Buying physical GOLD , Please advise ?

[icm63]

Hi,

Is the best way to BUY physical gold, are these guys SAFE ??

http://www.bullionvault.com/


I am a non usa person ?

Please advise of my options ?

[grapejelly]

The folks here swear by them.

I would take physical delivery myself but that's just me.

I would buy coins, only coins. Sovereigns are good. I am a huge fan. So are Philharmonics. So are Mapleleafs. So are good old fashioned Kruggerrands.

[Starving Steve]

First, the best way to buy gold is to buy GOLD, and NOT to pay for collectibles, antique gold, artistic gold, special blessed gold, rare gold, historic gold, low mintage gold, first edition gold, good-looking gold, first strike gold, third-party graded gold, mint state 65 gold, pre-1934 U.S. gold, 9999 gold, gold stamps, Olympic gold, etc. ( This is really important, but few people understand just how important this is. )

Second, buy gold for the least premium over melt-value possible. In fact, try to buy under melt, if possible. The uglier, the better with gold, but don't buy stolen gold or counterfeit gold--- because that is too ugly and too dirty to buy.

Third, gold is gold is gold. 10K gold is about 40% to 41% gold. 14K is about 55% to 57% gold. 18K is about 73 to 74 % gold. Buy the gold for the net gold content, not for anything else. Bring nitric acid along, if you can. And believe your acid test, not anything else.

Fourth, be suspicious of poured bars of gold. It is always better to buy gold wafers and gold coins, not bars. But your acid and a drill will get to the bottom of any questions on poured bars.

Fifth, rub gold tid-bits together, and they become gold bars. Save every atom of gold that you can get your hands on. Even save gold-fill because gold-fill refines to gold, just like everything else.

Sixth, there are charges to refine gold, and they can be quite substantial with gold-fill. So check with your refiner before you buy anything.

Seventh, the most convenient way to own gold is 1ounce Canada maple leafs, 1ounce US eagles, and 1ounce wafers by JM or Engelhard Co. or the Royal Canadian Mint. (But remember rule #1 above because the gold market does not pay very much for convenience when you sell into the gold market.)

Eighth, if you are going to keep gold for years, take delivery of your gold and keep it in a safety deposit box at your bank. The best place to keep gold might be outside the U.S, but always declare your gold to customs authorities coming into or out of any country.

Ninth, cheap gold is a much better hedge against inflation than expensive gold. There is a world of difference between investing in gold at $900 per ounce than investing in gold at $300 per ounce. So be careful of your entry level price for gold. ( This is really important because gold pays no dividends and no interest. So I can not stress this enough: Buy the low markets, and sell the high markets. )

Good luck with gold, and I am sure you will do well. :)

[c1ue]

I agree on the coins advice - it is useful because there is less worry about counterfeiting, etc. Well worth the premium in the long run.

[renyxzar]

The price of gold would go to the sky should a major financial crisis occur. But in such a crisis gold certificates, unallocated gold accounts, futures, options and any other form of paper gold are most likely to be defaulted upon and become worthless.

So only buy paper gold if you intend to trade and speculate.

[Chris]

I use BullionVault. Great service. Recommend it if you can't get delivery on bullion or worry about it being stolen when the 'baaaad' times come around.

[Jayhawk]

Anyone deal with Monex? What's the scoop on them?

[krakknisse]

Well count me in with the iTulip crowd that likes BullionVault.

You may want to take a look at the following blog, "BullionVault Watch":
http://bullionvaultwatch.blogspot.com/
BullionVault has come from practically nothing and in three years gone to equal their older competitor GoldMoney.

Bottom line: diversification, so BullionVault should be just a portion of your portfolio. But in these times, I can't for the life of me see how gold can fail to rise and BullionVault seems a good deal to me. It's kind of fun to twist your head around to gold. I've begun to think of the value of things in kilograms and ounces of gold. Like how many kilograms I would need to have financial independence - sigh. Friends think I'm profiting - but I think I'm conserving capital and storing value.

I've failed to convince friends and aquaintances, but then we haven't had a property crash yet. The local property market here has gone up a lot 10 years, and is now down some of that in less than a year. They all think it has bottomed... :rolleyes: I suspect that when the shit hits the fan, they may not be able to afford any substantial amount of gold at all. A friend told me to sell when it hit 1000 USD/oz - because ECB was going to reduce interest rates! :) This is my first post here at iTulip - so could you all take a look at the blog and tell me what you think?

[Jim Nickerson]

Well count me in with the iTulip crowd that likes BullionVault.

You may want to take a look at the following blog, "BullionVault Watch":
http://bullionvaultwatch.blogspot.com/
BullionVault has come from practically nothing and in three years gone to equal their older competitor GoldMoney.

Bottom line: diversification, so BullionVault should be just a portion of your portfolio. But in these times, I can't for the life of me see how gold can fail to rise and BullionVault seems a good deal to me.

It's kind of fun to twist your head around to gold. I've begun to think of the value of things in kilograms and ounces of gold. Like how many kilograms I would need to have financial independence - sigh. Friends think I'm profiting - but I think I'm conserving capital and storing value.

I've failed to convince friends and aquaintances, but then we haven't had a property crash yet. The local property market here has gone up >250% in 10 years, and is now down 8% in less than a year. They all think it has bottomed... :rolleyes: I suspect that when the shit hits the fan, they may not be able to afford any substantial amount of gold at all. A friend - financial analyst even - told me to sell when it hit 1000 USD/oz - because ECB was going to reduce interest rates! :)

This is my first post here at iTulip - so could you all take a look at the blog and tell me what you think?

Welcome, krakknisse.

I can't comment on your question, sorry. Do you know that you have a profile associated with your name, into which you can write where you are, either city, state, country, planet, galaxy. That sure helps me, if no one else, keep some of the myriad people here straight, plus when one makes comments like the real estate "here" is doing such and such, it gives us a hint as to where "here" is which certainly would, I think, add to any meaningfulness of your comment.

When to sell gold? Who knows for sure, but DJI is selling for about 12.58 ounces of gold as of Friday, the lowest it has been since I began tracking it back on 1/3/05. Some have suggested that ratio (DJI/gold) may drop to 5 or less. IF that turns out to be the case, then either gold has got to go up a bit or the DOW down a bit, or both. Further perhaps the suggestion won't play out.

[FRED]

Hi,

Is the best way to BUY physical gold, are these guys SAFE ??

http://www.bullionvault.com/


I am a non usa person ?

Please advise of my options ?

We started to promote Bullionvault in 2006 after EJ spoke with Paul Tustain and vetted the company through VC contacts. iTulip receives a commission if you open an account via this link:

http://www.itulip.com/images/bullionvault.gif (http://www.bullionvault.com/from/itulip)

[krakknisse]

Welcome, krakknisse.

I can't comment on your question, sorry. Do you know that you have a profile associated with your name, into which you can write where you are, either city, state, country, planet, galaxy. That sure helps me, if no one else, keep some of the myriad people here straight, plus when one makes comments like the real estate "here" is doing such and such, it gives us a hint as to where "here" is which certainly would, I think, add to any meaningfulness of your comment.

When to sell gold? Who knows for sure, but DJI is selling for about 12.58 ounces of gold as of Friday, the lowest it has been since I began tracking it back on 1/3/05. Some have suggested that ratio (DJI/gold) may drop to 5 or less. IF that turns out to be the case, then either gold has got to go up a bit or the DOW down a bit, or both. Further perhaps the suggestion won't play out.
Thanks for the quick reply and welcome. It's kind of hard to find any place that specifically discusses BullionVault, so I started this blog. There's some traffic, but few comments. Perhaps we can get a gold-related discussion going here instead then?

With respect to location, I've entered "Northern Europe" - I'm privacy sensitive. I even considered closing the blog because of that. I suspect that there will be some gnashing of teeth over the rise of gold from the powers that be. But I'm from a Northern European country that went through one "big 5 financial disasters" relatively recently (
http://www.economics.harvard.edu/faculty/rogoff/files/Is_The_US_Subprime_Crisis_So_Different.pdf)

But nearly all of my countrymen are oblivious to the risk. Less than twenty years ago in a small open economy: financial bubble, then property crash, then stock market crash, then bank nationalizations (top 3 banks nationalized). One guy actually dynamited himself and his house (and a policeman) in 1991 after a foreclosure. Thousands of debt slaves - all debt here is recourse - so no walk aways. Now our bubble is far bigger than the US: the average house mortgage holder has a debt-to-gross household income ratio of 3.5, and the average household total debt-to-income ratio is 1.9 (larger than at the last crash).

But I'm the _only_ one I know betting against the house. Even one of my most prudent financial friends just plunged for a 1 MILLION Euro house, trading up from a 425,000 Euro house that he's now having trouble selling in the face of a weakening property market.

I should stop now... But it's nice to be among friends...

[Jim Nickerson]

Thanks for the quick reply and welcome. It's kind of hard to find any place that specifically discusses BullionVault, so I started this blog. There's some traffic, but few comments. Perhaps we can get a gold-related discussion going here instead then?

