Be Prepared – Precious Metals

Posted at 8:25 PM (CST) by & filed under General Editorial.

My Dear Extended Family and Friends,

This article is about precious metals and their importance in preparedness. In this article, we are specifically referring to gold and silver when using the terms precious metals. These are not the only precious metals, but these are the metals familiar to most people and which are most likely to be available. Some have asked me why this topic was not the first one I addressed in the “Be Prepared” series. The reason the topic of gold and silver is fifth is because other areas of preparedness are more important in the scheme of things. You can’t eat gold if you are hungry. You can’t defend yourself with silver if you need protection. When it comes to survival in uncertain or difficult times, water, food, shelter, and safety are all ahead of precious metals in needed preparedness. Focusing first, or exclusively on precious metals would be a very myopic and a potentially hazardous path. It would be irresponsible of someone to tell you that precious metals will secure you in an emergency without suggesting other areas of preparedness which would have priority in the order of needs.

It is my goal to assist you to effectively prepare for your wellbeing, and writing about precious metals alone is not the highest choice. Anyone who advises you to have precious metals alone in preparing for natural disaster, geopolitical or financial uncertainly is a disservice to you. Having precious metals alone would not help to prepare you for challenging times, and it is my aim to help you transition through personal, societal or global emergency circumstances regardless of the cause and emerge as safely as possible to a more positive future destination.

Why are precious metals important, and why should we care about having them? Precious metals are misunderstood by many today. The under 50’s of today, don’t know when gold and silver were money. Many believe there is intrinsic value in paper dollars, euros, pounds, etc. But to paraphrase JP Morgan…gold and silver are money. Everything else is just an IOU. Many readers already have physical gold and silver and understand why. If this you, then well done on your investment and congratulations, however, this article is not aimed at you. This article is aimed at someone who does not possess (any or much) precious metals and doesn’t understand their ultimate roll in future. This article is aimed at the person who may be living from paycheck to paycheck or on a fixed income from month to month and may not have investments.

In the United States, people originally used gold and silver for their purchases and transactions. Gold and, particularly silver, are cumbersome. They weigh down the pockets. The government initially led people to use paper by notes which stated that the bearer of the note could redeem the note for gold or silver. This gave people confidence in the paper because they knew they could take the paper note to the bank and get their gold or silver. Eventually, through the generations, people no longer identified the paper currency with gold and silver. The demand notes for gold and silver were removed from circulation. Most people today accept notes which are not backed by gold or silver, but merely the promise of the issuer of the paper to pay and stand for debts, public and private. The thought process disconnected the connection between the paper and what it originally represented – gold or silver.

In starting out with precious metals, gold and silver coins are the best choice even in the smallest of denominations and build up from there. The provenance of the coin of a nation is understood and accepted. For this reason, investing in bullion coins is important. No one challenges the silver content of pre-1965 quarters, half dollars and dimes. They are recognized and aren’t subjected to metallurgical testing like bullion bars or rounds would be. Their provenance isn’t questionable and they are readily accepted. This is why people under the age of 50 don’t understand the function or the necessity for gold and silver. They have been taught to rely on the paper and not what it was originally used to represent. Paper was successfully used to get gold and silver from the people who trusted the paper. When the day comes that the paper is not trusted, only those who have gold and silver will have money.

This article would be too lengthy if I were to address how we got to where we presently are in the financial scheme of things. The Internet is replete with such articles. What is important here isn’t how we got to where we are, but how we will arrive as safely as possible to where we are going? If you are interested you can do a web search for the Weimar Republic, Zimbabwe, and Argentina to see what occurs when there is an emergency which starts with or leads to a currency crisis. This doesn’t have to be an emergency of national scope where you live, it can be as small as losing your job or your income.

Last month there were ATM failures for TD Bank and Deutsche Bank and went “dark” according to media reports. If you live from ATM transaction to ATM transaction and you counted on one of these institutions, what would you have done if the ATMs did not come back online? It is from this experience that we know that we need to keep some currency at home. Currency is paper money we use for transactions. Precious metals are what we need to ensure access to currency if paper money is still accepted for transactions, or in the final alternative precious metals as a medium for exchange. This is an important distinction. As long as currency (paper money) is accepted, it should be used as a medium of exchange for transactions. If you have some precious metals, you could take them to the flea market, the pawn shop, the local coin dealer and trade them for paper currency. You would then use the paper currency until such time that it was not accepted and then use your precious metals directly for your transactions.

