Will someone bring this old lady up to speed on gold. When I purchased gold in the early 70s, Kugerands were like 10 to 12% over spot price. Maple Leafs, when they came out, were a little more. Now I read spot price around $255 and the dealers want double that for an oz coin. That means it has to go up 100% for me to break even. This is ridiculous to my way of thinking. Would you go out and pay twice value for a piece of property and hope it would go up 100% so you could break even when you sold it? Am I missing something here?

Taz...who needs help

-- Taz (Tassie @aol.com), July 08, 1999

Answers

Taz, forget local dealers (unless you're really in Tasmania?). The best deals come thru the mail. I just checked AJPM's site (www.ajpm.com). Here are yesterday's numbers (they haven't updated yet):

Spot = $257.50 Eagles & Maples = $273 Kruggers =$269 Swiss ingots (in little plastic cards, no less) =$270

Smaller coins are also available.

(Postage is free is you buy more than 10 ounces at a time. Their service is excellent, that part I can vouch for, & no I don't work for them.)

You might find better prices if you shop around a bit, I don't know. The point is: If you're paying MORE than that, stop! I bought from a local dealer once. Never again.

-- don't (pay@too.much), July 08, 1999.

Hi Taz,

I am glad to finally be of some service to you after finding so much of your prep advice so valuable over the last few months.

Anyway, I checked out the web site that you just checked out from the prep thread. I choked when I saw it too. I think that price was due to low volume. You're supposed to call their 800 number for purchases higher than $500.

I have purchased coins from blanchard over the phone. I think they're at blanchard.com as well. I had some minor difficulties wiring funds to their bank because of a joint account and federal reporting requirements, but it was relatively painless and I was able to get my 1 oz. bullion coins for about 15% over the spot price. Recently (two weeks ago), he told me that the 1/10th oz. coins are going for 30% over the spot price.

They'll try to talk you into buying other metals as well, but they accepted the fact that I only wanted gold.

And they'll mail it through the USPS without any problems.

My email is real if you want to know why the 1/10th oz. coins are 30% over the spot price.

-- nothere nothere (notherethere@hotmail.com), July 08, 1999.

Whew!! thanks guys...I really couldn't believe my eyes. That was Investment Rarities, Inc not a local dealer. Ok...next problem. Back in the "old days" I could go to the bank and get a $20,000 cashiers check under Jane Smith, showing no ID. Send it to the seller and all accounting was done under an account #. They didn't care whose name was on the check. They got their money, I got my gold and the gov't got nada! Now, I understand that that is not the way it works. That you have to show ID to get a cashier's check (my bank requires you to write a check for a cashier's check...won't accept cash). I want to know how do I spend say $25000 on PM without the gov't knowing and my being able to use cash.

Taz.. who is getting too old for this kind of sh..!!

-- Taz (Tassie @aol.com), July 08, 1999.

blanchard won't let you do it like that at all Taz.

I don't know if anyone will these days.

It's all about drug money laundering. Anything above 10 g's and the gmen want it on record.

The guy I talked to at blanchard said that the auditors really hassle them if the names on the accounts and everything else doesn't match up.

My guess would be that a local dealer would be willing to erase the paper trail, but I doubt if any of the national dealers would do it today.

If you really want "anonymous" you're going to have to get a new identity and use that to open up an account and then use that to make the transfer of funds.

I figure that the Feds will be too busy at rollover to find me with my guns, grub, and gold (as someone recently put it).

-- nothere nothere (notherethere@hotmail.com), July 08, 1999.

Taz, that sticker shock you're getting is due to Y2K -- and dealer markup that varies with demand.

Gold prices are dropping, but not too many people are buying 100 oz. bars. Those who are using gold as a y2k shield are buying the coins, and are creating a demand for the coins that has no correlation with the price of the underlying. Dealers can now get large markups, because individuals will pay. Look at the price of 1/10th ounce coins (recommended for post chaos buying without having to make change by some people).........these are trading at over $30 each ($300/oz) with the base metal selling at $256. There's a hell of a spread.