With respect to location, I've entered "Northern Europe" - I'm privacy sensitive. I even considered closing the blog because of that. I suspect that there will be some gnashing of teeth over the rise of gold from the powers that be. But I'm from a Northern European country that went through one "big 5 financial disasters" relatively recently (
http://www.economics.harvard.edu/faculty/rogoff/files/Is_The_US_Subprime_Crisis_So_Different.pdf)

But nearly all of my countrymen are oblivious to the risk. Less than twenty years ago in a small open economy: financial bubble, then property crash, then stock market crash, then bank nationalizations (top 3 banks nationalized). One guy actually dynamited himself and his house (and a policeman) in 1991 after a foreclosure. Thousands of debt slaves - all debt here is recourse - so no walk aways. Now our bubble is far bigger than the US: the average house mortgage holder has a debt-to-gross household income ratio of 3.5, and the average household total debt-to-income ratio is 1.9 (larger than at the last crash).

But I'm the _only_ one I know betting against the house. Even one of my most prudent financial friends just plunged for a 1 MILLION Euro house, trading up from a 425,000 Euro house that he's now having trouble selling in the face of a weakening property market.

I should stop now... But it's nice to be among friends...

Thanks for Northern Europe, I was sure you were from Weogufka, Notasulga, Sylacauga, or Opelika, Alabama. It sure helps to know you aren't.

That harvard link you put up suggests you are not from Japan or Spain. Are you sure you are not giving us too much information here? (smiley face)

I obviously don't know what people worry about regarding web privacy, when almost all of us use hide-our-name screen names, but if one lives in Europa, one should not worry too much, I don't think, about many poor Americans having the bonar wherewithal to go snooping around Europe looking for anyone named krakknisse. I'm sure there is more to your concerns than that, and I don't belittle them.

[metalman]

Thanks for the quick reply and welcome. It's kind of hard to find any place that specifically discusses BullionVault, so I started this blog. There's some traffic, but few comments. Perhaps we can get a gold-related discussion going here instead then?

With respect to location, I've entered "Northern Europe" - I'm privacy sensitive. I even considered closing the blog because of that. I suspect that there will be some gnashing of teeth over the rise of gold from the powers that be. But I'm from a Northern European country that went through one "big 5 financial disasters" relatively recently (
http://www.economics.harvard.edu/faculty/rogoff/files/Is_The_US_Subprime_Crisis_So_Different.pdf)

But nearly all of my countrymen are oblivious to the risk. Less than twenty years ago in a small open economy: financial bubble, then property crash, then stock market crash, then bank nationalizations (top 3 banks nationalized). One guy actually dynamited himself and his house (and a policeman) in 1991 after a foreclosure. Thousands of debt slaves - all debt here is recourse - so no walk aways. Now our bubble is far bigger than the US: the average house mortgage holder has a debt-to-gross household income ratio of 3.5, and the average household total debt-to-income ratio is 1.9 (larger than at the last crash).

But I'm the _only_ one I know betting against the house. Even one of my most prudent financial friends just plunged for a 1 MILLION Euro house, trading up from a 425,000 Euro house that he's now having trouble selling in the face of a weakening property market.

I should stop now... But it's nice to be among friends...

great to have you here. your perspective is gold to us. we'll tell you what we've learned... and we have a lot to learn.

[grapejelly]

I'm for buying physical gold with delivery...then burying it somewhere. They can take your gold from Bullionvault in a heartbeat.

[krakknisse]

I'm for buying physical gold with delivery...then burying it somewhere. They can take your gold from Bullionvault in a heartbeat.

Thanks for the input. As a matter of fact, I've been thinking the same thing. Is it just my paranoia? Tell me about that heartbeat. What kind of scenario are we talking? BTW, "krakknisse" means "crash gnome" (obsessively worrying about a crash), and was originally a pejorative term. It has been taken up by a select proportion of my countrymen as a label to be worn with pride.

I just checked with my local dealer. The spreads on physical gold will really hurt you (buy-sell 10%). With BullionVault, spreads are smaller and sales - if you decide to get out - are faster. The "getting out" thing seems to be fading in importance to me at least - I expect there to be turbulence for several years. So the question to me is how fast you think the "heartbeat" is going to be.

Paul Tustain is a smart guy. He knows that the Swiss gold vaults were raided by Napoleon during his invasion. He probably has some physical. I talked to him, and he said that "keep it there and re-assess". So the rapidity of things happening will be critical. How will you store physical? Offshore bank safe deposit? Grandma?

Getting an offshore account safe from confiscation is neigh impossible - witness the recent Euro shakeup over Lichtenstein. I'd never thought I'd think about it even - but physical gold does seem more attractive. BullionVault is the safest liquid above-the-horizon investment.

Really guys - is there tinfoil growing on my head, not just graying hair? I've checked out AlphaRubicon.com and have even thought about learning to shoot. Shudder. Please - some of the more skeptical guys here say that tinfoil-hat mode physical gold and the other survivalist items will not be necessary. ITulip has a broad range of opinions, right?

BTW, how good is the iTulip select portion of iTulip? I get a little tired of Tanta, Mish and Roubini every day. How much is it, and is it fun?

Mr Crash Gnome

[raja]

The price of gold would go to the sky should a major financial crisis occur. But in such a crisis gold certificates, unallocated gold accounts, futures, options and any other form of paper gold are most likely to be defaulted upon and become worthless.
So only buy paper gold if you intend to trade and speculate.
In making a decision on whether to buy physical or paper gold, I thought, "What would have to happen for something like GLD to default?" My answer was that things would have to get pretty bad. :eek:

If the stock market dropped to 4000, and lots of banks failed, I think GLD stock would still be a safe investment. It seems to me that it would take a major collapse of society for all stocks to become worthless.

Therefore, I believe that the most profitable and convenient way to invest in gold is by using something like GLD. Also, a small amount of physical gold would be good in case the S really hits the fan. The amount of physical gold should be proportion to what one feels is the probability of societal collapse.

That's my opinion on the physical vs. paper debate . . . I'd appreciate hearing others' ideas . . . .

[Jim Nickerson]

Thanks for the input. As a matter of fact, I've been thinking the same thing. Is it just my paranoia? Tell me about that heartbeat. What kind of scenario are we talking? BTW, "krakknisse" means "crash gnome" (obsessively worrying about a crash), and was originally a pejorative term. It has been taken up by a select proportion of my countrymen as a label to be worn with pride.

I just checked with my local dealer. The spreads on physical gold will really hurt you (buy-sell 10%). With BullionVault, spreads are smaller and sales - if you decide to get out - are faster. The "getting out" thing seems to be fading in importance to me at least - I expect there to be turbulence for several years. So the question to me is how fast you think the "heartbeat" is going to be.

Paul Tustain is a smart guy. He knows that the Swiss gold vaults were raided by Napoleon during his invasion. He probably has some physical. I talked to him, and he said that "keep it there and re-assess". So the rapidity of things happening will be critical. How will you store physical? Offshore bank safe deposit? Grandma?

Getting an offshore account safe from confiscation is neigh impossible - witness the recent Euro shakeup over Lichtenstein. I'd never thought I'd think about it even - but physical gold does seem more attractive. BullionVault is the safest liquid above-the-horizon investment.

Really guys - is there tinfoil growing on my head, not just graying hair? I've checked out AlphaRubicon.com and have even thought about learning to shoot. Shudder. Please - some of the more skeptical guys here say that tinfoil-hat mode physical gold and the other survivalist items will not be necessary. ITulip has a broad range of opinions, right?

BTW, how good is the iTulip select portion of iTulip? I get a little tired of Tanta, Mish and Roubini every day. How much is it, and is it fun?

Mr Crash Gnome

http://www.itulip.com/forums/payments.php I think that link shows the amount of blood you must sacrifice to join iTulip select.

Sure it's fun, it's American, and America is all about fun, or so some believe.

[zoog]

...Really guys - is there tinfoil growing on my head, not just graying hair? I've checked out AlphaRubicon.com and have even thought about learning to shoot. Shudder. Please - some of the more skeptical guys here say that tinfoil-hat mode physical gold and the other survivalist items will not be necessary. ITulip has a broad range of opinions, right?...

I am definitely in the skeptical camp, as far as Mad Max warriors hiding their last remaining gold coins up in their tinfoil hats. I must be either a rational, reasonable guy or a naive fool, take your pick.

Nonetheless, I do figure gold will hit an incredible parabolic spike at some point (or perhaps several, building up to the big one), like it did back in 1980. I have wondered how quickly one could get out of various types of gold investments at that time. It seems to me that in terms of selling speed, the order would be 1) paper gold (GLD, CEF, etc funds), 2) BullionVault [a close second], 3) physical coins/bars in your local possession, 4) physical bullion in your secret island hideaway. There is risk in all these options though that if the spike crashes quickly you may not find any buyers. I'm no expert, but I would imagine it would be easier to find buyers for bullion, whether in your hand or via BullionVault, than for paper gold if there is widespread fear that gold will plummet in value. If there is not yet widespread fear when you decide to sell, i.e. so far only the smart money is bailing, then I think there will still be buyers for paper gold.

