How To Recover Gold And Silver From Scrap

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If you’re reading this article, you’re probably a gold bug, or maybe a gold digger. Either way, you probably don’t know that in 100,000 cellphones there’s about 2.4 kilos of gold to be collected (as in recuperated) by a competent gold digger.

Yes, I know – 100,000 cellphones is quite a lot of old hardware. Besides gold, you’ll also find 25 kilos of silver and more than 900 kilos of copper (that’s almost a metric ton).

Considering the fluctuation in market prices, all that stuff combined makes for a cool quarter million dollars, give or take. The problem is, where on Earth can you get 100,000 cellphones and how can you get the gold out of those darn circuits?

How to Recover Gold from Electronics

Recycling electronics can be a lucrative business provided it’s done on an industrial scale. For regular folk, this kind of enterprise is quite difficult and time consuming, especially if not done nice and proper. Now, if you want to make your own personal scrap fortune, today’s your lucky day, so keep reading, I’m giving pearls here folks!

Besides cellphones, gold and other precious metals can be found in almost all types of electronic circuits, ranging from computer main-boards to processors and what not.

The idea is that instead of throwing your old gear in the garbage, considering that there’s a small amount of gold in all types of circuits, how about putting that gold in your pocket instead of making some scrap metal company rich?

Phones, laptops, cameras and the like are packed full of gold-plated circuit boards, due to the precious metal’s excellent conductibility. Even scanners and printers have silver, gold, copper, and sometimes platinum inside their guts.

Besides being pretty expensive, as in precious, gold is a highly conductive and pliable metal which was used for thousands of years by humans as a highly valuable commodity, as it retains its value better than almost any other commodity.

Until Nixon nixed (pun intended) the Bretton Woods system in 1971, even the US dollar was backed by gold. Since then, the dollar lost a lot of its value, i.e. $1 in 1971 had the same purchasing power as $7 today (official figures), but take a load of this: back then an ounce of gold was $35, now it’s like what, $1200 (it was almost $1900 at some point)?

So, you do the math and ask yourself if scrapping gold from old electronic gear is worth your time and effort. I am digressing – of course it is!

Let’s recap: due to its excellent properties, gold is the material of choice for manufacturing various electronic parts in computers, cellphones and what not.

Removing the gold from scrap parts requires access to various equipment and it’s a pretty complicated process. However, if you’re well-armed with the right tools and knowledge, you can extract, refine, and maybe sell scrap gold, provided you have enough raw materials to extract it from.

As a general rule of thumb, considering that you’ll have to deal with highly corrosive acids, you should perform all these operations outside and always use protective gear, such as gloves, goggles and even a respirator.

Start your own woodworking business – $9500 per month guaranteed! 

Here’s a short list for starting a gold recovery enterprise:

  • rubber gloves
  • goggles
  • a rubber apron
  • hydrogen peroxide 3% from your local pharmacy
  • muriatic acid 31% (it’s available at hardware stores)
  • methyl hydrate (this is basically 99% methyl alcohol) available at automotive supply stores or hardware stores (it’s used for fuel line antifreeze)
  • a couple of large glass-made containers (a coffee pot would do the trick.
  • a funnel filter (a drip-coffee filter)
  • a stir stick made of plastic or glass
  • a blow torch powerful enough to hard solder
  • an accurate weigh scale (at least to one tenth of a gram)
  • borax
  • clay bowls or anything that has a melting point above gold
  • a measuring cup
  • and of course, a lot of scrap electronics.

The general rule is that you should collect any type of electronic scraps which are prone to contain gold inside, including computer processors, jewellery, gold tooth crowns, and old telephone wiring with an emphasis on outdated electronics, which may contain parts with a higher level of gold than modern ones.

Video first seen on indeedItdoes

In the first step, you must sort the gold into gold-plated parts: circuits which require cleaning, gold fingers, gold plated pins and so forth and so on.

Before working with chemicals, don’t forget to put on your safety gear.

In the second step, you must put the clean circuit boards and the gold fingers  inside the coffee pot. Using a different container, mix one part hydrogen peroxide with  2 parts muriatic acid and add the mixture to the coffee pot until it just covers the gold-containing stuff inside (gold fingers for example).

You’ll have to wait for about a week for the process to complete and don’t forget to stir your concoction on a daily basis.

After 7 days have passed, it’s now time to collect your gold. You’ll see that the acid has darkened and there are flakes of gold floating around inside the coffee pot. If you pour the acid through the coffee filter, the gold flakes will be captured by the filter.

Save the acid though, don’t dump it. The remaining circuit boards/gold fingers must be checked out, the clean parts thrown away, and the uncleaned parts saved for re-dipping.