Hey people, we have the classic case here of the large players (central banks, etc.) selling while the individual investor (us little guys) is buying. Is anyone but me concerned about this? Am I the only one who thinks gold will continue on down (other than Robert Prechter) for a while, and that the individual is going to get creamed?

-- de (delewis@inetone.net), July 08, 1999.

de,

You are not alone in the view that gold will continue on down (at least relative to such currencies as the US dollar).

Jerry

-- Jerry B (skeptic76@erols.com), July 08, 1999.

de,

Yes, gold will continue to decline, until it takes off like a rocket very late this year. The central banks are successfully driving down the price of gold for several reasons:

1) A low price will help central bank gold lessors get out of their horrendous short positions, thus preventing a massive default.

2) They are trying to dissuade ordinary people from buying the "barbarous relic." Gee, why wouldn't they want you and me to own gold?

3) A spike in gold prices will make the stock and bond markets edgy. When those markets slip -- and they will -- the house of cards will fall fast. Therefore, the central banks are doing everything possible to stave off a panic by showing the public a moribund gold market.

-- Lawrence (not@this.time), July 08, 1999.

That should be "lessees" in number one, above.

-- Lawrence (not@this.time), July 08, 1999.

Hi Taz, Perhaps you should also consider silver.5oz. bars now available at a reasonable markup over spot.I am a stockholder in this company but do not represent it in any way,it's just a good little company.It's primary business is fertilizer and heavy metals that are extracted from photographic wastes. RENO, Nev.--(BUSINESS WIRE)--June 18, 1999-- Itronics Inc. (OTC BB:ITRO) today announced that its wholly owned subsidiary, Itronics Metallurgical, Inc., will again market 5-ounce Silver Nevada Miner bars.

``The Silver Nevada Miner'' bar was originally created to commemorate the long and eventful silver mining history of Nevada. It is minted under the name ``Nevada Metallurgical, Inc.'' and is a wonderful souvenir of Nevada, the ``Silver State.'' ``We are bringing this product back because of numerous requests. Many of our past customers are collectors of Carson City dollars and another Nevada product is very attractive to them,'' said Dr. John Whitney, Itronics president.

The Silver Nevada Miner bars are produced using 99.9% pure silver. They are 2 1/2`` by 1 1/4'' by 1/4' thick and are ideal for gifts or souvenirs or to save as a precious metal. The bars will be available for purchase directly from Itronics Metallurgical Inc. in early July.

The top surface of the bar has an engraving that is an authentic reproduction of a miner in one of the famous ``square-set'' stopes of the Comstock Mines at Virginia City, Nevada in the mid-1860's. The bars are beautifully crafted making them an excellent gift item. This is believed to be the only 5-ounce silver bar made in the U.S.

``We are excited to be able to add souvenir pure silver bars to our silver product sales program,'' said Dr. Whitney. Those interested in obtaining more information about the Silver Nevada Miner bars should call Itronics Metallurgical, Inc. at 800/368-1865.

Itronics Inc. is one of Nevada's leading process technology development companies and a world leader in photochemical recycling. Headquartered in Reno, Nevada, it specializes in recycling technology development, photochemical recycling, silver refining, fertilizer manufacturing, and technical services for the mining and recycling industries.

Visit our web site: www.itronics.com

-- Desertj98 (jturner@ptway.com), July 08, 1999.

Hi Taz, I recently bought gold for the first time, and now have bought again with the price of gold dropping phenomonally.

It is important to understand that you are dealing with two major factors: 1) the literal price of gold or spot price; 2) the demand for gold coins, particularly the smaller ones, particularly American Eagles. Generally, as a hedge for Y2K in the U.S.A., its the American Eagles in 1/10 ounce that are most desired (and my gold is entirely AEs, predominately 1/10 oz).

Don't be surprised if the price of gold continues to drop due to sell-offs by England and Switzerland. I look at gold (and silver) coins as an option for use in a Y2K barter/meltdown scenario, not as any kind of "get rich quick" avenue.

