Protect Yourself Against Financial Collapse

In the last article I posted - the excellent article by Bob Rinear, titled "Disaster - Dealing With It, published on the International Forecaster, I hope the readers keyed on Bob's rhetorical question: "Lets suppose we do get some form of economic implosion that takes down the economic infrastructure. A few weeks of no banks, no credit cards working, no ATM’s, no way to buy anything…. And it’s nation wide. It isn’t localized. How well would you fare?

Well? How well would you fare? While food stocks, water sources, the ability to protect yourself - meaning firearms, a defensive plan and above all a PLAN are all important, I certainly think that holding cash on hand, plus silver and gold bullion is a vital component of any plan.

I have compiled two very good articles below. The first is a series of questions for, and answers from the Deviant Investor, concerning gold and silver. I have only posted the Q&A dealing outside of market forces and that Wall Street mumbo jumbo. The Deviant Investor article was posted on 8 April 2014 and available in it's full length here.

Q: “I see nothing but trouble in the financial and political world. I see potential war in the Middle-East, in the Ukraine, in the South China Sea, and maybe elsewhere. I see morons in high places doing silly things. I see bankers printing their currencies to excess, as in uncharted territory excess, and I can’t see how this will end well for anyone, even the upper 1% of the political and financial elite. I want to buy gold and hunker down, but I also know that gold prices are manipulated, controlled, and capped, so why should I buy gold?”

A: I think it is important to remember that the powers-that-be (PTB) have been mismanaging the world for a long time, we are still here, the sun still shines, and gold has retained its value for several millennia. If the manipulation were overwhelmingly powerful, why is gold selling for about $1,300 instead of $300 like it was 12 years ago? The answer is, in my opinion, that the PTB know the dollar is going down and gold is going up, probably a long way up, but the PTB want to manage the dollar’s devaluation, not let the devaluation get out of hand, and they need to keep the game of financial musical chairs playing while they “get theirs.” Buy gold and ignore the daily, weekly, and monthly shenanigans in the markets.

Q: “I think silver is a better value than gold. I think gold is going up and silver is going up even more. I’m selling my gold and buying silver. What do you think of that plan?”

A: I think, as of today, silver will appreciate much more than gold and so you are probably correct. But things change, and I like the safety and security of gold also. Balance is good.

Q: “I’m putting my trust in God and my money in 3 month Treasuries. I think you should also. Go ahead, admit it, you are a bit jealous.”

A: I’ll pass on the Treasuries. I’m not jealous. I put my faith and trust in God and Gold. It works for many people.

And another good (but long) article from Gold Silver Worlds titled: "Monetary Insurance: Protect With Physical Silver Against The Financial Winter."

UrbanMan's note: I would have replaced the words Financial Winter with Financial Collapse.

As part of our research to unveil the best tactics and strategies to protect against the upcoming tsunami in monetary and financial markets, we have reached out to Charles Savoie, author and researcher, with a tremendous knowledge of precious metals history. Our question was how individuals and small investors can best protect during the hard times that are coming, which will most likely be characterized as turmoil and collapses (of all sorts of assets, including currencies, around the world).

Charles Savoie wrote a very useful document for our readers. It is entitled “The Best Monetary Insurance”, counts 38 pages, and is a mix of practical tips embedded in an historical context. The key message of Mr. Savoie is to hold enough silver in physical form, ideally a mix of formats, but for sure silver dimes.

In this article, we highlight the most actionable tips and tactics. The full document is embedded at the bottom, it can also be downloaded.

Visit Mr. Savoie his two websites: www.nosilvernationalization.org and www.silverstealers.net. He offers all this information as a free service to the public.

Silver has historically played an important role. It has been money, but, more than anything else, a metal of the elites. Consider this:

U.S. Congress knew silver to be more valuable in regard to gold than the present bullion banking fiends. And Congress knew it nine generations ago! For details, see Senate document number 67 of the first session of the 73rd Congress, “Elementary Facts Bearing On The Silver Question” by Joel F. Vaile” (50 page document, 1896). Today the reality ratio of silver to gold may have fallen to 9, due to depletion of minable silver (The U.S. Geological Survey concurs) and even more so, the evanescence of above surface inventories. Ratios of silver to gold such as the approximate 64 to 1 of late March 2014 are illusory. But the real impact is that silver is a better buy than gold.

