Current Events > Why buy physical Gold and Silver in America?

(+) Yeah! (+)

People are saying it's best to prepare and buy PHYSICAL Gold and Silver... Honest question... Why? I know it keeps its value but do I just hold on to it and sell it to a pawn shop later or something? What do you do with it?

I know this is probably a dumb question for some but I'm being serious here
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You hold it and keep it in case doomsday comes and if you want fiat then sell it for a slightly lower price than spot.

Its honestly not really worth having it unless you believe the collapse of the government or something. Precious metals have been manipulated by paper metals for a long time and wont stop anytime soon.
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The question you should be asking is....

"Why do gold/silver buyers want your cash if said cash is supposed to devalue at 'any moment'."?
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Umbreon posted...

The question you should be asking is....

"Why do gold/silver buyers want your cash if said cash is supposed to devalue at 'any moment'."?

That is a great question. I'm glad I wasn't an idiot when I asked myself why unless I can make more money off of it compared to what I purchased it for
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Thought this was about Pokemon
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the doomsday scenario has never made much sense to me. Gold and silver don't have a whole lot of use at such a time. I know there's zero chance I'd trade for them at that point. Food, and the tools used to acquire and prepare food and water seem much more practical to me.

seems much better to have now, while they have industrial use, and hope the demand drives the price up.
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Medussa posted...

the doomsday scenario has never made much sense to me. Gold and silver don't have a whole lot of use at such a time. I know there's zero chance I'd trade for them at that point. Food, and the tools used to acquire and prepare food and water seem much more practical to me.

seems much better to have now, while they have industrial use, and hope the demand drives the price up.

Even when the world is gone, people will still put value in things like gold. Because they always have and it's a tangible thing that isnt super easy to come by.
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Medussa posted...

the doomsday scenario has never made much sense to me. Gold and silver don't have a whole lot of use at such a time. I know there's zero chance I'd trade for them at that point. Food, and the tools used to acquire and prepare food and water seem much more practical to me.

seems much better to have now, while they have industrial use, and hope the demand drives the price up.

Humans have always loved gold and seennit as somethng valuable, it hadnt had any industrial use until recently.
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yeah, but it at least had value in jewelry and such. that demand goes away with doomsday, too. (at least, I expect it would)
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Oh sure people will stubbornly try to keep the 'value' of shiny rocks.

But eventually they'll starve to death
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So you can get all 251 pokemon on both carts. Duh
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Saw an unopened Crystal at a record store for $150 today.
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Because baseless economic paranoia.
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No matter how you turn it, people will forced to start a trading system.
And then they will realize that things gets much much easier with a monetary system.
And since the old Governmental money is useless, people will have to decide to use something else.
And since we have valued gold since the dawn of time, it make sense that we keep doing it instead of, for example, bottlecaps.
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because Nintendo could shut down the virtual consoles/stores at any time
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paper money works when people agree on its value. gold is valued world wide.
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Most of my silver has come from coins I collected as a cashier years ago. Pretty much any coin made in '64 or earlier has silver and is worth more than the coin value.
I think I am going to actually invest in more silver once my taxes come in.
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WhinyZach posted...

An oz of gold now has the same purchasing power as an oz of gold did 1000 years ago.

fwiw the effective price of gold in today's dollars in 1792 was $500, so its real price is about 2x higher than then

that was when we had a gold standard IIRC, and a $20 pegged value of 1 oz of gold.
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RiderofHogs posted...

Most of my silver has come from coins I collected as a cashier years ago. Pretty much any coin made in '64 or earlier has silver and is worth more than the coin value.
I think I am going to actually invest in more silver once my taxes come in.

only dimes and up. plus a few years on nickels during WW2 (though only 40%, not the 90% the others had)
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People, like my step-mother collect it just in case our currency takes a nosedive and becomes like the Zimbabwean Dollar since the US dollar is no longer backed by gold or silver in the reserve. Precious metals will never lose its value..
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DirkDiggles posted...

People, like my step-mother collect it just in case our currency takes a nosedive and becomes like the Zimbabwean Dollar since the US dollar is no longer backed by gold or silver in the reserve. Precious metals will never lose its value..

unless its current value is raised above its historical value

which it is

in which case it can
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Darkman124 posted...

DirkDiggles posted...

People, like my step-mother collect it just in case our currency takes a nosedive and becomes like the Zimbabwean Dollar since the US dollar is no longer backed by gold or silver in the reserve. Precious metals will never lose its value..

unless its current value is raised above its historical value

which it is

in which case it can

The only way for that to happen is if there is a discovery in a new massive source for the metal, making it not as rare or someone obtains the Philosopher's Stone and transmutates lead into gold.
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DirkDiggles posted...

