Metal

I guess you have to kinda be living under a rock to not notice that gold hit an all-time  high the other day. I don’t really keep more than a passing glance on gold prices, but I watch silver pretty closely. You know, it was only a few months ago that silver crapped the bed at around $12. Today its more than twice that. In other words, silver doubled within four months. I can’t think of the last time that happened. Maybe back when the Hunt brothers were working their mojo?

Where does it go from here? Beats me. But, to my uneducated way of thinking, people flocking to metals and driving up the prices is indicative of a belief that perhaps the economic outlook is not that great. If that’s true, I think you’d do well to spend some of that precious metals money on getting your debt knocked out, some food and ammo in the basement, and whatever else you need. If you’re so uncertain of the future that you’re buying precious metals, than that future is uncertain enough that you may wanna backstop with ammo and canned goods. Just sayin’.

But…if the market tanks, people are gong to need to raise cash in a hurry to cover their market losses. And that means selling their metals. And that means a big dump into the market which, as I understand it, depresses prices. Or does it? Seems like all the rules are off these days.

As I’ve said, whatever disposable income I have gets split into three different areas: silver in case things go really, really wrong; my Roth in case things go really, really well; and cash savings in case I’m not sure which way to go. That way I’m not totally caught flat-footed if the economy tanks or if it booms.

As much as I enjoy the sexy parts of survivalism, like guns and gun bunnies, the fact is that you’ll  need fifty-dollar bills far more than you’ll need fifty BMG in most emergencies. I can’t recall the last time I had a personal-level TEOTWAWKI that was resolved by the judicious application of M193, but I can rattle off a half dozen where a pile o’ greenbacks turned out to be the multitool that fixed things.

By all means, buy some precious metals when you have the money…but not before you’ve got the really unsexy-but-more-likely-to-be-needed things taken care of.

 

24 thoughts on “Metal

  1. I agree that the PMs should be acquired after all of the more important things are nailed down. I tend to think that the majority of people that are holding PMs are in a good enough place to not panic. Rather, I think the smart ones sell quickly as the route starts and then buy them back cheaper at the bottom (or at least lower than when they got out). This is a way to increase your PM holdings without spending more money.

    • Sure, but it’s predicated on timing the markets which ranks right up there with horse racing and blackjack.

      • Dollar cost averaging is the classic strategy. Spend x dollars per month on (fill in the blank). You naturally buy more when cheaper and less when prices go up. Works out over the long haul much better than trying to time the market.

        • I agree. Most people, though, don’t have the discipline to do that and instead ‘jump’ in/out when they think ‘its the right time’.

      • Long time lurker. First time commenter. My approach will be when the gold-silver ratio drops convert a portion of silver into gold. When the GSR goes up, convert it back. Keep doing that and your stack keeps getting bigger. No need to try to time the market and no cash outlay. Seems like a winner.

        • Not a terrible strategy, but in order to implement your plan you will need a meaningful gold and/or silver stash to start with.

    • Absolutely; I’m going to sell my PM’S 4 days after hell freezes over. That’s just after the Plague of Locusts and before the Nile runs red as blood:. NOT!!!!! One thing I have learned is you need a lot more chocolate than supposed.

  2. Just viewed the latest edition of Trends journal
    The PM’s are taking off due to the collapse of
    the worlds economies…we all knew it was coming.
    In short, the collapse is here and the roll out of
    a “world”, or some fashion of a “new” currency
    is upon us. Yes, as the author advises, diverse
    your wealth. But I wouldn’t put much where I
    couldn’t physically control it. Land, silver, and raw
    resources, IMHO, would be the safest investments.
    What I refer to as “raw resources” are tools, and other
    items which one could work with or fashion a living with.
    But what do I know …

  3. Another metal that may be worth a look is platinum. Typically trades a hundred bucks or so above gold now it’s below $1000/oz while gold is inching it’s way to $2000. If manufacturing ever recovers the price should go back up.

    But then again I just paid ~$1.50 a round for Magtech .357 mag. so brass and lead is high also.

    https://www.jmbullion.com

      • IIRC platinum gets most of its valuation from its industrial uses, the biggest being catalytic converters for automobiles.

        With an economic crash, industrial uses will be way down, and the auto industry is well into a huge crash. My local Ford dealer had new F-series and Expeditions $20K off list a week or two ago, and it’s the second time they did that. The discounts were even bigger and broader this time, with over 800 vehicles discounted.

        The rental car collapse will destroy used vehicle prices, and that will put further downward pressure on new vehicle pricing and demand.

        In other words, if platinum’s value is determined by its use as an industrial metal, the it’s not going up until the “post war” boom….

        n

  4. US gov pumped 1Trillion+ into the economy as ‘stimulus’. Talking about another 1.2 or so. Euro countries talking about another 2-3Trillion. And people wonder why gold/silver is rising.

    And its not even ‘printing money’ anymore. All it is are a few keystrokes. So easy to do, so hard to live with.

