(Continued from Part 1. This concludes the article.)
Security
First off, never tell anyone that you have gold and silver stored at your home. Second, you must break rule #1 and tell someone you trust about the location, emphasis on trust. You will want to tell your wife/husband. Additionally, you will want to tell one of your heirs. You do not want to have your gold and silver lost to the person who buys your home when your heirs sell it if your heirs are unaware that you have gold/silver hidden on the property. Whomever you tell, emphasize to them that they should tell absolutely no one else. You will likely know ahead of time if someone is a blabbermouth and therefore not select them as your trusted heir.
If you store gold and silver at home, be prepared for the situation where a home invader knows of your gold and silver and threatens to torture/kill one of your loved ones if you don’t hand over the gold and silver. Will you give them what they want? Will you fight back? What if the home invader is given what he is asking for and then kills all of you anyway? Decide now on how you will handle such an unthinkable situation before it happens. Will you fight? Will you give up your gold/silver and hope that the thief does not murder you and your family members present even after receiving the gold/silver? Plan now so you will be prepared mentally.
Do not store more gold/silver at your home than you are willing to lose. My personal strategy is to store sufficient 90% junk silver (good for small transactions) at home to provide for my family should the Schumer hit the fan. The remainder is stored in commercial vaults, segregated and insured.
For gold/silver stored at your home, your homeowner’s insurance policy typically excludes valuables or has a ridiculously low coverage limit, maybe $2,000. You can get a special rider for what you store at home but then people at the local agency and insurance company home office know about your gold/silver. This is a potential security problem. Should you go without insurance? You must decide for yourself how you will address insurance for your home storage.
Where to Buy Gold and Silver
- Local Coin/Bullion Dealer?
- E-Bay?
- Costco or Walmart?
- National Coin/Bullion Dealer?
First, choose a dealer that can buy back your gold/silver should you ever want to trade them for Federal Reserve Notes in the future. Ask them how they determine the buy-back price.
You can buy from your local coin shop. I recall David Collum stating in an interview that in the early 2000s, when no one was buying gold and the price was near $250/troy ounce, he had a standing offer with his local coin dealer to buy any gold coins the dealer received at spot price. You can develop a similar relationship with your local coin dealer.
You can buy through eBay. I do not recommend this avenue and have never been brave enough to use eBay for gold/silver.
You can buy from Costco or Walmart but neither has any mechanism to buy your gold/silver from you when the time comes.
You can buy from a bullion dealer with national presence. This may include companies with a website capable of online order placement. Some dealers have an online presence but all dealers that I have encountered have a telephone customer service desk where you may speak with a live person and place your order. Many dealers will assign a representative to you with whom you can develop an ongoing relationship.
I recommend that you investigate the range of transaction sizes that the dealer is capable of handling. You will want someone with a sufficient credit line to facilitate large buy-back transactions.
The following are gold/silver dealers that I have used and would use again. Each of these dealers has a YouTube/Rumble presence where they provide excellent educational videos on macroeconomics and the gold/silver markets.
- Miles Franklin
I use the Liberty and Finance team as my brokers. You can also call Miles Franklin directly or use one of the other brokers associated with them, such as Bill Holter. - McAlvany
- SD Bullion
I’ve observed that they have email specials with good (low) premiums. - ITM Trading
Beware of Scammers
Beware, there are some companies that will sell gold to you that are scam artists. They focus on the IRA market. They will sell modern privately minted gold coins to you, maybe 1.5 troy ounces, and tell you that they are “rare” and your “investment” (paying an outrageous premium above spot) will go up in value significantly. They target older people. They often have a nationally recognized spokesman and slick TV advertisements. They are nothing but scheisters. Always determine how much you are paying above spot and comparison shop between dealers.
The Transaction
Before you finalize your transaction, determine what payment methods the dealer accepts. Your local coin shop will likely accept Federal Reserve Note paper currency. Dealers accept physical checks, ACH transactions, credit cards, and wire transfers. Above certain thresholds some dealers require wire transfers. If you use a credit card, the dealer will charge you an additional amount to cover the credit card fees they are charged. Be aware that dealers typically will not ship the product to you or to your designated storage location until the check or ACH clears. This can be a week or two after they deposit the check.
