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SHTF Finance - Gold,silver,nickel,copper where/what to buy

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SHTF Finance - Gold,silver,nickel,copper where/what to buy

Postby OldSalt » Sat May 12, 2012 1:32 am

Post-Script 9-19-2012: During the summer, when silver dropped to $27/oz, I ordered $8000 worth of silver coins from Southern; $100 face value of walking liberty half-dollars; the balance in mercury dimes. Quality was above good, but not collector quality; very few coins had unreadable dates. They shipped within 2 weeks. It came by US mail, unmarked package, signature required. Damned heavy box. Coins were dirty, oily. I cleaned them with an ammonia/dawn dish soap mixture in a cheap vibrator type jewelry cleaner.

Result: excellent price, no shipping charge, quality merchandise. I recommend them.



SHTF Finance - Gold, silver, nickel, copper where/what to buy

I am retired, living on Social Insecurity with some savings. I have an IRA/401K, a savings account, checking account, debit card, credit cards, and a $100 or so cash in my pocket. Not bad. I’m lower middle class, not a lot extra, but semi-secure.

If a disaster happens (you pick the scenario, there are many possibilities) and the internet goes down, I’m destitute. I can’t access Scottrade for my IRA, the bank can’t access their records to determine that I have money there, the stores can’t run my credit cards to verify my charges. When my cash runs out, I’m done.

I gotta stash some cash.

I’m 67 and my financial situation is such that I can withdraw about $10,000/yr from my IRA without having to pay taxes on it. How can I make the most of it without wasting my life savings? Keeping in mind that I might drop dead and my wife/kids will need to sort out whatever I set up.

Lots of options. Gold, silver, cash, coins.

An insight from an old guy about money.
Silver has a set value. When I was a kid, gasoline was about 20 cents a gallon. It still is. A silver dime is worth about $2.10 today. 2 silver dimes will buy a gallon of gas today. The gas isn’t more expensive. The money is just worth less (or worthless).

Gold. Beautiful stuff; nothing as lovely as a Krugerand, or US Gold Eagle - 1 oz of beauty. Until SHTF and you try to buy a $15 loaf of bread with it. Who has change for the $1800 coin? Who would trust it to be the .999 pure gold you say it is? Worse yet if you have stored up 4 oz gold bars. Want to let the guy cut it in two to make sure it is gold all the way through?

Silver. Equally lovely. A US Silver Eagle (99.99% pure silver) or Silver Round or Canadian Silver whatsit. Same problem. Determining value with someone who has never seen such a coin. Worse yet for foreign coins. What’s a Polish Silver pilaster worth?

Cash. Good old greenbacks. They are so popular that the government can’t print them fast enough. Now they just create them from thin air and deposit them in the fed banks. Saves printing costs. This thing they call Quantitative Easing has pumped trillions of new money…………..but I can go on and on. Inflation is here (gas and food, etc). Huge inflation will be here soon. Year or so. If the SHTF is short lived, $500 or so might help you thru it. I would make it small bills 1’s and 5’s.

Coins. Coins can generally be divided into pre- and post-1965.
Dimes, quarters, halves, and silver dollars were traditionally made of 90% silver and 10% copper to harden the silver so it wouldn’t wear out quickly. The coins were of intrinsic value. In 1965, they started making them of a copper slug with nickel faces. The “Johnson sandwich” took the intrinsic value from the coin so they could be as worthless as the paper money.

Nerd alert. Coins can be valued 2 ways. “Face value” of a dime is 10 cents. “Melt value” is the value of a coin if it were melted down, separated into the constituent metals and those metals sold. “Melt value” of a SILVER dime today is $2.086. “Melt value” of a 1965+ dime is $0.02.

In 1982, copper pennies had more than a penny worth of copper in them. Feds can’t have money that is worth something, so they put a copper coating around a zinc slug. Copper penny melt value $0.024; 1983 slug penny melt value $0.0052.

To see the “melt value” of any US coin go to http://www.coinflation.com/coin_calculators.html don’t believe me; I lie all the time. Melt values change all the time. This website applies the latest spot prices. Before making a purchase, check coinflation for the latest values.

