This is the 4^th installment in a series of 16 articles on acquiring gold and silver for your investment portfolio. Professional  precious metals advisor, Pat Gorman will  share some of his expertise with you to help you make better investment decisions. The less you have, the smarter you must invest to protect yourself against loss and diminishing returns on your assets.
 

(Note: Information is given as generalizations of typical portfolios. Some of this information was provided by Patrick C. Gorman, President & Owner, Resource Consultants Incorporated, 6139 S. Rural Road Ste.103 Phone: (800) 494-4149 or 480-820-5877  Fax: 480-820-5905. Resource Consultants deals in all gold, silver, and platinum coins, and bullion. Pat sells 90% silver in bags, gold and silver Eagle coins, silver dollars, and can recommend a strategy to fit individual need. His wife, Linda, has been in the business for 25+ years, and is experienced in every aspect of brokerage and precious metals management. Mr. Gorman has been in the hard asset business for more than 27 years. For the past 19 years, he has also hosted his own live talk show, “Hard Money Watch” and has been rated in the area’s top 5 radio shows for the last 6 years. Further, Pat Gorman and his company Resource Consultants is the most recommended precious metals brokers in the country. They are recommended by more than 20 financial newsletter writers and investment analysts.)

Read and study this information carefully! You are responsible for your own money! Invest it wisely, and it’ll serve you well.

Pat will Keep It Super Simple!

The 10 Most Asked Questions about Precious Metals

Many people have been conditioned to believe paper money is the ideal means of “storing” of their work’s value. They simply don’t understand the historic appeal and value of precious metals to those who are preparing for the uncertain financial future. Here are ten (10) of the most often asked questions about metals and coins we’ve encountered over the past 25 years.

Hopefully, the answers to these questions will provide both a working knowledge and some insight into the intrinsic value of precious metals, as well as why and how they provide long-term stability to their owner.

1. What Makes Precious Metals So Valuable?

2. What Determines the Value of Precious Metals?

3. How Much Gold and Silver Should Be in My Portfolio?

4. Do You Have A Suggested Portfolio of Precious Metals for Everyone?

5. I’ve Never Owned Precious Metals––What Items Do You Suggest?

6. What Forms of Precious Metals Should I Avoid?

7. Where Do I Store My Precious Metals and How Do I Protect Them?

8. What Are the “Rules of the Game” So I Don’t Violate the Law?

9. Just How Liquid Are Precious Metals in A Crisis Situation?

10. When Things Get Ugly, How Do I Use My Coins for the Things I Need?

The next blog post will start the explanations for the questions above.

It’s as simple as that!

Till next time…

Related Posts:

Should I Be Acquiring Gold and Silver?
Financial Preparedness: Why Gold?
What About Investing in Silver and Platinum?
Self Reliance: Make Sure You Have Some Junk
The Capstone of the Readiness Pyramid

Most people want to get rid of their junk. I don’t; not anymore.

I had just begun investing in silver. The year was 2004, and the asking price on the day I made my first purchase was $7.26 per troy oz. on the spot market. The spread was a mere three cents, and the price fluctuations were relatively mild from one day to the next. I was excited to share my newfound enthusiasm for what I believed to be the upcoming raging commodity (and particularly silver) bull market with a like-minded individual.

When I told a friend about my initial order of physical silver, said friend replied, “Oh, got yourself some junk silver?” Dismayed at the response, and feeling somewhat betrayed, I came to the defense of the precious and industrial metal—the best reflector of light, the best conductor of electricity, and the best conductor of heat. “It’s not junk!” I emphatically replied. Surely one man’s junk is another man’s treasure, but I failed to comprehend how anyone could perceive silver to be garbage to be disposed of, especially since silver had once been considered money; that in fact in 50-some-odd countries around the world the word for money is the same as the word for silver. My friend calmed my nerves by explaining that she was not insulting my investment vehicle, and that junk silver merely meant silver that was coined before1965. No longer on the defensive, I decided to learn more about “junk silver.”

Junk silver is composed of 90% silver and 10% copper. Each “dollar” (whatever combination of coins it is that adds up to $1.00) of silver equates to .715 troy oz. of silver. At that point, I became less concerned with numismatic silver, and more attracted to the idea of getting more silver for each Federal Reserve Note (FRN) I spent—knowing that the true definition of a dollar was 371.25 grains of silver.

A great benefit of junk silver is that it does not yet command a hefty premium over spot. It is generally the least expensive form of silver on the market to buy. Gresham’s Law has been enforced with this medium of exchange. Silver coinage has been chased out of circulation due to its intrinsic value, and replaced by a weak substitute. Within the past few years we have also seen such an eclipse with the penny. At one point the melt value of a zinc penny was worth more than the one cent it represented itself as. The cost to the Federal Reserve for producing both the penny and nickel now exceeds their stated value.

A silver dime’s metal content is today valued at about 10 times what it is denominated as on its face. What else besides gold holds its value over time so effectively? Milton Friedman once stated: “Inflation is always and everywhere a monetary phenomenon.” No civilization in the world’s recorded history has ever escaped the total debasement and eventual destruction of its fiat currency. Silver could indeed again be used as money. Something has got be used as a medium for exchange when the dollar and other currencies lose their full faith and credit and are no longer honored as anything of value. Got junk?

