I set great score by the accuracy of the material presented in my Blog. A single source of information is not enough.
The level set is that of a Jury; Does the material meet the standard of "Beyond Reasonable Doubt". Because the material is so far beyond what a person is exposed to the standard is higher. You can perform the checks & balances yourself. I hope you will as your life and the future of the Human Race hangs in the balance.
We live in a time that might occur once in 25,000 Years.

Saturday, August 28, 2010

Buying Gold and Silver, various considerations from personnel experience.

Buying Gold and Silver, various considerations from personnel experience.

There are numerous ways to buy Gold & Silver, combinations of Coins and Bullion of both. Allocated storage, private vaulting or a hole in the ground. Safety Deposit Boxes are not in my opinion a good place to store anything except documents. In the USA they can be seized and you are trusting a Bank. That alone is a bad idea with there track records.

I tend to have fairly radical views on the present state of the worlds Governments, Currency’s. The Banking and Political establishment have track records of bad / Disreputable / incompetence and stupidity. Our Government whatever it is will be no better than it was. The Australian Government ‘Guarantees’ deposits 100%. In a World currency or Banking collapse that guarantee is not in MHO worth anything, Paper Money is exactly what it is; Paper backed by faith.

With regard to the experiences I have had investing in the Precious Metals market (And I am not an expert, this is not Investment advice) I prefer a mixture of both Gold and Silver some of each; in Coins and some in Bullion form.

Purchasing ‘Physical’ Silver & Gold involves paying a ‘Mark Up’ from the Spot price and living in Australia, we also have to take the value of our currency
into account.

The Australian Dollar is a “Commodity Currency”; in that it is high relative to the USD when prices for commodities such as Coal, Copper, Iron Ore etc are high and demand (usually from China) is also high. Lately the range has been around .885 to .910 to $1 US. Hence Gold at Spot of 1237.37.

Alternatively when our Currency is at .6500 to $1USD your investment appreciates as the Aussie drops, this relationship can be looked at as an investment in our Dollar, its loss is your gain….after you have purchased your Bullion at for example AUD $.8800. At AUD $.6500 today’s Gold ounce would cost $1980.

I will use today’s price (27th Aug) and the AUD at .8847 will translate to a Spot Price of $1398.52 Australian. Add to that, the mark up from the trader selling you the 1 Ounce of Bullion, it varies but 5% is a rough guide. 1 Oz will cost you $1,424.00 add to that Shipping & Insurance $30 (Depends on weight and value of the purchase.) The total delivered overnight to your door is $1454.00.

Another option (I prefer this as its safe and cheaper) is a one off payment in this case, of $15 +$5 for each purchase after that to have your Gold stored in the dealers Vault. This way you can buy a bit each week or month as suits you and eventually have the lot delivered or sold back to the dealer. These costs vary between dealers. A 10% Payment secures your order over the phone at the current market price. The balance usually required in 24 hours.

For example you decide to add a Kilo of Silver Bullion to the order, the USD Spot Price today is $18.94. Translates to $AUD spot price of per KG $ 688.30. The mark up on Silver is a bit higher than it is for Gold, your Kilo (32.15 Ounces) will cost $729.00.AUD

Lets add some Bullion Coins, as distinct from Numismatic coins, stay away from Numismatics, they are for collectors, they look pretty but the mark ups are very high. Using today’s prices again for example a 1 Ounce Gold Coin. Note # (All Bullion & Coins should be 99.95% to 99.99% pure)

To buy a 1 Oz Australian Gold ‘Koala’ will cost $1,476; (enclosed in a plastic container for safe storage) hence from the Spot price of $1398.00 the ‘Premium’ or mark up is $78 from the Spot of $1398. If you decided to sell it back to the dealer the same hour, as prices change over a day. The ‘Buy Back’ will be $1,384 a loss of $92.

Purchase a Silver coin, only realistic economically in lots of 20, preferably 100 at a time, (a single coin is about $32 to $35) lots of 20 x 1 Oz Tiger/Koala coins the total is $554. ($27.70 per coin)

A Kilo of Silver in coins will set you back $ 890.55 compared to the Bullion price of $ 1 KG - A $729. The least expensive way to purchase Silver is in Bullion bars 100 ounce for $2,259 or 10 KG = $7,263 plus the $5 /$15 vaulting fee or S&H depending on how much weight / insurance value.

The premium on coins is cheaper if you buy the 1Kg Coin ‘Koala’ 2010 Coin $794.00 compared to a Kilo of Bullion for $729.00 a lot less mark up than the 1 Oz Coins. (A very attractive coin with a $30 face value)

If your worried about a Mad Max scenario in the future; then having some Gold or Silver coins is better than trying to buy a sack of Rice, and having only 100 ounce bars. You cannot use a Hacksaw and chop off ounces J Its not going to be practical, a 1 ounce Silver coin is more appropriate. That $27 you pay today might be worth $270 in a few years.

Silver is projected to be the first metal to become ‘Extinct’ or at least very rare, for every ounce of Gold there used to be 15 of Silver in the Earths crust, now the Gold still exists nearly every bit ever recovered. With Silver its used Industrially and is vital for many Electronics.

Silver is not recycled as Gold is, every Computer in the town dump has some Silver in it, that Silver is gone forever. Above ground only 600 Million Ounces a year are mined and there is no real stockpile as there is with Gold.

WARNING: If you decide on taking physical delivery Its not a good idea to advertise it to the neighbors! Find a safe place in your home, and rule # 1 Do Not Tell Anyone About It. Dig a discrete hole in the ground or use a private vault. Personally Allocated storage with the dealer is the best. It saves on Shipping and allows you to sell back a portion if you need cash its in your designated Bank account in a matter of hours to a day.

In each state of Australia there are dealers, different dealers offer various variety’s of metals, Platinum, Palladium, various sizes & weights. The buy back prices also vary; don’t let a dealer talk you into Numismatics unless you want to be a collector not an Investor. The premium you pay from the Spot Price on coins goes up as a ratio or % to the price.

Above information is derived from Ainslie Bullions Price Sheet of 27th Aug 2010

Ainslie Bullion - Gold and Silver Bullion

Other Dealers:

Silver Coins - Australian Bullion Company

The Perth Mint Australia

W Davis & Son - About Us (Melbourne)

# Allocated means your name on it figuratively speaking. Unallocated is the sort of thing you get buying through GLD or SLV, there is some well founded suspicion that in some of the big ETF’s Bullion is ‘lent out’ on a Fractional Reserve Basis and the existence of 40 owners to a single bar is a strong possibility. # GATA has compiled so much more evidence of central bank manipulation of the gold market here:


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