Now, pour some water through the filter and then flush using methyl hydrate to clean it.

In the next step, you’ll have to add borax to your “mined” gold. Borax works by reducing the melting point of gold from its regular 1063 Celsius. By adding some borax to your cleaned gold flakes, you’ll be able to melt your gold out of the heavy mineral concentrate to salvage it.

Next you’ll have to heat the clay bowl (don’t worry if it splits or cracks) and add borax. When the borax melts, put the gold flakes in too and add more borax, then heat it continuously until you end up with a nice bead of gold. Let it cool and weigh it. There you have it, your own gold from scrap electronics.

That’s one method, the simplest actually.

Here’s an interesting tutorial about the top 10 most valuable computer processors, as in the ones with the most gold inside for recovery by weight counted down.

Video first seen on eWaste Ben

Here’s a detailed hard drive tear-down video tutorial, teaching you how to look for precious metals (gold, silver, palladium and aluminum) inside your old hard drives.

Video first seen on Rob The Plumber

Good luck and scrap hard!

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This article has been written by Chris Black for Survivopedia. 

Is Stocking up on Gold and Silver Smart?

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Written by Guest Contributor on The Prepper Journal.

You have a gold coin that you paid $1100 for back when the world was still somewhat sane. Do you offer that coin for a loaf of bread? 100 loaves or a years supply?

The post Is Stocking up on Gold and Silver Smart? appeared first on The Prepper Journal.

When the Economy Collapses, What is “Money”?

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It seems like every year there is talk of an imminent economic collapse. 2017 is no different. With the economic deck stacked against Trump, I don’t have much confidence that he, alone, can turn things around. After all, the national debt is completely out of control and has doubled in the past 8 years. Sooner or later, the piper must be paid and preppers who breathed a sigh of relief when Trump was elected, may want to think again, as I wrote about in this article.

So, with continued predictions of economic collapse, I asked Mac Slavo over at SHTFplan blog to share with my readers his insights into how a family might survive following a collapse of our money system.  Here is his answer, in his own words:

Economist Mike Shedlock defines money through the eyes of Austrian economist Murray N. Rothbard as, “a commodity used as a medium of exchange.”

“Like all commodities, it has an existing stock, it faces demands by people to buy and hold it. Like all commodities, its “price” in terms of other goods is determined by the interaction of its total supply, or stock, and the total demand by people to buy and hold it. People “buy” money by selling their goods and services for it, just as they “sell” money when they buy goods and services.”

What is money when the system collapses and the SHTF?

In disaster situations, the value of money as we know it now, changes, especially if we are dealing with a hyperinflationary collapse of the system’s core currency. This article discusses money as a commodity in an event where the traditional currency (US Dollar) is no longer valuable.

In a collapse of the system, there will be multiple phases, with the first phase being the “crunch”, as discussed in James Rawles’ book Patriots. The crunch is the period of time directly preceding a collapse and the collapse itself. Too often, preppers prep for “the crunch” and fail to realize they will have to be ready to survive for many months, if not years afterwards.

Traditional Currency

Initially, the traditional currency system will maintain some value, though it may be rapidly depreciating in buying power. For those with physical, non-precious metal denominated currency on hand (paper dollars, non-silver coins), spending it as rapidly as possible is the best approach. In Argentina during that country’s many economic collapses, if someone received a check in payment, the immediately rushed to cash it, knowing that it was losing its value minute by minute. This short Kindle document, written by a survivor of that time in Argentina’s history, details that event.

It is during the crunch that ATM machines around the country will run out of currency as people aware of the rapidly devaluing dollar will be attempting to withdraw as much money as possible. This immediate increase in money supply, coupled with the population’s general knowledge of the currency depreciation in progress, will lead to instant price increases for goods, especially essential goods.

And, forget the classic “run on banks” that have been depicted in old movies, including “It’s a Wonderful Life.” A modern day “run” simply won’t happen. Rather, the electronic system that moves money from a billion different points to another billion points will simply be turned off. In a split second, all access to funds will cease, and there will be no point running to a bank to get cash, since banks will be in lockdown mode and, in any case, they hold very little actual cash.

If your physical cash has not been converted into tangible assets, this would be the time to do so. Acquiring as much food, fuel, clothing and toiletry items as possible would be the ideal way to spend remaining cash before it completely collapses to zero, as it did in the Weimar inflation in 1930’s Germany or Zimbabwe’s hyperinflation in recent years. This family survival and prepping manual has in depth advice for preppers at all stages.