The best monetary insurance you can have is 90% silver dimes 1964 and earlier. Many gold bugs readily admit silver to be more depressed than gold. Ted Butler stated long ago that not even gold has a users association. The fact of the existence of this group is another of many proofs that synthetic money creators hate and fear silver even more than their loathing for gold. The Silver Users Association started out as the Silver Users Emergency Committee in World War II and in 1947 was renamed the Silver Users Association. Directors of SUA companies, especially the biggest silver users, are also since that time, directors of megabanks. 90% U.S. coins, historic money, facilitated many billions of transactions during their long history spanning many generations. Inasmuch as silver is so depressed relative to gold, personally, I advocate owning little or no gold; unless the investor cannot acquire silver. This is not disdain for gold, but more so, advocacy for acquiring the interest with higher potential. Silver can be swapped for gold at a later time if the ratio tilts to overvalue silver versus gold. Why buy 1 ounce of gold today versus 60+ silver ounces, when you may be able later on to swap those 60 + silver ounces for over 5 gold ounces?

UrbanMan's Comment: 90% silver coins are good to have but only part of the equation. I would also recommend silver bullion - i.e...one once silver rounds as well as some smaller denomination gold coins such as 1/10th and 1/4th ounce gold bullion coins.

A silver dime at the mints started out with a content of .0723 oz silver (4 digits is enough!) Due to average circulated wear, the business typically uses the figure of .0715 ounce contained silver. You will be able to tell the difference from a dime with no wear and a dime with light wear and more so, a heavily worn dime. I feel that very worn dimes are better melted, except for collectors seeking an inexpensive “cull” or “filler” coin for a key date and mint mark. When you buy dimes, you’re unlikely to get any with 89.24% silver, which were minted from 1796 to 1837. The clear advantage of Mercury dimes over Roosevelt is guaranteed identification of purity with no check of the date nor glance at the rim to look for telltale copper insides. Silver coins have a surprisingly large variation in surface tone, and you can’t always rely on telling the surface tone of a cupronickel (sandwich dime, 1965 and later) from a silver dime. Of course, proof silver dimes (1992-2009) can be found in dates beyond the fabled 1964 date. These are good buys generally only if you chance to come by some in a batch of mixed date dimes, in which case, they won’t be proof anymore, but will very likely stand way out due to newness and absence of wear.

I am not saying buy silver dimes, and no other silver. I have all types except the 1,000 ounce ingots, which you can anticipate having to have assayed if you have these and decide to sell. Unless you’re a larger investor and have intentions of using metal to buy land, stick with smaller units. Having smaller units wouldn’t preclude their use in buying land; smaller units are more “maneuverable” as to utility in purchases.

If dimes aren’t available, try for quarters. It mostly comes down to two considerations. One, the 90% coins haven’t been minted now for an entire half century—they get scarcer by the day, as some of these are always being smelted into bullion with silver scrap at refineries, and being melted in jewelers crucibles with some three-niner, in a proportion to yield .925 Sterling jewelry and Two, the silver dime is the most divisible, or the most fractionated, form of silver. You can go buy a 100 ounce silver bar. However, you can instead go for the same amount of silver, approximately, in 90% dimes. This equates to almost exactly 1,400 dimes (28 rolls of 50 coins) at the .0715 figure. In most cases, dealers have allowed me to cherry pick the dimes I wanted and the methodology I used was as follows.

Tip: Avoid damaged coins

Never buy coins with damage such as hole drilled, bent, clipped, etched (vandalized) or shaved rims. There’s the inevitable coin with red nail polish, best avoided. While date and mint mark checking is usually only practical in over the counter situations, and is unlikely to turn up anything of outstanding scarcity, it could help you in terms of being able to assemble some starter sets for sale to numismatic collectors. So while you aren’t paying numismatic prices, you will be getting some numismatic values, as long as people want to collect coin series as a hobby or business. It pays to print out a list of these mint issues and be familiar with them.

Tip: Avoid high premiums

You can buy .999 silver as half, quarter, and tenth of an ounce rounds. There is nothing wrong with these items. However, know two things—the collectible value will remain less, and when you buy 90% coin, you aren’t paying for any manufacturing or minting premium. You will pay such premiums with the smaller three-niners. Seven dimes in nearly all cases can be considered a touch more than a half ounce of silver; and 14 dimes a full ounce. In terms of how much silver is out there as separate items each weighing less than one ounce, definitely at this time, there is more 90% coin than these newer bullion items.

If your silver consists entirely of three and four-niner bullion—stop! Buy some dimes, or trade bullion for some dimes. These 90% coins—in all denominations—are increasingly hard to source. More investors have caught on that whereas these coins are a half century and older, and the supply is constantly shrinking; bullion silver will be produced as long as mining and scrap can supply silver. The 90% silver, though not industrially pure as is, is nonetheless the scarcer form of silver. If buying on E-Bay, do avoid dealers with less than very high positive feedback. Be fairly quiet about your holdings—no boasting to anyone. Keep these precious items in several scattered, and unpredictable—locations. If a thief finds one cache, hopefully the others will be missed.

