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!
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