I’m not sure if that is a good title, but I am using it anyway… Several months ago, I priced silver, on a per ounce basis. It was $31.00 and change. I thought, Hmmm. I should buy some silver. I disregarded… I few weeks later I looked at the price of silver again. (I don’t monitor it every day), and it was up to 38.00 and change. A couple weeks later, it is up to $43.00 and change. I am an idiot. The price is going up and I could be buying small amounts and hedging my bet on pricing. Well, I looked yesterday, and Silver is selling (street price) for roughly $51.00 and change per oz. Sigh, I bit the bullet and bought a couple of ounces of silver, and have made a promise/plan with myself to purchase a couple ounces of silver every time I get my paycheck. It’s not like I won’t be able to resell it, and it’s not like it is ever going to be worthless. In addition, several states are looking at minting their own coinage as well as making precious metals legal tender again in their state. Utah, has already taken steps and passed legislation making it legal to use silver and gold as currency in that state. Several other states are trying to follow the same path. If this is the case, then I certainly needed to think harder about precious metals. Will they do that in NY, NJ, PA or other surrounding states near me? Not sure, but if they do, then I want to be be able to use the coins if I have to. If I never have to, then that is fine, I will own some physical precious metals that I can pass on to my family or my nephew in the future.
What is really to come of money? Are we really destroying our currency?
So, where did I buy my silver from? Well, honestly, I wasn’t sure who to buy from or who to trust. So, that said, I sent an email to Jack Spirko over at The Survival Podcast some time ago, since I know he had spoken several times about owning silver in his podcasts… Jack responded in minutes pointing me towards the organization he uses called Silver and Gold Shop (Click the link to go to their Website). The small shipment is on the way, and I am looking forward to starting my collection of silver…
Now for the metaphysical behind potentially having to use that silver as currency… Hmmm… First, if an oz, is potentially going to be worth $100.00 or more in the future, how do you break it down for smaller denominations? Well, I have been thinking about this. There are bars you can buy that can be cut into quarters (see the picture to the right further breaking down the silver and being able to use it for smaller items… On the flip side of that, there is also “junk silver” that you can purchase that would give you much smaller denominations to work with. Here is the downside of junk silver as I see it. First, people see it as the same currency that we use today. So, if you have a 1964 quarter which, I believe is 90% silver and worth (I believe) around two dollars ($2.00) today (someone please correct me if I am wrong) the store keeper that is taking that 1964 quarter may only see it as 25% of $1.00 if he or she does not know the actual worth of that piece of currency. It is an interesting conundrum because we will not know until we must use that coinage to purchase goods and services…
In the end, I feel good about buying the Silver, regardless of the currency situation. It is an investment, and as Jack Spirko says, he feels better giving a shiny new silver dollar to his nieces or nephews than a toy at holiday time or for a birthday anyway. I think I agree…
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I’ve always said to stay away from part silver quarters and dollars.
As for pure silver as tender I wonder how that can work since the value for a up and down all the time. Example: if silver is at $50/oz and an item is priced at $50 one ounce silver should buy it. But if silver goes up or down does that mean the item gets repriced? Do stores have to have live comex feeds?
And there is risk to the receiver if as some feel gold and silver is in a massive bubble then a silver coin today could be half value tomorrow. Guess you can say the same about the Dollar too.
MasterPo — These are my same concerns… However, I am thinking that something that is worth more than the denomination of money is worth makes sense to have on hand in the event it is needed… I am not investing tons of money into the silver, just having some on hand for the “what if” situation… If the prices continue to escalate then it may slow down the purchase and inventory, but if they stay relatively the same and escalate later, I win. If they go down, I hold on to them just in case… It is all relative to me at this juncture. The price seems to be going up so I am sort of kicking myself for not buying a small supply earlier.
I guess it is a different way to think. Instead of pricing things in terms of dollars, what would be the price in terms of silver. Imagine going to the store and the loaf of bread is 0.07 oz silver today, tomorrow and next week. You never see the price in USD nor does the price of that loaf of bread change as the silver / USD rate change. If merchants go to silver based pricing, that is what the world would look like.
Another way to look at it is to price the stock market in terms of silver instead of dollars. If this is too much, imagine you were a european and priced everything in Euros. They don’t care what the euro/dollar exchange rate is, their life is based in euros.
Interestingly, businesses are taking more forms of payment in foreign currencies these days. No one says you MUST take US Currency. It is not law that you have to accept it as a merchant. If you have an internet connection, you can simply do a lookup for the Euro, Pound, Ruble, etc. and take the currency denomination. You can then exchange it at your bank assuming you do not use a branch or deposit it into your bank… Using a currency exchange service usually takes a percentage of your currency and I discourage it… The Euro is weak, but is still currency… Silver, Gold, Copper, Platinum, they are all universal. Everyone knows what they are. As long as “I think,” you have the latest spot price, you will know what your metal is worth. Then it becomes, how badly do I want to trade my silver, gold, etc. for that product, service, currency…
Well last I checked a silver dime was worth about $3.20 ! and quarters about $6. Better check your sources for current price. Enjoyed the article!
Scottishblacksmith
Appreciate the update. I was pretty sure my number was wrong, and used it as an illustration. I think the Junk silver is going to be tough to use because it is what people recognize as a standard denomination…
Great post! I don’t have any silver on hand. I think as the $ keeps declining, silver might be a smart bet. I’ll look into it.
Interestingly, the place I ordered mine from is now out of stock for a week to two weeks, and I am finding other resources are out of stock as well…
People are panic buying. Now is time to either sit back and wait or *sell* to them.
I am not buying a damn thing until things calm down.
One thing to think about is making your silver buying transaction annonymous and untrackable. If you do over the internet, it is trackable. It is also more noticeable if done in large quantities. I believe the sale has to be reported if is $5000 or more or if the pattern is strange. My plan is to get cash and buy $200 — $500 at a time.
Of course, I think we are in bubble land, so I am going to start slow!
I am starting slowly… I do not have 5,000 dollars to whack down on silver, nor would I want to all at once. I would rather take 1000 — 2500 of that money and put it in an emergency cash reserve in a safe somewhere, versus a possibly hard to use currency such as 50 — 100 dollar silver rounds… As I have stated, people will use cash, in my opinion, until it is depleted and then they will turn to those other things, whether precious metals, foods, etc. to use as currencies…
Otoh, if you think things aren’t going to get any better soon or even worse hold will go higher until something significant in the world changes I dont see a popping bubble in gold or silver.