Related Posts:

What About Investing in Silver and Platinum?
Financial Preparedness: Why Gold?
Should I Be Acquiring Gold and Silver?
The Capstone of the Readiness Pyramid

If you have followed the Emergency Preparedness and Disaster Survival Readiness Pyramid starting from the bottom with water storage and 72 hour emergency kits, and you have progressed through each level making sure your preparation is as tight as a pyramid at Giza (with no space to slip even a thin postcard through the cracks), you have made it all the way to storing a sufficient supply of personal hygiene items. You are now ready to extend your efforts into the financial area of preparedness. This category includes accumulating a three to six month supply of cash flow for living expenses, and should lean more toward the six than the three. But, you are all about setting goals and moving up levels, and three months is nothing to shake a stick at. Most Americans are one paycheck from disaster (economist Howard Ruff points out that as many as 24 out of 25 households in your neighborhood are living in quiet desperation)! Once you have momentum on your side, you have won half the battle, and the three months becomes six in short order. Especially if it is done automatically by direct deposit from your paycheck into a savings account.

Having accumulated all of your cash reserves, the rest of the capstone on the readiness pyramid is gold and silver bullion. Most if not all of this should be either stored yourself or stored safely for you by a company with a good reputation that has been in business for half a century or more. You should have all the serial numbers of the bars in your possession, and have access to the bullion to audit it whenever you please.

Economist Marc Faber has made the bold statement: “I am 100 percent sure that the U.S. will go into hyperinflation.” Others have not been as vocal in their warnings, but point out the exponential growth in the money supply, and that inflation is the inevitable result of quantitative easing. They further reason that no civilization’s fiat currency has ever stood the test of time. The former Comptroller General (the nation’s chief accountant) has made comparisons between the fall of Rome and the current path America is on– namely the breakup of the family, the basic unit of society, the overextension and spreading too thinly the military, and the debasement of the currency.

Numerous economists are emphasizing the ballooning deficits and anywhere between $50 to $70 plus trillion in unfunded liabilities (Social Security, Medicare, etc.). Additionally there is more than $600 trillion in financial derivatives worldwide, the likes of which arguably the greatest investor of all time, Warren Buffet, has referred to as WFD’s (Weapons of Financial Destruction). More telling is the response of Chinese university students recently to a question posed to Timothy Geithner about Chinese assets to which he made the remark, “Chinese assets are very safe.” He went on to explain how the U.S. supports a strong dollar. He was laughed at loudly by the students in attendance of the event.

All of this may paint a pretty grim picture of the future, but it doesn’t have to be grim for the preparedness-minded individual. Your insurance against a financial meltdown, greater than anything that has happened thus far is bullion. It follows that the tiniest market in bullion with only approximately 330 million oz. for trading will be the best protection/most lucrative as well. This metal is both industrial and monetary in nature. When inflation causes gold bullion to accelerate and appreciate, silver outperforms by a wide margin (percentage wise) in the long run. Besides, it is the most affordable of the precious metals, making it more suitable for the common person. But, gold bullion may be the choice of some, as you get less of it for your money, thus creating less of a need for large storage space should you choose to store it on your own. Still others may want some combination of gold and silver bullion. This is understandable, as gold has ingrained itself in the psyche of the public, and silver is seen as a close second. Few realize that above ground there is less verifiable silver than gold. Yes, silver is rarer than gold (above earth)! Whichever tickles your fancy, get started! Remember the new GM has nothing to do with general or motors, rather Gold Money. Congratulations for having come this far in your emergency preparedness efforts!

Related Posts:

The Emergency Preparedness and Disaster Survival Readiness Pyramid
Self Reliance: Make Sure You Have Some Junk
Should I Be Acquiring Gold and Silver?
Financial Preparedness: Why Gold?
What About Investing in Silver and Platinum?

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Emergency preparedness is a noble endeavor, one that every individual should be engaged in. But, in order to make it an efficient pursuit, it shouldn’t be performed haphazardly. Many people start out with good intentions, but are misguided in their preparedness and food storage activities. They have a great goal in mind (i.e., being ready for the worst should a disaster or emergency occur), but there is no method to their madness. After they have randomly accumulated some of the necessities for any possible perceived threats, they are not then sure if they have all they need, and if they have allocated their resources properly. Of course almost anything is better than nothing, but there should be some prioritization beginning with preparation for a short-term disaster survival scenario all the way through to a “doomsday” predicament. Not everything can be prepared for because it is impossible to accurately predict the future, but it is certainly better to be over- than under prepared, and the best approach is to build a rock-solid emergency preparedness foundation and add to it in the proper sequence.

The proposed sequence is as follows: the first thing that everyone should store in case of emergency is a 72 hour emergency kit.  A 72 hour emergency kit  is an easy-to-carry and easily accessible package that contains items such as three days of water (most important) and non-perishable food items (preferably ready-to-eat goods), personal toiletry/hygiene items, first aid kit and medications, flashlight and batteries, blankets and sleeping bag, a radio, pocket knife, etc. 72 hours is the time frame that it will likely take to restore the usual services that are interrupted after a major disaster. You should plan on being self-sufficient for at least these three days.

Related Posts:

The Capstone of the Readiness Pyramid
Emergency Food Storage Essentials
Disaster Survival- Food for Thought and Belly
The Water Storage Part of an Effective Food Storage and Emergency Preparedness Program