These are the
most frequently asked questions that I get. In Phoenix, I spoke
from memory on the following topics, and my answers went something like this:
Before I get started, let me introduce the topic of Silver with one
argument on why you need silver. If you look at a 600
year inflation adjusted price chart for silver, silver is basically free
today. In fact, the form of silver in silver dimes is below what it
would cost to mint them today even if you made 200,000 of them, which would
be about $2 per dime, and the cost would be the same if you privately minted
zinc or copper, and you can get those dimes for $1 today, which means that
the underlying silver is free. It does not get any cheaper than free,
so silver is the best value that there is, and I really don't need to say
anything more than that. But people have plenty of questions about
silver, either just before they buy, or as they accumulate, and
these are the popular questions people ask me.
Why are you selling
silver if you are bullish on silver?
Let me answer
with another question. How do all bullion dealers and coin shops stay
in business? They re-purchase the silver. In my case, I've
recognized that the public is no longer selling silver in enough quantities
to meet or exceed demand, and so I'm having 1000 oz. bars minted into rounds.
I don't think this was a good business in the last 15-20 years when
there were more silver sellers than buyers.
How do you make
money selling silver?
I buy silver in
1000 oz. bars that are cheaper by the ounce, and create value by minting
rounds that may cost more per ounce, but are more affordable, more fungible,
so that coins can be easily exchanged, and can be used for exchange.
How do I make
money selling silver?
My readers can
make money by buying silver from me, and selling it at ebay
in smaller quantities, or anywhere else, such as in a coin shop. Often,
people are willing to pay more when they can pay for silver in person, with
cash, because such a transaction is more anonymous and is free of any chance
of default. This is why I ship "same day" to avoid defaults
for my customers, even if my suppliers default on me, my customers will get
the exact silver they paid for.
Where can I get
You can buy
silver from me and other sellers at ebay. In
larger quantities, I sell at www.seekbullion.com along with
several other dealers. If you want to buy over 100,000 oz., you would
do well to order directly from a refiner. Minimum order size from Penoles is 300,000 oz. at 15 cents over spot prices, but
that's for 300 of the 1000 oz. bars.
Where can I
The best place
to sell your silver today is ebay. Often, you
can get more at ebay than from a dealer.
How can you
tell that silver is real?
This is a
common question. Silver is actually easier to tell if its real than paper money! Very often I see cashiers
take a yellow pen, or ask a manager, to see if a $100 bill is real.
difficult to counterfeit silver coinage. If it were easier to do so,
don't you think our dimes and quarters today would look and feel and sound
more like silver?
Our coins today have that copper slice in the middle, and are lighter,
and don't sound the same as old 90% silver coinage dated from 1964 or
We know our
silver rounds are real also by the weight, sound, and feel of them.
We've visited the mint, and seen the production lines, and know it's silver,
as the mint starts out with .999 fine silver bars. We've cut them open
to check, and weighed them.
There are two
tests for 100 oz. silver bars.
The first is
the ring test. Put a silver bar on a glass counter top, or suspend it
in the air with a piece of string, like dental floss. Bang it with a
wooden spoon. It will ring, because silver has a great resonance, which
is why they used silver to make musical wind instruments like trumpets.
The poured bars do not ring as well as extruded machined bars will ring.
The second test
is the ice test. Push a cube of ice into the bar. Silver is the greatest
conductor of heat, and so the latent heat of the bar will quickly move into
the point of contact with the ice, continuing to melt it quickly, in about
Which kind of
silver is best?
I like the
cheapest form of silver available. I have never liked Silver Eagles,
because the premium is always too high. I've always bought the
"generic rounds", because you get more silver for your
dollar. I also like the 100 oz. bars, when they are cheaper, which they
What do you think about
rare coins? Should I buy them? And how can I sell them if I have
I think rare
coins are like idols. Too much value is placed on the image, and not
the substance. Don't buy them. If you spend $300,000 on a certain
kind of rare coins, you ARE the market for those rare coins. There are
so many scams with rare coins. They will sell junk coins as rare coins
for a 100% premium over spot, at twice the silver value, and then buy it back
at spot, for 50% less!
Once, I bought
some old Roman coins, as gifts for my friends, but I spent about $200, and
it's certainly not suitable for long term investment money.
If you have any
rare coins, build up a seller's reputation on ebay,
first. Then sell off your rare coins at ebay,
having carefully described exactly what they are, and having consulted a rare
coin book. If it's not worth your time to do that, then it's likely not
worth anyone else's time either.
In the Bible,
Samuel warned the Israelites who wanted a King, what a King, and governments,
will do, which is to confiscate everything, from the best people to the best
biggest form of confiscation is through inflation and taxes.