Precious Metals

During the initial phase of the ‘crunch’, precious metals will be a primary bartering tool, but this may not last long. The old survivalist adage, “You can’t eat your gold,” will become apparent very quickly. In a total breakdown of the system, food, water and fuel will be the most important tangible goods to acquire, and for beginners, this list of where to start with food storage is invaluable.

Consider someone who has a two-week or one-month supply of food on hand. Do you believe they would be willing to part with that food for some precious metals? The likely answer is no. There will be almost no bartering item that one would be willing to trade their food for once it is realized that food supply lines have been cut. At that point, it’s anyone’s guess as to when supplies, food and otherwise, will be replenished.

That being said, since most will not barter their food, not even for fuel, the next recognized medium of exchange by merchants, especially those selling fuel, will be precious metals. For the initial crunch, silver coins, especially recognizable coins like 90% silver quarters, dimes and half dollars, along with one ounce government mint issued silver coins, like US Silver Eagles, will be accepted by some, probably most, merchants. For those trying to flee cities to bug-out locations, silver coins of the aforementioned denominations may be a life saver, as they can be used to acquire fuel. While it’s recommended to have gold as well, the issue with gold is that its value is so much higher than that of silver. Breaking a one-ounce gold coin into ten pieces just to buy a tank of gas will not be practical. It is for this reason that having silver on hand is highly recommended. Packing at least $25 – $50 worth of silver coins in each bug-out bag would be a prudent prepping idea.

In a total SHTF scenario, silver and gold may eventually break down as a bartering unit, as contact with the, “outside” world breaks down. One reason for this, is that the fair value price of precious metals will be hard to determine, as it will be difficult to locate buyers for this commodity. As well, the vast majority of people will not have precious metals of any kind for barter, so other forms of currency will begin to appear.

This, however, does not mean that you should spend all of your precious metals right at the onset of a collapse. Precious metals will have value after bartering and trade is reestablished and once the system begins to stabilize. Once stabilization begins, the likely scenario is that precious metals will be one of the most valuable monetary units available, so having plenty may be quite a benefit. At this point, they could be used to purchase property, livestock, services, and labor.

Water as currency

Water is often overlooked as a medium of exchange, though it is one of the most essential commodities for survival on the planet.

For those bugging out of cities, it will be impractical to carry with them more than 5 – 10 gallons of water because of space limitations in their vehicles. Due to the weight of water, 8 lbs. per gallon, it’s very difficult to carry much if getting out on foot. Thus, having a method to procure water may not only save your life but also provide you with additional goods for which you can barter

An easy solution for providing yourself and others with clean water is to acquire a portable water filtration unit for your bug-out bag(s). While they are a bit costly, with a good unit such as the Katadyn Combi water filter running around $170, the water produced will be worth its weight in gold, almost literally. This particular filter produces 13,000 gallons of clean water! It’s a must-have for any survival kit.

Because we like reserves for our reserves, we’d also recommend acquiring water treatment tablets like the EPA approved Katadyn Micropur tabs. If your filter is lost or breaks for whatever reason, each tablet can filter 1 liter of water. In our opinion, it’s the best chemical water treatment available.

Clean water is money. In a bartering environment, especially before individuals have had time to establish water sources, this will be an extremely valuable medium of exchange and will have more buying power than even silver or gold on the individual bartering level.

Food as currency when SHTF

In a system collapse, food will be another of the core essential items that individuals will want to acquire. Survival Blog founder James Rawles suggests storing food for 1) personal use, 2) charity, and 3) bartering.

Dry goods, canned goods, and freeze dried foods can be used for bartering, but only if you have enought to feed yourself, family and friends. They should be bartered by expiration date, with those foods with the expiration dates farthest out being the last to be traded. You don’t know how long the crunch and recovery periods will last, so hold the foods with the longest expiration dates in your posession if you get to a point where you must trade.

Baby formula will also be a highly valued item in a SHTF scenario, so whether you have young children or not, it may not be a bad idea to stockpile a one or two weeks supply. (For parents of young children, this should be the absolute first thing you should be stockpiling!). In addition to water, baby formula may be one of the most precious of all monetary commodities.

Another tradeable food good would be non-hybrid produce seeds, but the need for these may not be apparent to most at the initial onset of a collapse, though having extra seeds in your bug-out location may come in handy later. If you currently have a productive garden, check out these instructions for creating your own mini seed banks for barter or sale.

Fuel as currency in a post-SHTF world

Fuel, including gas, diesel, propane and kerosene will all become barterable goods in a collapse, with gas being the primary of these energy monetary units during the crunch as individuals flee cities. For most, stockpiling large quantities will be impractical, so for those individuals who prepared, they may only have 20 – 50 gallons in their possession as they are leaving their homes. If you are near your final bug-out destination, and you must acquire food, water or firearms, fuel may be a good medium of exchange, especially for those that have extra food stuffs they are willing to trade.