Of course, if the doomsdayers are right, then I suppose gold will ratchet up to some astronomical value and then stay there indefinitely while you huddle in your nuclear-bomb-proof shelter. Eventually you shall emerge... a bit gaunt perhaps, and with more grey hair, but in generally good health and of sound mind. You will proffer one of your shiny gold coins to the first ragged band of mutants in hopes of obtaining some food, and they will fall back in amazement and declare you god and emperor.

[c1ue]

Of course, if the doomsdayers are right, then I suppose gold will ratchet up to some astronomical value and then stay there indefinitely while you huddle in your nuclear-bomb-proof shelter. Eventually you shall emerge... a bit gaunt perhaps, and with more grey hair, but in generally good health and of sound mind. You will proffer one of your shiny gold coins to the first ragged band of mutants in hopes of obtaining some food, and they will fall back in amazement and declare you god and emperor.

Zoog,

Yes, it is clear you've not spent much thought on the worst case.

Should you emerge from your shelter and confront a ragged band, what is more likely to happen is that they EAT you. Tastes like chicken...

Then take the shiny coins and make necklaces out of them.

[raja]

I am definitely in the skeptical camp, as far as Mad Max warriors hiding their last remaining gold coins up in their tinfoil hats. I must be either a rational, reasonable guy or a naive fool, take your pick.

There are some scenarios less drastic than Mad Max in which you might want those gold coins, such as a hyper-inflationary event in which dollars are used for toilet paper, the government has taken over food distribution, and all your dollar savings are wiped out. My wife went through something like this in Ukraine after the Soviet Union disintegrated -- everybody's savings were wiped out.

I'm not saying that scenario has a high probability . . . but it has some chance of occurring.

For less dire scenarios, GLD and other forms of paper gold are more desirable because of high liquidity.

[zoog]

Zoog,

Yes, it is clear you've not spent much thought on the worst case.

Should you emerge from your shelter and confront a ragged band, what is more likely to happen is that they EAT you. Tastes like chicken...

Then take the shiny coins and make necklaces out of them.

Nah I don't have enough meat on my bones to be worth the effort.:) Good thing it will never come to this anyway. You guys that seriously worry about this kind of scenario are paranoid. I really mean that. You may have convinced yourself that you are only being realistically cautious, but I think it is an unhealthy level of pessimism, and I'm a pretty pessimistic guy in general. You will never convince me to become that fearful.

There are some scenarios less drastic than Mad Max in which you might want those gold coins, such as a hyper-inflationary event in which dollars are used for toilet paper, the government has taken over food distribution, and all your dollar savings are wiped out. My wife went through something like this in Ukraine after the Soviet Union disintegrated -- everybody's savings were wiped out.

I'm not saying that scenario has a high probability . . . but it has some chance of occurring.

For less dire scenarios, GLD and other forms of paper gold are more desirable because of high liquidity.

This, at least, I am willing to concede is a remote possibility. I would be totally unprepared if it were to happen suddenly.

Hey, somebody around here has to try to counter the uberdoomers, of which there seem to be many. Why me I don't know, there must be others who think these dystopian futures won't come to pass. You (c1ue) are obviously a very smart guy and give out lots of good financial advice and analysis, and I do appreciate all that you contribute. I just think you (and others) go to far on this one, that's all. C'est la vie.

[grapejelly]

Thanks for the input. As a matter of fact, I've been thinking the same thing. Is it just my paranoia? Tell me about that heartbeat. What kind of scenario are we talking?

I'm talking about lots of things. They can pass a law or executive order. They can go after you personally. Just a legal notice served on Bullionvault, say for an "IRS lien" or what have you, and your gold is not yours anymore.


In making a decision on whether to buy physical or paper gold, I thought, "What would have to happen for something like GLD to default?" My answer was that things would have to get pretty bad. :eek:

If the stock market dropped to 4000, and lots of banks failed, I think GLD stock would still be a safe investment. It seems to me that it would take a major collapse of society for all stocks to become worthless.

Therefore, I believe that the most profitable and convenient way to invest in gold is by using something like GLD. Also, a small amount of physical gold would be good in case the S really hits the fan. The amount of physical gold should be proportion to what one feels is the probability of societal collapse.

That's my opinion on the physical vs. paper debate . . . I'd appreciate hearing others' ideas . . . .


No, you are kidding yourself. The whole idea of having gold is being in an asset that is not someone else's liability.

If you have paper gold, you have someone else's liability. You have nothing when push comes to shove. It's an oxymoron to have paper gold and for good reason.

I am continually amazed at how people rationalize paper. Paper is paper.

[raja]

No, you are kidding yourself. The whole idea of having gold is being in an asset that is not someone else's liability.

If you have paper gold, you have someone else's liability. You have nothing when push comes to shove. It's an oxymoron to have paper gold and for good reason.

I am continually amazed at how people rationalize paper. Paper is paper.
I guess our difference here is that I can't picture a scenario in which GLD would become worthless.

In a severe economic depression, I can visualize many companies going out of business, but not a company whose sole business is to keep insured gold bars in a vault.

Grapejelly, can you please describe the scenario in which you see GLD paper becoming worthless and the probability of its occurring?

[grapejelly]

I guess our difference here is that I can't picture a scenario in which GLD would become worthless.

In a severe economic depression, I can visualize many companies going out of business, but not a company whose sole business is to keep insured gold bars in a vault.

Grapejelly, can you please describe the scenario in which you see GLD paper becoming worthless and the probability of its occurring?

Yeah, the authorities prohibit you from accessing GLD. Or they confiscate it. Or freeze it...it's just paper, y'know :)

[krakknisse]

Yeah, the authorities prohibit you from accessing GLD. Or they confiscate it. Or freeze it...it's just paper, y'know :)

OK, so there's some disagreement over the seriousness of the various shit-hits-the-fan scenarios.

With respect to BullionVault, the US authorities have no jurisdiction. They can prevent withdrawals and new funds (a "gold corralito"), but they cannot confiscate it. Unless - and it could happen - there's some concerted action from many different authorities, some sort of global corralito (read on)

Paul Tustain's (BV founder) argument is that the net revenue of various sorts of gold confiscation is much, much lower than just a small increase in for example property taxes.

Could that change? In a scenario with depression and high-ish inflation, there might just not be much extra revenue to be had from exhausted consumers and businesses. In that case, the case for punitive gold regulation and taxes might be more attractive, revenue-wise.

Also, there's the question of forcing support for fiat currencies. Think Ron Paul and "competing currencies". All currencies are competing - and gold, as money, is now winning hands on. Not because of convenience, but because it's much, much safer as a store of value. In any competetive market, you use whatever means available to win the competition. That includes hobbling the competition with excess regulation.

The StreetTracks gold ETF currently has as much gold as China or Russia. BullionVault has 6 metric tonnes, which is 2% of Bank of England's gold reserves. Both StreetTracks and BullionVault might increase their holdings a lot, and in that case would attract a lot of attention. I can see a revival of "evil hoarders" rethoric.

BullionVault's most popular vault location is Zurich. The global scenario under which Swiss authorities would allow some sort of international gold confiscation seems to me to be very severe.

Which leads me back to the "global concerted action" to shore up fiat currencies. I wouldn't quite rule out significant regulatory stumbling blocks in the gold trade, based on this report:
h ttp://seekingalpha.com/article/64762-central-bankers-fueling-global-commodity-inflation
"We have agreed in Tokyo that if there are irrational price movements in the markets, we will collectively take suitable measures to calm the financial market... Whoever has a strategy should not lay it out. Otherwise it will lose its effect, if it is explained.”

Call me tin hat. But fiat isn't going to give up without a fight. Any sort of easily liquid gold has a much higher regulatory visibility than in-your-hand physical gold. So I'll seriously consider physical gold.

Now - for the tin foil hat crowd - would you pay for gold in cash only? It is the safest, but under what circumstances would you actually see authorities retrospectively going through the records of major dealers, even if StreetTracks and BullionVault are hobbled? Cash is inconvenient.

[metalman]

OK, so there's some disagreement over the seriousness of the various shit-hits-the-fan scenarios.

With respect to BullionVault, the US authorities have no jurisdiction. They can prevent withdrawals and new funds (a "gold corralito"), but they cannot confiscate it. Unless - and it could happen - there's some concerted action from many different authorities, some sort of global corralito (read on)

Paul Tustain's (BV founder) argument is that the net revenue of various sorts of gold confiscation is much, much lower than just a small increase in for example property taxes.

Could that change? In a scenario with depression and high-ish inflation, there might just not be much extra revenue to be had from exhausted consumers and businesses. In that case, the case for punitive gold regulation and taxes might be more attractive, revenue-wise.