The U.S. 2009
Federal budget is about $3 trillion. The size of the annual investment
market for silver is about $1 billion. The U.S. budget is 3000 times
larger than the silver market.
have to be 3000 times higher in value in order to be meaningful to the annual
If they need my
silver to balance the budget, let them confiscate! I'll give them some
of it. At least it would mean that my silver would be worth
significantly more than it is, such as maybe up to $10,000 per ounce!
recommend any storage programs?
suggest you get a safe, or wall safe, or hide a safe in the walls of your
house. Bolt the safe down, as the instruction manuals suggest.
Safes are safe, it's why they call them safes.
Don't give anyone else the combination.
If you must
trust a third party, then put a safe into the homes of the people you plan to
leave your money with when you die. Give them the combination upon your
death, through your lawyer.
All third party
storage programs are targets of government confiscation if there ever
was a confiscation order.
point of precious metals is that they are very hard to confiscate, because
they are off the grid, off the books, hidden, unknown, and you can hide them,
and protect them. It is 10,000 times easier to confiscate through paper
money, and so they do. The will never go house to house demanding
metals, and even if they did, you could say you sold it, and if they still
bothered to look they should not even find it, because you should have
it well hidden.
How do I invest
my IRA money into silver?
There are some
IRA storage programs that will hold silver for you, but I don't trust
them. I would not trust any major bank or brokerage firm, certainly not
anyone who was a member of the LBMA, which includes all major western
There is only
one fund that I would trust, and that's CEF, the Central Fund of Canada,
which you can easily buy like any stock, the ticker symbol is CEF. They
are like a company that simply puts 95% of their assets into physical silver
and gold, at a ratio of 50 oz. of silver to 1 oz. of gold, and they have the
But in the
event of total government melt down from hyperinflation,
that would probably not be safe, so it's probably best to look at that
only as a temporary solution until you can get physical, or look at
CEF as a diversification. If you have all your wealth in your IRA,
stop contributing, or take some out early.
How do I avoid the VAT
(value added tax) on silver in Europe?
The VAT is
grossly unfair, and ranges as high as 17-20% on silver in Europe.
CEF is also
another way to avoid the VAT.
Another way to
avoid it is to buy government issued coinage, such as Eagles, Maples,
Philharmonics, or Aussie coins. However, those kinds of coins today are
often far higher than a 17% premium, more like 25% or more, like they cost
I sometimes retort that if people don't like paying such taxes, maybe
they should consider a revolution. We, here in America, had a
revolution when the King of England dared levy us with a 1% tea tax, so
I'm thankful that we won that war so that we would not have to pay such
What about Capital gains
popular belief, a "investment guy"
cannot advise you on taxes, it would be illegal for me to do so,
despite all I know. Only your tax attorney can answer your
questions. You see people like Suze Orman answering tax questions all the time, but that's a
violation of the law, and I would NEVER advise anyone to violate the LAW,
because if I did that, I could go to jail!
While I cannot
talk about taxes, it remains perfectly legal to talk about philosophy and
So, on a
totally unrelated subject, let's think for a moment, philosophically
If a tree falls
in the forest, and if nobody is around to hear it, does it have to file a
1040? Of course it does, trees can fill out forms like anyone else,
The point is
that some kinds of silver sales are non reportable
events, and other kinds of silver sales are. If you are buying almost
any kind of paper silver through any major brokerage, it's generally a
reportable event. If you pay in physical cash, generally not
The Bible also speaks on taxes in many places. Read the book of
Judges, it uses the word "tribute".
Jesus was asked
a trick question about taxes once, so that he would be damned if he answered
it either way. They asked, Should we pay taxes to Caesar or not?
If Jesus said, "no", he would be in trouble with Caesar. If
Jesus said "yes", he would be in violation of scripture, and not
So Jesus gave a
trick answer. Jesus answered, and said, "Show me a coin" and
then asked, "Whose image is on the coin?" They answered
famously said, "Render Caesar's things to Caesar, and God's things to
Many use that
to say that Jesus said to pay taxes.
question Jesus asked before his answer was not "Who does this coin
belong to?" For example, just because our $5 bill contains the
image of Lincoln, nobody thinks the note belongs to Lincoln or the
government, instead, we all know it belongs to the person holding it.
The Bible is
clear that God created the entire world, and thus, it all belongs to Him, all
the gold and all the silver belong to God. So, we are to give what
belongs to God to God, that's the real answer to the question.
the proper allocation / HOW MUCH silver should I buy?
I had 20% of my
assets in silver, as a protection to balance the risk of the silver
stocks. Eventually, that allocation rose to about 70% of my portfolio,
because the stocks did so horribly.
for me, was great insurance. I would now recommend that people put as
much into silver as they are comfortable with, up to nearly 100% of your
assets, but not all, as, of course, you need cash to buy things.
If I just want to hold
long term, when should I sell?
