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Q: How are the PREMIUMS determined for silver and gold?  Who sets them?  Thank you!

David Schectman’s Answer:

The first level is the wholesale level. All retail dealers buy product from a wholesale source, either the mints or the secondary market. They determine the “premium” which is the added cost above the spot price. The next level is the “markup” added by the seller, or in this case us or dealers like Miles Franklin. We keep our added markup very low and competitive with any legitimate dealer who does not “give away” product. It costs money to run a business, advertise and provide service and a world-class newsletter. Our pricing is fair and competitive. You know that what you order is what you will get, and in a timely fashion accompanied with the best possible service. Our reputation is stellar throughout the industry. The difference in the price you pay from one dealer to another is usually within one percent, though some dealers work outside that margin on either end. Those that are cheaper are order takers and do not offer personal brokers or our level of service. Tulving is a good example of a dealer who sold too cheap and in the end had to file for bankruptcy and then walked away with over $100 million in client’s funds. You get what you pay for.

No one can sell their products at a loss and stay in business. If you chose to deal with us, you will not be overcharged and you will receive your product. Gold and silver companies are starting to fail now, after four years of declining sales. We are in excellent shape, as I made sure that our overhead was low enough to survive slowdowns. That is something many of our competition failed to do.

Q: I have a question for your Q&A day on Wednesday and I believe you have addressed it before but I have someone I think is misleading me in this. Should I move all or a portion of my IRA to silver and gold? I don’t believe I can possess the physical metals due to it being a 401K rollover and I’m being told I can. If I pay the penalty and taxes first I could purchase it but I don’t want to pay the additional 10% on top of the tax percentage. Do you at Miles Franklin offer gold and silver IRA’s?

Looking forward to your reply,

John J. Gutjahr

Andy Hoffman’s Answer:

John,

First off, my personal belief is that all government sponsored retirement plans will inevitably be “confiscated” – in some way, shape, or form.  Not to mention, that as we morph into the United States of Socialism, tax rates have nowhere to go but up.  This is why I cashed out my IRA in 2009 – at the age of 39 – happily paying the 10% penalty and taxes for the privilege of having control of my own money.

That said, your question about putting your retirement plan into PMs is confusing, as you first ask about IRAs, then say your plan is a 401k.  If it is indeed an IRA, Miles Franklin offers multiple gold and silver IRA options.  However, if it is still a 401k (because you remain employed with the employer sponsoring it), it is very difficult to withdraw unless you can prove hardship.

Q:Hello again! this is my favorite place to chat, keep up all the good work. I know you have touched this before but I am at a loss as to whether I should try and sell my apartment building (10 units) and just buy some gold or keep it as I live off the rents right now. I guess its scary when you think of the idea of a busted nation and economy (possibly with tenants who cant pay rent anymore, some are on disability/retirement). Does the bubble in real estate that Bill discusses relate to income producing or residential? Does Miles sell crystal balls or twilight zone type computers that can see into the future?, Thanks

Ed

Bill Holter’s Answer:

A tough question Ed, this is a personal choice question and one I cannot really answer without knowing about other assets/income.  That said, I do certainly believe even income producing assets will also be re set in value with the onset of a new currency.  Probably not as much as single family homes but still a re set.  If you go back in history you will find even rental properties were affected in downturns.  The most stark being Weimar Germany.  When they went to a gold backed mark, real estate in general dropped 30% overnight … AND THEN started going down.  The reason being, there was very little cash “on the street” to begin with.  For me personally, I would rather have gold and silver because of their liquidity and can be moved into productive assets at a later date.  This will be so for your rentals but real estate is simply not as liquid and may require time to sell.  It’s truly a personal choice.