Don't Be an Uneducated Silver and Gold Buyer

Sep 9, 2011 at 4:55 PM

By Megan Duffield

I know being a student or recent grad doesn't allow for much investing, but as of late many opportunities have come up to get your physical silver and gold purchases started. I won't go into detail about my own personal investment practices, however I went into most of my investments trusting the person on the other end of the deal. Luckily, I wasn't dooped into spending far too much on far too little, but I know people who have had bad experiences with metal dealers.

I want to encourage all of you to start reading into your options when it comes to buying precious metals as a hedge against inflation, a temporary investment, or something you want to use for bartering. I recently read a great report, by Peter Schiff, that helped me understand and identify popular scams that are out there. Since precious metals are becoming more of a mainstream haven for investments, you have to watch out for the frauds.

So spread the news to friends and family who are interested in getting started or who maybe had a bad experience the first time around. There are honest places and investing in precious metals seems to be a great decision, thus far. Join the Gold Scams Facebook Page for more details on stories, fraudulent companies listed by name, and just go and post a question to be answered!

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For silver check local coin shops. Most of them sell "junk silver" in the form of pre-1965 U.S. change, some may even have gold and silver bullion. You can usually get the "junk silver" coins for a low premium, let them know you're not looking for numismatic value. Ask questions if you don't understand something. Usually small "mom and pop" shops are more than happy to help. Other than that, I use Apmex and I've had good experiences. Also, this website is a good reference.

http://www.coinflation.com/

Submitted by Herbert Hale on September 9, 2011.

Physical gold and silver are hedges against extreme currency de-valuation as a direct result from the Federal Reserve, and other western world central banks, engaging in inflationary monetary policy in hopes to spark the world-wide economies. The problem becomes creating money/debt/un-natural market conditions eventually results in a loss in confidence in the monetary system that fuels the economy (the US Dollar). When you buy physical gold or physical silver, you absolve yourself of the counter-party risk to the current monetary system, as the physical possession of the metal maintains the traits of what money is. Historically, gold and silver have been used as money, and will be treated as money in a condition that the US dollar begins to inflate rapidly (which will happen with constant stimulus). Thus, it may well very be a good idea to exchange Federal Reserve Notes (US Dollars) for physical metal to protect your savings. Consider the fact that China is actively encouraging its citizens to buy gold and silver, and are rolling out a gold exchange in 2011 which will effectively peg the Yuan (RMB - Chinese currency) to the price of gold, a pseudo gold-standard.

One can buy physical gold and silver at a local coin shop, or an online dealer.

Some of the most reputible online dealers include APMEX, Provident, Tulving, Gainesville, and BullionDirect. Do your fair share of research for best prices, or for other reputable dealers, but be sure to compare the prices to these online dealers to make sure you are not getting ripped off.

As far as investing in securities, there evidence to suggest that SLV and GLD are NOT safe investment vehicles. SLV/GLD are ETFs which function in a manner which there is a pool of gold and silver located in london vaults, and the fair amount of shares representing the value of the physical metal is suppose to be represented in the share price. The custodians of these ETFs are J.P. Morgan for SLV, and HSBC for GLD. These two banks hold a massive amount of "short" positions in which calls for conflict of interest, so tread carefully.

For more information, please visit some of the leading sites in the gold an silver community.

Jim Sinclair - "The Santa of Gold" -- http://www.jsmineset.com

Trader Dan -- http://traderdannorcini.blogspot.com/

Jesse's Cafe: http://jessescrossroadscafe.blogspot.com/

And an all encompassing community:

Turd Fergueson's Metal Report: http://www.tfmetalsreport.com

Scott J

Submitted by ScottJ (not verified) on September 9, 2011.