The only way for that to happen is if there is a discovery in a new massive source for the metal, making it not as rare or someone obtains the Philosopher's Stone and transmutates lead into gold.

that is absolutely not the only thing that can change confidence levels in whether a precious metal holds its value

speculation drove its price to insanely high levels throughout the post-2008 period and it is only now reaching parity with its 1972 value

it has done so by losing value

if you bought gold after 2009 and sold it today you would have less money after adjusting for inflation
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also more broadly, index ETFs exist that hold physical gold in vaults with minimal expense ratios, so if you really want precious metal exposure there's no reason to buy physical gold and try to deal with storing + exchanging it yourself (at great transactional cost each step)

unless you are afraid of a total run on the bank. the ETFs have 2:1 leverage (assets outstanding:gold held in vaults to trade and cover sale costs) which is very reasonable. most banks have far higher leverage.
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Darkman124 posted...

also more broadly, index ETFs exist that hold physical gold in vaults with minimal expense ratios, so if you really want precious metal exposure there's no reason to buy physical gold and try to deal with storing + exchanging it yourself (at great transactional cost each step)

unless you are afraid of a total run on the bank. the ETFs have 2:1 leverage (assets outstanding:gold held in vaults to trade and cover sale costs) which is very reasonable. most banks have far higher leverage.

This was the main thing I was thinking as well. Why not just invest into the ETF? Sounds simple to me.
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Because a dollar collapse in the next 50 years is very possible, and in that scenario if you dont hold it you dont own it.
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tennisdude818 posted...

very possible

define this
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known2FAIL posted...

Darkman124 posted...

also more broadly, index ETFs exist that hold physical gold in vaults with minimal expense ratios, so if you really want precious metal exposure there's no reason to buy physical gold and try to deal with storing + exchanging it yourself (at great transactional cost each step)

unless you are afraid of a total run on the bank. the ETFs have 2:1 leverage (assets outstanding:gold held in vaults to trade and cover sale costs) which is very reasonable. most banks have far higher leverage.

This was the main thing I was thinking as well. Why not just invest into the ETF? Sounds simple to me.

Some sources say that paper metals (ETFs) arent really backed by actual metals. Some sure, but not all. If I were to go that route, I would personally rather get physical gold/silver not an ETF. At least, I can look at it sparkling.
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Flockaveli posted...

Saw an unopened Crystal at a record store for $150 today.

Can you PM me the record store?
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The basic reasoning behind buying gold or silver is a lack of faith in the federal reserve being able to keep inflation under control. It isn't for some kind of an apocalyptic scenario but more for a situation where there is just a really big misstep by the powers that be in this country that leads to inflation of the value of the paper currency significantly exceeding what we've seen in since the 1970's.

Slaya4 posted...

Some sources say that paper metals (ETFs) arent really backed by actual metals. Some sure, but not all. If I were to go that route, I would personally rather get physical gold/silver not an ETF. At least, I can look at it sparkling.

which sources say that

ETFs are legally required to have disclosures that identify all holdings that back their equity assets so any source claiming that is basically levying multi-billion dollar level fraud
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DirkDiggles posted...

Precious metals will never lose its value..

Explain https://en.m.wikipedia.org/wiki/File:Gold_price_in_USD.png
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NeonOctopus posted...

So you can get all 251 pokemon on both carts. Duh

theres only 151 pokemon though
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Medussa posted...

RiderofHogs posted...

Most of my silver has come from coins I collected as a cashier years ago. Pretty much any coin made in '64 or earlier has silver and is worth more than the coin value.
I think I am going to actually invest in more silver once my taxes come in.

only dimes and up. plus a few years on nickels during WW2 (though only 40%, not the 90% the others had)

I found a nice 1942 dime in my change the other day. It was surprisingly in good shape.
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Gold and silver's value isn't quite as subject to the whims of the economy as fiat currency. That said, there was quite a bit of price hiking due to the recent ad campaigns to buy and sell gold.
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Darkman124 posted...

tennisdude818 posted...

very possible

define this

I cant give a % to it if thats what you mean. I think its likely enough to have some insurance ready.

Im not talking doomsday, but the way the US, Japan, etc. would default is via inflation.
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I think the battery in my Silver is dead.
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Darkman124 posted...

Slaya4 posted...

Some sources say that paper metals (ETFs) arent really backed by actual metals. Some sure, but not all. If I were to go that route, I would personally rather get physical gold/silver not an ETF. At least, I can look at it sparkling.

which sources say that

ETFs are legally required to have disclosures that identify all holdings that back their equity assets so any source claiming that is basically levying multi-billion dollar level fraud

Sorry, that was such an ugly way to say that reading it the next day. A more specific way to what I was saying, the whole situation in Venezuela and Germany not getting their gold back leds me to believe that, at any one time, an ETF may or may not actually have the actual gold since it appears that the central banks dont have it.