Tip: Where and how to store your bullion

If you don’t have a vault or safe, and plan to obtain one, you may consider paying cash, for clear reasons you can imagine yourself. If it needs to be delivered and installed, arrange to have someone photograph the delivery personnel and the vehicle, from several views. When my vaults were delivered to an off-site location I have, I remarked as they were finishing, “Now if I only had something worthwhile to store in them;” I then indicated I expected to inherit an antique gun collection in several years. It never hurts to be careful. Read “The Art Of War” by Sun-Tzu. Many major military blunders, costing so many lives. As always, check ratings first, and buy from the source with the best ratings.

There’s always the steel vault and loaded gun approach—which are quite reasonable. I advise going on EBay and buying some cheap synthetic rubies. Then, you make up a phony gemological appraisal showing a stone is worth lots of money. Next, you place these in a jewelry box (unlocked) on top of a dresser. A thief would think he’s got a real haul, and maybe decide to stop searching. I suggest printing out articles making fun of silver as investment, and leaving these where you think it might mislead someone. If you use a keypad operated vault, consider acquiring a solar battery recharger and in case the power grid fails and the stores close. If you find your battery operated keypad fails due to battery exhaustion, this device will solve the problem of accessing your money metal. Be sure you’re using compatible batteries in the first place; they must be a size that matches the recharger, and must be rechargeable batteries. Keep backup batteries in a climate controlled environment where they’ll last longer. Cover any vault/safe with a tarp or other use of drapery, such as a decorative item—even a Mexican style multicolored serape or even plain canvas. Whenever possible, place any type of objects of low value on top, around and in front of the safe.

Tip: Check what you are buying

Never buy a bag, half bag, quarter bag or tenth of a bag in a shop without first having it opened up and spread out, unless you have a long trust relationship with the dealer. Paper rolls, more than plastic tube rolls, should be checked. You aren’t accusing the dealer of dishonesty, you are verifying contents, because errors can happen on anyone’s part. Eventually, due to real variations in silver weight in bags, these will have to be sold by actual weight rather than by face value times a factor! Check ratings of Internet sellers before buying. Many unfortunates out there are stressed out due to the Tulving fiasco. I consider the 40% Kennedy halves (1965-1970) a poor choice as long as 90% is available. The war nickel series, 1942-1945, contains even less silver, at 35% but is a better buy, weight for weight, if similar rates for contained silver are offered. Those nickels are more historic.

In closing, Charles Savoie says: “The suppression of the silver price is the most nagging and pestilential problem in world monetary history.”

Gold and Silver News

While there is continuing debate in the Survival-Prepper circles about the value of having silver and gold bullion, and silver coins for melt or barter value on hand for when the dollar or economic collapse occurs,....and it is apearing more and more likely that it is a question of "when" and not "if",........it is still a good idea, even if you do not subscribe to having precious metals, to keep on top of what is occuring in the gold and silver market.   

American Eagle gold bullion coin sales jump, by Kerry Hall, March 9, 2013 on www.mining.com

The US Mint sold 80,500 ounces of American Eagle gold bullion coins during February compared to 21,000 ounces the previous year in that month for a 283% increase, reports Mineweb.

In the first two months of 2013, sales were up 56% compared to the same period last year.

Overall, total gold coin sales for January and February were 430,500 ounces. During the same months last year, sales were 124,500 ounces.

January 2013 made the record book at sixth place with gold coin sales of 124,500 ounces.

For American Eagle silver bullion coins, reported sales were 3,368,500 ounces during the second month of the year. That's 126% more than the same month last year.

For January and February, silver coin sales were 10,866,500 ounces — up 43% from 2012 when 7,597,000 ounces were sold.

Will we see a silver breakout in 2013? from the Gold Report, March 13, 2013 on www.mining.com

Silver has been trading sideways so far in 2013, but what will the rest of the year bring? Will 2013 be the year silver prices break out or crash and burn?

What is a sustainable silver price for mining companies and where will the metal come from to supply the next generation of industrial and investment demand? Most important, how can investors make money off this volatile sector?

These were the burning questions The Gold Report took to analysts, money managers and heads of silver mining companies. The answers may surprise you.

One of the world's biggest silver investors, Eric Sprott, pointed to the availability ratio between silver and gold for why the metal price could jump from $30/ounce ($30/oz) to as high as $200/oz as he predicted in a recent radio interview.

He quotes statistics that show once the industrial use of silver and gold is subtracted from the production and recycling new supply calculations, three times more silver is available for purchase each year than gold. However sales of gold and silver at the U.S. Mint, through exchange-traded funds (ETFs) and Sprott's own Physical Trust, show that investors are buying many multiples more silver than gold and have been for years.

Sprott firmly believes that outsized demand in such a relatively small market ($9 trillion for gold and $150 million for silver) will result in price inflation. "We are surprised that the price of silver has remained at such a depressed level compared to gold. Historically, the price ratio between gold and silver has been 16:1. Today the ratio is 55:1, so what are the numbers telling us? We believe this is one of those times when smart investors will be well rewarded if they follow the money."