Bottom line: post-1964 coins were meant to be worthless and they succeeded.

Nickels are an exception. Nickels are still made of Copper and Nickel. Melt value = $0.05166. Slightly more than face value. I’m sure they will rectify this oversight in the relentless march to totally worthless money.

The good thing about nickels is that you get them at the bank for face value, but the metal in them is worth slightly more than face value. If you run short of cash, you can use them to spend and get them back later for the same price.

This cannot be said for silver or gold. Silver and gold can go up in value. They can also go down. If you run short of cash, silver or gold cannot be readily converted back to currency of the same value nor can it be repurchased without paying brokers charges and shipping. With my luck, when I need to cash out some silver the price will be down and when I repurchase it, of course, it will be up.

U.S. 90% “JUNK SILVER. Don’t be afraid of the name. It is a numismatic term meaning of no collector’s value. The coins are presentable legal tender, but of value only for their silver content. You may even find some in your change. If you look at the edges of your “silver” coins in your pocket, you will see that they are partly silvery, partly coppery. These are post-1964 coins. Occasionally, (maybe once every year or so) you may see one that is all silvery. Once you’ve seen a silver dime in a stack of newer dimes, you’ll spot it easily, if you look. Anyhow pre-1965 silver coins are easily recognizeable by one and all as having intrinsic value. They are also much less bulky than a bucket of nickels.

Additionally, silver fluctuates, along with gold, relative to the worth of the dollar. As inflation rises, the value, in dollars, of silver coins rises. The paper dollars in your safe become worth less and less. The silver value stays the same, but relative to dollars rises.

Two silver dimes still buy a gallon of gas, but it takes more and more dollars to do the same. Is the price of oil going up, or is the worth of the dollar going down?

So after reading all the forgoing valuable information (or crap, depending on viewpoint), what’s a prepper to do?

My viewpoint. 19??-1982 pennies are worth having. Each penny is worth about 2 ½ cents. Nickels are worth having; melt value being on par with face value. Silver coins pre-1965 are worth having; melt value being 21 times face value. Paper and current slug coins are not worth having.

Here’s what I’m trying to do: Nickels $1000-2000 face value. Pennies not worth the effort of sorting through rolls to find pre-1983. Silver dimes, quarters, half-dollars $500-1000 face value. Silver dollars are selling at a premium. They have $22.31 melt value, but sell for $30+. I’m not buying “cool”, I’m buying value. Greenbacks $500-1000 just in case of a short SHTF.

Where to buy: Be wary. There are scammers everywhere. Be alert for “that sounds too good to be true” or “this guy is too eager to sell me” or “please leave a message, cousin Vinny will be with you after he gets his car running”. Make a relatively small purchase first and if that goes well, make several purchases instead of one big one. If things go wrong, you won’t be out the whole batch.

Nickels: Once every week or so, I go to my local bank (small town) and buy a $100 box of nickels. I don't get more because I don't want to make them run short. If I cause them inconvenience or make myself a nusiance, they might add a service charge. A $100 box of nickels weighs 22 1/2 pounds. $10,000 of nickels would weigh 2250 pounds. Hard to steal. Crooks get hernia.

Best prices http://www.coloradogold.com/ $1000 face value bag of 90% US Silver coins $20,877 including S & H. They will sell ½ bag $500 face, but no smaller. They choose the denominations of the coins; mixed bag. They sounded very professional, but deal mostly with the higher rollers. The price works out to be $20.87 per $1 face value at a time when value is $20.87 per $1 face, but charge shipping and