Though we do not recommend expending your fuel, if you are left with no choice, then food, water and clothing may take precedence.

For those with the ability to do so, store fuel in underground tanks on your property for later use and trading, and this article provides vital instructions for storing fuel safely — a major consideration.

Firearms and Ammunition

Though firearms and ammunition may not be something you want to give up, those without them will be willing to trade some of their food, precious metals, fuel and water for personal security. If the system collapses, there will likely be pandemonium, and those without a way to protect themselves will be sitting ducks to thieves, predators, and gangs.

Even if you choose not to trade your firearms and ammo during the onset of a collapse, these items will be valuable later. As food supplies diminish, those without firearms will want to acquire them so they can hunt for food. Those with firearms may very well be running low on ammunition and will be willing to trade for any of the aforementioned items.

In James Rawles’ Patriots and William Forstchen’s One Second After, ammunition was the primary trading good during the recovery and stabilization periods, where it was traded for food, clothing, shoes, livestock, precious metals, and fuel.

Clothing and Footwear

We may take it for granted now because of the seemingly endless supply, but clothing and footwear items will be critical in both, the crunch and the phases after it. Having an extra pair of boots, a jacket, socks, underwear and sweaters can be an excellent way to acquire other essential items in a trade.

As children grow out of their clothes, rather than throwing them away, they will become barterable goods, and one possible way to earn an income during this time could be running a second hand clothing store.

It is recommended that those with children stock up on essential clothing items like socks, underwear and winter-wear that is sized a year or two ahead of your child’s age.

Additional Monetary Commodities

The above monetary units are essential goods that will be helpful for bartering in the initial phases of a collapse in the system. As the crunch wanes and recovery and stabilization begin to take over, other commodities will become tradeable goods.

Another important monetary commodity after the crunch will be trade skills. If you know how to fish, machine tools, hunt, sew, fix and operate radioes, fix cars, manufacture shoes, or grow food, you’ll have some very important skills during the recovery period. It costs very little, if anything, to acquire skills and survival knowledge, and, in the worst of times, those are things that cannot be taken from you.

Guest post by Mac Slavo from SHTFplan, updated by Noah, 1/2/17.

The post When the Economy Collapses, What is “Money”? appeared first on Preparedness Advice.

When You are Ready to Buy Precious Metals, Visit APMEX

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I would like to welcome to our newest sponsor, APMEX Investments, your online source for precious metals. A few months ago, I described my visit to a gold dealer.  However, visiting an online store makes it more convenient to purchase precious metals.  You can order gold, silver, platinum and other precious metals at the lowest prices using APMEX’s secure, hassle-free, real-time online ordering system. Why buy from APMEX? There are a number of reasons why APMEX is a leading precious […]

The post When You are Ready to Buy Precious Metals, Visit APMEX appeared first on Apartment Prepper.

The Truth About Precious Metals in a SHTF Scenario

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The Truth About Precious Metals in a SHTF Scenario There are a few common misconceptions associated with precious metals and how they may not be helpful to a preparedness plan for either a SHTF scenario or potential economic collapse. If I can’t eat it, drink it, or use it to defend myself, I don’t need it. […]

The post The Truth About Precious Metals in a SHTF Scenario appeared first on SHTF DAD.

5 Items You Probably Should NOT Stock Long Term

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Most preppers have a bit of a hoarding mentality. We want to stock up on as many things as we can reasonably fit in our closets and storage spaces. That’s why I was a bit surprised when James from PlanAndPrepared.com wrote an article about things you shouldn’t stock up on. Here’s his list: Toilet Paper […]

The post 5 Items You Probably Should NOT Stock Long Term appeared first on Urban Survival Site.

Money Mondays: What’s It Like to Visit a Gold Dealer?

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This post is by Bernie Carr, apartmentprepper.com Many prepper sites recommend buying gold as part of your portfolio.  On the other hand, many other people have never thought about buying gold, and have never gone to a place that buys … Continue reading

The post Money Mondays: What’s It Like to Visit a Gold Dealer? appeared first on Apartment Prepper.

Considering Precious Metals? – the Case for Suisse Bars

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Written by R. Ann Parris on The Prepper Journal.

There are options when we talk about stockpiling wealth or currency in preparedness folds. Precious metals (PM) as a preparedness item are a topic of some debate in and of themselves

The post Considering Precious Metals? – the Case for Suisse Bars appeared first on The Prepper Journal.