ETFs kind of go against the purpose of buying gold because if the government blows up that gold is no longer yours. That and the futures market for precious metals leads me to have a distrust for paper metals. Its a fallacy, agreed, but I just have trust issues with my money. Though, I do see the benefit of them.
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the reason actual investors buy GLD/SLV/etc is a belief that they are a hedge against economic downturns that hurt the value of stock equities they also hold. the fear of a downturn is logical and understandable, and even wise during periods of peak greed.

as peak greed gives way to peak fear, being able to liquidate those investments and shift back into riskier assets is a benefit.

physical gold makes zero sense for such an investor. it is highly inefficient, and illiquid. it only serves the interests of the kind of person who believes that the next problem will be a government collapse.

such people might have a point in venezuela, though if they have any real assets they would be better served spending them to move elsewhere and invest in local equity markets. in the united states, such people are known as "conspiracy theorists."

they are the primary target of gold sellers, who pander to their fears in order to rid themselves of gold assets at high prices that they themselves bought up at very low cost from a similar bunch during the last time those conspiracy theories proved untrue.

it is a cycle of shysters fucking gullable fools.
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I don't think people are conspiracy theorists for looking at nonstop deficits and massive unfunded liabilities across the West and saying "Gee that looks unsustainable, let me look at what has historically happened in cases like this. Oh shit." You can disagree with them if you think it's different this time, but there's no real conspiracy.
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tennisdude818 posted...

I don't think people are conspiracy theorists for looking at nonstop deficits and massive unfunded liabilities across the West and saying "Gee that looks unsustainable, let me look at what has historically happened in cases like this. Oh s***." You can disagree with them if you think it's different this time, but there's no real conspiracy.

debt taken out at or below the inflation rate is fundamentally a free loan

an investment in your society made with money you can borrow for free is worth it if it produces any return at all

this is why current debt/gdp ratios of most western nations (aside from greece) are viewed as low risk despite "nonstop deficits"
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i buy / own physical gold, silver and platinum.

it started from gold panning as a kid. I got gold fever once I found my first flake. Finding precious metals is better than buying it, but buying it still sort of scratches that itch.

from a financial point, there are high transaction fees in owning physical gold. If you go to a pawn shop you will pay over spot price to buy and get paid under or at spot to sell. ETFs are a smarter tool if you just want to balance risk, at least for me the transaction fees would be lower.

there is also a tiny bit that is insurance against governmental collapse where the faith in the currency/banks plummet. That is the most likely doomsday scenario to me, not nuclear war or asteroid or zombies, just excessive debt leading to runaway inflation and the currency not being worth the paper it is printed on.

but mostly i just like knowing i have physical precious metals, sometimes touching it, smelling it.

i buy most of my precious metal at APMEX. Sometimes a small time coin store you can get deals but that is rare now. Back in the 90s I would go with my dad and you could get really good deals at coin stores sometimes back then, but everyone is better educated on the values now. Pawnshops I only trust if it is US minted currency. Bars are sometimes fake at pawnshops, or so ive heard.
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I own quite a few pounds of pure silver and a few ounces of Platinum. If I cashed out right now I'd probably have 15,000 in cash on trade.
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Darkman124 posted...

tennisdude818 posted...

I don't think people are conspiracy theorists for looking at nonstop deficits and massive unfunded liabilities across the West and saying "Gee that looks unsustainable, let me look at what has historically happened in cases like this. Oh s***." You can disagree with them if you think it's different this time, but there's no real conspiracy.

debt taken out at or below the inflation rate is fundamentally a free loan

an investment in your society made with money you can borrow for free is worth it if it produces any return at all

this is why current debt/gdp ratios of most western nations (aside from greece) are viewed as low risk despite "nonstop deficits"

also, "it will cause a recession" is very different from "it will collapse society"

It is a free loan because it's a wealth transfer via an inflation tax. But remember that I used a 50 year time frame. The bond bear market was 30 years long with periods of high inflation, the bull market has been 30 years long as well. Saying that the status quo will last for another 50 years airs on normalcy bias, and that's why nobody cares about the debt/GDP ratios of western nations.

If inflation comes back in significant way, we will still be stuck with massive deficits that suddenly can't be funded via "free debt". Current deficits arent generated from a bunch of Keynesian short term infrastructure projects that will be politically easy to shut off when inflation picks up.
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Darkman124 posted...

"it will cause a recession" is very different from "it will collapse society"

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Even after the collapse of a government there will still be a society, and with society comes trading. Gold will always likely have value.

But lmao @ believeing on total governmental collapse and everyone reverting back to pre-historic times
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TONG
J.C.... the net's going... the net's going black... J.C.... no more infolinks,
transmissions of any kind... we'll start again... live in villages... if you
receive this, if you survive, then find us... find us...

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Darkman124 posted...

Darkman124 posted...

"it will cause a recession" is very different from "it will collapse society"

I'm completely open to the possibility that nothing major will happen in my lifetime. Maybe the Western economies will limp along with their addiction to low rates. But the fact that the alternative is really bad doesn't mean that it's anywhere near impossible.

There are decades where nothing happens; and there are weeks where decades happen. -Vladimir Lenin
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