Sort of another best: Southern Coin http://www.scpm.com/bullion.phpThese folks sell small or large quantities. $20.59 per $1 face value mixed denomination. $20.82 per $1 face value either halves or mercury dimes, you choose. I placed an $1100 order with them and they delivered quickly. The coins were of good quality. I placed another order for $4654. The next day I sent them a cashiers check. The day after that, silver dropped $2/oz. I called and cancelled the order. 2 days later, I called and asked to reinstate the order at the new lower price. She said no she would return my check. I asked a couple more questions which didn’t get me anywhere. Finally I said “So, you don’t want to do business with me any more?” She didn’t answer. I gave up. After reflecting, I was in the wrong. I committed to the purchase. They may have made commitments based on that. Then I backed out. I didn’t consider that at the time. I called back to repent of my transgression, but they bounced me to the voice-mail. I’ll let you know if I get my check back. It’s supposed to be in the mail. (UPDATE 5/15/12 - Today, I received my cashier's check back from Southern Coins, so they may be pissy, but not crooks......John). Since I am persona non-grata, I may have to get a neighbor to make any additional purchases, but that might not work. She may have black-listed everyone from Indiana. We are such blaggards.
If you deal with these folks, walk on tiptoes. Shipping is free. They charge extra for credit card payment, about 3 or 4%.

Others: I have seen other suggestions on this and other sites, but their prices are $2 to $4 per $1 face value higher than these. Let me know if you find somewhere better.

I hope my thoughts on this subject have not been too disjointed and that I’ve helped to dispel some of the myths surrounding it.

John
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Re: SHTF Finance - Gold,silver,nickel,copper where/what to b

Postby SaltyDog » Sat May 12, 2012 5:45 am

Who is going to be refining when SHTF? Ammo, food, medicine are the next gens currency...
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Re: SHTF Finance - Gold,silver,nickel,copper where/what to b

Postby MoeRN » Sat May 12, 2012 7:15 am

I agree with SaltyDog. Although it may be beneficial to have some of these items, what really matters then will be ammo, food, medicine, and supplies. People will go to bartering more.

Thanks for the info though! ;)
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Re: SHTF Finance - Gold,silver,nickel,copper where/what to b

Postby namwal » Sat May 12, 2012 8:48 am

MoeRN wrote:I agree with SaltyDog. Although it may be beneficial to have some of these items, what really matters then will be ammo, food, medicine, and supplies. People will go to bartering more.

Thanks for the info though! ;)


I'm stocking up these prepper staples as well, but it's my belief that a prepper attempts to be ready for all contingencies. The SHTF may not be a Mad Max or Book of Elie scenario. If it is simply an economic disaster like the great depression where some commerce still exists, or the dollar collapses and China puts its currency on a gold standard. I think some precious metals would be a good idea. 

Since many preppers and all survivalists are already stocking up ammo, it won't be as desirable as we may think. It's hard to convince you to come help me fix a leak in my roof in the 110 degree sun for some bullets when you already have a closet full. If word gets out that you have enough ammo to spare, you may be a target for military groups or feuding clans at war who need lots of ammo for their conflicts. Food and medicine will always be in demand, but the ones who will need it most desperately will be the masses of unprepared sheeple who will have little to offer in exchange except perhaps labor if you trust them and think they will do a decent job. I'd rather not let non preppers in to my compound to see my set up or associate me as a source of food. 

Even in the Mad Max situation some local warlords or leaders will emerge and from Pharos and Kings to petty third world dictators, they have always lusted after gold as a symbol of their status. During the darkest ages or in the midst of wars, for thousands of years men suffered, searched and fought for gold. I do not see this changing. Men will continue to pursue woman and present them with shiny stuff to help win their hearts. 

No period of collapse, chaos or dark ages last forever. As the first waves of people die off, their will be less demand for food and small scale agriculture will sustain most people. Commerce and trade will re emerge as it always has throughout history. Once folks are secure in food shelter water and security. It will be human nature to start commerce. From farmers markets to construction projects. Some medium of exchange will be needed. Paper money won't be trusted again for many generations. PM will fit the bill nicely. Copper and nickel will have very practical applications and might be initially more sought after than even gold and silver.  

If S doesn't hit the F, gold and silver still make a great hedge against inflation.  If a gold or silver standard is reestablished prices will go through the roof. PM are also a tax free way to pass wealth to your children when you die. 