Also, there's the question of forcing support for fiat currencies. Think Ron Paul and "competing currencies". All currencies are competing - and gold, as money, is now winning hands on. Not because of convenience, but because it's much, much safer as a store of value. In any competetive market, you use whatever means available to win the competition. That includes hobbling the competition with excess regulation.

The StreetTracks gold ETF currently has as much gold as China or Russia. BullionVault has 6 metric tonnes, which is 2% of Bank of England's gold reserves. Both StreetTracks and BullionVault might increase their holdings a lot, and in that case would attract a lot of attention. I can see a revival of "evil hoarders" rethoric.

BullionVault's most popular vault location is Zurich. The global scenario under which Swiss authorities would allow some sort of international gold confiscation seems to me to be very severe.

Which leads me back to the "global concerted action" to shore up fiat currencies. I wouldn't quite rule out significant regulatory stumbling blocks in the gold trade, based on this report:
h ttp://seekingalpha.com/article/64762-central-bankers-fueling-global-commodity-inflation
"We have agreed in Tokyo that if there are irrational price movements in the markets, we will collectively take suitable measures to calm the financial market... Whoever has a strategy should not lay it out. Otherwise it will lose its effect, if it is explained.”

Call me tin hat. But fiat isn't going to give up without a fight. Any sort of easily liquid gold has a much higher regulatory visibility than in-your-hand physical gold. So I'll seriously consider physical gold.

Now - for the tin foil hat crowd - would you pay for gold in cash only? It is the safest, but under what circumstances would you actually see authorities retrospectively going through the records of major dealers, even if StreetTracks and BullionVault are hobbled? Cash is inconvenient.

not sure which authorities they'd send after gold owners in the tin foil hat case. let's say it's officers of the treasury dept.

officer: we're here for your gold.
gold owner: what gold? oh, i bought some long ago but i can't find it. buried someplace. gone. i dunno. lost it. join me for another scotch and soda?

more likely it's the irs who cares about gold... when ya sell it.

there's an old thread on this here... http://www.itulip.com/forums/showthread.php?t=275

[grapejelly]

With respect to BullionVault, the US authorities have no jurisdiction. They can prevent withdrawals and new funds (a "gold corralito"), but they cannot confiscate it.


Yeah, right. The US pushes every other country around using powerful military. They already have gotten the Swiss to cave in on bank secrecy time and time again...

If they serve legal papers on Bullionvault, then Bullionvault isn't gonna be able to hold out for very long. They will reach an accomodation. Remember eGold? It may take a little longer but the evil Bullionvault will be brought down. So will GLD. They cannot stand up to the power of the US government, alas.

I am not alarmist in saying this will happen. I am saying it is entirely possible.

Who among us would have predicted that Citigroup would face insolvency in 2008? Or any of the stuff happening now.

If the gold mania takes off the way I expect it to, then the evil gold and silver speculators will bear the brunt of populist hysteria. Seems implausible today...but who knows...

[GRG55]

There are some scenarios less drastic than Mad Max in which you might want those gold coins, such as a hyper-inflationary event in which dollars are used for toilet paper, the government has taken over food distribution, and all your dollar savings are wiped out. My wife went through something like this in Ukraine after the Soviet Union disintegrated -- everybody's savings were wiped out.

I'm not saying that scenario has a high probability . . . but it has some chance of occurring.

For less dire scenarios, GLD and other forms of paper gold are more desirable because of high liquidity.

Just don't forget what GLD gets converted into when you sell any of it. Is that the type of liquidity that you really want?

[GRG55]

I guess our difference here is that I can't picture a scenario in which GLD would become worthless.

In a severe economic depression, I can visualize many companies going out of business, but not a company whose sole business is to keep insured gold bars in a vault.

Grapejelly, can you please describe the scenario in which you see GLD paper becoming worthless and the probability of its occurring?

Keeping gold bars in a vault is not actually their business.

Creating and administering a liquid paper security that can be traded on a major exchange is their business.

Keeping the gold bars is the business of the bank they use.

If there is fraud or any sort of financial "event" with the issuer it is not clear in the prospectus that GLD unitholders have the right to access and segregate any portion of the bullion backing the units. That may be up to the receiver and the judge to decide. And that could take a while.

Is this type of scenario likely? Probably not. But then again, few expected Enron to go under either.

[GRG55]

OK, so there's some disagreement over the seriousness of the various shit-hits-the-fan scenarios.

With respect to BullionVault, the US authorities have no jurisdiction. They can prevent withdrawals and new funds (a "gold corralito"), but they cannot confiscate it. Unless - and it could happen - there's some concerted action from many different authorities, some sort of global corralito (read on)...

...BullionVault's most popular vault location is Zurich. The global scenario under which Swiss authorities would allow some sort of international gold confiscation seems to me to be very severe.

Really? They don't need to confiscate it physically. They simply demand an onerous annual wealth tax on it no matter where one has stashed it.

Think they can't find out about it, just because it's in Switzerland? Seems quite a few folks didn't think anyone would find out about their accounts and trusts in Leichtenstein either...and we all know how well that worked. :eek:

[metalman]

Yeah, right. The US pushes every other country around using powerful military. They already have gotten the Swiss to cave in on bank secrecy time and time again...

If they serve legal papers on Bullionvault, then Bullionvault isn't gonna be able to hold out for very long. They will reach an accomodation. Remember eGold? It may take a little longer but the evil Bullionvault will be brought down. So will GLD. They cannot stand up to the power of the US government, alas.

I am not alarmist in saying this will happen. I am saying it is entirely possible.

Who among us would have predicted that Citigroup would face insolvency in 2008? Or any of the stuff happening now.

If the gold mania takes off the way I expect it to, then the evil gold and silver speculators will bear the brunt of populist hysteria. Seems implausible today...but who knows...

i like an outlandish conspiracy theory as much as the next guy, but let me play the opposite scenario.

let's say that the shit hits the fan fast as it tends to in these situations, when foreign lenders pull the plug.

earlier today donalds posted this and it's a brilliant piece on argentina. (http://www.newleftreview.org/?view=2410) you gotta read it. it ain't short but it's worth it... very instructive.

they make no attempt to make parallels between argentina and the usa but they are striking. one thing all foreign debt dependent countries have in common... when the money stops flowing, the economy crashes in a matter of months, the currency crashes... and inflation goes through the roof.

to my contrarian case... what if the free market and monetarist philosophy of the past several decades is not suddenly thrown out the window? what if gold owners are prized for helping to keep the economy alive with hard money? that seems to be the other lesson of these episodes... there is not a sudden break from the past but policy is based on the past... applied to the new crisis. really... it could go the other way.

[grapejelly]

to my contrarian case... what if the free market and monetarist philosophy of the past several decades is not suddenly thrown out the window? what if gold owners are prized for helping to keep the economy alive with hard money? that seems to be the other lesson of these episodes... there is not a sudden break from the past but policy is based on the past... applied to the new crisis. really... it could go the other way.

That's very fanciful and offbeat, metalman. My Libertarian ideas are like that...they aren't going to happen in my lifetime but hey, we dream and we theorize.

Fact is, in a heartbeat, there can be all sorts of draconian stuff done by our government. For any reason or no reason.

I had a tax lien served on my bank once. The lien was not right. But the bank held my money anyway and wouldn't let me have it. Bullionvault would do the same thing, I guarantee you. I suppose it might be a lot better if you held the gold through a foreign corporation etc. etc. etc. but bottom line, paper is paper. A claim on Bullionvault is not the same as holding gold. Sorry but it's quite plain. In one scenario you have gold coins you can hold. In the other you have imaginary bits and bytes and a story. It's a heck of a story, but it's still one more liability.

[raja]

Yeah, the authorities prohibit you from accessing GLD. Or they confiscate it. Or freeze it...it's just paper, y'know :)
And why would the government do that?
What would the circumstances be?

[raja]

Just don't forget what GLD gets converted into when you sell any of it. Is that the type of liquidity that you really want?
Yes, at the top that's what I'd want.
When gold is going down, I believe inflation will go down in step.

[raja]

If there is fraud or any sort of financial "event" with the issuer it is not clear in the prospectus that GLD unitholders have the right to access and segregate any portion of the bullion backing the units. That may be up to the receiver and the judge to decide. And that could take a while.

Is this type of scenario likely? Probably not. But then again, few expected Enron to go under either.
Yes, I agree that that this scenario is not likely.
I also think GLD is vastly different than Enron . . . .

[Jim Nickerson]

Just don't forget what GLD gets converted into when you sell any of it. Is that the type of liquidity that you really want?

I had the rare occasion today to have an actual conversation with a person about investing which eventually got me to thinking about the frequent use of the word "hedging" around here, and not in reference hedge-funds per se.

Is it right, there is movement amongst us to "hedge" the collapse of the dollar by investing in gold and PM's (real and paper investments = GLD,SLV,etc.) commodities, foreign currencies using the FXy,e,a,s,f and foreign sovereign bonds, and BRIC vehicles, and probably somethings I'm missing either knowing or recalling, but for all us Americans living in the United States where we have homes, possessions, families, jobs, retirement plans, does it make any difference what we invest in?

