Fiats are scary.
Posted on 01/18/2011 5:42:20 PM PST by DeaconBenjamin
Collectors of old coins fill their vaults with nostalgia. Think of the Boy Scout who covets his first buffalo nickel, or the uncle who cherishes his special-edition set.
But a new class of collector is focused on the future: people who are clinging onto precious metals for fear that the nation's currency will implode.
And they were out in full force Saturday and Sunday to buy up freshly minted gold and silver U.S. coins at the Carolina Coin and Stamp Show, which was held at the N.C. State Fairgrounds.
"These are Americans thinking that they're going to wake up one day ... and our dollar is not going to be worth a dollar," said Jim Neely, owner of Fuquay Coins & Jewelry in Fuquay-Varina. "They think that they may have to trade silver or gold to get by."
These aren't camouflaged survivalists holed up in bunkers. Many are engineers, programmers and other white-collar types who have lost faith in social structures, in governments and in those who run them.
"We're about up to here with promissory notes," said John "Doc" Yancho, a retired chiropractor and a co-owner of Rare Coins of Raleigh. "We want something tangible. It's the fear factor."
Demand for bullion - as the precious metal is called - is so strong that dealers are putting customers on waiting lists. Yancho said one man called hoping to buy $50,000 in coinage.
Gold and silver have long been valued as insurance against currency fluctuations. And the value of these metals rises when stocks, real estate and consumer confidence tank.
One popular benchmark - gold American-eagle coins - has climbed over $1,400 per troy ounce, rising more than 400 percent in the past decade, according to the Certified Coin Exchange, a dealers network. Silver coins also have surged to more than $30 per troy ounce.
Dealers this weekend said the recession has resulted in a surge of buyers who are amassing bullion. These customers prefer to buy coins stamped out of gold and silver and valued many times their face value. A 1-ounce silver dollar costs more than $30 today and a 1-ounce $50 gold coin goes for $1,650.
The bullion investors say that social decline and unrest are the inevitable consequences of the overspending that has led to a record national debt.
The reason these government-skeptics prefer coins over ingots: The quality of the metal is certified by the U.S. government.
Brian Bell, an electrical engineer in Apex, has been accumulating gold and silver for three decades.
"The real deal is, you can take gold and silver anywhere in the world and feed your family," Bell said. "It's a smart thing to have."
But not all the collectors buy into this world view. Some, especially traditional collectors who prefer coins for their historical value, suspect something else is behind the price run-up.
"Have you ever heard of a bubble?" said G.E. Shuford, a firearms instructor in Cary. "It's still just a metal. You can't eat it, you can't drink it. It can be overvalued."
Abdi Salahshour, a software architect from Raleigh, concurs.
"They're paying a premium," Salahshour said. "They're going to be disappointed one day when they're not going to be able to sell it at that price."
Market experts have been warning of a gold bubble for the past year. But though many economists expect the dollar to rebound as the U.S. economy recovers, some have said that a collapse of the dollar is not inconceivable.
The bullion collectors are a secretive bunch. Don't even think about asking how much they have squirreled away. Many won't tell you their name. Even some dealers don't reveal their full names on their business cards.
Jay Nichols said he's not one of the radical survivalists. The retired municipal surveyor is just preparing for the inevitable.
"Things are going to get bad," he said. "I can see people having to protect their own houses. What happens when the state of North Carolina declares bankruptcy? They can't pay the police, can't pay the fire department."
Fiats are scary.
Really! ... I believe in precious metals as a store of wealth, but goobermints run all the borders. How does this guy propose one take any serious quantity of it across international borders???
Close. The real reason is that the rest of the world is going to discover that they can't grow their manufacturing or amass wealth on the promise of America any more. So rather than take debt-dollars for their goods (China) or oil (Arabs), they will demand gold. While I won't have to personally send them my gold, it will work its wonders through some middlemen.
Is it time to trot out the “I told you so” banner?
The next ten years are going to be something some have never experienced.
While it may last a long time, the time is coming fast. It may be coming as soon as this year.
If you can get enough humans across a border to cause a demographic shift in the target country...
If you can get enough illegal pharmaceuticals across a border to keep entire campi of major universities in a mellow haze...
If can carry it in a backpack, you can get it across a border.
It’s already here people are selling Aluminum to pay for food
There are still fools paying a high premium above spot price for gold/silver coins on eBay and other sites. Numestatic value won’t mean squat when it comes to trading your coins for food/clothes/ammo. Only the silver or gold content will count.
If you can get retards to pay $60 to 100 a month to be brainwashed in HD.....
Was sagen Sie jetzt? Non sequitur.
I used to have a Bianchini back in the ‘60’s. Used it as a golf cart. Could drive it on the road but nothing scarey about it.
I had a FIAT.
BE AFRAID. BE VERY AFRAID.......
In the past I’ve had dealers give me a hard time when I wouldn’t give much above spot; “numismatic” value only applied if I really liked the coin. I learned early on that if you had a nice 100 year-old silver dime, dealers would still try to screw you if you were selling it (probably because I collected coins after the heyday of the 1970s, in which a flat stock market made them look more attractive than they really were).
I took some coins to one of those traveling-gypsy type buyers at a nearby hotel on their rounds; their offer was so low I literally made 3X as much selling at a nearby coin shop which was more competitive just based on the silver content of the coins. Lesson learned.
Even the metal content is tricky; Canada’s gold Maple Leaf coins are purer than the American Eagle (which is why the US made the Buffalo). Buyers would bat around terms like “melt price” if you brought in things that weren’t .999 (and use it as grounds to reduce their offer). Pandas, Maple Leafs, and Buffalos pretty much destroyed the market for Krugerrands (which look like a copper penny by comparison).
In the end you can park extra cash in just about anything to “protect” the value; at a time when a can of pork & beans has a shelf life of several years, buying that makes just as much sense (not from a survivalist standpoint, but for the fact that the can that costs $3 now will cost $4 next year, or the $3 can will be much smaller). This really is an indication of how third-world we’ve become; in much of southern Asia when people are paid, they buy all of their necessities, then buy gold with whatever is left over. They know the gold will hold its value much better than a rupee; this is what we’ve been reduced to.
These people are beyond stupid and as a coin collector, I do have some knowledge of this.
This are the doom and gloomers. If things get as bad as they fear, gold will be worthless compared to food. For the same price as one ounce of gold, they can get a year’s supply of food and be better off.
You can’t eat gold and its in a bubble. The same idiots pushing gold were pushing real estate in 2005-2007 when it was in a bubble and attacked everyone who tried to warn others.
Pretty sure the fools will be by to attack me next. Fine with me if they piss away their money, but I will be back to say I TOLD YOU SO SUCKERS!
He can’t. He’s stupid and fallen for the hype. He’d be better off buying food.
I would love to see evidence of this. The people I saw pushing gold in 2005-07 were pushing it in 1999-2001, when it was universally despised by the powers that be (and has this changed?).
The Krugerrand is 1.1 ounces in total weight. 1.0 ounces of pure gold and 0.1 ounce of copper.
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