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Guest Post: So How Many Ounces Of Gold (Or Silver) Should You Own?

Tyler Durden's picture





 

Submitted by Adam Taggart of Peak Prosperity,

This week, Chris talks with Jeff Clark, Senior Precious Metals Analyst at Casey Research, where he serves as editor of their Big Gold newsletter.

They tackle head-on many of the questions weary precious metals investors are wondering after enduing the volatile yet range-bound price action of gold and silver over the past year:

  • Have the fundamentals for owning gold & silver changed over the past year? No
  • What are they? currency devaluation/crisis, supply-chain risk, ore grade depletion
  • How should retail investors own gold? Mostly physical metal, some quality mining majors (avoid the indices), and ETFs only for trading
  • Is gold in a bubble? No
  • Could gold get re-monetized? Quite possibly
  • Where is gold flowing? From the West to the East. At some point, capital controls will be put in place

What the politicians are doing is the exact opposite of what they need to be doing. We continue adding to our debt, we continue raising the debt ceiling, we continue deficit spending, we continue borrowing money, and, of course, we continue printing money. We are doing the exact opposite of all the things that would lead us away from inflation. So yes, I think that is an important point.

 

I will add that inflation has occurred very quickly, very rapidly, very suddenly many times in the past, just in recent history. If you look back at the high inflationary times, just in the past 100 years here in the U.S., many of those that hit 12%, 14%, 15% -- two years prior to then, the CPI was completely benign. It was 1%, 2% – I think at one point it was 4% – and then all of a sudden within 24 months, it was 12%, 14%. So it can happen very suddenly, and my fear is that is what is going to happen this time. People are in a lull; no one is expecting it: the CPI is low; nothing is really happening with all this money printing; there has been no fallout. But I think that is the critical point. You cannot do these kinds of things we are doing forever and not experience any consequences. Sooner or later there are going to be consequences to what we are doing, and my fear is that it is going to be nasty, catch a lot of people off guard, and really hurt our society. The bottom line for me is, that is why I am buying gold and silver, still, to this day.

For these reasons and others, Jeff strongly believes everyone should have exposure to gold and silver as a defense for preserving the purchasing power of their weath. The key question is: how much exposure?

You want to focus on how many ounces you own, not necessarily looking at whether the price is $5 higher today than it was yesterday. How many ounces do you own? That is really the question you want to ask yourself, so you can focus on how much you are really going to need, and the amount really comes down to this.

 

For me, I am probably going to use some of this gold if we get high inflation. How are you going to protect your standard of living if we get some kind of runaway inflation? And let’s say it's not runaway hyperinflation; let’s just say it's high inflation, 10%, 15%. Remember it was 14% in 1980, so the odds of us getting high inflation are realistic. So if I am going to use that gold to cover my standard of living, you are going to need about two thirds of an ounce of gold for every thousand dollars of monthly expenses. If you want to protect your standard of living and not have your house be ravaged by inflation, so to speak, so that is a good guideline to follow.

 

So if inflation lasts a couple years, well, you are going to need 15 ounces of gold for every thousand dollars of monthly expenses. That is a good guideline to think about. And if your expenses are more per month, you are going to need more gold than that. If inflation lasts longer than two years, you are going to need more than that, but you can actually use the sales of gold and silver to protect your standard of living. You sell some gold and silver, you are going to get U.S. dollars or Canadian dollars with it and you can use the increase in the gold and silver price to offset the increase in the goods and services you are buying.

 

So I think that is the way to view it, to look at how you are going to use it. And so the focus again comes back to how many ounces do you own? So if you do not have any, you need to obviously start buying. 

Here are two tables -- one for gold and the other for silver -- Jeff offers in his newsletter to help investors calculate the requisite ounces needed to protect against rising inflation over time:

The point here is that you're probably going to need more ounces than you think. Look at your bank statement and assess how much you spend each month – and do it honestly.

 

The other part of the equation is how long we'll need to use gold and silver to cover those expenses. The potential duration of high inflation will dictate how much physical bullion we need stashed away. This is also probably longer than you think; in Weimar Germany, high inflation lasted two years – and then hyperinflation hit and lasted another two. Four years of high inflation. That's not kindling – that's a wildfire roaring through your back yard.

 

So here's how much gold you'll need, depending on your monthly expenses and how long high inflation lasts.