I would never put all my eggs in one basket and count on only gold and silver, I don't think that is what old salt was advocating. He was giving some good advice for those who want to diversify their preps and investments. 

In the end, nobody knows. It's all speculation. That's why I think having a variety of things including some PM in my preps is the right thing for my family. 
"World oil production can probably keep going up for another 6 or 8 years. But some time in the 1980s it can’t go up much more. Demand will overtake production."-jimmy carter 1977

"Because of increased dust, cloud cover and water vapor the planet will cool, the water vapor will fall and freeze, and a new Ice Age will be born"-Newsweek 1970

"civilization will end within 15 or 30 years unless immediate action is taken against problems facing mankind,”-George Wald 1970.
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Re: SHTF Finance - Gold,silver,nickel,copper where/what to b

Postby OldSalt » Sat May 12, 2012 12:23 pm

Well said "namwal". I already have almost all the rest.

I'm 67, so bugging out with my also 67 wife and a hundred pounds of survival gear is not an option. Survival "living off the land" is ridiculous. Without a supply chain, even soldiers die (badly).

My biggest concern is electricity loss as in the book "One Second After". Back to 1850 lifestyle.

Stable money -- silver coins is just part of it. I spent hundreds of hours studying the subject and the above treatise is my attempt to pass on what I have learned. For me gold is nice and a good inflation hedge, but US silver coins (and nickels) are useable in an emergency situation. And you haven't wasted money. Ten years from now the silver coins retain their relative value.

Ammunition is not generic. Your .223 won't fit my M1 carbine or whatever. You can't readily use it for money.

Can't call a cop if bad guys show up. On the other hand, you probably wouldn't want to. What do you do if a cop comes to the house and demands to come in and "inspect" your belongings? Shoot him? Send him off at gunpoint to return with several "deputies"?

I have several pistols and rifles, several thousand rounds of ammo for them. The most likely to be used is a .22 Ruger rifle. Cheap, reliable, ammo cheap, good for squirrels, good for Obama snacks (stray dogs), and a .22 pill in the arm will deter most aggression. 25-round magazines available at http://www.cheaperthandirt.com/Default.aspx for cheap. I have the skill and willingness to use firearms effectively yet responsibly. Don't want to have to answer tough questions from St. Peter at the pearly gates.

My main security concerns revolve around roving gangs of hungry toughs from the city that are unconcerned about life or property rights.

I have around 10,000 pounds of grain (and manual grain mill), sugar, beans, powdered milk, powdered eggs, all sealed with dry ice ahla James Wesley, Rawles "From Beginning Prepper, to Fully-Stocked Retreat: What to Buy, and When" article.

I have a house & barn in the country. I have hand pumps to get water out of the well, so water is no problem.

My non-computerized diesel tractor and gas generator and tiller and ATV probably will likely survive an EMF since they are parked in a metal pole barn, so I have several 55-gal barrels of stabilized gas and diesel (actually home heating oil, it was cheaper and my tractor runs well on it). I buy more when the price is lower; use some when the price is high.

I bought a windmill and am rebuilding the motor head. When set up, it will keep the basement from flooding when the wind cooperates.

I'm getting there. I think I have enough to sustain 20 people for a year or so.

My children and selected friends know that if SHTF happens, then come to my house with whatever necessities they can carry. They were told that if they show up with 50 of their closest friends they will be turned away - at gunpoint, if necessary. Additionally, I pointed out that each additional person reduces the length of time their children can eat. Bring an extra person, take food from your child's mouth. I provided each invitee with a mylar/oxygen/sealed bag of rolled oatmeal-sugar mixture for traveling sustenance. My children were given a shotgun and box of #2 shotshells.

My thinking of the 20 people is, first, to protect my family. Secondly, younger people will be needed to grind grain and cook, pump water, etc. Security requires several people watching for intruders at all times. One of the invitees is my son-in-law's brother who is a cop and his 2 children. Solves the cops-taking-over dilema. I want him to. He will do a better job than I can and he will be protecting his children and his brother's family.

