This weekend, Kendel and Tox are participating in an amphibious preparedness exercise (they refer to it as a "Girl Scout/Girl Scout Mom Weekend At The Beach," but my description sounds much cooler). Since they are out of town, I participated in what I hope is the first of many Preparedness Summits with two friends - Jerid and Becky.
We met at Jerid's "Doomstead" in rural Texas. After taking a tour of his impressive compound (a well, a pond, fruit trees, out buildings, good fencing, good soil, well-built home), we began with a solar oven bread making exercise. Jerid and Becky got to see the oven and grain mill in action. We put two loaves in the oven and went off to lunch.
Becky took this pic of me grinding wheat. (Let the record reflect I ground much more wheat than she did.)
One theme resonated with the three of us. While we each consume cable news to one degree or another, we all felt that written news sources, including web sites like ZeroHedge, provide far more objective analysis, free of the inane politicization of news often promulgated by the likes of MSNBC, Fox and CNN. Part of being prepared is getting your intel from reliable sources.
One point I made during lunch which I'll share with you: if you think the nebulous "they" (whoever "they" are - the Federal Reserve, Congress, the President, Goldman Sachs, Wu Tang Financial) can fix what ails us, consider the fact that former Treasury Secretary Hank Paulsen told a number of people on Capitol Hill at the height of the financial crisis that if Congress didn't pass the TARP bill, the United States would end up under martial law. Simultaneously, Paulsen often told the public during this same time frame that everything was fine and that our political leaders had things under control.
Martial law. Uttered not by a conspiracy theorist, but by the Secretary of the Treasury. As recently as 2008. Remember that.
After lunch, we went back to the Doomstead to check on the bread. The solar oven didn't disappoint. We made two nice loaves, and Becky and Jerid now have more confidence in the abilities of solar cooking devices and baking bread in grid down conditions.
Jerid then provided both Becky and me a great tutorial on investing in precious metals. He's been actively buying coins for years now, and he brought several along today to show us what we are to look for. To accurately relay what we learned, I've summarized his comments in a Q and A format below.
Q. What's the difference between proof coins and bullion coins? And why should we care?
A. Bullion coins are coins made of precious metals. Proof coins are in essence bullion coins which have been minted for collector value (also called "numismatic value.") Proof coins generally trade at a premium to a similar bullion coin, due to that special collector value.
Why should we care? When FDR banned the possession of gold (yes, this really did happen; look it up if you don't believe me), the order did not ban the possession of proof coins. Thus, many today believe that if the government were ever to reinstate FDR's ban on possessing gold, coins with numismatic value (such as proofs) would be exempted. If that's the case, you'd be able to own as many proof coins as you want with impunity.
Q. What's the normal commission on coin sales?
A. For American Eagles, the commission is set by the mint at $99 for one ounce coins. Jerid reports some coin dealers in Houston charge no commission for junk silver purchases (discussed below).
Q. What's the preferred junk silver purchase for a prepper?
A. Junk silver simply refers to coins which contain silver and have no numismatic value. In essence, you are simply "buying the metal in the coin." They look like old coins, often showing wear and tear after years being in circulation.
Jerid recommends purchasing Mercury dimes for your junk silver investment. He prefers Mercury dimes over Roosevelt dimes because of the fact not all Roosevelt dimes have silver in them, while Mercury dimes do. Further, Mercury dimes are easily identifiable - the image of Mercury is found on one side of the coin.
Q. So if we buy a one ounce gold coin, how on Earth are we going "break" something that valuable into smaller units so we can buy things we need?
A. Jerid offered a good rule of thumb - Gold is used to buy currency. Junk silver is used for those wishing to trade in metals rather than fiat currency. This makes perfect sense. Silver coins are worth far less than gold coins. A Mercury dime as of yesterday was worth about $2.06. You can easily carry a number of dimes with you to pay for things from those sellers preferring to do business in metals rather than currency. Meanwhile, when you do need to obtain U.S. dollars, your gold coins will be a great way to do so.
By the way - do you think I'm nuts for discussing the possibility of doing transactions in gold or silver rather than U.S. dollars? Take a look at this CNN article from earlier this year. Thirteen states are contemplating laws that would allow citizens to complete transactions in gold or silver coins. This is getting much attention. If you're not up to speed on the issue, it's worth a couple of minutes of your time to read the article.
Q. What about investing in things like gold Krugerrands or gold Francs?
A. Offshore coins which are generally recognizable by the public, like Krugerrands, can be a good investment. Jerid reports many Houston area coin brokers will sell offshore coins for a lower commission than coins minted in the United States. Again, the trick here is to make sure you invest in coins that are generally recognized by the public.
Q. What's the best way to secure your coins?
A. Coins are small, so hiding them in your home is a good strategy. Of course, if you have a fire proof safe, that's even better. The one place you don't want to put them? In your bank's safe deposit box. If you do, you're relying on the bank to be open when you need to access it. Further, banks do burn down. The local branch of my bank did a few years ago, essentially destroying everything in the safe deposit boxes there.
After the coin tutorial, I went through the contents of my bug out bag to give Jerid and Becky some ideas of things they might consider keeping in theirs.
Some thoughts from the three of us:
- Spending time with people who "get it" like you do is key. I learned a tremendous amount today, especially about coins. I hope the other two got something out of our discussions as well. If nothing else, it serves as a reminder that you're not alone in your concerns about the future and the need to prepare.
- There's a lot to know. Don't be overwhelmed by that fact. Just start doing and learning. And asking others for help understanding.
- As I've said a number of times recently, start building a network of friends who think like you do. You can't read every news story or product review. Share information you think is important with others. That's what I try to do here.
- Take heart knowing that if you make any preparations at all, you're ahead of most of the population.
- Seek out substantive sources of news.
- Don't be bashful about sharing your knowledge with others, even if you're not an expert on a subject. Tell them what you know and that you're still learning.