Conservatives Defending Liberty

I have heard much lately about people trying to invest in gold in an attempt to protect themselves from the decline of the dollar. While in general I agree with the idea there are a few things people need to understand about investing in gold. If you are using it in a survival mode, there is even more you need to factor in about buying and saving gold. Its not the be all end all answer. Gold this morning is about $1165.00 an ounce, silver is just under $19.00 at approximately $18.71.

When gold went over $1000.00 per ounce people really started to take notice. The real truth is that the time to invest in gold was a few years back, the prices were in the $700.00 to $750.00 range, meaning you could have made big money if you owned a pound or two from back then. But that’s not what I’m talking about here. People looking to get gold as protection from the sinking dollar need to understand a few things most people won’t tell you. To begin with the current American eagle gold pieces began under President Reagan in 1986. These along with the gold buffalo which came out a couple years back are among the highest quality gold coins you can buy. If you are looking to gold as an investment stay away from graded coins. These coins have been submitted to grading services and are valued in part on their perfect or near perfect condition. MS-70 is perfect, and as such you will pay a higher price for that coin, sometimes much higher. For the gold investor graded coins don’t make much sense. If the economy collapses gold coins will be worth their weight in gold, get it? Having collector grade coins won’t help you much when nobody is collecting. Gold as a hedge against the dollar is based on gold value, not how collectible it is. Another thing people need to realize, the government could stop production of gold coins at any time. It was illegal to buy and own gold until Reagan changed the law in mid 80′s. FDR outlawed private ownership of gold and silver. Since the current administration feels the need to worry about individual wealth, it is not that hard to believe that people once again could be cut off from buying gold by the government. Stay away from pre-1933 gold coins, these are collector coins and bring a premium because if what they are, what they are not is something a survivalist should be looking at.

Gold coins come in various sizes, in the past two years the mint as slowed production of what it calls fractional coins, meaning coins of less than one ounce. A $50 gold eagle is 1 ounce, a $25 gold eagle is half an ounce, a $10 gold eagle is one quarter of an ounce and a $5 gold eagle is one tenth of one ounce. Here is why this is important, imagine you have gold locked in your gun safe in your basement, now for some reason you need to buy something and you want to convert some gold into cash. Remember market value is of little use should  people not have the money to buy it. You don’t want to end up trading a $50 gold eagle for a tank of gas. The smaller sized coins offer you an ability to convert them quicker with less chance of loss. For a survivalist having a bunch of $50 gold coins may be nice, but it won’t help much if you need things in a hurry. Getting rid of gold will take time, real time when big dollar numbers are involved. Being able to trade for something you need may be something to consider when buying your gold. Its like when you save money at home, your emergency money should not be made up of $100.00 bills, you may need to pay for things in a hurry but again, if you only have large bills you will end up paying way to much for whatever it is. Gold is the same way, its worth way to much to use for barter on a daily basis. When people talk about stocking up on things gold can be part of it, but don’t bank on it. Gold should be part of an overall plan, not the plan. Consider things like silver, it costs less, can be used for trading if needed and it won’t cost you a small fortune. Silver will and has risen in value in the past and it will continue rise just as gold. Also, consider things like the Maple Leaf and the Krugerrand as other forms of gold coins, not just American gold. For investment purposes, gold is still gold, for trading purposes American eagles will still be best.

For a survivalist, or for people who are just concerned about the economy and a very large looming disaster gold can be a great part of what you can save to help you get through hard times. But and this is a big but, gold is not the answer by itself. People get discouraged because they don’t have the money to buy and save gold, now more than ever. Gold should be only a piece of the puzzle, owning gold is not the only way to survive a collapse. Think of it this way, gold or anything else is worth only what someone will pay for it. If things really get bad, they could, and you end up trading things with others, gold will be the least of your concerns.  Yes gold can get you food, gas or other things but you need to consider the cost to invest in gold compared to the cost of whatever you may think you could be trading for. Maybe the items you are looking at needing could be had now for a lot less than gold. As a matter of fact, you know they can. You must understand, I am not against owning gold. What I am saying here is that for most normal people, buying gold is something that is a long term investment. For a person looking to survive a TEOTWAWKI type collapse, gold is probably not that important. Yes it has great value but so does food when your hungry. Survivalists are preparing, people who don’t think they are survivalists are preparing. There is no difference any more, most people just don’t realize it. If you have money to invest, gold is great. If you are like most people right now, you may be trying to gather your supplies one piece at a time. If you can’t afford to let your money set for an extended period of time, gold is not the best way for you to become a survivalist.