That dreaded phrase: ''The system is fundamentally sound''

[Andreuccio]

Re: That dreaded phrase: ''The system is fundamentally sound''

Mr. Shadow Fed, I believe this is not completely accurate.

I understand that the SA Krugerrand lost a lot of shine precisely due to the fact that they are not 99.99% pure (24K), but only 91.67% or 22K pure.

This allowed other gold coins such as the Canadian Maple Leaf (crowd cheering ;)), Chinese Panda and Australian Kangaroo to overtake the gold bullion coin market. Later the US Mint issued the Buffalo which is also 99.99% pure (unlike the American Eagle ones).

No expert, but I remember reading there are advantages to an alloy. I think they're stronger and more resistant to wear than the pure stuff.

[LargoWinch]

Re: That dreaded phrase: ''The system is fundamentally sound''

True indeed as we all know from the cartoons, gold is a "soft" metal (got a friend to bite one of my J&M gold bar with great results earlier this year).

From experience however, please note that gold buyers will pay below spot for Krugerrands because they are not pure (see kitco.com for live "buy" prices).

[Andreuccio]

Re: That dreaded phrase: ''The system is fundamentally sound''

What I would do if I were you: Besides gold coins, buy a lot of small gold rings and other jewelry. They should be less expensive than gold coins, and if the SHTF bad, you’ll not be loosing money, selling premium quality gold coins for the price of junk gold. If I could travel back in time, I’d buy a small bag worth of gold rings.

Is this true? Are small gold rings and other jewelry really cheaper than coins? You can get Krugerrands for not much over spot, and other coins for a little bit more than that. I can't imagine a pawn broker or other gold ring dealer selling for less than melt value.

[metalman]

Re: That dreaded phrase: ''The system is fundamentally sound''

True indeed as we all know from the cartoons, gold is a "soft" metal.

From experience however, please note that gold buyers will pay below spot for Krugerrands because they are not pure.

nonsense. right now...

Coin

Weight

Buy

Sell

Krugerrand

1.0 oz

$942.91 (live)

$956.91 (live)

Canadian Maple .9999

1.0 oz

$950.91 (live)

$971.91 (live)

Austrian 100 Corona

.98 oz

$910.37 (live)

$938.24 (live)

U.S. Gold Eagle

1.0 oz

$962.91 (live)

$982.91 (live)

Panda

1.0 oz

$928.95 (live)

$985.83 (live)

all have the same gold in 'em.. 1 oz. except the corona... .98 oz.

anyone who pays more because the 1 oz. is mixed with something else is an idiot. who cares, right?

krugarands are cheapest because everyone knows the the gold in them was dug up by slave labor. bad marketing and worse karma.

maples are so soft you can chew 'em like gumballs. pandas, too. but they're in plastic wrappers so you can't. smart those chinese! why are maples a discount to pandas? racism, my best guess.

why usa eagles always the highest premium? flags waving, crosses flying... you know.

net it out... long racism and nationalism, short slavery. buy usa eagles!

[LargoWinch]

NOT nonsense, who is your dealer? Why the wild spreads in prices among the pieces?

Bullion Prices - per unit Product Gold Silver Platinum Palladium Kitco Anniversary Silver Coin - limited edition - 17.96 - - Kitco ChipGold 1gr 30.47 - - - Kitco ChipGold 5 gr 152.36 - - - Kitco ChipGold 10 gr 304.72 - - - Kitco ChipGold 20 gr 609.45 - - - 50 gr Bar 1,518.00 - - - 500 gr Bar 15,179.99 286.30 - - 1 gr Bar 30.36 - - - 1 oz Australian Nugget 944.30 - - - 1 oz Vienna Philharmonic 945.30 17.81 - - 400 oz Bar 377,720.00 7,124.00 - - 1 oz Chinese Panda 942.30 - - - 1 oz Bar 945.30 17.81 1,773.00 391.00 1 oz Eagle (Ship to Canada) 935.30 17.81 1,773.00 - 1 oz Eagle (Ship to USA) 945.30 17.81 1,773.00 - 1 oz Maple .999 943.30 - - - 1 oz Maple .9999 945.30 17.81 1,773.00 381.00 1 oz Maple .99999 947.30 - - - 1 oz Mountie 944.30 - - - 1 oz Krugerrand (Ship to Canada) 933.30 - - - 1 oz Krugerrand (Ship to USA) 943.30 - - - 1 oz Coin - - - 381.00 1/10 oz Eagle (Ship to Canada) 93.43 - 177.30 - 1/10 oz Eagle (Ship to USA) 94.43 - 177.30 - 1/10 oz Maple 94.43 - 177.30 - 1/2 oz Bar 472.15 - - - 1/2 oz Eagle (Ship to Canada) 467.15 - 886.50 - 1/2 oz Eagle (Ship to USA) 472.15 - 886.50 - 1/2 oz Maple 472.15 - 886.50 - 1/20 oz Maple 46.12 - - - 1/4 oz Bar 236.08 - - - 1/4 oz Eagle (Ship to Canada) 233.57 - 443.25 - 1/4 oz Eagle (Ship to USA) 236.07 - 443.25 - 1/4 oz Maple 236.08 - 443.25 - 10 gr Bar 303.60 - - - 10 oz Bar 9,433.00 178.10 - - 100 gr Bar 3,036.00 - - - 100 oz Bar 94,330.00 1,796.00 - - 1000 gr Bar 30,327.97 572.60 - - 1000 oz. Bar - 17,810.00 - - 2 oz Bar 1,888.60 35.62 - - 20 gr Bar 607.20 - - - 5 gr Bar 151.80 - - - 5 oz Bar 4,721.50 89.05 - - 50 oz Bar - 890.50 - - Gold Buffalo 1 oz 945.30 - - -

