I titled this article in part using the words "bits & pieces", I would like to first explore tiny bits of gold and their utility. I am starting to really like the very small 1/10 oz American Eagle coins, and even the 1/4 oz pieces as well. The smaller coins are not as efficient a way of buy the most gold for the money, but they are a readily identified smaller amount of gold than the large 1 oz coins. I now have the below "collection" of smaller gold bullion coins:
1/10 oz Gold Eagle
1/10 oz Maple Leaf
1/4 oz Gold Eagle
1/4 oz Maple Leaf
1/4 oz Krugerrand
I like these small pieces because they conceivably could be used in extreme TEOTWAWKI situations to make larger purchases than you probably could not easily do with silver, say a month's worth of groceries for the family or a used motorcycle. And not have to worry as much about getting "change" back versus a 1 oz coin. [They also make fine gifts, for raising consciousness of gold for example...]
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And, yes, you can see a *slight* color difference between the Eagle and the K-rand. The Eagle has about 3.0% silver as part of its alloy (the other 5.17% is copper) , while the K-rand has just 8.17% copper, so the latter is slightly more reddish in color. Since I am putting up stuff in this post tonight, here is wiki's color-triangle on gold and its more common alloys (*click* on any image for a better view):
According to wiki "pure gold" (999 fine, at the top of the triangle) has a slight red-yellow color, although the 1/4 Maple (999 fine) looks pretty yellow to me... Link to above: http://en.wikipedia.org/wiki/Gold
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A couple of times now I have wanted to use FOFOA's very interesting graph from 2009, whether at Zero Hedge discussions or elsewhere. Here is his graph, for my easy reference as well as for any of you! Note, these are his 2009 estimates:
It is my humble opinion (and I emphasize that it is humble, in that I have already written about my poor record as a predictor of things, especially in the future...), that even if the price of gold winds up at $25,000 (now considered fantastically high by most gold analysts -- "fantastic' in the sense of extreme and unlikely), well his whole set of arguments will be proven correct...
["Humility" is a subject that I am becoming more interested in... I hope to write about that soon.]
And I would have a lot more money (however you define it),,,, what's not to like about that?!
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FOFOA's "Freegold" is becoming a more visible meme now... The destruction of "paper-gold" is discussed at the ZH link above, but this is not the only place outside of FOFOA-land where Freegold is getting noticed. Why even wikipedia now has an article on Freegold! There is, however, considerable controversy over how his ideas can be simplified to reach a wider audience. And wiki's take is not all that persuasive, IMO, but at least it is there for the world to see, and this may jump-start additional conversation:
http://en.wikipedia.org/wiki/Freegold
Even "General Jim" Sinclair (jsmineset.com) is looking at and discussing Freegold. It is not clear to me whether he has switched any of his thinking or not. He has always been bullish (big time) on gold, but not to the very high prices as envisioned by FOFOA.
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A book has apparently just come out that I want to get ASAP! $10,000 Gold (by by noted gold analyst Nick Barisheff). I saw an ad for it just today, clicked on it and read the chapter that they (amazon.com?) allow you to read. Nothing NEW in that chapter, but $10,000 in the book's title is enough to get lots of attention.
If I can get the book and read it soon, I will review it. [But, there are other books in the queue as well... The book I am reading now is about the Italian 'Ndrangheta -- Calabria's mafia. More mobile and powerful than even the Sicilian mafia. This book is very interesting: The Honored Society by journalist Petra Reski, 2013]
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In my wanderings about the Internet I have run into Ohio Precious Metals' nice looking website (opmmetals.com). They are a refinery in Jackson, Ohio, and are apparently the USA's largest refiner of gold bars that are COMEX certified. All of their feedstock is recycled gold (source is mostly all the "We buy gold" places), they even have the three revolving arrow logo of certified recycled products. Check out OPM's kilo bars (photo courtesy of Provident Metals (providentmetals.com):
Each kilo bar is about 117 mm * 51 * 9 (roughly 4 5/8" * 2 * 5/16), reference: http://www.goldbarsworldwide.com/PDF/NBA_76_Ohio_PreciousMetals.pdf. Most other kilo bars have similar dimensions.
goldbarsworldwide.com is a wonderful website, hey, just sayin'... Lots of pictures and useful reference data there.