The One Precious Metal Investment You’ve Probably Never Heard Of

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rhodium wikimediaFor the most part preppers are already very well acquainted with gold and silver. I don’t think you could study prepping for any significant amount of time without being inundated with opinions and analyses on what these metals may be worth during a crisis. However, most people are completely unaware that there are other precious metals you can buy. Aside from gold and silver, they might know about platinum and palladium, but would be dumbfounded if you ever mentioned anything else.

One precious metal that has been flying under everyone’s radar for decades is rhodium. You’d be forgiven for not knowing about it. Though it is occasionally used to coat jewelry, it has very little presence in the global jewelry market. Unlike silver, it’s not a critical component in electronics or industry. The only thing it’s widely used for is as a component for catalytic converters.

It does however have a lot of the qualities that would make it a good precious metal investment. It’s hard, durable, portable, and has a very high corrosion resistance. It’s definitely something you can buy and stash away without worrying about it degrading. More importantly though, rhodium is incredible rare. In fact, it’s the second most rare naturally occurring substance on Earth.

And that rarity is both an advantage and a disadvantage from an investing prospective. Annual production of this metal is very small, which tends to create an environment of price volatility. There’s a lot of potential here for profits, as well as horrendous losses if you buy it high. Not too long ago the price spiked to $10,000 per ounce before the financial crisis of 2008 dragged it back down to around $1000 per ounce.

rhodium price

But aside from those spikes, the metal has managed to keep pace with inflation, so it is still a decent store of value when it’s bought at the low-end.

rhodium price wikipedia

The other glaring problem with the rarity of rhodium is its liquidity. Since very few people know about it or own it, there aren’t very many sellers. That unfortunately means that there aren’t very many buyers. If you try to wait for the price to spike before selling it, there’s a decent chance that the price will plummet before you find a buyer.

One really nice plus with Rhodium though, is that you can’t buy it on the stock market. There aren’t any paper contracts for it. If you want to invest in rhodium, you have to buy it in its physical form. This means that large financial institutions can’t easily manipulate its price, unlike gold and silver. Its value is always reflected by solid economic realities.

Another positive aspect of Rhodium is that it isn’t tightly pegged to gold. Its price doesn’t normally fluctuate with that precious metal, and there’s a really nice opportunity there. If gold goes up drastically, you could probably sell it and put the money toward rhodium while it’s low, and wait for that price to go up before selling.

But the most interesting aspect of this metal is what could influence its price in the future. Because it’s so rare there are only a handful of countries that produce it. South Africa produces more than 80% of the world’s Rhodium supply, followed by Russia with around 9%. You might notice that these are both very problematic countries.

Given current geopolitical tensions between the West and Russia, it would be no stretch of the imagination to assume that at some point, their rhodium supply could be cut off from the rest of the world. But that’s small potatoes compared to South Africa.

This is a country run by radical leftists that is teetering on economic collapse at any given time. Both public debts and inflation are at record highs, and their infrastructure and public services are crumbling at an alarming rate. To top it all off, South Africa is rife with ethnic and political tensions. The country is a powder keg slipping into a third world status. That instability could result in a serious rhodium supply crunch in the years ahead, which would of course result in very high prices.

So keep a close eye on this metal. While rhodium lacks the stability and historical precedence of gold and silver, there’s no denying that its price has a really good chance of reaching astronomical levels in our lifetime.

Joshua Krause was born and raised in the Bay Area. He is a writer and researcher focused on principles of self-sufficiency and liberty at Ready Nutrition. You can follow Joshua’s work at our Facebook page or on his personal Twitter.

Joshua’s website is Strange Danger

This information has been made available by Ready Nutrition

What To Do With Some Money?

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If everything goes as it should I will have some money become liquid in the next month or so, between $15,000 and 20k. I am trying to figure out what to do with it. As such I am soliciting your input.

Ideas I have considered then discarded
-Beans, bullets and band aid’s. I am relatively pretty good there. Of course these are always areas we are working to improve but I have a bunch of guns, cans full of ammo, literally tons of food, etc.
-Various medium to large sized prep items. FLIR, silencers, a nice rifle scope or two, etc. Will get many of these in time in due time but I can handle them (except FLIR) on a save for a couple months then buy type plan. I try hard to be smart with the occasional times I get a big chunk of cash.
-Buying a(nother) house. With my semi nomadic nature buying a place I planned to live where I am working is a lot more space than I need, plus the costs of buying/ selling as often as we move add up. Buying where I might live later would leave me as an absentee land lord for a long time. Also that would involve debt which I really don’t like.
-Cash in the bank. I have an emergency fund and a vehicle replacement fund both in the bank now. Between the two that is as much exposure to that risk as I can tolerate. Still I included this in the poll on the right because it is a good ‘figuring it out’ short term option.

