[Note: Readers have been asking me how to buy gold and silver so I thought it best to give some advice from my own experience on how to buy it if one feels led to do it. I realize this would be a new experience for most people.]
The American Founding Fathers knew that the only real money on this earth was gold and silver. That’s why they wrote it into our constitution:
“No State shall…make any Thing but gold and silver Coin a Tender in Payment of Debts…”
U.S. Constitution, Article I, Section 10
This was the prevailing opinion among a group of intelligent, educated and moral men. I cannot think of any other group of 55 people coming together in all of human history with the purpose of setting up a government that were armed with those three qualities.
It is perhaps appropriate that the highest form of money on this broken and sinful earth is also to be the pavement, the surface of the roads to be trodden on by brothers and sisters for ages to come in the New Jerusalem:
“The great street of the city was of gold, as pure as transparent glass.”
Revelation 21:21b, NIV
The U.S. Coinage Act of 1792 established that every U.S. Dollar was to be equal to about 3/4 ounce of silver, and that twenty U.S. Dollars was equal to one ounce of gold. U.S. money was silver and gold from 1792 until 1933. In 1933 the collectivist and tyrannical administration forced paper on Americans as their money. Prices may have risen and fallen over the nineteenth century, but overall net inflation was zero. In 1792 an ounce of gold bought the best men’s suit. Someone holding that one ounce of gold in the early 1900’s could have also bought a really nice suit.
Money in general must be usable as a convenient medium of exchange but must also inherently have and preserve its own worth. Gold and silver has been used for 5,000 years to do just that. This is why a reserve of gold has been part of the core holdings of every major central bank in the last three centuries. But in the last hundred years or so central banking has done a thorough job of manipulating the price of gold and scaring the common person from holding it. Unlike the Founding Fathers bankers have proven that by and large they are not moral (by bankers I am not referring to tellers and loan officers, but to the leadership of banks). The only people Jesus got physical with were bankers.
The current system of western banking (which today is in fact insolvent since 2008) which uses U.S. Dollars and Euros to manipulate markets and prices, will be removed and shown for what it is after the Second Signpost begins.
Why Own Gold Now?
Just as every American household was its own central bank through the 1800’s, every household can be again but only if one is prepared. Gold has been the safe haven to store wealth every time a currency becomes worthless. Gold coins are an excellent ticket to bribe border guards so one may pass.
The Second Signpost will most likely end the U.S. Petrodollar system. This will be the nail in the coffin for the dollar maintaining its value and thus the end of wealth for people holding their assets in U.S. dollars. It may be very soon. Gold allows one to transfer wealth from the old currency to whatever is the next currency. During times of hyperinflation which is a currency event that the dollar will go through, gold and silver will help your family eat.
As I was writing this article I looked on Jim Sinclair’s site. He was just repeating his big message – “GOTS” – “Get Out of The System“.
How to Buy Gold and Silver
Here are some tips for purchasing gold:
1) Buy coins not ingots nor bars (unless you are incredibly wealthy and need to store millions of dollars). Coins (1-oz, 1/2-oz) are mobile, convenient, and typically will not need to be re-weighed when using them for barter or if you need to sell them.
2) Buy 90% gold coins not the pure 99.999%. The latter type such as Canadian Maple Leafs will easily scratch lessening their value somewhat. The 90% gold coins such as American Eagles can stand up to wear and use as money.
3) There are two kinds of gold coins – bullion (Eagles, Maple Leafs, Krugerrands) and numismatic coins (i.e. old coins that are collected). The jury is out on whether gold will be confiscated again. I don’t think it will, but one never knows. Numismatic coins have a collectors’ premium of 30% or more, but having a fraction of your coins in this form would most likely escape a confiscation as it did in 1933.
4) Buy from reputable firms. Do not buy from outfits who advertise on TV. A good firm will typically charge less than 5% commission on your purchase. 10% is still alright but heavy. 20-30% or more is the realm of the scammers and corner Gold dealers that have popped up.
5) 1-oz coins have less commission. Half ounce and quarter ounce coins have increasing commission. Some half ounce and quarter ounce coins might come in handy for barter but they are more expensive ounce-for-ounce.
6) You can track the spot price for an ounce of gold yourself either on financial news on TV or at Kitco online. That way you can also compute the commission you will pay.
7) There are two kinds of dealers to go with – buy from a national gold firm which does business by mail, or find a local gold or coin dealer.
8) Major national firms that I have dealt with and whom I can recommend are Monex Precious Metals and Schiffgold. With either of them you set up an account, wire money or mail a check to them, and you call them and tell them what you want to buy. Both companies will mail you the product discreetly. Monex will even store it for you for a small monthly fee. Both companies only allow sales and purchases in lots of 10 1-oz coins at a time.
9) If you cannot buy 10 ounces at a time your local coin dealer will sell them to you on an individual basis. Ask them what their mark-up is on gold coins. If it’s greater than 10% go elsewhere unless you are late, the price is going up and gold is hard to get.
10) Only buy physical gold – not paper like in ETFs or futures. Buy gold that you can hold in your hand. If you can hold it, it is really yours. If you cannot it may be legally yours but it still is not yours until you get it into your hands.
Silver is poor man’s gold and should be useful for everyday purchases like groceries. Before paper money, before 1913, a typical day laborer would earn $2 in silver coins and could buy a week’s groceries for $1. Here are some tips for purchasing silver:
1) Items 1, 4, 7, 8, and 10 above for gold apply here to silver as well.
2) There are two kinds of silver coins one can buy. The first is pure silver bullion coins typically one ounce each. Silver eagles are an example. The other and my preferred method is to get what is called either “90% US silver” or “junk silver.” These are silver coins, pre-1965, dimes, quarters, and half-dollars. Silver dollars are not included because they will have a large collectors mark-up. Every silver half dollar contains half of ¾ ounce of silver. Every quarter is one quarter of ¾ ounce and every dime is a tenth of ¾ ounce. You can typically get these coins at a coin store. Some stores sell it pre-packaged by face value, and others let you pick through their inventory. This may be confusing, so as an example let’s say you want to buy $100 “face” in junk silver. This could be 400 quarters or 1,000 dimes. $100 would contain (3/4 ounce per dollar X 100 dollars) 75 ounces of silver. If Kitco shows a price of $20 per ounce, then $100 face of junk silver coins would be ($20 per ounce X 75 ounces) $1,500.
3) Silver bullion can be bought at Monex and Schiffgold but junk silver can usually only be had at local coin stores.
Do not trade in silver and gold. Do not buy and sell it hoping to make a profit. When the currency event happens and gold goes to the sky you will be left out if you are caught without it. Silver and gold is not an investment – it is insurance for your provision. You don’t buy and sell insurance policies do you?
Pray about this topic. With gold and silver you are your own central bank and immune from the corruption and judgment of the western banking system. One might sound righteous by saying he would depend on the Lord and not get gold or silver but when the economic rug is pulled out from under our society, those without gold and silver become dependent on others with it, and become part of the problem rather than the solution. The Lord can do miracles but He usually uses those with resources to help others.
Lastly, gold and silver are resources, not your god. Trust in the God, not idols of silver and gold. Make sure your heart is with your treasure in heaven not down here where thieves can break in and steal.