Money Monday – My Experience Buying Gold and Silver Bullion Coins Last WeekJuly 2nd, 2012
Suiting action to words last week, I finally made a trip to a local coin store in my city to start my run on the global fiat banking system by letting their bad money drive the good money (gold and silver) into my new hoard of inflation proof value. I’m hoping that when the fiat money system crashes, everything will be so cheap for people who have gold and silver to spend that I can take a year off and ride motorcycles across South America. Or something awesome like that.
So on the big day, I rolled into this coin shop with a collection of numismatic coins (coins that have collector’s value because they are rare, or have interesting stories behind them) that I used to collect as a(n extremely nerdy) child. I wanted them to appraise the collector’s value of the coins, and then trade them in along with a stack of Federal Reserve notes for some gold and silver. I was happily surprised to learn what a couple of my coin sets were worth. I definitely got more for them than I hoped to expect. Then I kicked in my FRNs to buy some hard assets…
Here was my strategy: I did a bunch of research the day before on all the world’s most well-known bullion coins, that is, coins minted after the year 1800 out of 90% or more of a precious metal, and are or were a legal tender in their country of origin. I prefer these to junk metal because they are in a form that people are comfortable viewing and using as money, and they are more-readily recognizable as trusted pieces of metal bullion with metal content in amounts that are already well-established and known. They have a reputation.
In next week’s Money Monday post, I’ll discuss bullion coins comprehensively. The next part of my strategy was to spread out my purchase among different-sized coins for best ease of use as a medium of exchange. If all I have for example, is 20 one-troy-ounce silver coins, which are currently worth around $26 USD apiece, then how do I trade for something worth half or a quarter that amount to me?
Instead of being stuck with “denominations” of money that are too big in the future, I want a fair amount of flexibility in this store of value I’m building, so I got several old silver half dollars, quarters, and dimes, all legal US tender from back in the days that they made coins out of silver. Holding some of them in my hand, with dates from the late 1800s stamped into them and knowing they’ve held their value that entire time kind of blows my mind every time.
The way I see it, today you’ve got your $1, $2, $5, $10, $20, and $50 notes for a reason; in the post fiat world, it’ll be useful to have 1/20th oz. silver coins, silver dimes, silver quarters, silver half dollars, and silver ounces. In case I needed a couple post-collapse equivalents of hundred dollar notes for the real big stuff (and also to diversify between silver and gold), I also got a couple 1/20th oz. gold Chinese Pandas that had a little wear on them so I didn’t have to pay the premium associated with Pandas because collectors like them so much. I practically paid junk gold prices for them. It was totally awesome!
I just found the coin shop by Googling for coin shops in my city online. They were super helpful and answered all the questions I had during our appointment. Storing the surplus value of your hard work in the form of inflation-proof metal rather than Bernanke’s funny money isn’t hard, intimidating, or cumbersome. At least it wasn’t in my experience. And I got more of a shopping “thrill” (I think I’ve heard it referred to as “retail therapy” in an episode of Gossip Girl) from saving my money in gold and silver than I’ve had from spending it on over-priced consumer items in a long time.
It made me wonder how hard it would be to take this love of shopping and this hoarding instinct Americans have misapplied to consumer electronics and Margaritaville brand margarita makers, and channel it toward shopping for and hoarding their own savings. Wouldn’t that be a neat trick? Give people the same thrill that consuming gives them while they’re actually saving? Maybe one reason people don’t save anymore is because it isn’t as fun as it used to be. Saving isn’t as sexy when you’re just dumping your paycheck into a bank to hold in some lame account. Last week while I was buying gold and silver, saving felt sexy as hell.
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