Ideas that remain with pro’s and con’s
-Buy land. Pro. BUG OUT SITE!!! Tangible and not going away. Will allow me to cache a bunch of stuff I have been hauling around. Like no BS I would set up a Terminator Cache!!!  Except technically a Terminator inspired cache as we should all know CONNEX’s are only designed to take weight on the top corners not on the roof or sides so literally burying one would require bracing, probably via poured cement but I digress. Will give me a place I could go and live real cheap if I need to. Con. I am in the bottom end of this being feasible price wise. Fixes me to a location. As I move every 2-3 years that it is a bit more complicated than buying land 30 minutes from home. If I don’t end up nearby when I settle down this could end up being a long distance thing which is not optimal.

-Buy gold/ silver. Pro. Inflation proof and (particularly silver) at pretty good prices these days. Transportable store of wealth. Con. Doesn’t solve any problems for me. Also leaves me trying to physically store more assets and a higher percentage of my net worth. My risk, relative to my overall financial situation, of a catastrophic break in is already about at tolerance level now.
-Replace the soccer mom SUV. It is still running fine now but isn’t getting any younger. I hope to get another year or 18 months out of it but am not totally sure that is realistic. Since I do not borrow money for vehicles this will be a major expense. Pro. Solves a significant financial/ life problem I have coming up. Con. This is the closest thing to a nest egg I have and using it for a short term (vehicles constantly need fixing/ replacing) problem seems penny wise and pound foolish. Used right I think this money could go a long way to setting me up in a decent spot. Also I feel like having the upcoming need to replace the vehicle will help me be disciplined in saving for that while I might not be so disciplined to put money back in the bank (or whatever) to replace what came out. Worst case if the vehicle I have now dies before I have the cash to replace it outright I could borrow from my emergency fund or get a loan for some of the money and pay it off in a hurry, which ever made the most sense.

-Something else I didn’t mention?

My gut says if I can make it work land is the preferred option. 

Please vote in the poll on the left and leave your comments here.

20 Reasons Why All The People That Quit Prepping After September Are Dead Wrong

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Wrong Way - Public Domain

By Michael Snyder – The Economic Collapse Blog

Millions of Americans were gearing up for some huge event to happen in September, but the world didn’t end and now many of them have given up entirely on prepping.  Of course the truth is that some absolutely earth-shattering events did take place last month, but because September did not play out exactly as some were anticipating, a lot of people feel very let down.  My contacts in the emergency food industry tell me that sales have dropped off dramatically, and yesterday I was told by someone that I trust that the same is true for those that sell precious metals.  But this should not be happening.  What we witnessed in August and September was just the warm up act, and all of the numbers are absolutely screaming at us that we are right on track for a major global crisis.  In this article I am going to focus on economic and financial issues, but there are so many other things going on around the planet right now that threaten to throw our world into turmoil.  Anyone that thinks that it is safe to “relax” now is simply not paying attention.  The following are 20 reasons why all the people that quit prepping after September are dead wrong…

#1 U.S. exports are down 11 percent for the year so far.  The only other times they have fallen this dramatically since the turn of the century were during the last two recessions.

#2 Since March, the amount of stuff being shipped by truck, rail and air inside the United States has been falling every single month on a year over year basis.  This is a clear indication that economic activity is really slowing down.

#3 Wholesale sales in the U.S. have fallen to the lowest level since the last recession.

#4 The inventory to sales ratio has risen to the highest level since the last recession.  This means that there is a whole lot of unsold inventory that is just sitting around out there and not selling.

#5 Industrial production declined for five months in a row during the first half of 2015.  That is something that has never happened outside of a recession.

Continue reading at The Economic Collapse Blog: 20 Reasons Why All The People That Quit Prepping After September Are Dead Wrong

About the author:

Michael T. Snyder is a graduate of the University of Florida law school and he worked as an attorney in the heart of Washington D.C. for a number of years.

Today, Michael is best known for his work as the publisher of The Economic Collapse Blog and The American Dream

Filed under: Economy, News/ Current Events, Prepping

Foundational Precious Metals Post 2 of 2

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Foundational Precious Metals Post 1 of 2

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Our friends Peter formerly Bayou Renaissance Man and Jamie of My Adventures in Self Reliance have both recently mentioned precious metals. I got to looking and realized I did not have (or could not readily find) a good foundation post on precious metals. So my intent is to write one.

Before getting started it should be noted I am  not a doctor, lawyer, accountant, financial adviser or anything like that. I speak solely of my own experiences, observations and beliefs. You should check with whatever sort of people, officially licenses or otherwise, then make your own decisions. Consider yourself officially disclaimed.