For what it is worth, both times before I placed my order for gold coins, I priced around, and always found www.ajpm.com to be the cheapest. (I just now checked, they have 1/10 oz AEs going at $29.95 per.) And they are very good folks to do business with.

-- Jack (jsprat@eld.net), July 08, 1999.

Taz,

You might also consider bidding on gold and silver coins on eBay. I recently purchased (270) 1/10 oz AE's and (450) 1 oz .999 silver pieces using ebay. The good thing about them is that you bid what you think the PM is worth, not what the dealer thinks it's worth.

I payed $29.50 apiece for the AE's and about $6.25 apiece on average for the silver pieces. Takes a little more time than working with a dealer directly, but it is another option to consider.

-- Nabi Davidson (nabi7@yahoo.com), July 08, 1999.

Taz,

You should only be paying at most 3% over spot for those coins for such a large purchase. Tell them you have serious money and are a long term buyer and ask for their offer to you. Give them a ball park so that they know.

The whole check thing is about reporting requirements. If you make a check out for 10k or more then you are already 'in system' and the seller will not ask for personal information. If under that but significant they will ask for ID to fill out their paper work.

If you sell 30 or more ounces of gold in a year you are required to declare this to the federaL government.

My feeling is that if you try to hide your activities then you are 'suspicious'. Just go along with the reporting requirements. Owning gold is not illegal. Looking like a money launderer or drug lord will bring scrutiny. Be up front and do the deal in a way that they can not complain about it.

But if you want to do it quietly then take out cash every week and buy 10 or 20 ounces at the counter. Its your money and you can do what you want to with it (what they let you do).

You can also put an ad in the paper and arrange private sales. I see these where someone is offering x-times face value for silver coins, etc. You would have to think about security but cash is taken readily.

-- ..- (dit@dot.dash), July 08, 1999.

Thanks for all the info. I don't need to cash checks at the bank. I have the cash already. I think what I will do is call around and get the best buy price I can get and then head out to shop the local dealers in the city. Ask them if they can match the price and buy small lots of coins. I don't think I want to get into eagles, etc. I just want kugerands or maple leaves. And for silver I want bags of junk silver. Will report back when it happens. Thanks again, guys.

Taz...who feels blessed to be part of this bunch of concerned people.

-- Taz (Tassie @aol.com), July 08, 1999.

Taz,

There is one advantage to gold American Eagles (over Maple Leafs and Rands) which has not yet been mentioned. The one ounce AE's are denominated in dollars (50 dollar face value, if I'm not mistaken) which gives them a base value as long as our government honors dollars. Might be something to consider, if gold prices go the wrong way. This factor is also true of silver AE's and junk silver coins.

-- Elbow Grease (LBO Grise@aol.com), July 08, 1999.

For a really good description, comparison, and all round great education of the various types of gold and silver coins, go to

www.certifiedmint.com

-- Jack (jsprat@eld.net), July 08, 1999.

Do NOT buy "numismatic" coins. The prices depend on subjective grading criteria (when you buy, it's a high grade coin; when you go to sell, it's a low grade coin). The premium (fiat money cost vs. the fiat money value) is very high. If you had to sell or use just for content, you would take a tremendous hit -- poof! most of what you paid would disappear.

Numismatic or "rare" coin dealers promote that the coins they sell, being "collectors" items, will not be confiscated when the government next time demands all gold be turned in to the government. The government has become many orders of magnitude more rapacious than it was in the 1930s. Do you trust the government to now confiscate only bullion bars and coins and leave you your "collectors" items?

If you'r gonna get gold, get "bullion" coins. Gold bullion coin premiums, such as the Maple Leaf, Krugerrand, Corona, etc., can be tracked in the Wall Street Journal, Investors Business Daily, and on the many web sites.

For Silver, I'm not as definite. Get the pre-1964 coinage (bags), that's my opinion. Real silver dollars, halves, quarters, dimes. Not the plated copper of the present day.

Gold can be buried with minimal protection. Silver should be protected (e.g., capped and sealed PCV pipe). And not on your own property (unless you've got a ranch). Got maps?

-- A (A@AisA.com), July 09, 1999.