When you make a purchase, you will agree with the representative on the specific product, the premium, and the total price. Be aware that precious metals transactions are old school. Once you agree on the final transaction details and say, “Place the order,” you are expected to keep your word. If the spot price goes down, you cannot cancel the order. Similarly, if the spot price goes up the dealer will not cancel the order. This market is one of the last vestiges of the time when people kept their word, no matter what, when deals were made with a handshake. Large dealers cover their risk that the spot price will change by using the futures market.
If you have a large quantity of Federal Reserve Notes you are going to trade for gold/silver then consider splitting the transactions up into tranches in case the spot price starts going down. Split the transaction into four or more tranches and execute over several weeks or months. I used to try and figure out if the market was going up or down in preparation for a transaction. The market goes up. The market goes down. I now know that I am not smart enough to predict the short-term movements.
Where Should I Store my Gold and Silver?
Here are some options for where to store your real money:
- Bank Safe Deposit Box
- Buried in Your Back Yard
- In a Safe in Your Home
- Hidden in Your Home
- With a Bullion Dealer
- In a Commercial Vault Allocated to You with Insurance
- In a Commercial Vault Segregated to You with Insurance
- In Your Home Country or Offshore?
I strongly recommend against using a bank safe deposit box. First, it is part of the banking system, one of the things that some of us are trying to avoid when we buy gold and silver. Second, the bank may lose the contents of your box. Yes, it can happen! I had a safe deposit box at a Wells Fargo Bank branch in a fancy part of town. I went to the bank one day to access my box, and it was gone! The clerk couldn’t find my box. I showed the clerk the specific location in the vault where the box had been and that space was empty. Making a long story short, they finally found the contents of the box after nine months of searching. They had remodeled the interior of the vault and misplaced the contents of my box. Note that they opened the box to remodel the vault and they did so without my permission. During this ordeal, I learned that there are lawyers who specialize in filing lawsuits against banks who lose safe deposit boxes, so this apparently occurs fairly often.
You can bury your gold/silver in your backyard. Create a waterproof container such as a PVC pipe with caps. Add a desiccant. Seal the container. Dig a tall skinny hole so the top of the container is two feet below the surface to reduce the metal detector signature. Do the digging at night when no one will observe you. Be a pirate – make a treasure map sufficient for someone to find the location in the future after you are dead.
If you store gold/silver in your house, then hide it well. Look up hiding locations on YouTube. Then don’t use any of those ideas, rather, be innovative. If you use a safe then hide it well. Consider using a cylindrical safe embedded in the concrete floor. AMSEC makes one with which I am familiar. My grandma worked at the gas company and had such a floor safe in her office for cash payments from customers. (That was a long time ago!) Place a piece of furniture or a rug over the safe to hide it.
I recommend against storing your gold/silver directly with a dealer. Some dealers have storage programs where the bullion is stored segregated in a vault with a third party such as Brinks. I use one such program. Make certain that you can visit the vault and inspect your money. Yes, gold and silver are money. Federal Reserve Notes are a debt instrument, currency, not money. Make certain that the storage is insured for replacement with like-kind product, not settlement in Federal Reserve Notes.
You will have to pay for storage and that includes security and insurance. Storage rates are about 0.5-1% per year for gold and about 0.5-1% per year for silver with rates typically higher for silver. Shop around convince yourself of the security and insurance terms before placing anything into storage. Names which I am familiar with and use are Idaho Armored Vaults, McAlvany’s program with Delaware Depository, and Miles Franklin’s program with Brinks. In such programs the gold/silver are held in your name, not the dealer’s name and you can choose a different dealer when you sell, should you choose to do so.
Consider storing some of your gold/silver overseas. If you have a second home with residency in a country other than your home country, then store some gold/silver the country where you have residency. Consider storing some gold/silver in Switzerland or Singapore, out of the reach of tyrants who would steal your possessions.
Conclusion
Select a dealer and place your order. Convert some of your Federal Reserve Note-denominated assets into real money, gold and silver. I hope that I have covered the details that will enable you to make a purchase intelligently and avoid getting scammed.
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