What everyone is looking for it seems to me is anything that will go up more than something else. The better choices will at some point return us more fiat US dollars. Perhaps it is correct that those things I mentioned above are possibly the best vehicles to try to capture having more bonars at various points of need in our various futures, but in using the word "hedging" are we actually doing anything different from what investors have always done, and that is to identify those assets which the individual feels will offer the best return over some period?

GRG I think made a good point for consideration, which only those who are not US-based with accounts can make. Jim Rogers might be the epitome of one who has gone all out to get out of US$ denominated assets, all the rest of us seem to be doing is trying to buy things that hopefully will yield us more dollars that are worth less, and perhaps keep us above those who have less of the worthless pieces of paper.

[godraz]

to my contrarian case... what if the free market and monetarist philosophy of the past several decades is not suddenly thrown out the window? what if gold owners are prized for helping to keep the economy alive with hard money? that seems to be the other lesson of these episodes... there is not a sudden break from the past but policy is based on the past... applied to the new crisis. really... it could go the other way.

This is in line with my thoughts too. Sure the PTB can go after us hard money savers, but IMO there are a number of reasons why, unlike in the 1930's, this wouldn't at all help and might only prolong the necessary measures of economic/monetary rectification.

Today, unlike the 1930's, gold and silver can be bought and held a lot of different ways and in places far removed from local bank safe deposit boxes.

Today, unlike the 1930's, folks will much less likely surrender their PM coins or foreign vault held gold/silver without a fight.

Today, unlike the 1930's, trust in government is at its nadir, and any such threats of confiscation/penalization against people who were smart enough to get out of bonars (and all unbacked fiat currncies) and into PMs will not carry the same level of social scapegoating. The economic problems of today have no relation to the economic problems of gold hoarding of yesterday, and so any attempt to link them today won't fly.

Rather, I would think that any economic/monetary resuscitation efforts would be better suited by government efforts to rebuild trust with allowance for folks to readily re-engage their PM holdings back into productive local currency circulation to help speed our recovery.

Still, because I remain highly mistrustful of government and its propensity to shoot itself in the foot before amending its stupidity in an economic/currency crisis, I do not like paper demoninated assets like GLD precisely because it would be very easy for the govt. to first go after and seize/outlaw this type of paper asset.

Getting what I hold personally or in a foriegn bullion vault is an entirely different matter, especially as it would involve infringements upon or arrangements through international law and other sovereign rights. (Because GoldMoney is incorporated in the Isle of Jersey is one reason I chose them. I don't know about BullionVault's place of incorporation.)

Not knowing exactly how all this will pan out with respect to all the flight from fiat money flooding into PM that is occuring (and IMO has a long way yet to go), but metalman's thought about how we might be regarded is one that I hope for. We'll see...

And for what its worth, selling physical PM bullion coins is pretty much as swiftly liquid today as selling paper GLD and usually done with a locked in price at the time of sale arrangement despite needing to ship out the coins.

[Rajiv]

The Ten Commandments of Gold & Silver Buying
(http://www.the-moneychanger.com/commandments.phtml)

Ten Commandments For Buying Gold & Silver :

I. Always take delivery

II. Never buy premium if you can avoid it.

III. Buy bullion for business, numismatics for fun.

IV. Buy silver first, then gold.

V. Buy small gold first, then large.

VI. Never buy exotic coins or modern rarities or anything you don't understand.

VII. Know your dealer.

VIII. What governments can't find, they can't steal.

IX. Never swap bullion coins for U.S. $20 gold pieces.

X. Never break the law.

[metalman]

The Ten Commandments of Gold & Silver Buying for non morons who don't want to be taken to the cleaners by silver dealers and other asshats:

Ten Commandments For Buying Gold & Silver :

I. Never break the law.

II. Never buy premium if you can avoid it.

III. Buy bullion for profit, numismatics for more profit, porn for fun.

IV. Buy silver first, then gold, unless you have a gold account.

V. Buy a little gold first, then a lot, unless you have lots of money.

VI. Never buy exotic coins or modern rarities or anything you don't understand, including junior stocks, gold stocks in general, drugs from girls named "Goldie" or, uh, whatever.

VII. Know your gold and drug dealer.

VIII. What governments can't dig their way out of and find, they can't steal. So hide your government under a mountain of legislation.

IX. Never swap bullion coins for U.S. $20 gold pieces unless you are out of drugs.

X. Always take delivery of gold or drugs but never mix. You'll choke.

[touchring]

Keeping the gold bars is the business of the bank they use.

If there is fraud or any sort of financial "event" with the issuer it is not clear in the prospectus that GLD unitholders have the right to access and segregate any portion of the bullion backing the units. That may be up to the receiver and the judge to decide. And that could take a while.

Is this type of scenario likely? Probably not. But then again, few expected Enron to go under either.


This might happen in the 70s, but today, every man is for himself, rip as much as possible from the system. Who cares about the US economy. If the GLD unitholders are congressmen, fed officials, rich americans, will they rip off their own fortune?

[Lukester]

Rajiv -

I'm shocked. You are a gold bug too? I would never have dreamed it in a million years ... You don't sound like a gold bug! You sound more like a dreamy scholar type with his head in the clouds. Who could have guessed you were the type of guy who sits at home, in a corner, with his back to the wall, cleaning his shotgun, a half-empty bottle of Tenessee Sour Mash spilled on the carpet, nervously eyeing his ragged tin full of gold coins ... watching the door ... :D

[Rajiv]

Yes and no! Gold is an interesting conundrum to me! It has been money since time immemorial - however it is no longer money -- even though it has historically been a hedge against inflation -- but all studies of it being a hedge against inflation are done on a period when it has been money. However, today gold IS NOT money -- It has been a commodity whose major use historically has been as money -- i.e. you could go and physically exchange gold coinage for goods. However, today that is not the case -- in order to get an exchangeable medium, I have to sell the gold before I can obtain any goods. Until gold becomes the standard of money again, buying and selling gold is speculation, and does not necessarily add to my liquidity.

Yes an alternate inflation free money is needed -- However will it be gold? At current prices, ALL the gold in the world is valued at ~$3 Trillion. The current world outstanding debt (money)is of the order of $100 Trillion. The fact that gold is valued nowhere close to that level, leads me to believe that under current conditions, a return to the gold standard is extremely unlikely. That being the case, gold loses its attraction to me - as a long term solution to the current mess. Over the short term (I cannot clearly define the length of time) it could be a relatively small part of a strategy for preserving one's wealth -- But there are other asset categories that would have to be a part of that strategy -- primarily assets that, with some work, will almost always produce an income.

After all one cannot eat gold.

[krakknisse]

Guys : you need to twist your heads around. How did gold end up as money since "time immemorial"? Freely competing currencies. How did it lose that market-leading position? It got sent to jail by the central banks for "monopolizing". Even the gold standard wasn't a freely competing currency, but rather managed.

Rajiv: I would turn it on its head. There's about $3 trillion of money out there, in gold. And there's a hell of a lot of paper promises. Sooner or later, sooner or later. Signs of desperation from CBs: small taxes on gold trading and ownership, pretty soon ratcheting up. Then: licensing to own/trade gold, "evil speculators" rhetoric. Then, as the black market price increases: same spiel against "evil hoarders".

[Rajiv]

See Fred's recent Post "Euro bond spreads hit record as panic grips markets (http://www.itulip.com/forums/showthread.php?p=29380#post29380)" to highlight my concerns about gold.

[Lukester]

Rajiv -

"Be right, and sit tight". There is a reason why this apparently childishly simple advice is followed by so few. It's not easy to do.

[touchring]

See Fred's recent Post "Euro bond spreads hit record as panic grips markets (http://www.itulip.com/forums/showthread.php?p=29380#post29380)" to highlight my concerns about gold.




This is nothing new. Before the feds starting reducing interest rates, when gold was around $500 to $650, gold always fell considerably whenever the stock market corrects, but over a 12 months period or so, it always ended up higher.

I'm sure gold bugs here will agree. :p

[Jayhawk]

I just set up a precious metals IRA with Sterling Trust. I need to find a dealer to buy coins from so if anyone can recommend one that would be great. :)

[Lukester]

Jayhawk -

I've bought Euro-gold coins from American Gold Exchange in Austin Texas. They are an honest broker and offer fair prices. Please note all the Euro-gold is not 24 karat. They do also sell pure bullion coins of any description. They are specialized in "cheaper" Euro-Gold coins. That is to say their prices are great, but you'll never order batches of Swedish or Danish Kronors, Dutch Guilders or French Angels from them and find the coins are in AU condition. Mostly they will be EF, or "fairly dinged up".

However that's immaterial. The premium over bullion price is to be calculaated by comparing their price to equivalent fractional coins in the American Eagle variety. The smaller the coin, generally the larger the markup over the bullion price. So one eighth ounce ounce coins are more "expensive" relative to spot gold than are quarter ounce coins like the Brit Sovereign.

