Stocking Up On Silver
First, a disclaimer... I am not a silver expert. I am not a financial advisor. I'm simply providing information here based on research and personal experience. If you lose your retirement fund, it's not my fault. However, if you make a butt load of profit, I would not be against getting a cut of it ;-)
A reader sent me an email asking about buying silver. He had ordered a couple of Canadian Maples from a dealer in Florida, thinking that as .9999 pure, it would be better than all the other .999 pure. He was wondering if he made a good investment and if he should continue that route, or if he should try other types of silver.
If I was in his shoes...
First, why do I want to buy silver? As an investment to turn over into cash when the price goes up? To hold long term to protect my money against inflation? For after TEOTWAWKI to use as barter? Because it's neat looking and I like it? All of these are legitimate reasons, but all have pros and cons. If an investment, can you stand the risk if the price goes down? The spot price as I write this is about $28.17 an ounce. From 1990 to about 2002, silver bounced around the $4-$5 range for the most part. The record high was on Jan. 18, 1980 and did not come close again until Apr. 28, 2011. Both were in the $49 range . If I was using silver as an investment, I wouldn't try to time the market or buy low and sell high. I'd either buy on dips and hold... and hold... and hold... and hold... or I would buy a set amount each month, whether $20 or $2,000, and hold, hold, hold. I also would not put all my eggs in one basket. I'd limit my precious metals to about 10-20% of my investment or savings dollars. SHTF barter silver has it's own concerns... Do I have all of my other preps up to speed? I can't eat silver. I can't patch a wound with it. I can't shoot it (unless I'm casting bullets for werewolves or vampires). Do I have other things for barter? Toiletries, food, airplane bottles of Jim Beam...that type of thing. Am I out of debt? All are important questions to ask before I start buying silver for barter or SHTF living. If I am in the right position to do so, I'd want to diversify my silver. Some junk silver (pre-1965 U.S. coins), some American Eagles, some mint rounds and bars, some marked industrial silver, some silver grain or shot, perhaps some 10 oz. and 100 oz. bars, some cool private maker rounds or bars... all have their own particular potential uses and benefits.
The second thing I would consider is to look at everything in the price whether buying mail order, the local metal shop, or off of eBay. Include sales tax (I know, it seems stupid to pay a sales tax to buy money, but that's the rule, around here at least), shipping charges, and gas costs if I have to drive out of my way to a local shop. The local metal shops have the benefit of paying with cash and no records, and maybe some negotiation wiggle room. With more and more of the "we buy your gold and silver" shops popping up in every town, I can certainly shop around for the best deal. On eBay, I can often get good deals on junk silver coins, sometimes paying below spot with free shipping. With mail order from a big name dealer, I can get quantities that can often not be found at a local shop.
One of the handiest resources I've found is the melt value coin list and calculator at Coinflation. It's great for knowing how much to bid or offer, and making sure you don't get screwed by a less than honorable dealer. Ten dimes, four quarters, two half-dollars all equal the same melt value - .715 ounces per dollar of face value. A silver dollar is actually a little higher at .734 ounces of silver each. These coins are not easily found, but I typically get a couple of dimes or a quarter in change every year. If I worked in a business running a cash register, I'd be sure to always have some spare change in my pocket to swap out with any silver coins that a customer paid with. If I owned a bubble gum or snack or drink machine concession, I'd really check all my revenue close before I took it to the bank. I also check those Coinstar machines at the grocery store. The machines will kick out silver coins, and anyone goofy enough to pay a 10% surcharge for cashing in change will often just leave the coins there thinking that they were too worn or dirty to be worth picking up.
APMEX sells every imaginable type of silver that you could want to diversify your holdings. If I want junk silver, they have it from $1 face value ($22.73) to $1,000 face value ($20,906.60). Old silver dollars are $28.38 each. If I had $15,895 I could buy a 500 coin megabox of Silver Eagles. For as little as $2,899 I can get a 100 oz. bar. That sounds huge, but it is really only about 6.5 pounds. They sell BB sized silver shot in bags ranging from 10 oz. ($299.70) to 25 kilograms ($23,525.76).
If I wanted to actually use my silver, I like the American Open Currency Standard which organizes silver trade and barter. They sell their own AOCS precious metal medallions and work with the Free Lakota Bank as well.
Silver has historic value, industrial value, monetary value, and it can be a great way to store wealth. If it is right for you, do your research, and don't let a huckster take advantage of you. I hope some of the information and resources here tonight can help you do that.