    • Watch Mike Maloney’s ‘Hidden Secrets of Money”, episode 7. Details the timeline of Germany’s post-WWI hyperinflation. It looks disturbingly similar to our situation since 2009.

  5. A good read about this very situation is the book titled “The Death of Money” by James Rickards if you have some free time. Like CZ said, pay off debts first. Then begin stacking if you can.

  6. With in Rule of Law gold and silver helps you maintain your accumulated wealth. A high quality men’s suit head to toe used to cost in Victorian England an ounce of Gold. Today the dollar value of gold will get you a similar high end suit from head to toe.

    With out Rule of Law that handful of gold and silver has limited trade value. If your starving and offer me gold for a days rations don’t expect change. If your thinking of robbing me of my food then wonder why I didn’t rob YOU of your gold?

    Get the survival basics FIRST. Shelter, water, Food, defense (so they cannot easily rob you eh?) trusted friends (same reasons plus plenty more) seeds, small livestock OR buy in a share of someone you trust (see friends) that CAN keep them, livestock food (a LOT of new chicken owners are going to be a hurting when Tractor Supply is a smoking ruin), LEARN SKILLS that will make you useful to others like fixing shoes or… (way too many wannabe “Security” applicants, they are like Mercenaries not trustable IMHO) Get the TOOLS to do those skills. During the Great Depression Gold was essentially STOLEN under color of Law by President Roosevelt. As nobody trusted banks then (and shouldn’t trust them now, ever hear of Bail IN’s? where your money is used to bail out the banks mistakes?) GOLD was a Families storage of wealth but Roosevelt declared it illegal to own and forced folks to bring it in or confiscation and prison at some 20.00 and ounce. THEN re-valued it at 35.00 an ounce STEALING real wealth from the families of America.

    So under socialism rule of law WILL change but trusted friend and skills are hard to steal.

  7. Wow. I haven’t been paying attention to it but goodness. May have to keep my eye out and buy some silver soon.

  8. Silver and gold may have been ‘officially’ cheap a couple of months ago, but the premiums were so high that the real price was more than it had been last fall. Then demand was low enough that the price to get it in hand was lower than at any point this year. I picked up some silver dollars in November when APMEX, my usual supplier, had them on sale for $15 each…

  9. Silver and gold never increase.
    An ounce of either is ALWAYS an ounce of either.
    What you *meant* to say is that relative to silver, the dollar has halved in value in the last few weeks to months.

    The confusion sets in for people who mistakenly regard government-printed fiatbux as actual money, rather than merely highly decorated paper treated as currency. That is nothing like being “money”.

    • Good Morning Aesop! And thus families used to store gold to preserve family wealth. Thus the example of the high end suit from Victorian era to today *still* costing about an ounce of gold.

      Fiatbux is a real problem. The Dems have dusted off an old Obama era bill to create an electronic Dollar again. Seems the Leftist concept of never let an crisis go to waste arises with this designer bioweapon COVID19 to eliminate cash as dangerous with COVID…

      Just THINK No Cash to prevent the Government from assessing their control and taxes on everything you do. If they disapprove of your purchase your card simply fails to work. If you are a problem it simply fails totally. Privacy, Piffft, what’s that sheeple comment “If your not doing anything wrong you have…”

      Even NEGATIVE Interest rates can be enforced with all electronic dollars. Gee a tax if you don’t spend every dime before they take some from you every month/week/day (their choice you know).

      Gold and Silver have some value BUT only in a socialist paradise in the grey or black market with all the risks thereof.

      Thus my strong suggestions of investing in trusted friends, skills and tools. If your a valued member of the community you can always make whatever the current government flim flam money needed or trade for needed things.

      If it’s in the bank you HOPE it’s yours, if it’s in your hands a LOT harder to steal.

  10. I’m in a holding pattern regarding PMs. I was right about prices dumping back in March and in that brief time when you could get some really good Ag prices (like ~ 12 hours) I took advantage of it. Only thing I’ve been doing since was putting a little into Au fractionals (.9999) and leaving it at that. Ag is just crazy premiums wise and I’m going with one of CZ’s options above.

    There is going to be a massive stawk market dump after Nov (regardless of who wins but for very different reasons) and PM prices will come down for a while until the U.S. Dollar totally tanks then it’s going to climb like a homesick angel. I don’t anticipate there is much time left for this current iteration of U.S. currency…

    Be Prepared

  11. I have to say PM’s are the only prep I have not done. Although I realize those metals will always have some value, I do agree with CZ that food and guns/ammo are far more easily converted or useful than a couple ounces of gold. Can’t eat the stuff and even if you had a van full of gold coins and offered them to a guy for some food and you all were starving chances are not good he/she would trade you for them.

    • PM’s are good for the other side; after the crisis. Of course, you need the other stuff in order to get through the crisis. However, once the crisis is over, you need some capital to get started again and PM’s have proven to be a store of value for thousands of years.

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