I think all that is a headache and largely irrelevant. Get the most gold you can own for the money, which generally means you won't buy Euro-gold coins or semi-numismatics. The cheapest gold is Krugerrands or gold one ounce rounds. Or in Silver the absolute cheapest are the 100 OZ bars.

I'm betting we will see something equivalent to gold confiscation in the US. All the above "forms of gold and silver" are totally irrelevant. What is highly relevant is being outside of the jurisdiction!!

If you are buying only pure bullion and in larger quantities, I recommend the Northwest Territorial Mint in Auburn Washington. Their prices are great and they are a very well known and well established mint, serving many of the agencies within the US Govt. for medallions, medals, commemorative coins, etc.

Most important, if you are interested in bulk silver, they sell 100 Oz bars at extremely good prices over spot. Also a very good item to accumulate (although not cheap any more unfortunately) are the 500 coin mint sealed boxes of American Silver Eagles.

You used to be able to buy these and sell them back to this same mint with ease, even in larger quantities. Now it's getting a little harder to get those boxes without looong lead times. Expect a spread between your buy price and your sell price of as much as 10%. It sounds outlandish, until you stop to think that in the last bull market silver went unp well over 1000%.

To be a scrooge about a ten percent spread in that environment is therefore senseless. Best strategy is to own the purest, most fractional, most fungible form of silver, and the US eagles are the premiere silver coin.

Altogether I've drifted away from the American Gold Exchange in Austin and don't buy anything other than pure bullion now, from the Northwest Mint. I highly recommend them for their integrity.

______________

EDIT: Well it looks like I'll have to eat my hat on that "top rating" of the Northwest Mint. Did a little more research on them this evening - although my own experience has been problem free, there are apparently numerous "issues" with orders being filled very late - as in 5-6 week lead times to receive an order. However, one very interesting thing emerged from that search - all the complaints involved delivery of silver! I know this company - they are quite large, and I don't believe the primary issue is in any way to do with integrity. Every order gets filled. But the problem that seems to emerge is that they consistently have problems sourcing and fabricating large silver orders! This ties in exactly with what I'm reading elsewhere. This bullion is not so easy to obtain in large quantities.

I know what to interpret from that. Does anyone else get what the issue is? ... It's a real issue as far as I can tell - and it is very interesting.

[GRG55]

Yes, I agree that that this scenario is not likely.
I also think GLD is vastly different than Enron . . . .

Perhaps. But don't forget that many, including those well-fed analysts that inhabit the upper floors around Wall Street, thought that Enron was "different" from every other company that had ever proceeded it.

Turned out they were right. But not in the way they expected. ;)

[Jayhawk]

Jayhawk -

I've bought Euro-gold coins from American Gold Exchange in Austin Texas. They are an honest broker and offer fair prices. Please note all the Euro-gold is not 24 karat. They do also sell pure bullion coins of any description. They are specialized in "cheaper" Euro-Gold coins. That is to say their prices are great, but you'll never order batches of Swedish or Danish Kronors, Dutch Guilders or French Angels from them and find the coins are in AU condition. Mostly they will be EF, or "fairly dinged up".

However that's immaterial. The premium over bullion price is to be calculaated by comparing their price to equivalent fractional coins in the American Eagle variety. The smaller the coin, generally the larger the markup over the bullion price. So one eighth ounce ounce coins are more "expensive" relative to spot gold than are quarter ounce coins like the Brit Sovereign.

I think all that is a headache and largely irrelevant. Get the most gold you can own for the money, which generally means you won't buy Euro-gold coins or semi-numismatics. The cheapest gold is Krugerrands or gold one ounce rounds. Or in Silver the absolute cheapest are the 100 OZ bars.

I'm betting we will see something equivalent to gold confiscation in the US. All the above "forms of gold and silver" are totally irrelevant. What is highly relevant is being outside of the jurisdiction!!

If you are buying only pure bullion and in larger quantities, I recommend the Northwest Territorial Mint in Auburn Washington. Their prices are great and they are a very well known and well established mint, serving many of the agencies within the US Govt. for medallions, medals, commemorative coins, etc.

Most important, if you are interested in bulk silver, they sell 100 Oz bars at extremely good prices over spot. Also a very good item to accumulate (although not cheap any more unfortunately) are the 500 coin mint sealed boxes of American Silver Eagles.

You used to be able to buy these and sell them back to this same mint with ease, even in larger quantities. Now it's getting a little harder to get those boxes without looong lead times. Expect a spread between your buy price and your sell price of as much as 10%. It sounds outlandish, until you stop to think that in the last bull market silver went unp well over 1000%.

To be a scrooge about a ten percent spread in that environment is therefore senseless. Best strategy is to own the purest, most fractional, most fungible form of silver, and the US eagles are the premiere silver coin.

Altogether I've drifted away from the American Gold Exchange in Austin and don't buy anything other than pure bullion now, from the Northwest Mint. I highly recommend them for their integrity.

______________

EDIT: Well it looks like I'll have to eat my hat on that "top rating" of the Northwest Mint. Did a little more research on them this evening - although my own experience has been problem free, there are apparently numerous "issues" with orders being filled very late - as in 5-6 week lead times to receive an order. However, one very interesting thing emerged from that search - all the complaints involved delivery of silver! I know this company - they are quite large, and I don't believe the primary issue is in any way to do with integrity. Every order gets filled. But the problem that seems to emerge is that they consistently have problems sourcing and fabricating large silver orders! This ties in exactly with what I'm reading elsewhere. This bullion is not so easy to obtain in large quantities.

I know what to interpret from that. Does anyone else get what the issue is? ... It's a real issue as far as I can tell - and it is very interesting.

Hey, great info...I really appreciate this. I'm going to look into both companies today. :D

[jk]

Hey, great info...I really appreciate this. I'm going to look into both companies today. :D
let us know what you learn.

[godraz]

I recommend California Numismatics Investments. Here's a link to their quote page: http://www.golddealer.com/bullionpage.html

I've bought a lot from them and been fully satisfied, especially with their pricing compared to most other dealers.

Just to show a comparison between CNI and NWM, as of today you could buy a Buffalo 1oz for $1015 at CNI and the same coin for $1060.64 at NWM. :eek:

I bought from other dealers but with prices like CNI offers, what's not to like.

[Masher]

I recommend California Numismatics Investments. Here's a link to their quote page: http://www.golddealer.com/bullionpage.html

I've bought a lot from them and been fully satisfied, especially with their pricing compared to most other dealers.

Just to show a comparison between CNI and NWM, as of today you could buy a Buffalo 1oz for $1015 at CNI and the same coin for $1060.64 at NWM. :eek:

I bought from other dealers but with prices like CNI offers, what's not to like.

I love those Buffalo pure gold coins! It will break my heart when I sell them but I will.

[godraz]

I love those Buffalo pure gold coins! It will break my heart when I sell them but I will.

Yeah, the bullion Buffalos are wonderfully iconic American coins, and oh so ironic too -- what with a venerable American Indian head profile next to the word "LIBERTY" stamped alongside it, and then the lone buffalo on the reverse, saddled with "E PLURIBUS UNUM" over its back while leaning down to nibble on "IN GOD WE TRUST". Not to mention the "$50" o_O Alas, that's monetary beauty for us in America.

The PAMP Suisse "Gold Dream" bullion mini-bars (in various sizes) are beautiful and iconic without all the mixed messages. On one side is this image:

http://homepage.mac.com/gooz/.Pictures/PampSuisse.jpg

And the reverse simply states under the PAMP symbol: "SUISSE, ONE (or TEN), TROY OUNCE, 999.9, FINE GOLD, (lot #).

Not a coin, but for investment price without coin type markup premium, they are the way to buy and hold gold for private possession.

Holding one of these ten ounce babes is a real treat!

[merry]

EDIT: Well it looks like I'll have to eat my hat on that "top rating" of the Northwest Mint. ...there are apparently numerous "issues" with orders being filled very late - as in 5-6 week lead times to receive an order.

I'm glad you edited your entry because I was just about to correct you. After reading so many complaints about NW at goldismoney.info, I will never buy from them. I prefer APMEX for silver. Also, I would stay far away from 100 oz bars since as silver goes up in value, they will be harder to unload since some bars have been drilled and filled with lead. Brand name 10 oz bars, SAE, and maples are best in my opinion. Some prefer 90% but I won't touch it. That's just a personal preference on my part.

[Lukester]

Merry -

Thanks for your input on Northwest Territorial Mint. I confess I found those articles last night too. What an eye opener! There's a good chance they are playing with the 'float' between new cashed up orders coming in and silver purchases to fill orders going out, which would explain the very long lead times to get silver orders filled.

Even if it wasn't that, when it comes to buying or selling PM's, any smallest blemish on a track record is enough for me to dump that source summarily. I agree 100%. This company came well recommended, and I did some buys with them that were no problem at all. They do a very large volume of commemorative medals orders for the US Govt. so it's odd if their shop has a checkered history and yet they have large Govt. contracts, no?