Your quote:
"krugarands are cheapest because everyone knows the the gold in them was dug up by slave labor. bad marketing and worse karma."

Firstly, very funny

Secondly, that is what I am talking about and the real issue of this. Ks are not the best bullion, something that is 99.999% or 24K pure is the best.

It is my understanding that the local pure bullion coin is usually the best: i.e. Maple Leafs if you are in Canada / Buffalos if you are in the US / Pandas for China etc.

[World Traveler]

Re: That dreaded phrase: ''The system is fundamentally sound''

I went to the site to read about living through the Argentinian economic crisis. I've seen the news reels of people smashing at bank doors in late 2001...what always impressed me was the age of so many of the rioters/demonstrators, they were in their 40's, 50's, and 60's. Usually outbreaks of social unrest are the the domain of the the young, things have to be very bad to get the older folks out in the streets.

His tales of how to survive the severe personal danger, shortages, and stress in a collapsed society are horrific to say the least.

I'm hoping we don't have a repeat of that lawlessness in the U.S., I honestly don't think we will. We have a much stronger law and order ethic in the U.S. and our police forces are fairly honest.

My gut feel is that we have a repeat at a national level of what happened in Houston in the 1980's, since so many of the up-to-now characteristics and outcomes are the same. Failing banks, significant job losses, massive foreclosures, bankruptcy auctions, "see-thru" shopping centers, etc.

Houston in mid to late '80's was just a depressing place to be. But the city and its people still functioned. Laws were obeyed, lots of people still had jobs, road repair and infrastructure were maintained. Life went on, but economically and business-wise, at a much more subdued level.

[MLM]

Re: That dreaded phrase: ''The system is fundamentally sound''

Spent some time reading through this guy's blog last night (http://www.ferfal.blogspot.com/). Along with a lot of practical advice based on lots of time reflecting on his situation, he notes that things went to hell more or less overnight. What set everything off was a currency devaluation. Everybody woke up one morning and could no longer afford to live. Well worth skimming through, even if you aren't considering the possibility of things in the U.S. really going to hell.

[RebbePete]

Re: That dreaded phrase: ''The system is fundamentally sound''

Don't hold cash, hold coins! US regular change, same effect, much better protection.

Oh and everyone go get one of these. Very nice, I have one, it's perfect.

http://www.msarinc.com/stg556_sporting.html

Now, that's a gun. :cool:

Anyway, why hold coins? I refer to the current crop of US coins as "fiat coinage" since it doesn't have any precious metal content. It's also harder to store - I can hide a grand easily between the pages of a book on a shelf, but 4,000 quarters are a bit dicier.

- Pete

[RebbePete]

Re: That dreaded phrase: ''The system is fundamentally sound''

How far do you think we'll have to fall? AFAIK rural and suburb midwestern/rust belt cites and towns are already fairly depressed, its just the big cities on the coasts that are still living it up (relatively speaking that is...) at least it seems that way to me. I don't want to live out in the middle of nowhere nor do I have any arm chair fantasies of taking on all comers in the wilderness, but it does seem to me that moving temporarily at least from the major pop. centers would be a great way to avoid anything truly ugly as that was where most of the violence and disorder was during the Arg. Financial Crisis...

Maybe I'm stupid but I'd rather not have to leave the country... D:

With the whole world on the fiat system, and with economies so intertwined, what country would you choose anyway? If things came unglued totally, I'd rather find a nice little US town in the middle of nowhere that has a farming community nearby.

- Pete

[Guest]

Re: That dreaded phrase: ''The system is fundamentally sound''

Just as an addendum to the post above, I chanced upon a video interview with Martin Hennecke of TYCHE group who also refers routinely to gold as a hedge / protection in both inflationary and deflationary crises. Evidently this idea has some broad circulation - so we should not conclude that EJ's definition / clarification of this distinction is subscribed to without equivocation by a variety of other's interpretations. I am not making any assertion, just noting the opposite view seems to enjoy broad circulation. When you look for it, you can find this reference in many different analysts comments - I believe for example even in Marc Faber's.