First we should narrow the scope of this post. My intent is to talk about the purchase of physical precious metals. So immediately I am excluding ETF’s and various places that offer to store PM’s for you in terms of purchase options. Next I intend to focus on bullion metals. Bullion being various bars, coins, etc that are purchased for the value of their physical metal content. This is different from ‘numismatic’ or collectible type coins. Numismatic coins carry a value based on their age/ history and condition; a rare 300 year old coin in excellent condition might have a bullion/ melt value (the actual value of the precious metals in the coin) of $300 but a collectible value of $5k. Numismatic coins are a whole different ball of wax and outside the scope of this discussion. We are also not really talking about jewelry. The primary reason we are not talking about jewelry is that it tends not to be a good deal in terms of bullion value and a lot of stuff floating around is fake. The one exception I can think of is for countries where the purchase of non jewelry precious metals is heavily restricted. At that point I would buy simple jewelry like plain wedding bands, bracelets and necklaces but I digress. So we have narrowed the scope of this discussion. Also I guess to further narrow things down I am talking about silver and gold. I am not talking platinum, palladium, copper or my favorite precious metal lead.

As to buying precious metals you can primarily go to a local dealer or an online one. Both have advantages and disadvantages. That is a long conversation. I will note that it is important to consider the complete out the door cost of a given item. Online guys charge for shipping, etc sometimes at high rates. Brick and mortar guys can be a real asset, especially if you want to make a big purchase today. Also the local PM guy can be a pretty handy ‘grey market’ asset. Their downside is often these folks do not treat smaller, normal Joe Everyday purchasers, very well. The premiums some of them charge are ridiculous. As to putting my money where my mouth is on buying PM’s. For the last 3 years or so I have been buying from Montana Rarities and have no complaints though if a local dealer would treat me square he could earn my business in short order.

The pricing of precious metals is a little weird. They are traded on the open market like any other commodity such as wheat or pork bellies. This is called ‘spot price’. That being said spot price does not tell the whole story in terms of precious metals for physical delivery. This is called a premium. It is probably a touch more complicated with a wide array of fees, long term contracts, etc all but we will keep it simple.

Theoretically an ounce of gold is worth spot price when it is a bunch of little flakes in a tiny container. The folks at the South African mint making Krugerrands or any other coin have costs to turn those flakes into the shiny coin we covet. Also they have this crazy desire to make money. Those folks sell the coin along with a bunch of its friends to a dealer. That guy also has costs and a desire to make a profit. Depending on the size of the operation there may be a couple progressively smaller dealers between production and the point of sale to Joe Everyday. In fairness to the people involved in this chain they obviously should be compensated for their efforts and they operate on razor thin margins.

These costs generally represent the premium between spot and the real physical price of a given item. Generally premiums are pretty level. Say it is spot plus 5-10% depending on the item involved. This baseline part of the premium is theoretically static or at least pretty consistent.

However sometimes premiums go crazy. At times we can see significant gaps between spot prices and the actual price of a coin in your hand. Why does this happen?

In general I can see two real reasons. One I know and one I think I have seen some evidence of and tend to believe. They both tend to flow together.

One piece is good old economics 99. The reasons large institutional investors buy (largely paper/ electronic) gold is different than the reasons people buy physical precious metals. If the indicators for institutional investors are down and the indicators for buying physical PMs are up you can get a gap. Think of it like this. The Jim Beam factory had a fire so they are having a rough week but it is Friday night and bottles of the stuff are flying off the shelves inn your town. Also physical PM’s are a surprisingly small market. A modest increase in demand will mean shortages. Pretty quickly this new demand will get built into the market, maybe within a week or two.

The other piece is that arguably there is considerable evidence that big banking interests, specifically Goldman Sachs manipulating gold and silver prices. With those resources it would not be hard to do but this manipulation would not necessarily cross over to the physical PM market.

Why would a person choose to buy precious metals? In my mind there are four readily apparent reasons.

-First is some sort of speculation. Buy low/ sell high, that sort of thing. Though most people do this with ETF’s or such maybe a person might want to physically hold the metals because they are a contrarian investor, have some sort of worst case concerns or something. I am neutral about this sort of plan. It has worked out well for some folks so I am not against it per se, just that it is outside the scope of this discussion.

-Second is some sort of tangible investment but in a more buy and hold kind off way than the first option. I generally like this plan. PM’s do not grow via compound interest the way some other investments might. On the other hand when you look at compound interest and factor in inflation the tale is a bit less favorable to those 3-4 percentage points a year. It is said in the time of Shakespeare an ounce of gold would buy a fine men’s suit and it still does. If you wanted to stash say a few grand (or more) for ten or twenty years especially if the local currency is unstable or you see bad times coming PM’s would be a good way to go.