Later on I actually cancelled an order of 100 Oz bars from them (early last summer). Fortunately, for the horror stories you tell about the drilled out large bars, I've concentrated on buying 500 coin mint-sealed boxes of eagles (back when they were real cheap), and a nice pile of silver Mexican 1 peso pieces (.999% pure silver - which I find a handsome coin) so I'm 'vaccinated' against the large bar fraud you describe. Yeesh! I'd hate to be the victim of that.

I will look up your referenced seller. I've heard good things about them, but I'm unfortunately 'all tapped out' in terms of funds to buy more silver! :)

[grapejelly]

can't say enough good things about Apmex. Prices, delivery, customer service...they have been 100% outstanding.

[ocelotl]

Merry -

Later on I actually cancelled an order of 100 Oz bars from them (early last summer). Fortunately, for the horror stories you tell about the drilled out large bars, I've concentrated on buying 500 coin mint-sealed boxes of eagles (back when they were real cheap), and a nice pile of silver Mexican 1 peso pieces (.999% pure silver - which I find a handsome coin) so I'm 'vaccinated' against the large bar fraud you describe. Yeesh! I'd hate to be the victim of that.

I will look up your referenced seller. I've heard good things about them, but I'm unfortunately 'all tapped out' in terms of funds to buy more silver! :)

Just to ask.

Which 1 peso mexican silver coins have you acquired?

I mean since numismatic PM silver coins in Mexico with a stated value are limited editions (large premium), or old coinage. Most common 0.999 silver coins are the Libertad Series, all of them expressing their content in troy ounces and not in pesos. The only other peso denominated silver coins you can acquire that don't take a premium over melt are 1992-5 10 and 20 nuevos pesos and 2003-7 100 pesos. All of them characterized by the aluminum bronze rim and sterling (0.925) silver center.

I have to add that the bulk of my silver stock is in Libertad single ounces, a few 1947-8 Cuauhtemoc 5 pesos, a few 1977 100 pesos, a few of the above mentioned (10, 20 nuevos pesos and states 100 pesos) and a few 2 troy ounce Libertad Silver Coins (the largest single silver objects of my stock).

[Lukester]

Ocelotl -

My mistake - I was referring indeed 1 ounce LIBERTAD coins. I really like the intricately designed "eagle and cactus" emblem on the reverse side. I think it's a much more visually rich coin than the US eagle, which is touted as 'beautiful' but I find as boring as a vanilla ice cream. The old American eagles and double eagles from the 19th century are beautiful, but the modern eagles are very uninteresting 'art' in my view.

Still, pure silver is pure silver, and I like it in any format I can get it, these days! :D

[Verrocchio]

What everyone is looking for it seems to me is anything that will go up more than something else. The better choices will at some point return us more fiat US dollars. Perhaps it is correct that those things I mentioned above are possibly the best vehicles to try to capture having more bonars at various points of need in our various futures, but in using the word "hedging" are we actually doing anything different from what investors have always done, and that is to identify those assets which the individual feels will offer the best return over some period?

GRG I think made a good point for consideration, which only those who are not US-based with accounts can make. Jim Rogers might be the epitome of one who has gone all out to get out of US$ denominated assets, all the rest of us seem to be doing is trying to buy things that hopefully will yield us more dollars that are worth less, and perhaps keep us above those who have less of the worthless pieces of paper.

I sometimes share your perspective, Jim, but see it a little differently lately. These days, as we watch the bonar-based system unravel, I'm thinking of investing more in terms of identifying a reliable store of value. I'm not at all interested in chasing yields, and to my way of thinking this can include investing in assets because "the individual feels [those assets] will offer the best return over some period."

For this reason, the discussion about the relative safety of BullionVault and physical possession of PMs has been most interesting.

[Jim Nickerson]

I sometimes share your perspective, Jim, but see it a little differently lately. These days, as we watch the bonar-based system unravel, I'm thinking of investing more in terms of identifying a reliable store of value. I'm not at all interested in chasing yields, and to my way of thinking this can include investing in assets because "the individual feels [those assets] will offer the best return over some period."

For this reason, the discussion about the relative safety of BullionVault and physical possession of PMs has been most interesting.

Well, if you get that "sometimes" up to "all the time," Verrochhio, you'll be making real progress. :) If you are meaning what you seem to me to be writing, I think it is the same as I offered. If we are bound to be spending bonars in our futures, we need any investment that when liquidated will bring us more bonars. Then it is the same age-old question, "What will give me the greatest return over some period"? It might be metals or it might be wheat, or Wal-Mart, or whatever is tomorrow's Microsoft. The problem is the same and that is to attempt to figure out what it is or some number of "its" are. I think it is correct that no prudent person is going to invest all his/her assets in one thing, though some one here was touting his 85% allocation into precious metals.

[mercerbear]

Personally I use Hannes Tulving. I'm surprised no one else has listed this name yet. I think he's the best gold dealer to go through when prices and personal service are a consideration. The minimum purchase for gold is 20 oz, but if that's within your price range, you won't find a better dealer. Here's his site: http://www.tulving.com/

[grapejelly]

in the USA, Apmex...prices, service, everything. A pleasure to deal with.

[sadsack]

Just call me "Young Frankenstein" for reviving this thread . . .

Having read both Williams' and iTulip's take on inflation over the next few years, I have seriously been considering a "Mad Max stash" of PM.

My goal is to acquire liquid PM holdings in my physical possession that can, insofar as possible:

1) Minimize transaction costs/spreads when dealing in $5-10K amounts.

2) Serve readily as an "alternate currency" should Williams be accurate in his 2010-2018 hyper-hyperinflation prognostication.

I'm planning on 6-12 months total living expenses (in 2008 dollars), including silver coin for "day to day" transactions, and gold coin for the bigger stuff.

Don't worry - I live frugally, and this sum would not exceed 3-6% of my current net worth.

For "trade/barter" silver, am I better off acquiring 90% pre-1965 US coin or are 0.999 silver rounds the preferred option? I've seen 90% coin offered at parity to melt value, while 0.999 rounds are approx. 10% over spot.

Apologies for any threadjack; any constructive thoughts are greatly appreciated.

[Jim Nickerson]

Just call me "Young Frankenstein" for reviving this thread . . .

Having read both Williams' and iTulip's take on inflation over the next few years, I have seriously been considering a "Mad Max stash" of PM.

My goal is to acquire liquid PM holdings in my physical possession that can, insofar as possible:

1) Minimize transaction costs/spreads when dealing in $5-10K amounts.

2) Serve readily as an "alternate currency" should Williams be accurate in his 2010-2018 hyper-hyperinflation prognostication.

I'm planning on 6-12 months total living expenses (in 2008 dollars), including silver coin for "day to day" transactions, and gold coin for the bigger stuff.

Don't worry - I live frugally, and this sum would not exceed 3-6% of my current net worth.

For "trade/barter" silver, am I better off acquiring 90% pre-1965 US coin or are 0.999 silver rounds the preferred option? I've seen 90% coin offered at parity to melt value, while 0.999 rounds are approx. 10% over spot.

Apologies for any threadjack; any constructive thoughts are greatly appreciated.

Those are good questions, Sadsack. My interest in physical coin was jacked up from near zero to very serious by Williams' article too.

There is a lot of difference between expenses for 6 and 12 months, and if things were to get to be nearly as bad as Williams suggests, just what "bigger stuff" do you think you'll likely be buying?

Hopefully, metalman or grapejelly or else will chime in with some opinions.

[sadsack]

Those are good questions, Sadsack. My interest in physical coin was jacked up from near zero to very serious by Williams' article too.

There is a lot of difference between expenses for 6 and 12 months, and if things were to get to be nearly as bad as Williams suggests, just what "bigger stuff" do you think you'll likely be buying?

Hopefully, metalman or grapejelly or else will chime in with some opinions.

I currently rent (at the rate of $0.55 per square foot per month for 1800 sqft). Should Williams prove correct, I have the possibililty (ballpark under 1% - my landlords are on the verge of being "turned") of renegotiating my lease in terms of PM. In this instance, should leveraged assets (i.e., housing) continue to fall in value, I need an effective way to hedge my housing expenses while I wait for the "mythical bottom."


EDIT:

See EJ's Post:


Such a bottom, per my likely substantially flawed synthesis of Williams amd iTulip, would be reached when nobody can afford to buy real estate other than "in cash;" i.e., though mutual exchange of "fair value."

Living in the "great nation of Texas," I've met a significant number of "country folk." These individuals have been hoarding silver for the past few years, and may prove useful contacts should (pardon my French) TMFSHTF.

Maximally fungible silver specie would be a great advantage in any potential overtures to this subculture (they collectively have comparable small arms & associated ammo to the nearest National Guard - not to worry, this is TX after all).

I'm trying to satisfy perhaps two mutually incompatible goals - on the one hand have maximum SHTF resources, while maintaining an easy out if the hat is revealed as 100% tinfoil.