The reference noted above is within a Squawk Box interview with Martin Hennecke, directly after minute # 4.00:

http://www.cnbc.com/id/15840232?video=777001969&play=1

Who are Martin Hennecke and the TYCHE GROUP? - Bio :

http://www.tyche-group.com/en/service_per_front.php

Metalman - isn't it great when we can recite iTulip 101 and sound like gurus? You are of course right on the point. Leeb is getting his definitions a little woolly with that statement. ... Meantime your point on the sloppy definitions which Leeb has indulged on this point are certainly well taken.

[sn1p3r]

Re: That dreaded phrase: ''The system is fundamentally sound''

Any chance that this is a supply/market issue and not people buying with their politics?

[raja]

Re: That dreaded phrase: ''The system is fundamentally sound''

What I would do if I were you: Besides gold coins, buy a lot of small gold rings and other jewelry. They should be less expensive than gold coins, and if the SHTF bad, you’ll not be loosing money, selling premium quality gold coins for the price of junk gold. If I could travel back in time, I’d buy a small bag worth of gold rings.

Small time thieves will snatch gold chains right out of your neck and sell them at these small dealers found everywhere. This is VERY common at train stations, subways and other crowded areas.

So, my advice, if you are preparing for a small economical crisis, gold coins make sense. You will keep the value of the stuff and be able to sell it for its actual cost to gold dealers or maybe other survivalists that know the true value of the item. In my case, gold coins would have been an excellent investment, saving me from loosing money when the local economy crashed. Even though things are bad, I can go to a bank down town and get paid for what a gold coin is truly worth, same goes for pure silver.

This guy doesn't make sense . . . .
On the one hand, he says to buy plenty of jewelry because you can only get junk gold prices for gold coins at the local dealers. But at the same time he say he can go down to the bank and get the full value of gold coins.
So, in this real-world example, things are working just fine with gold coins.

If things got a lot worse, gold things would still be fine, IMHO . . . .

After a BIG economic meltdown, if it it was accompanied by hyperinflation, who would accept dollars? If it were a deflationary event, people might accept dollars, but they might be more inclined to take gold . . . I would. Who's going to trust anything connected with the government?

However, most here believe that inflation or hyperinflation are a much higher probability than deflation, so . . . .

Let's say you had some surplus you wanted to sell. If you could trade for something of equal value, that would be fine. But what about if the guy who wanted to buy didn't have something you needed? That's how money got invented. If not immediately, soon after people would be trading all kinds of things, and especially gold and silver.

Gold coins are recognizable as coins because of the fluted edges and the designs. I have printed off some web pages that describe how to tell if a coin is fake, and I am saving those in case I ever need to convince a wary seller.

As to the value of coins, I'd divide them into "eights" as Mega said, then it would be a case of haggling over their worth. I would probably argue the case for a valuation at what gold could buy just prior to the SHTF event. Today, that would be the equivalent of $125.
Of course, one wouldn't buy a small item like a cabbage for that, but there are possibilities for creative dealing, e.g., one might strike up a deal for 2 months worth of cabbage for a "piece of eight".

So my conclusion is that gold coins would work just fine in any scenario . . . .
And, it would also be convenient to have some silver coins on hand for small items . . . .

[LargoWinch]

Re: That dreaded phrase: ''The system is fundamentally sound''

Raja, I think the author mentionned that gold coins are not ideal in a remote location because he cannot sell them for their full value.

He did say however that he can go to a town, and get full value there. Travel is required however and I guess it is somewhat dangerous.

The idea of cutting gold coins in eights is awesome (thanks for the idea ). But how? One of those lock cutter? Silver eagles would also prove very usefull indeed for the smaller stuff.

The problem I see with the junk gold, is that in the event of no major meltdown, you will stand to lose quite a bit of money. Meanwhile, gold bullion coins/bars even in the best environment, will always remain a solid investment i.e. you can get your money back if there is no SHTF situation.

I do believe - and hopefully this is the majority - that the current economic situation will not result in the MadMax scenario... A good dose of inflation is bad, but the world and our societies will not stop functionning.

After all, people went through the Depression and the high-inflation period of the 70s without anything close to the kind of troubles being described by the author.

[Slimprofits]

Re: That dreaded phrase: ''The system is fundamentally sound''

This guy doesn't make sense . . . .
On the one hand, he says to buy plenty of jewelry because you can only get junk gold prices for gold coins at the local dealers. But at the same time he say he can go down to the bank and get the full value of gold coins.
So, in this real-world example, things are working just fine with gold coins.

It makes sense. It sounds as if he is factoring in travel time, or cost, or danger to the closest city with a bank. That could be applied to folks that live in rural hill or mountain areas in the U.S., away from the closest town or city.

But where I live, in my local are small time dealers

[Verrocchio]

Re: That dreaded phrase: ''The system is fundamentally sound''

''The system is fundamentally sound''

I'm sure this is the same phrase used by Zimbabwe President Mugabe, shortly before his government began printing the 10 million dollar note pictured above! They have since printed a 100 billion dollar note. How much would this largest of large bills buy? Not even lunch, only about two loaves of bread.