But DURING the crisis, ounce gold pieces aren't so good. They are too valuable for everyday commerce. You won't find anyone who can give you "change" for a 1 ounce Gold Eagle or Maple Leaf. Also, anyone showing that kind of wealth is "rich" and could be a target for robbery and fraud.
Trust is also in short supply during a currency crisis. People will be making "gold pieces" from plaster molds and junk gold jewelry and lead from their car batteries. Nobody will trust gold unless they test it, and if they only have test materials to satisfy themselves that you have 14K gold (like junk jewelry), then you'll get 14K price for a 24K gold piece (losing nearly half the value in the transaction).
Silver (in ounces or in 90% Silver pre-1965 US coins) will likely be a better mediumm of exchange DURING a crisis. Also, junk gold jewelry (rings, chains, necklaces in 14K) will be the true "Poor man's gold."
When precious metals rise, historically, the ratio of gold to silver prices falls. It gets closer to that 16:1 ratio of scarcity. Right now it's around 50:1. Last year when you bought silver at $16/ounce, it was more like 70:1.
There's a good chance that gold and silver will continue to rise due to monetary policy. I would not be surprised to see $50-$75 silver by this time next year, and possibly $2000+ gold. Of course, that's just some guy on the internet guessing. It could be $8/ounce silver and $300/ounce gold sometime in the future as well.
Silver is less attractive for an investment because of the fees, discounts (selling) and premiums (buying). In absolute dollars, it costs nearly as much to store, protect and handle ounces of silver and silver coins as it does to handle, store and protect gold coins. But as a percentage of the value, these costs are much higher.
Try to sell silver ounces today to a dealer or coin shop. You'll find opening offers of $20/ounce or less for bullion pieces and $14 or $15 per dollar of face value for 90% coins. That's with silver at $30/ounce (which equates to $22-$24 per dollar of face value for coins). On the other hand, you're often lucky to buy at the "spot price" of $30/ounce. During rising prices, buying for "spot price" is about the best deal you'll usually find. During stable or falling prices, you'll often find you have to pay 10% or more over "spot price" for silver in small lots.
Still, as insurance, especially for use during a crisis situation, silver coins and silver ounces (rounds or bars) are good insurance. Just realize that the price has to nearly double (again) before you really start making money after fees. So as an investment, it's not great. It's more valuable for peace of mind as insurance.
Oh, and the biggest historical industrial use of silver is photographic film. That's a rapidly shrinking market. There are other uses, but for industrial use, demand for silver is not in high demand. Most of the demand now is speculation and distrust of all paper currencies.
I think the whole point is when a dollar drops to no value you’ll have something to “buy” with. Then again, if that happens will there be anything to buy?
>> “IMO, Gold (in ounce increments) is for preserving some wealth across a TSHTF scenario. After a currrency crisis, Gold will hold significant value. Hopefully near the value you used to buy it before the crisis.” <<
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That’s why we have two sticks of Eagle ‘dimes’ in addition to the maples and Krugers. Got them way back at $287/oz.
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My local dealer bought some onzas from me last week for $29.25 -- less than a dime under spot. He said he would buy Englehards for $.50 under spot.
silver bunp
My coin dealer prices junk and bullion with a 1-3% margin on what is on his Kitco screen RIGHT NOW. His low margins and resulting high volume have made him very comfortable economically. He is debt free and owns property overseas (his wife’s birthplace) to where he intends to retire. He was going to retire last year but the income started ramping up big time so he is still at it.
Try to sell silver ounces today to a dealer or coin shop.
I wouldn't sell to a dealer, I would sell on Ebay or some such transaction.
Oh, and the biggest historical industrial use of silver is photographic film. That's a rapidly shrinking market. There are other uses, but for industrial use, demand for silver is not in high demand. Most of the demand now is speculation and distrust of all paper currencies.
The market for photographic film has already mostly dissappeared, and it was a reason that silver went down to a few dollars a few years ago. Now more industrial uses are filling in the gap, and industrial demand is growing at 18% per year.
You need a new dealer
My dealer will give you about $1 less than spot for the junk/art bars and bullion, spot for the more well known popular bars/bullion (i.e. Englehart, Sunshine, NWT, etc) and slightly more than spot for government bullion like eagles, maple leafs, philharmonics, etc.