Ohio Precious Metals is owned by privately held Global Metals Holdings, LLC (which also owns NTR Metals).
Provident, by the way, is now offering the above kilo bars for a very reasonable looking $5.95 per oz over spot (beating tulving.com by about $5.00 per oz, NTR suggested that I call Provident about OPM's kilo gold bars). Three week delivery however... And, do your own diligence!
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Finally "a bit" (or a piece) for knowledgeable FOFOA follower "Michael dV", who has been kind enough to comment on my blog. Michael takes a pretty hard line vs. silver, as many of FOFOA's followers do. The main idea behind silver being dissed is that the choice of Store of Value of wealth has already been chosen: gold! And so, silver will not ride gold's coattails in a price reset dramatically higher than precious metals prices now. Just gold will go up 30 times...! Well, I am not so sure (I have learned recently to be less sure of things, particularly in the future).
Michael commented at my recent "Preparations" piece, and is dubious about the value of silver in a SHTF, saying that fiat currency will work just fine. I had no good response for him until now. Yes, he is right about a need and use for currency, there will always be a need for a currency (even paper fiats).
But, if it were my gas station (liquor store, pharmacy, booth at the farmer's market, etc.), and the chips were really down, would I prefer to be paid with currency, or silver? Hmm, for me that's an easy one!
me again
ReplyDeletemy comment was not derived from freegold but from reading and talking to 2 friends who have lived through hyperinflation (Bolivia in 84-86 and Romania (late 90s). All sources tell us that in hyperinflation the countries currency continues in use until it does not. A black market usually exists for stronger currencies as well.
good luck to all
Another comment about silver. It is not that we don't 'like' silver or mining stocks. It is that FOA said that gold would be THE wealth asset in freehold. Also the concept of the Nash equilibrium and focal point tell us that there is usually one winner. Combine this theory with the fact that central banks hold ONLY GOLD and I think the world is telling us something about the future.
ReplyDeleteI'm interested in this to preserve wealth and not to win an argument. Before the GFC I ws completely uninterested in the monetary system My fondest gift from childhood was a collection of 5 silver dollars my grandfather gave me at age 5.
Do what feels good if that is what you want but if you are serious about coming out of this disaster intact I suggest all consider the freegold perspective. It makes sense and has persistent logic which other belief systems lack. There is a lot riding on being right and understanding what is happening. If you are wrong you may wind up poor in your old age as is so often the case with financial crises. The pensioners are always the ones who get hurt.
I've lived through hyperinflation period, too, although intended and somewhat "controlled" one - '89, getting Polish economy from centrally-planned, Soviet style one, into free-market one. Yes that's true, there always WAS a strong black market in currencies, and you could buy ANYTHING with dollars/deutsche marks BUT... these were always small-scale, local collapses, of some backwater, shithole countries - and the public there could always fallback on the "strong" global currencies. In fact, when talking to my friends and family back in Poland, about the inflation eating away whatever wealth they were able to accumulate, they still automatically assume that "dollars" or "euros" are the answer and best hedge against it (they didn't seem to notice YET, that keeping EUR/$ instead of Polish Zloty, doesn't do them any good, in terms of exchange rates, remaining relatively flat - because as oposed to "back then", today, all Central Banks are printing together, as one happy printing family).
ReplyDeleteWell, when US dollar collapses, what other fiat currency do you think could even REMOTELY assume this position? Answer: none. There's ultimate money, though - PMs. Gold will be most probably beyond rich of general public by then - so my humble belief is, small folk will go after silver, when the music stops.
My own observation regarding silver is less from the wealth preservation view (where I completely agree with Michael dV) and is really better thought of from the "spendable nature" of silver. I too am preserving wealth for any generations to come by holding gold. But, I want to "protect the precious" by holding some silver to spend on any necessities...
ReplyDeleteMichal B! I visited Poland in 1984, when the Communists ran the place. Indeed, the dollars we carried in were more valuable than the zlotys. I agree with your second comment (paragraph) as well. What currency would anyone hold if/when the US$ should die? Chinese Yuan? Uh, uh... PMs are it. Gold to preserve wealth. Silver for buying food.
Gold is really very helpful in the worst situation than other assets. In a bit form gold is really very helpful as it is easily convertible into liquid cash. Buy gold bullion online is really easy way to invest in gold.
ReplyDelete