-Third is as a hedge against inflation or a currency collapse. We will get to it later but I really like PM’s in this context. A situation with high inflation or maybe even a currency collapsing but where the fabric of society doesn’t entirely break is where I think PM’s thrive.

-Fourth is for some sort of mad max type scenario. I do think silver and gold would be traded in this type of scenario but that their value would pale in comparison to say fishing hooks, AA batteries, condoms, etc or especially .22lr, various 12 gauge ammo or guns (purchased for good prices and thoughtfully sold with a decent holster/ sling a few boxes of ammo and if applicable a few mags). In this scenario a person would be most prudent to be thinking past the immediate event a year or two to the recovery which of course implies you have put considerable energy and resources into getting to that point, then put some money into a big ole bag of silver or 5 and as much gold as they can afford.

Maybe we could say there are some other reasons but one could probably generalize them under one of the ones I mentioned at least for the purpose of this conversation.

Something The Money Changer said is worth mentioning here. I think he stays heavy on silver for longer than I would but still generally good advice to consider.

So we have talked a bit about precious metals and briefly described the reasons a person might choose to purchase them. Those reasons matter because different purposes are best suited by different kinds, or at least quantities of silver and gold.

Let us talk about the pro’s and con’s of silver and gold in general, before getting to specific products.

Silver:
Pros
– Affordable. Right now spot is around $15 which puts a generic 1 ounce silver round a shade under $18 and pre 64 US Coinage 90% is at about 16x face. (This is slightly skipping ahead to specific products but my goal is to illustrate affordability here which necessitates it.) Assuming you are not a homeless junkie these are prices at much anyone can get into precious metals. Buy an ounce or two every payday and over time it will add up.

-Divisibility. The smaller dollar value per bar/ coin make silver the small bills of the PM world. If you wanted to trade for a weeks groceries either strait across or, more realistically, by selling some coins to a dealer then using the cash to buy the groceries a few ounces of silver are the ticket, not an ounce of gold.

-The small dollar amounts involved let you start off small. There is a reason a baseball player doesn’t start with the NY Yankees, a lawyer doesn’t argue his first case to the supreme court, etc. This way when you screw up, which you will (spending way too much on shipping, pay a silly premium to a local pawn shop, etc) the real dollar amounts involved are negligible. Ten percent screw up factor in a couple hundred bucks of silver purchased while you are learning is the cost of a pizza. 10% screw up on a 10k USD purchase after you unload those jet ski’s hurts.

Cons
-Heavy/ bulky. You do not need to have too much money in silver for it to get heavy and to a lesser degree bulky in a hurry. A decent normal guy stash of 3-4 grand in silver is going to be heavy. Much more than that and it gets quickly into wheel barrow/ pick up truck territory. If your goal is to have a whole bunch of silver to trade for things over the long run this is a good thing. The downside is if you have to go somewhere.

I know a guy who has a lot of silver. He is well past wheel barrow territory and deeply into pickup truck territory. If he needed to move in a hurry, say to avoid a natural disaster or some sort of crime thing, a good chunk of the weight his truck could take would be silver. Obviously if he could only leave with a backpack the vast majority of that silver would have to be left behind. Now if he had half or two thirds of that value in gold it could fit in a small pouch in a day pack.

Gold
Pros
-Compact. An ounce of gold is worth about $1,200 bucks. A little tube holding 10 ounces of gold would be worth $12,000. You could fit that in a pants pocket.

-Recognizably.  Gold has a weird almost magical attraction. A fractional gold coin might just get you through a checkpoint you are not supposed to get through or convince a crooked official to look the other way.

Cons
-Compact. Think being in a store that only accepts bills under $20 with a hundred. In some scenarios making change could be very difficult so at a minimum your negotiating power is bad and at the worst the price of the thing could just become the coin in your hand.

You probably noted that the pros/ cons of silver and gold are polar opposites. Both have valid roles and they compliment each other well. For pretty much every scenario a person will end up with some mix of gold and silver.

As to the ratio between them.

On the lower end it favors silver. A guy who has a few hundred bucks to put into PM’s should probably jut buy silver.

Long term trading favors silver.

If portability and extreme compactness are issues then gold is the way to go.

On the high end it favors gold. If a person had a bunch of money, either in one shot or over time, to put into PM’s the compactness of gold is needed.

I am going to break this into a 2 part post because I am tired of writing and need to get something up since it has been a few days. In part 2 I am going to talk about specific types of gold and silver products and throw out some recommended ratios/ products that might fit different needs.