Picture this: A guy drives into a gas station with his new Mercedes, and fills the tank with gas. He then checks his oil, and discovers it’s a quart low. He goes into the station, and asks what kind of oil they carry. “Well, we’ve got Quaker State and Pennzoil for $2 a quart, and we’ve also got some re-filtered oil a guy back in the woods sells for a quarter a quart. He calls it, “Bill’s Oil.” Would the guy order “Bill’s Oil,” or put in a quart of Quaker State? Silly question, huh?
A woman is in the super market, to buy her weekly groceries. Would she buy “Charlie Schmidlack’s” canned pineapple, or “Dole?” Would she buy unknown brands of anything? Probably not. Who would buy anything that is important, or to be taken into one’s stomach, unless they were awfully sure of its quality and genuineness? “Joe Blow’s White Lit’nin” or “Jack Daniels?” Nocturnal Airline tires, or Goodyear? Captain Eddie Ricketyback’s Airline, or American Airlines? And on it could go, but the point is made, I hope.
Sometimes it’s difficult to tell counterfeit paper currency from genuine, because both look about the same. But if there is a label on something, it is an easy choice to make, be it food, transport, or precious metals. Below, is the wrong way to buy silver.
Why is it wrong? Because even though its weight is stamped on it, how do you know it’s the correct weight? How do you know how pure it is? Is it .999 pure, as any silver bar or round must be to make it saleable, or is it .50 pure? If someone tries to sell you a bargain, it usually isn’t. If someone said that he’d sell you the above bar for half the spot price of silver, would you buy it? I wouldn’t. Everything one buys, will eventually be eaten, sold, or thrown away. If you are buying silver for an investment, how is the above a bargain, at any price? Why? Because when you decide to sell it, the buyer would probably like to know what he’s getting, and the above bar doesn’t tell anyone anything, except it is silver probably. Maybe it is half lead. Who knows? Bad buy for an investment. Brand names are very important, and especially things that are consumed, or are for investment. The photo below is of a Johnson-Mathey 100 ounce silver bar. It even has a serial number on it. It has the famous J-M hallmark. A “hallmark” in precious metals, is the same as a brand name. Johnson-Mathey makes these bars in Salt lake City, and its reputation is flawless. Good way to buy silver! Want a smaller bar? Try the 10 ounce bar from A-mark, (also below) an equally fine hallmark, made in Idaho, and these bars are “extruded,” meaning they are not rough in texture, but shiny. The 10 ouncers are even individually wrapped in plastic, so they won’t tarnish, and come in boxes of ten. Easy to store, and beautiful. Same price as the JM’s, and I usually buy these when I buy silver, because of their beauty and ease of storage.
The cheapest way to buy silver, and one which has no hallmark problems, are the “bags” of US silver coins. Each “bag” contains $1,000 face value of quarters or dimes. Halves are $50 extra. In other words, 10,000 dimes, 4,000 quarters, or 2,000 halves, in 90% US silver coinage, which constitutes a “bag.” No one has ever doubted “bags,” as far as quantity or purity is concerned. As I write this, bags (715 ounces of pure silver) are a mere two cents over the spot price. They are heavy though, and difficult to store. Half bags, add $50 for the re-bagging and re-counting. I know bags are the cheapest way to own silver, but I like ten ounce bars better, due to their beauty and ease of storage. I’m not going to lug a heavy bag out of my safe to photograph it. Too heavy! Imagine a 56 pound sealed canvas bag, and that’s it.
Then there are one ounce silver “rounds,” as they are called. Below I show two such ones. The US Silver Eagle, which is one ounce of .999 pure silver, dated, and made in West Point New York. It looks a lot like the old silver dollar, but has a lot more silver in it. The other is a typical silver round, also one ounce of .999 pure silver, undated, made in Idaho and is a dollar cheaper for the same amount of silver. Both are easy to sell, and universally recognized. You decide.
Gold? The way NOT to buy gold is shown below. This is called a “button,” and I bought it from a Silverton Colorado miner, years ago, who had his own little back yard smelter. The mines are all closed and sealed, so there are no more miners to “high grade” (steal from the mine) ore in their lunch pails when they leave shift. How much gold is in the button? I have no idea. How much does it weigh, and what purity is it? Beats me. Steer clear of this kind of gold at any price, just like you would rather have a Coke or Pepsi, rather than Ochy Bopp’s soda. Notice how small it is, compared to a stamp. They come in all sizes, but steer clear of them.
The way to buy gold, is in the form of a bar, which has a recognized hallmark, or a coin which is well known, easily identified, and sold. The bar is a Credit Suisse bar, $8 over spot, and is sealed in plastic with serial number on it. No question about its being genuine. The coins are the American Gold Eagle, Canadian Maple Leaf, and South African Krugerrand. The Krugerrand is the cheapest one-ounce coin, usually about $6 over spot. The Gold Eagle is the most expensive, usually about $15 over spot. Why? Because the US government sets the price of the Gold and Silver Eagle. The Krugerrand has been around so long, that the market sets its price. The Maple Leaf, at $12 over spot, is the least desirable one-ounce coin to me, for two reasons. (1) It has no alloy in it, and is very soft and easily damaged, which will take away from its value when being sold, and (2) its “spread’ is too large. The “spread,” is the difference between what you buy the coin or bar for, and what you can sell it for, when the time comes. The spread on most coins is about $6, but on the Maple Leaf it is $12. Why? I don’t know, but it has always been that way, so I steer clear of “Maple Leafs.”
There are two absolutely beautiful coins, which have been around for longer than any of the rest, and which are the cheapest way to own gold, without any exceptions. These are the Austrian 100 Corona, and Mexican 50 Peso. Both are a mere fifty cents over spot, and their spreads are the same as other coins. The only catch, is that they are not one ounce. The Austrian 100 is .9802 of an ounce, and the Mex 50, is 1.2057 ounces. Still, they are beautiful, easily sold, and are the most gold for the least dollars. They aren’t on my web site, because they aren’t that plentiful, since they are not “re-strikes,” but original.
Whichever you choose, be sure you get a good hallmark, and of course protect yourself.