In most currency events, you don’t start out using your precious metals. Precious metals are not only a medium of exchange for transactions, they are a store of wealth. They are a means to preserve your wealth and your buying power. In large scale currency events, most populations who have experienced these events start out using what they have in paper currency. Many without paper resort to barter and that is why barter was addressed in the previous article. Historically, all paper currencies fail. There is no paper currency which has set a historical precedent for surviving a major economic crisis – none.

Historically, when an economic crisis has grasped a nation, it has resulted not only in economic collapse, but also domestic socio-political collapse. As systems in crisis break down and deteriorate, black markets in other, more stable currencies were substituted by people for their transactions. During a hyper-inflationary financial crisis, people have often turned to barter or more stable foreign currencies for their purchases. At the time of a currency crisis, there is usually a period of civil unrest until there are reforms and the county re-stabilizes. This interim period is most challenging. Having your country’s paper currency for the interim is valuable. By having some precious metals, you can exchange your metals for the currency you need for purchases of goods and services for survival. You would not likely use your precious metals directly for purchases if there is still a paper currency in place which you can acquire by trading your precious metals to obtain the currency. This is more discrete than paying for goods and services directly with precious metals.

The time to buy physical precious metals is whenever you can. It isn’t about price, or even getting the best price. It is about getting the precious metals even in the smallest amounts. One or two coins will get you started. Buy when you have the money or can get the money without going into debt to make the purchases. Look at antique stores for old silver dollars or other old coins. Check out your local pawn shop, flea markets or garage sales. Look at Internet sites like eBay, bulletin boards, and coin dealers, online bullion purveyors with good reputation and reviews. Look at your phone book in the yellow pages, or ads in the newspaper. People who buy coins also sell them. This could be a good time to practice some barter for something of value you don’t want or need for some old coins.

In the event of price controls, limits on bank withdrawals, food or other rationing, informal economic transactions tend to thrive. Precious metals are often resorted to in these informal transactions, but only if paper currency is not accepted. If paper currency is accepted, then its use is the highest choice since you do not disclose to the person you are transacting with that you have gold and/or silver. If paper currency is the norm, it is important to stay with that norm to the degree possible.

Ultimately, countries, economies, prices and the social order are reinstated after some needed reforms. After economic stability returns, anyone holding precious metals will have preserved their buying power and their wealth. At that time, the holder of precious metals can exchange them for a new currency by having preserved their wealth.

Most people today don’t have precious metals. Many people who think they have precious metals only have paper they believe can be surrendered for actual gold and silver. This is a great hoax perpetrated on even the most intelligent of investors. The hoax is perpetrated on investors because they have subscribed to a mis-belief. This is the same mis-belief which causes people to believe there is intrinsic value in paper money. Gold and silver are real money. Precious metals aren’t dependent on any other entity’s promise to pay. There is no performance needed. There is no risk from someone not fulfilling their obligation to deliver. What you have in your hands, in your possession you own. It is that old expression, “If you don’t have it in your possession, you don’t have it.” This is sad but true.

Although I don’t give investment advice, I urge you to get some coins of gold or silver.

Even if you are having difficulty making ends meet, invest in some pre-1965 US 90% silver coins. Forgo a cup of coffee or a beer and make this investment. You can do it a little at a time. One coin at a time. The important thing is to start, and start now!

We have readers from around the globe and from all walks of life and all socio-economic circumstances. I am writing to all of you. You don’t need to be a savvy investor to understand this simple information. In fact, a savvy investor has already considered the facts, the political and economic landscape and their investment agenda and made an informed decision for themselves, regardless if it is best or not.

I am writing to them, but also to readers who already have almost nothing to get by on. One out of six people in the USA need food assistance to provide meals for their families. This information is for you as much as it is for anyone else.

Even if you consider yourself to be among the abject poor you can probably find the resources for some 90% silver dimes. If you have very few resources, just buy one pre-1965 dime– just one. There may be a world emerging where one dime can make a difference in your wellbeing and those who may be dependent on you. I urge you to start today! I care about you. For me, helping you with this information is a moral imperative. My goal to assist you is more important than any title or reputation which has been bestowed on me.

Respectfully yours,

Jim Sinclair