Right now, the
era of cheap silver has been created by the fact that no nation on earth is
using silver as money. It might be wise then, to sell silver when most
nations on earth return to using silver as money.
Another time to
sell is if you can find any other asset for selling at a price that is
basically "free". Silver is free today, if you can find it in
the form of silver dimes. To make brand new 1/10th oz. silver pieces,
would cost about $2 dollars per coin. Dimes today cost about $1 per
coin, which is less than the minting cost would be, and the silver itself was
For a long
time, when silver was issued, the premium on silver coinage was 500%.
In the great depression, the U.S. government bought silver at 29 cents per
ounce from the miners, and turned 1 troy oz. of silver into $1.40 worth of
coinage, since $1 of coins contains .72 of an oz. of silver. Thus, that
would be like if the U.S. government was buying silver at $10/oz., and sold 1
ounce silver Eagles for $50 each!
The point is
that when silver is money, the value is much, much higher.
afford a 100 oz. bar when silver goes way up?
I'll say it
again, another way. When silver is much much
higher, it's probably because its
more likely to be used as money. When something is used as money, a
circulating medium of exchange, it's very easy to spend it, or trade
Today, at the bottom
of the silver market, there is often only one good bullion shop in any major
city. At the top of the silver market, perhaps 1 person in 50 will be a
bullion trader, just like 1 person in 50 was a real estate professional in
Florida during the top of the real estate market.
Thus, you will
have much less trouble buying and selling silver at the top of the market,
Is there a silver
There are at
least two proofs of a silver shortage.
are no longer using silver in the currency. Thus, that's proof that
they have printed up too much currency, relative to the silver, so there is a
shortage of silver compared to the money. Whether people who have that
fraudulent currency are currently wise enough to try to buy the limited
silver available, or not, is a separate question, but it's an axiom, a fact,
that there is not enough gold or silver at present prices in the event that
people need protection from currency devaluation, and it's only a matter of
time when that need becomes self evident to a large
portion of the population.
have position limits on longs in the futures markets. Thus, that's
proof that they have issued too many short contracts to deliver silver, and
they don't want to be held accountable to actually deliver all the silver
they have promised.
A third big
factor is that a lot of bullion traders survived the bear market in silver by
dealing in silver while refusing to hold it, or by taking on a silver
debt. A silver debt can be "profitable" in a declining
market, but leads to bankruptcy in a rising market. That kind of
business practice creates a shortage of silver for those entities who are
short of silver, and that was standard practice of all the major banks, and
many major mints and bullion traders in the last 40 years or more.
remain available for sale because new silver is being produced each
year. The market is open enough and free enough, that people can
buy these 1000 oz. bars, and prevent them from going to the banks who need them to honor their
How are silver
Banks sell more
silver than they have. People who trust promises more than delivery
have their potential silver demand diverted into paper promises,
instead. ETF's, Futures Contracts, Silver Certificates, Bullion on
account, bullion on deposit, all of those are probably not backed by real
But the biggest
manipulation is paper money. This diverts "demand" away from
silver, into paper, all the same.
How long can
they manipulate? / Can't they manipulate forever?
break down when deliveries cannot be made, and when people lose faith in
fraudulent currencies. This is not a function of price, it's a function of running out of silver!
Won't the CFTC
stop the manipulation if there was one?
The CFTC is complicit. They
are a willing participant in the silver manipulation. As a government
agency, their job is to lend the "aura" of respectability to the
game of government confiscation. Their job is actually the opposite of
what we think it should be. Their job is to prevent longs from
accumulating too much silver -- that's what they call manipulation.
When there is
too much paper money, the key problem is that any one of a thousand different
billionaires, from Martha Stewart to the Olson Twins to Oprah Winfrey could
buy up all the silver, and begin to destroy the value of the dollar by
revealing the inflation of the currency that has already happened.
That, they would call, "manipulation". I would call that
freedom. They, on the other hand, think freedom means the freedom to
sell promises to deliver what does not exist.
Won't high precious
metals prices bring chaos to society?
metals prices bring civility, not chaos.
metals prices are manipulated too low, that is the cause of the chaos we see
prices are too low, it destroys the mining industry. The mining
industry for gold and silver create by byproduct
metals that modern civilization needs to thrive, such as copper, zinc,
molybdenum, lead, and all sorts of other metals that are found as byproducts of all sorts of mines.
If very wealthy
investors are not allowed to buy silver, they do other more dangerous things
to the world economy, such as trying to corner the copper market which causes
even more chaos with wild price fluctuations that destroy capital
investments, and turn investors into gamblers who try to chase the latest
investment fad, rather than getting down to productive enterprise.
investors may try to corner the food markets and hoard excessive amounts of
food, which can cause many other less well off
people around the world to begin starving.
metals prices increase the value of the existing stock of precious metals,
and thus, create capital value. And unlike paper money, silver and gold
cannot be created to excess.
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