Strategy for gold and silver

10 posts / 0 new
Last post
Ameet's picture
Ameet
Status: Member (Offline)
Joined: Mar 18 2011
Posts: 8
Strategy for gold and silver

Hi all,

I'm interested in what strategy people have for their gold and silver.

I've read some people will hold forever and give to their children.

I've just read Mike Maloney's book ' 'Guide to investing in Gold and Silver' and he talks about the greatest wealth transfer in history and selling his holdings just near the peak when the masses rush to gold and silver, and then using that to buy cash flowing real estate.

But what if I sell my gold at the peak, and its  hyper-inflation, and before i buy the property, the money becomes worthless after 24 hours?

Would be interested to hear what others have in terms of their long-term strategy.

Take care

Ameet

SagerXX's picture
SagerXX
Status: Diamond Member (Offline)
Joined: Feb 11 2009
Posts: 2252
Ameet wrote: But what if I
Ameet wrote:

But what if I sell my gold at the peak, and its  hyper-inflation, and before i buy the property, the money becomes worthless after 24 hours?

If we're into a hyperinflationary scenario, and you've got gold in hand and are looking to buy property, I would imagine the seller would be happy to accept X ounces of gold for that property.  In hyperinflation, not only will paper money be relatively worthless, physical PMs will be hard to come by -- making your physical gold...uh, as good as gold!

Viva -- Sager

sundarb's picture
sundarb
Status: Bronze Member (Offline)
Joined: Jan 10 2011
Posts: 72
Agree with Sager

You don't sell your gold, instead you spend it.

ewilkerson's picture
ewilkerson
Status: Gold Member (Offline)
Joined: Jul 18 2010
Posts: 390
How do you decide where the

How do you decide where the peak is?

earthwise's picture
earthwise
Status: Platinum Member (Offline)
Joined: Aug 10 2009
Posts: 848
Spend gold like FRNs
ewilkerson wrote:

How do you decide where the peak is?

Like any other time you spend: when the object of purchase is worth more to you than the money you hold, whether that money be paper or 'shiny metal'.

cshepherd's picture
cshepherd
Status: Member (Offline)
Joined: Nov 4 2010
Posts: 2
Get in now or wait

What do people think about getting into gold and silver now if one has no holding at all???  We seem to be in another classic "bubble" scenario but then again maybe the past is not a guide for the futue anymore.

ao's picture
ao
Status: Diamond Member (Offline)
Joined: Feb 4 2009
Posts: 2220
cshepherd wrote: What do
cshepherd wrote:

What do people think about getting into gold and silver now if one has no holding at all???  We seem to be in another classic "bubble" scenario but then again maybe the past is not a guide for the futue anymore.

The past is always a guide for the future but it's not the most favorable time to get into gold and silver (from both a long term and a short term perspective) but it's not yet in full blown bubble territory.

Meaning there's not a simple answer for you.

If I were in your shoes, I'd wait for at least a small correction and then buy a small position.  The size of your position obviously depends on your financial status.  If you have no food or water storage, no emergency cash, etc., take care of those items first before buying any PMs.  On the other hand, if you have all your basic preparations taken care of and have a sizeable amount of liquid assets, I'd buy PMs equivalent to 5-10% of my liquid net worth and cost average up to the whatever percentage you ultimately want to hold.  With 5% in PMs, you at least have some "currency insurance".  Production costs for PMs have risen so even if the bottom were to instantaneously and miraculously fall out of the PM market, you wouldn't lose much.  On the other hand, the risks of the bottom falling out for paper assets is steadily climbing and if it does, you could potentially be left with essentially nothing. 

  

 

thc0655's picture
thc0655
Status: Diamond Member (Offline)
Joined: Apr 27 2010
Posts: 1712
Peak gold/silver

Ameet, 

Go back to Maloney.  On his website goldsilver.com he has recently posted presentations addressing this very question.  He is a PM investor and he and his staff have a methodology for estimating when the peak is being approached/reached.  He discusses what some of the indicators are that they're looking at (but not all, of course) and they make sense to me.  I bought some of my PM's from him and that got me on his list to receive updates on when he starts selling when the peak is approaching.  When he starts selling that will be one important indicator for me, but not the only one.  I was completely pleased buying from him so you might consider doing so to get access to his research (but you can get slightly lower prices by browsing goldshark.com).  Personally, to keep myself from pulling the trigger too soon I did all my own research and decided on two price targets below which I won't even consider selling at ($5,000 gold, $100 silver).  But remember, price doesn't matter, VALUE is everything. In a worst case scenario you won't want to trade gold/silver for any amount of worthless paper (only trade them directly for assets, like real estate).

If I had none, I'd do as written above: look for the dips and buy.  If Chris is right about the Fed temporarily stopping QE this summer and a crash in all types of asset prices occurs, you could get in in July - Sept, if not before.  It depends on how high it all goes.  If you buy silver now at $40 that might seem pretty steep when you could've bought it last year this time for half that.  BUT that will all be forgotten when you sell for, say, $125. You have to do your own research and make your own decisions since it's your money, future, survival.  You also have to give up the fantasy of picking the exact top.  Like with hand grenades, "close" is good enough.  And that anxiety you feel?  We all feel it.  That's the injustice and immorality of a financial system built on debt, inflation and fraud -- it forces the average Joe to take risks with their wealth they shouldn't have to take.  Hard work and saving should allow you to live a decent life and retirement, but we're forced to take risks in this system just to survive.

I hope I have some gold/silver to leave my children, but it may end up I have to use it all just to survive.

Good luck. 

thc0655

eexpo's picture
eexpo
Status: Bronze Member (Offline)
Joined: Jun 30 2011
Posts: 51
selling gold

Thank you  thc0655.    I may  choose to pay off my  personal residence mtg with physical gold if and when hyper inflation starts.I am concerned with where I could cash in say 100 oz  of PM's  during a chaotic period where  using postal delivery may be  too  high a  failure risk. Where do you go to exchange gold into fiat to pay a mtg debt? If one can't trust the mail or other delivery systems. Do I drive to where I bought my gold and knock on their door?(2500 miles away) Will a coin shop have enough fiat ? ' Lost in the mail 'is an event that I wish to avoid.Are there any options?

thc0655's picture
thc0655
Status: Diamond Member (Offline)
Joined: Apr 27 2010
Posts: 1712
Fiat and PMs during the chaos

Good questions!  Ferfal in his book and blog (themodernsurvivalist.com) talks about how in the Argentinian crisis legit and black market dealers appeared seemingly out of nowhere to facilitate barter, and converting PMs to fiat and back. Sounds like a business opportunity to me, though Ferfal did point out how dangerous it was for the customers and the dealers (crime, police, corrupt bureaucrats).  Another business opportunity for that future time I've envisioned is providing transportation via armored vehicles and with armed guards.  And I don't mean the usual armored car security guards -- more like laid off and moonlighting police and retired military.  Another approach will just be to spend your PMs to buy what you need.  Merchants won't take it now in most places, but they will if things get as bad as they did in Argentina.  Obviously a 1oz gold Eagle will be too big, unless you're buying a car or a boat.  Silver Eagles and "junk silver" (90% silver US coins pre-1965) would be easier to buy food and other essentials with.  And there's another business opportunity -- all of a sudden merchants and customers will need to know on a daily basis what the going price for a 1 oz silver Eagle is, or a pre-1965 dime or quarter, or a sterling silver place setting.  Just providing that information could generate income and help everybody cope until a new system is developed.  As you can see, some of the "infrastructure" we'll need to survive probably won't be developed until it's needed in the midst of the crisis, and that's not a comforting feeling right now.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Login or Register to post comments