Thursday, January 7, 2010



thanks for that little bit on not selling your PMs. I was just thinking whether I should or not. But this has also got me thinking. Should I continue building my gold/silver stock even though prices are sky high? The smart investor always says buy low and sell high. I know my PMs are not for investment but for emergency and also, I don't have money to buy more right now. But, should I wait till the prices drop or slowly buy a little over time even though the price are high?

Thanks, anonymous

Hi Anon,
I'd just apply common sense. We know that because of the crisis, gold is a bit more expensive these days. Silver is a good option because, while still a precious metal, it hasn't gone up as much due to the crisis fear.

If you dont have money to buy more now, certainly, DON'T buy. Don't go into debt of sacrifice other priorities you may have.

When you find that you have a bit extra income, maybe buy some more silver if you can afford it.

Maybe you come across some good deals of pre 65 dimes (silver) or broken gold jewelry that is getting sold below its gold content, simply because the owner doesn't even want to bother with it. Used wedding rings, broken gold chain, its still gold and if the price goes up, its still gold that you have.

Again, when buying junk gold, small amounts people. A few rings and pieces of chain to sell in case things get bad and you dont want to sell a coin that would attract much more attention in a local store. For greater amounts of money, stick to well recognized silver and gold eagles.

Anonymous said...

Just curious. Has your government tried to make gold illegal, and confiscate it like the U.S. government did in the 30's? That would seem like the next logical next step in total governmental control of the people.

No, not really. There were some cases where personal bank vaults were opened ( cash, and yes, gold) but that mostly happened to tax evaders and such.

Argentina is kind of peculiar because we didn't have much wealthy people to begin with, so this may be yet another difference of how things may end up developing if (big if things get as bad as they got here in USA. If gold becomes a problem for the government during or after an economic collapse, rest assured, they will do something about it so you better keep your purchases below the radar. Preferably buy gold with cash if you're buying large amounts. Use different dealers and stores. Didn't happen here because of our peculiar situation, doesn't mean it wont happen in other countries.

Joseph said...

This post by FerFAL is good for provolking thought however I would disagree with never. Some of my PMs are purchased for what FerFAL discusses however some has been purchased for investment purposes as well. When/If my price points are reached I will sell those amounts and take a profit however if those points are not reached in the near future I will not be crushed either :)

January 6, 2010 3:50 AM

As long as you know and understand the difference and have two separate piles, that's just fine.



Don Williams said...


Off topic, but I thought I would give you a warning re Spain's future over the next 10 years since you have family there.

It doesn't look good because of how the EU is organized. Financial Times explains why:

Note that the EU is the only entity on the planet with a GDP large enough to challenge the USA -- so this US-created EU crisis is not necessarily causing weeping in Washington.

Our British partner, Sir Humphrey, explains why:

[Clip is from UK comedy Yes, Prime Minister --but has a lot of truth. The US inherited several things from the British Empire]

Anonymous said...

I like American junk silver half dollars because they have next to no markup over spot silver, there aren't many post-1964 half dollar coins polluting the market yet they're easily recognizable as money by the masses. Each coin has 0.36 ounces of silver so 3 coins makes a bit over an ounce. Silver dollars have too high of a markup. Silver dimes will probably be a good thing to have too for making change. I still like silver bullion, mind you, but it does attract more attention. You just happened to find that junk silver in the back of a drawer, or Grandma did, as far as anyone knows. Ideally you'll have both junk and bullion.

After your stash of silver is squared away, then you can worry about gold coins. When storage and transport of silver starts to become problematic, favor gold.

You might want to dollar cost average your purchases. Budget a fixed amount of fiat money every so often and buy what you can with it. You'll buy less when prices are high and more when it's low. Waiting for a "good deal" is just too dangerous at this point IMHO.

Anonymous said...

"Buy Low Sell High" is a joke, you do know that, right? How could you know in advance what the highest high and the lowest low will be? You can't, of course. The joke is that in hindsight you can see where you should have acted, but of course back then you didn't know what was coming. You do your best to do what's right. What's right, in this case, is add to your store of purchasing power by spending today's fiat currency. When prices go up, you buy less. If it continues going up, you'll be glad you did. If it goes down, you didn't waste too much averaged over time.

Anonymous said...

FerFAL -

I love your site and your thoughful comparison between Argentina's history and what could happen elsewhere in the Western world.

With regard to PM's, I've decided to hold 1/3 of my "financial" wealth (primarily savings and IRA/401K retirement) in physical gold and silver. Some is immediately available, some is elsewhere (following your two safe comparison). I've also set up linkage between various accounts to be able to convert almost everything to gold and get it in very little time (1-2 days).

I can't afford to tie up my life savings and retirement in PM's because they don't grow (they're a hedge), and lack of growth over the next 10 years would be tragic if this economy doesn't collapse. But it would likewise be tragic to ignore what's happening and not hedge a healthy portion of what I've saved. If things happen so fast that I lose 2/3 of my net worth, I'm sure I'll still be in much better shape than most, and that wealth will be the least of our concerns. We'll probably be fighting a war by then.

The Hero said...

Don't buy gold at all. Right now it is too late because it is cost prohibitive. But let's look at a more obvious reason: gold is heavy, non-edible, and if the whole world goes bad, you will not know if gold even has value over food and other resources (ammo, e.g.). It would be more advantageous to buy things that will keep you alive, and then use those to barter with rather than presuppose gold with be worth 'x' amount of value.
Save your money, buy things of actual survival worth, and worry not about protecting the shiny element of gold.

The Hero said...

Lest I get flamed for down-playing the significance of gold/precious metals, allow me to expand upon my above comment.

I started off by saying not to buy gold "at all" because the price for gold is "now" to high. Meaning, if you did not buy gold already, then your time to do so has eclipsed, and you need to find something else to invest it. At this point, so late in the game (IMO), best you focus on means of maintaining your survival.

On the other hand, I stated gold is heavy, which it is. I said this because if a catastrophe does happen, and you have to relocate with your possessions, moving gold is risky and burdensome.

So, I am not diminishing the overall value of gold (which I believe is in its own bubble currently), but I am ragging on the notion that gold is paramount to survival. At best, it is third from the top: food, protection (shelter & weapons), then gold/PM, maybe.

Silver, anyone?

Anonymous said...

I just want to correct a constantly repeated mistake about gold confiscation in the U.S.
yes theres was such a thing but the OMITTED, yet significant loopholes, in the law was that it EXCLUDED JEWELRY AND U.S. minted gold coins. that is the reason there are so many foreign gold coins with holes drilled in them. people quickly converted themto jewelry by drilling holes in them and or mounting them so they could be worn as jewelry.

Anonymous said...

Gold is not too expensive to buy right now. But you had better hurry, it's going up fast and it's said that something major is about to take place in the world and markets within the next week.

Gold will double probably 100 times, as the Ponzi scheme of fake ETFs, with no real gold baking, is made known. NEVER BUY PAPER GOLD. ONLY PHYSICAL

My question is, where does one buy and sell silver coins and bullion in Argentina?

What happened in Argentina is happening in the US and Europe.