of the gold. New laws are coming into effect to take more information about buys and sells of physical gold. Get it while you can.
And do you propose that because drugs have a high black market value that a mother of four can grab a handful of crack and buy groceries for the week. If you have plans to be an outlaw then laws won't matter much, but to many families the idea of risking imprisonment to do the grocery shopping is a big impediment. The laws won't make gold worthless, but it will stop it from being a medium of exchange.
I agree that the government could make gold illegal as a currency and could either crack down on gold owners or not. A black market would crop up, but a good PR campaign demonizing gold owners as \”hoarders\” and a few well-publicized sting operations would cause many people to think twice before offering gold in exchange for goods. (I\’m not paranoid at all, am I??)
Confiscated how? Gold ETFs and other paper gold can be confiscated with some strokes on a keyboard. How do they confiscate physical gold if you paid cash for it, keep it out of a bank's safety deposit box, and keep it well hidden. If gold is outlawed there will be a black market for it where you can sell it for outrageous prices. Of course, you will be a "criminal" for doing so, but who are the real criminals if such a law is enacted. Or melt your physical gold into wedding rings. If you think government agents at the behest of politicians are going to take your wedding ring off your finger you should head for the hills.
Well……..Good point,GoneWithTheWind!Geesh….now I have to really sit and think on this!……Lol…Good post,Good info.
The dollar can be devalued at any time. Too many people are wising up to the importance of having their wealth in something other than paper money. When I hear of billionaires buying gold by the ton, I figure they must know something I don't!
There is a stiff penalty for not paying your taxes also. I remember in the late 70s early 80s reading an article that if they included the underground economy in the economic statistics the country would not have been in a rescission.
Just a quick note. An ounce is 28.35 grams and a troy ounce is 31.1 grams. Something to bear in mind when saying something is a one ounce round.
Thanks Sean. I'd always remembered an ounce being just under 28 1/2 grams, so when I saw 31.1 I was wondering if my memory was faulty or something.
IMO it may be worth holding metal from a foreign source (like Mapel Leafs) in spite of the lower recognition (which I'm not so sure is fact anyway). Depending how things go during and after an economic SHTF event you may be dealing more with foreigners and foreign businesses more (maybe even having to go abroad). An Eagle coin identifies you more as an American and that may not be something you want to easily be known for.
Cycling back to an old post, but what’s old is new again, right?
I didn’t see anything about junk silver here. Anyone have any thoughts on that?
Not sure this is what you’re looking for, Nancy….. What is junk silver?