I think I've thought this out fairly well. I'm spending only what is necessary. And much of what is spent is convertable back to cash if not needed. Daughters "Well, Dad was a nut but fortunately we can sell all this stuff and get some money out of it".

John
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Re: SHTF Finance - Gold,silver,nickel,copper where/what to b

Postby Pedro wyoming » Sat May 12, 2012 2:49 pm

SaltyDog wrote:Who is going to be refining when SHTF? Ammo, food, medicine are the next gens currency...

Refining Gold and silver are fairly simple. WSHTF, the local jeweler will likely change his business from diamonds and sapphires to local assayer. If this is something that you want to learn, check with local pawn shops about valuation of metals.

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Re: SHTF Finance - Gold,silver,nickel,copper where/what to b

Postby namwal » Sat May 12, 2012 5:11 pm

Pedro wyoming wrote:
SaltyDog wrote:Who is going to be refining when SHTF? Ammo, food, medicine are the next gens currency...

Refining Gold and silver are fairly simple. WSHTF, the local jeweler will likely change his business from diamonds and sapphires to local assayer. If this is something that you want to learn, check with local pawn shops about valuation of metals.

pW


Yup, you correct, man had been refining and melting PM long before electricity no reason to think he won't again.
"World oil production can probably keep going up for another 6 or 8 years. But some time in the 1980s it can’t go up much more. Demand will overtake production."-jimmy carter 1977

"Because of increased dust, cloud cover and water vapor the planet will cool, the water vapor will fall and freeze, and a new Ice Age will be born"-Newsweek 1970

"civilization will end within 15 or 30 years unless immediate action is taken against problems facing mankind,”-George Wald 1970.
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Re: SHTF Finance - Gold,silver,nickel,copper where/what to b

Postby PrepsterGirl » Sat May 12, 2012 6:15 pm

Thanks for this great info, John. Extremely helpful. :thumbup:
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Re: SHTF Finance - Gold,silver,nickel,copper where/what to b

Postby OldSalt » Sat May 12, 2012 10:31 pm

What does refining of PM have to do with the subject of stocking up on silver coins?

What would you do with a lump of refined silver? How would anyone know what it was or what it's value is?

The whole point of the article is to have on hand reliable currency.

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Re: SHTF Finance - Gold,silver,nickel,copper where/what to b

Postby OldSalt » Sat May 12, 2012 11:38 pm

OK, I re-read the article and figured out where all this refining stuff came from.

You didn't understand the term "melt value". I doesn't literally mean to melt the coins and refine them. Why the hell would anyone do that? I means here is what the intrinsic value of the metals used to make the coin are. The word "intrinsic" means it's inherent value. You must have skipped the "Nerd Alert" paragraphs. In that section I stated "“Melt value” is the value of a coin if it were melted down, separated into the constituent metals and those metals sold." You're not supposed to actually do that. That would be goofy and defeat the whole purpose of obtaining the coins.

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Re: SHTF Finance - Gold,silver,nickel,copper where/what to b

Postby Pedro wyoming » Sun May 13, 2012 4:34 am

OldSalt wrote:...You didn't understand the term "melt value". I doesn't literally mean to melt the coins and refine them. Why the hell would anyone do that? I means here is what the intrinsic value of the metals used to make the coin are. The word "intrinsic" means it's inherent value. You must have skipped the "Nerd Alert" paragraphs. In that section I stated "“Melt value” is the value of a coin if it were melted down, separated into the constituent metals and those metals sold." You're not supposed to actually do that. That would be goofy and defeat the whole purpose of obtaining the coins.

John


I understand the term "melt value". My first post was to answer your question. I now see that your question was rhetorical. My point in refining is that when the time comes for us to rely on PMs for currency, we will also be using other objects of intrinsic value. If you establish yourself as a trusted community assayer, you have yet another skill with which to trade. If you live anywhere near a mining area, you will likely see some of the PMs collected by panning or mining. Without a way to authenticate the content, you will be engaging in a risky trade business.