My tenuous connection with "people of the land" explains my flexibility in reserve requirements. Should a true collapse occur, I could most likely trade silver for food, until I could reliably ascertain the best black market commodities (e.g., cigarettes/chocolate/pantyhose in post-WWII Europe, toilet paper in the USSR . . .)

Let me re-emphasize: The funds I intend to commit to the above purpose are not much more than what I would pay for insurance over the next 2-5 years (rates are jacked once the insurers get soaked on their investment portfolios). My conjectural "squirrel hole" is quite modest at this point, subject to revision . . .

EDIT:

See EJ's Post:

http://www.itulip.com/forums/showthread.php?t=4009

Williams is even giving EJ the "willies" . . .

[hayekvindicated]

I am definitely in the skeptical camp, as far as Mad Max warriors hiding their last remaining gold coins up in their tinfoil hats. I must be either a rational, reasonable guy or a naive fool, take your pick.

Nonetheless, I do figure gold will hit an incredible parabolic spike at some point (or perhaps several, building up to the big one), like it did back in 1980. I have wondered how quickly one could get out of various types of gold investments at that time. It seems to me that in terms of selling speed, the order would be 1) paper gold (GLD, CEF, etc funds), 2) BullionVault [a close second], 3) physical coins/bars in your local possession, 4) physical bullion in your secret island hideaway. There is risk in all these options though that if the spike crashes quickly you may not find any buyers. I'm no expert, but I would imagine it would be easier to find buyers for bullion, whether in your hand or via BullionVault, than for paper gold if there is widespread fear that gold will plummet in value. If there is not yet widespread fear when you decide to sell, i.e. so far only the smart money is bailing, then I think there will still be buyers for paper gold.

Of course, if the doomsdayers are right, then I suppose gold will ratchet up to some astronomical value and then stay there indefinitely while you huddle in your nuclear-bomb-proof shelter. Eventually you shall emerge... a bit gaunt perhaps, and with more grey hair, but in generally good health and of sound mind. You will proffer one of your shiny gold coins to the first ragged band of mutants in hopes of obtaining some food, and they will fall back in amazement and declare you god and emperor.

I am a lawyer and the fears of confiscation appear to me to be unfounded (if the gold is stored in Switzerland rather than London or New York). The basic thing we need to remember is that even if the British or American Governments could force Bullionvault to surrender the gold is has in its Zurich vaults, the "decree" would have to be enforced in Switzerland through a Swiss Court. The Gold would then have to be confiscated by the Governments and then returned to the UK and the US.

I believe this is not going to happen. Why not? Because the British and American Governments will be so desperate for large amounts of money, they won't bother trying to loot some trifling amount of gold lying in some vault in Zurich. What they will do is go cap in hand to Japan and China, get on their knees and ask for money. In the larger scheme of things, nothing else will save them.

We are already on the verge of seeing this happen. The confiscation of gold in Zurich scenario is one that depends on the US and the UK turning into Zimbabwe (this is not a possibility that we should be worrying about in my opinion). I agree that storing gold in London or New York makes no sense if one fears capital controls in the UK.

I hold physical gold in India in a bank vault which my family owns. That's storing gold the old fashioned Indian way :D. But that also has its problems. Moving it or trading it is extremely cumbersome and India is also a jurisdiction with a currency that is not freely convertible. For the average investor, buying up an island to store gold is not an option. And storing your gold in a bank vault in Britain or America doesn't make sense in my view because you are greater risk of confiscation.

So I fail to see how having gold in Zurich through bullionvault is a bad deal - unless bullionvault is a fraud and you find out that the gold they sell is fake and/or they do not segregate your gold from others which causes a disaster for you. Leaving aside those two possibilities, I do not see storing gold in a vault in Zurich through bullionvault a bad idea. But Ive never done it myself so I leave it to those who have done it to tell us if they are a legit operation.

[Lukester]

Hayekvindicated - You should speak up then on iTulip's thesis and core question to deflationists. If you have a country with utterly unpayable existing debt burdens, who's rollover financing of existing debt depends on continuation of the financing inflows of the recent past, and you observe charts showing that financing has disintegrated / evaporated and therefore the country shows real signs of progressing towards a default on an external interest payment - how in the light of this predicament can that country stage a deflation within it's currency zone?

There is NO way, if their interal current account situation is in a runaway collapse, that they can fend off an interest payment default indefinitely, and this leads directly to a default and a major blow to the currency. This entire confluence of circumstances leads to a major bout of inflation within that currency zone when foreign creditors become scared away by the rapidly deteriorating current account situation in that nation. Not even the global superpower and global anchor currency and "gold substitute" can fend off this classic outcome when the current account goes into a deficit spiral.

The ONLY argument that has been put forward by deflationists is that they can monetize this debt payment, but what the heck kind of deflationist argument is that? If you claim, as you state in your post, that you "can already see" this current account dilemma heading straight for a crisis, then you should speak out for rational economic forecasting here and state flatly that it is impossible for an economy headed straight for debt default due to lender disengagement, to ever stage a deflation.

It is time for rationalism to speak out here as to this macro backdrop for all the assertions of deflation. The USD reflects the US current account, underpinned by the senior currency's right to print without limit, but this in no way constitutes a rational argument for deflation. Any better arguments should be made now, else reiterated calls for deflation are not backing their arguments with rationality.

British and American Governments will be so desperate for large amounts of money, they ... will ... go cap in hand to Japan and China, get on their knees and ask for money. ... nothing else will save them. ... We are already on the verge of seeing this happen.

[hayekvindicated]

Hayekvindicated - You should speak up then on iTulip's thesis and core question to deflationists. If you have a country with utterly unpayable existing debt burdens, who's rollover financing of existing debt depends on continuation of the financing inflows of the recent past, and you observe charts showing that financing has disintegrated / evaporated and therefore the country shows real signs of progressing towards a default on an external interest payment - how in the light of this predicament can that country stage a deflation within it's currency zone?

There is NO way, if their interal current account situation is in a runaway collapse, that they can fend off an interest payment default indefinitely, and this leads directly to a default and a major blow to the currency. This entire confluence of circumstances leads to a major bout of inflation within that currency zone when foreign creditors become scared away by the rapidly deteriorating current account situation in that nation. Not even the global superpower and global anchor currency and "gold substitute" can fend off this classic outcome when the current account goes into a deficit spiral.

The ONLY argument that has been put forward by deflationists is that they can monetize this debt payment, but what the heck kind of deflationist argument is that? If you claim, as you state in your post, that you "can already see" this current account dilemma heading straight for a crisis, then you should speak out for rational economic forecasting here and state flatly that it is impossible for an economy headed straight for debt default due to lender disengagement, to ever stage a deflation.

It is time for rationalism to speak out here as to this macro backdrop for all the assertions of deflation. The USD reflects the US current account, underpinned by the senior currency's right to print without limit, but this in no way constitutes a rational argument for deflation. Any better arguments should be made now, else reiterated calls for deflation are not backing their arguments with rationality.

The deflation scenario depends upon the country's currency becoming impregnable and a flight to the currency so that everything else tumbles in value.

In Britain, I cannot see such a thing happening. And the US may be able to sustain the value of the Dollar for some time, but eventually the sheer cost of several generations of profligacy will destroy the currency. Benjamin Franklin once wrote that in the long run no paper currency can survive. It goes to the crapper because the propensity for rulers to abuse it can only be resisted for so long. It is not without good reason that the American constitution forbade pure fiat money.

With the US Dollar, the crisis will occur later. With Britain, deflation talk by the central bank makes me laugh. The Pound is down 25 percent against the US Dollar. I cannot see how this will lead to deflation when the price of everything Britain imports is going to go up because of its tumbling currency. And Britain produces NOTHING - it does not even grow enough food to feed itself. The economy is a joke.

I am firmly in the Rogers/Faber school on Government bankruptcy. You cannot set a timeline on US Government bankruptcy today - but the government will go broke and it is inevitable. Whether you get hyperinflation or not at that point is a more academic question.

[slavomir]

'emerge from bomb shelter' = exit stategy. at least as important as a 'buy' or entrance stategy is the exit strategy. buy a house and then try to sell it. if you can't, you're in a liquidity trap, not an 'investment'. silver (recognizable american coins) would be better for the barter system than gold. the human body is 90+% water so we are all walking liquidity traps and let's say it's nice to be in one considering the unfathomabilities of non existence. it's liquidity we want more than anything else? which is why money will always be invented. physical gold may as well be packaged by bullion vault and other similar companies along with the other required appurtanances for the worst case scenario - a shotgun (for which shooting lessons are not required), long term food supply (interesting mention of this made in the books 'Little House on the Prarie' - a false wall wherein was hidden whole grain wheat berries with a cork in the bottom of the wall), water supply, heck, maybe a cave out in the woods...how much fear am i capable of anyway? now i'm reading sentences like "worse than the great depression". i read roubini and jim jubak (forgive me) and the tulipers am at least as interested in the lens we look through than what we're looking at.