Gold and silver

Why and How to Buy Bullion... Plus Where to Store It

In terms of storing your wealth or preparing for what’s to come, I think everyone should have SOME gold and silver bullion on hand.

Zero Hedge,

2 November, 2012

How much you purchase is up to you. But you should have several months’ worth of expenses in gold and silver bullion. Why Gold and Silver? Because if the banks are closed or if paper money is worthless, you don’t want to be walking around with an ounce of gold (worth $1k+) to buy groceries. Instead, you will want some precious metals of smaller denomination to purchase/ barter with, hence the need for some silver.

Buy some of both now. I cannot tell you which broker to use, but whoever you work with, make sure that YOU store the gold/silver yourself (more on this in a moment) and that you buy bullion that is liquid enough that you can buy or sell it quickly.

In terms of actual gold coins, there are three coins that comprise the bulk of the bullion market. They are Kruggerands, Canadian Maple Leafs, and American Gold Eagles. I’ve been told to avoid Maple Leafs by both a trader and a bullion dealer as they can easily be scratched which damages the gold and reduces the coin’s value.

In terms of silver, the easiest way to get it is via pre-1965 coins (often termed “junk” silver). The bullion dealer I spoke to prices them at 50 cents over spot. However, you can also get silver one-ounce rounds (coin-like medallions) and 10-ounce bars, both of which can be bought at 95 cents over spot. You can buy Silver Eagles coins at $2.50 over spot, though the premium higher.

Again, I cannot tell you which dealer to go with, but look for someone who’s been dealing for years (not a newbie).  You should ALWAYS ask for references from the dealer (former clients you can talk to about their purchases/ experiences).

Some warning signs to avoid are dealers who try to store your bullion. NEVER, I repeat, NEVER store your bullion with someone else. ALWAYS store it yourself. Also, be sure to talk to the dealer for some time and ask him or her numerous questions about the industry, the coins, etc (feel free to test him or her on the information I’ve provided you with eg the three most liquid Gold coins, etc). If they can answer everything you ask in a knowledgeable fashion, their references check out, and you verify everything they say with a 3^rd party, you should be OK.

In terms of storing your bullion, you can store it in a safe deposit box or buy a decent home safe from Target or Wal-Mart (or a specific safe store). If you go the safe deposit box route, make sure it’s with a bank that has as little exposure to derivatives as possible. 

Personally, I distrust safe deposit boxes because part of the reason for having gold or silver on hand is in case there’s a run on the banks or a bank holiday is declared. So I like the idea of having at least some bullion in a personal safe somewhere. You can get a decent safe for anywhere between $100 and $1,000. Both Target and Wal-Mart sell decent models for $50-$300.

On a side note DO NOT tell people about your bullion stash OR your safe. Trust virtually NO ONE with this information except your closest loved ones (and I mean CLOSEST).

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Best Regards,

Graham Summers

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