While I realize that PM investors represent a very small percentage of all investors worldwide, (something like just 1%), I am wondering who will be willing to purchase some of my silver when the price exceeds $100 or more per oz., and I am wanting to take some profit.
Will the local “mom and pop” coin dealer shops have that kind of cash available if they are swarmed by others having the same motive? Would Miles Franklin be in such a position to purchase back the silver I have purchased from them?
A related question would be then what the heck do I do with all the devalued fiat dollars I will be getting for my silver, which I am assuming might be to diversify and purchase other non-dollar valued assets, like rental real estate, collectibles, etc.
A third related statement/question; although Miles Franklin is not in the financial advise business, am I a fool and/or crazy to be 100% invested in silver, and as such “rolling the dice” for the price to eventually shoot to the moon?
At what point should a person hoarding silver in their home safe be needing to get some of it out of the country, say to your program you have set up in Canada?
I will answer your questions in the order you listed them.
When the price of gold and silver soar, the demand will be tremendous. It will be global, not just domestic. Most investors chase the price on the way up. There are more buyers than product on the way up and buyers disappear on the way down. The adage is “buy at the bottom and sell at the top,” but most people act just the opposite. Mom and pop stores, Miles Franklin and any retail source will be able to buy your metals because we all “off-load” our buybacks. Before we quote you a price, we first “lock-in” the sale with one of our large wholesalers. You will never have a problem getting a quote or selling your precious metals. But the opposite may not be true; you may not be able to BUY gold or silver because the suppliers will be so over-sold that they cannot quote a price or offer a delivery time. The mint can produce only so many coins, but they will only be able to fill a small fraction of the orders. The secondary market will not provide enough product to bridge the gap to fill the orders either. We have already seen that happen, several years ago and it will happen again.
What will you do with your dollars? You still have to pay your mortgage, buy gas and food, and pay your utility bills. The dollar will have utility, but it may take an awful lot of them to buy anything. You can’t “spend” your gold coins for much of anything; they will be too expensive, but you will be able to barter your silver – if it is the form of “junk.” A bag of junk silver has 10,000 90% silver dimes and each dime should be worth around one gallon of gas. For example, one dime is worth $4 with silver at $50. With silver at $200 it is worth $16. And gas could cost $15-$20/gallon with the dollar in free-fall. Yes, gas stations did sell gas for a silver dime (many of them) in 1980.
A bag of junk silver ($1000 face value) contains about 715 ounces of pure silver. You may wish to buy a bag, or a half bag as soon as possible. It not only increases your silver holdings, which is a good idea, it will be the best form of barter. Be sure and get dimes, not quarters or half dollars. That is the best form for barter.
Real estate and collectables may be able to keep pace with inflation – and dollar debasement, but they are NOT liquid and unless you are very wealthy, which is apparently not the case, they are not a good idea for you. Keep your dollar hedges – your inflation hedges in a liquid form. Gold, silver, platinum and palladium are the way to go here.
Diversification is always a smart thing to do. I have about half my portfolio in silver, half in gold and a nice position in physical platinum. I do not see any risk in owning a lot of silver, even all, as in your case, as long as you have the financial strength to hold onto it until the price is right to sell. Too many people run into unexpected cash crunches and are forced to sell when the price is too low. That is what you need to avoid. As an aside, nearly my entire portfolio is in precious metals. So, in a sense, I am NOT diversified, but I diversify within the asset class.
You are speaking about silver in terms reserved for profit and/or investments. Gold and silver are your financial insurance policy. They are there to protect you, not make you rich (though depending on when you sold your metals you would probably realize a large profit). Would you cancel all of your insurance polices – life, health, auto, home, etc. because you are “rolling the dice” and may never need them? I think not.
You should keep your silver where it is. You do not have a large enough position to ship it to Canada for storage. And you might need it immediately in a crisis situation, like a currency collapse or bank holiday. The folks who store their metals at Brinks also usually have a position close at hand and have other assets to rely on.
Sit tight with your silver, add to your position if or when you can, don’t worry about who will buy it – worry about what this country will look like when the price of silver is $200 or $350 an ounce or more! You will be glad you purchased it.
Why is there gold for China but none for Germany?
This is a very good question, I guess the simple answer is “the lesser of two evils”. If there is not enough gold to go around who do you pay? Do you pay your banker or do you pay your friend? If you don’t pay your banker he might foreclose. If you don’t pay your friend you might be able to say to him “just wait a little while, it’s inconvenient right now”. The Germans have fallen into line with the Bundesbank providing some cover by saying “no, we really didn’t want our gold back, we trust the Americans”. I don’t think that this would work very well with the Chinese. I have said all along that on the day the Chinese are told there is no more gold, they will pull the plug and the system will unwind entirely …including and on top of the Chinese. However, the Chinese can stand a paper meltdown and reset better than anyone on the planet. They have built cities (many empty to this point), roads, bridges, factories, etc. oh, and they also have gold. The Germans on the other hand are not quite as modernized and only have possession of 60% of their gold, a paper breakdown will affect them more so in my opinion they are prolonging the game and “hoping” that their gold will magically appear. I doubt it. I do believe however that they have been told “you can’t have your gold back…for now”. It is a sad state of affairs as I see it.
How much gold has been mined in world history that we know about and what would it be worth in today’s dollars? Everyone has been writing about the gold assets of governments which we can kind of track, but what about private holdings which have been accumulated by the wealthy for ages? I have been hearing the Dragon Family (consisting of a cadre of families in Asia, the Middle East and Europe) has vaulted gold assets valued up to $100 trillion (even up to $300 trillion) that they are going to use to “redistribute” in a global currency reset. The caveat is, the criminal cabal (as distinct from them) running the financial Ponzi scheme has to be ousted first, implying a split among the TPTB. Can there be that much gold out there in private hands?
It is estimated that roughly 5.5 billion ounces have been mined throughout history, worth a measly $7 trillion.
Even if that number is true, it’s still a pittance compared to the amount of money printed. Moreover, most of this gold is in “strong hands” that wouldn’t sell it under any circumstances, so it’s highly unlikely it will ever see the light of day. I know mine won’t; at least, not until a new monetary system is introduced valuing gold at the much higher levels it would be in a free market. In fact, gold is one of the few elastic assets, wherein demand increases in price; so don’t worry, gold won’t “flood” the market when the Cartel is broken and prices soar. When this occurs, the global monetary system will be in chaos, and gold will be nearly impossible to get your hands on.
As for said “fabled gold,” just more propaganda with not a shred of evidence to support it. Let alone, conspiracy plans like gold redistribution or the like; which frankly, have a roughly ZERO percent chance of ever occurring – much less, in some manner that would harm gold holders.
The only entity to “fear” is the gold Cartel, whose sole purpose is to delay the inevitable run on the limited amount of remaining physical gold that is actually available for sale. However, if you simply hold your physical, you have already beaten them. Just sit and wait, read the Miles Franklin Blog, and relax!
Andrew C. Hoffman