Bullion for Insuring Fiat Currency and $ Collapse.

[Neways]

Hi everyone!

Just posted in the Welcome New Members section to introduce myself. As I am new to, I guess it is called something 'stacking silver', I would like to hear about your take on more efficient ways of purchasing bullion for the different goals that I have.

I have done a search and could not find anything. Excuses if there actually is an existing thread already.
Firstly, I would like to invest almost by means of insuring a portion of my fiat currency. This, I can imagine, would happen over a life-time. Thereby it would be awesome if the spot price were to rise, but in the end it needs to have a reasonable degree of liquidity. I find 1 oz. bars, with their higher overall premiums, not interesting for this purpose. I was thinking 10 oz. bars with liquidity and an upward trend in mind. What says you?

Secondly I foresee a collapse in the near future, based on historical and current trends ... heck, how about the foundation of this monetary system by itself! I was thinking 1 oz. bullion coins such as Maple Leafs, ASE and the like for this scenario due to their world-wide reputation and high liquidity. Would it make sense to, now that we're starting to pay premiums anyways, step it up and get Canadian Moose coins and fetch the extra Dollar for it's numismatic characteristics? I tend to say no since you'll need a significant amount to make it worth the while ... and for the scenario that it is intended for ... just not sure about it. In any case would I consider buying by the tube to cut premiums.

I am a bit lost on this last scenario and would love to hear what your thoughts are. Am I on the right path or am I wondering off into a distance?

Thanks in advance!

Neways

 

[silverbulldog]

Welcome to the forums. I think you have the right idea and if your goal is to eventually liquidate your stack for the most about of fiat in the future i would say 10oz Bars and any recognizable coin or bullion is a good choice if the premiums are low.

Maples and ASE's are great to start out and i also do like the smaller stuff as it can be more liquid depending upon who you are selling to.

You get the most silver for your money when buying larger bars and rolls of coins and bullion.

If i were you i would buy what makes you happy but if you are not even a slight collector than just get a bunch of JM or Englehard Bars strictly for investment.

for me i invest but i also collect..thats why i dabble with Morgans and Pandas and the like.

 

[jpanggy]

Hi Neways,

Just like all new silverstackers (me included) we all were concerned about fiat collapse.

However once you start reading all financial literature and reviewed the history of economy, you will learn that economy will not disappear as long as humans are around.

If you are going to be betting on financial collapse, then you will be going in too much with your money and at the end of the day you will be very disappointed when silver or gold crashes (like these few days).

My advice is to buy a set amount of gold and silver every month as a small percentage of your income (not saving). That way, you are diversifying and building it slowly, sheltering you from massive loss (and massive gain). That is my 2 cent and I am sorry for throwing a bucket of cold water to your hot silver love.

 

[mmm....shiney!]

However once you start reading all financial literature and reviewed the history of economy, you will learn that economy will not disappear as long as humans are around.

Hi Neways, welcome.

@ jpanggy, what economic history do you refer to? If you refer to the fiat economy then it's demise and collapse are patently obvious to any with eyes to see.

http://dailyreckoning.com/fiat-currency/

Of course there will always be an "economy" as long as humans are around. The economy is a social creation of humans, in just the same way as politics, art, music and even religion (as some would argue). The basis of economic trade is what is at fault under a fiat system - not "economy", fiat based economies are faulty and always lead to devaluations of the currency in circulation.

A financial collapse will occur. The rehabilitation of our current fiat currency backed economy will not.

You should be saving silver and gold primarily Neways, and stashing some fiat in Mattress Bank.

 

[jpanggy]

Hi Neways, welcome.

@ jpanggy, what economic history do you refer to? If you refer to the fiat economy then it's demise and collapse are patently obvious to any with eyes to see.

http://dailyreckoning.com/fiat-currency/

Of course there will always be an "economy" as long as humans are around. The economy is a social creation of humans, in just the same way as politics, art, music and even religion (as some would argue). The basis of economic trade is what is at fault under a fiat system - not "economy", fiat based economies are faulty and always lead to devaluations of the currency in circulation.

A financial collapse will occur. The rehabilitation of our current fiat currency backed economy will not.

You should be saving silver and gold primarily Neways, and stashing some fiat in Mattress Bank.

In my short study:

A.d. 0 - 1900 = gold standard or some finite standard. So, less of inflation, tulip mania being an exception. Early forms of banking (knights templar), monarchy relies on credit (renegs by homicide).

1900-1945 Great depression, preceded by loosening of lending, gold confiscation. World war 1 and 2.

1945-1990: Germany hyperinflation, I think some other countries too, but too many to read. Then coming off gold standard and the east asian economy boom. First gold boom, followed by bust.

1990-2000: South east asian economy boom, followed by currency crisis. Dot com boom bust.

2000-Now: 9/11, Real estate boom, GFC, Precious metals boom and now signs of deflation.

I am very familiar with the south east asian bust. It was very high inlfation, near hyper (70% p.a.), currency lost 70% of its value and bank runs, capital flight, civilian unrest, riot, rape, pillage, arson, etc. But, afterwards .... it all went back to normal. It even got stronger, if you track the south east asian economy, they are growing during GFC and chugging along nicely now, them along with mexico, turkey, brazil, india and china are the focus of a lot of multinational companies.

During the crisis, some people made a killing by acquiring properties and letting their money sit in bank (interest of 50% per month at one point). After the crisis, let's just say there were a few new rich dudes.

To declare end of fiat, you need to be able to assess the world govt's strength. It is not just economic strength, it is also military strength. We are at peace, so military strength is never factored in. But assuming the scenario leads to massive instability, military strength will come into play.

Look at egypt, unstable, but at the end of the day the military can keep the lid on the public. I am not justifying what they did, but as long as they can maintain order, then life will resume to normal again (zombie apocalypse an exception).

Will we see hyperinflation in Australia? I doubt it, not in the next few years. Maybe if China declares they will invade us tomorrow, maybe. Will we see currency devaluation in Australia? Yeah, definitely, how severe? Maybe to usd 0.5c at worst and that will be for a very short period.

Will Precious metals go to the moon? Depends on the big boys (hedge funds, sovereigns, etc) if they start speculating and gaming PM market, prepare for mega boom (and mega bust). I have no control over the big boys, so I play it safe by diversifying. If it goes to the moon I profit a bit, if it crashes to the planet's crack my losses are minimal.