Gold & Silver to Buy or Not?

I will be honest and admit that I personally own precious metals. Some gold but mostly silver. This will probably be my only post about why it is smart to buy metals as I am probably not saying anything that most of my readers have not already heard before.  As preppers it makes sense to get informed about things and stay that way.  As individuals we all get to make our own choices an if it turns to be stupid then we get to live with them.

1941 Mercury Dime - 90% Silver
1941 Mercury Dime – 90% Silver

First things first.  Metals are NOT an investment like a 401K or IRA.  they are a hedge and a store of value.  Metals are possessions that will always have value, even when the current monetary system collapses which it is certain to do absent serious structural change.  When paper dollars are worthless because of inflation silver and gold will still be worth something.  Next the best place online to determine spot (current) prices for precious metals is KITCO.

As a medium of exchange you can’t beat these two precious metals for stores of value and after any collapse but particularly a monetary collapse they will retain their value. I read a good quote from JP Morgan recently that sums it up nicely; “Gold is money, everything else is credit.” In a crisis, gold will retain it’s usefulness as a store of value and medium of exchange as it has done for thousands of years. Now, the question is should you buy gold & silver and if so how much?  here is no question that both gold and silver are expensive.  on 21 may, 2014 gold closed at $1291.90 per ounce on the NYMEX and silver closed at $19.38 per ounce.  Those prices are for, bullion which are simple bars of the metal.  Both prices are lower than the all time high that was reached just a few years ago when gold went for $1890 an ounce in September, 2011 and silver went for $46 an ounce in April, 2011.

5M coins and canadian and American silver dollars.
German 5 ReichsMark coins and Canadian and American silver dollars.

On thing about buying coins is that you can sometimes find silver coins where you least expect it.  AT least once or twice a year I get a silver dime or quarter as change at a store.  I also go to local flea markets where I live and sometimes find coins there that the seller does not know they are silver.  Last year I got my hands on several German 1935 5RM Hindenburg commemorative coins for $2 a piece because the seller did not know they were silver.  Not only are they silver but they are commemoratives and worth between $18-$35 dollars each.

Bullion is different from coins in that pure metal in bars or rounds tends to be slightly cheaper than minted coins.  That is mainly because bullion is simply pure metal and as long as you buy from a reputable dealer you are going to be fine wheres coins from national mints have known weights and standard measures and they also have numismatic value for collectors, especially the coins from rare years.  That is not to say that bullion does not have it’s place in your collection.  However, if you are buying metals as a hedge against currency collapse or for survival purposes it is my opinion that coins are a better bet and should make up the largest part of your collection.  I think a good ratio is 2/3 coinage to 1/3 bullion.  1/3 to 2/3 by weight is also a good ratio for gold to silver as well.

Going further, I do not think you should keep your metal in offsite storage.  It is kind of stupid to pay someone to store your metals securely if that means that you cannot access it when the SHTF now isn’t it?  The whole point of owning metals is that they are a readily available medium of exchange when paper money turns into toilet paper. Another advantage of buying coins is that you can buy them in various weights and denominations that are easily portable.  You can also buy gold and silver in multiple weights and as bars or rounds but a silver dime will be recognized as a silver dime everywhere and there should be no haggling about what it is worth.

Personally, I buy almost all my metals through APMEX (That is not an ad and they are not paying me for the plug), APMEX has always been fair to me with fast and discreet service and reasonable prices.  Plus they are based in my home state of Oklahoma.  There are several other reputable online metals sellers, among them are KITCO, JM Bullion, and MONEX.