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Re: SHTF Finance - Gold,silver,nickel,copper where/what to b

Postby daaswampman » Sun May 13, 2012 5:37 pm

Good post and lots of good information. My two cents! History has many periods when coin was the medium of exchange. In early America we used a variety of coin as there was not enough U.S. coinage to fill the need. Raw gold and silver items were also commonly exchanged. If you collect antiques - you would see examples of "chop marks" which was the mark of a trusted community assayer on items and coin that varified its value. There are many examples of private mints that were nothing more then the work of a trusted assayer.

A good working knowledge of gold and silver would be very valuable. As would a knowledge of gold and silver marks. I recently got a coin silver tray that is nearly four pounds for twenty dollars. It had only a lion with a raised paw mark on it. Everybody was looking for the word sterling. Early standards were not nearly as precise as they are today. You can find early examples of gold and silver that vary by over 20 percent with the same marks. Even gold nuggets are rarely 100 percent gold. For less than fifty dollars you can buy a set of stamps and mark almost anything. Be very careful of what and where you buy anything. I have seen a good deal of Sterling that is not silver and several silver rounds that appear to be lead. Perhaps after SHTF a man could make a good living at this? Swamp
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Re: SHTF Finance - Gold,silver,nickel,copper where/what to b

Postby Lance » Sun May 13, 2012 6:11 pm

I am retired, living on Social Insecurity with some savings. I have an IRA/401K, a savings account, checking account, debit card, credit cards, and a $100 or so cash in my pocket. Not bad. I’m lower middle class, not a lot extra, but semi-secure.

If a disaster happens (you pick the scenario, there are many possibilities) and the internet goes down, I’m destitute. I can’t access Scottrade for my IRA, the bank can’t access their records to determine that I have money there, the stores can’t run my credit cards to verify my charges. When my cash runs out, I’m done.

I gotta stash some cash.

I’m 67 and my financial situation is such that I can withdraw about $10,000/yr from my IRA without having to pay taxes on it. How can I make the most of it without wasting my life savings? Keeping in mind that I might drop dead and my wife/kids will need to sort out whatever I set up.


In your situation a large garden would provide you all the currency you would ever need. You can't eat gold or silver but 10#'s of potatoes could be traded for lots of stuff.........


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Re: SHTF Finance - Gold,silver,nickel,copper where/what to b

Postby OldSalt » Sun May 13, 2012 10:12 pm

Already have a garden. Damned nuisance. But I have a diesel tractor, plow, disk, cultivator, 5000# seed, and 4 acres (minus house and barn area). I have 400 gal of diesel fuel stabilized. Just have to get my kids/grandkids to do the work while I guard them. John
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Re: SHTF Finance - Gold,silver,nickel,copper where/what to b

Postby OldSalt » Sun May 13, 2012 10:17 pm

I got a PM asking how about Liberty Coin Service in Lansing, MI. I'm repeating my reply here for the benefit of others.

I looked Liberty Coin Service of Lansing, MI up on the internet and found this quote:

*U.S. 90% Silver Coin face wgt. Price Au Price Markup
$1,000 715 21,150.00 29.58 2.5%
$100 71.5 2,125.00 29.72 3.0%
$10 7.15 221.50 30.98 7.4%

OK, here we go. $1.00 face = 10 dimes or 4 quarters or 2 half-dollars.
All 3 options have the same amount of silver in them because that's the way they designed the coinage. Except the Silver Dollar, but that doesn't matter because they charge a premium for silver dollars because they can. What you are paying for is the silver content.
Let's assume you are getting dimes. $10 face means 100 dimes (2 rolls). As shown above, there are 7.15 ounces of silver in those 100 dimes. They quoted the spot price on silver at $28.85. You can do the math. They will sell you those 100 dimes for $221.50. They are telling you that they are charging you $30.98 per ounce for the silver content of those 100 dimes which is 7.4% above the spot price of $28.85.

If you buy larger quantities, they take less of a markup.

Southern Coin mentioned in my article is cheaper, but not local to you. If you prefer local, then by all means, go for it. I would deal locally if I could, but alas...........

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