 

Ounces of Gold Needed to Meet Expenses During High Inflation
Monthly expenses in US dollars Monthly expenses in gold, oz* Inflation Duration
6 months  1 year  18 months 2 years 3 years 4 years 5 years 
$500
0.31
1.9
3.7
5.6
7.5
11.2
15.0
18.7
$1,000
0.63
3.8
7.5
11.3
15.0
22.5
30.0
37.5
$2,000
1.25
7.5
15.0
22.5
30.0
45.0
60.0
75.0
$3,000
1.88
11.3
22.5
33.8
45.0
67.5
90.0
112.5
$4,000
2.50
15.0
30.0
45.0
60.0
90.0
120.0
150.0
$5,000
3.13
18.8
37.5
56.3
75.0
112.5
150.0
187.5
$10,000
6.25
37.5
75.0
112.5
150.0
225.0
300.0
375.0
$20,000
12.50
75.0
150.0
225.0
300.0
450.0
600.0
750.0
*Based on $1,600 gold price

 

If my monthly expenses are about $3,000/month, I need 45 ounces to cover two years of high inflation, and 90 if it lasts four years. Those already well off should use the bottom rows of the table. How much will you need?

 

Of course many of us own silver, too. Here's how many ounces we'd need, if we saved in silver.

 

Ounces of Silver Needed to Meet Expenses During High Inflation
Monthly expenses in US dollars Monthly expenses in silver, oz* Inflation Duration
6 months  1 year  18 months 2 years 3 years 4 years 5 years 
$500
17.9
107.1
214.2
321.3
428.4
642.6
856.8
1,071.0
$1,000
35.7
214.3
428.5
642.8
857.0
1,285.6
1,714.1
2,142.6
$2,000
71.4
428.5
857.0
1,285.6
1,714.1
2,571.1
3,428.2
4,285.2
$3,000
107.1
642.8
1,285.7
1,928.5
2,571.4
3,857.0
5,142.7
6,428.4
$4,000
142.9
857.1
1,714.2
2,571.3
3,428.4
5,142.6
6,856.8
8,571.0
$5,000
178.6
1,071.4
2,142.8
3,214.3
4,285.7
6,428.5
8,571.4
10,714.2
$10,000
357.1
2,142.6
4,285.0
6,427.8
8,570.4
1,2855.6
17,140.8
21,426.0
$20,000
714.3
4,285.7
8,571.4
12,857.0
17,142.7
25,714.1
34,285.4
42,856.8
*Based on $28 silver price

 

A $3,000 monthly budget needs 1,285 ounces to get through one year, or 3,857 ounces for three years.

 

I know these amounts probably sound like a lot. But here's the thing: if you don't save now in gold and silver, you're going to spend a whole lot more later. What I've outlined here is exactly what gold and silver are for: to protect your purchasing power, your standard of living. 

Jeff discusses the Hard Assets Alliance as a solution worth considering when purchasing bullion. For more information on the HAA can be found here. 

Click the play button below to listen to Chris' interview with Jeff Clark (46m:01s):

 

 


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Sat, 11/17/2012 - 16:35 | Link to Comment SilverTree
SilverTree's picture

I thought one tenth of an oz of silver is worth ~20 hours of labor...

Sat, 11/17/2012 - 16:38 | Link to Comment r3phl0x
r3phl0x's picture

That's $0.165 USD/hr -- maybe in a Foxconn sweatshop, or privatized US prison.

Sat, 11/17/2012 - 16:40 | Link to Comment SilverTree
SilverTree's picture

Correction:

~12 hours for one tenth of an oz of silver.

Honest Work For Honest Silver Pay

Silver Shield

http://www.silverbearcafe.com/private/08.11/honestwork.html

Sat, 11/17/2012 - 17:05 | Link to Comment icanhasbailout
icanhasbailout's picture

The general consensus seems to be that the proper amount of silver to own is 30 pieces.

Sat, 11/17/2012 - 17:07 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

You should own as many ounces of precious metal as you possibly can, for several reasons.

http://www.zerohedge.com/article/national-inflation-association-silver-short-squeeze-could-be-imminent#comment-289461

Sat, 11/17/2012 - 18:17 | Link to Comment The Shootist
The Shootist's picture

Roman soldiers were paid a silver denarius per day. About the size of a silver dime. Job description: brutal hand to hand combat against barbarian hordes.

Sat, 11/17/2012 - 19:17 | Link to Comment Dr. Sandi
Dr. Sandi's picture

Similar work to being a Wal-Mart cashier on Black Friday.

Sat, 11/17/2012 - 20:02 | Link to Comment Pool Shark
Pool Shark's picture

 

 

The wages of sin is death.

But, the wages of a retail clerk are far worse...

 

Sat, 11/17/2012 - 21:30 | Link to Comment Joe Sixpack
Joe Sixpack's picture

About 116.9 oz. per month (silver) or 116.5 grams of gold per month.

What Do Silver and Gold Buy?

By John Q. Public

Sat, 11/17/2012 - 23:12 | Link to Comment Half_A_Billion_...
Half_A_Billion_Hollow_Points's picture

This article was clearly written by someone who's never lived through a long period of hyperinflation.  You don't spend gold or silver.  

You become a snake, you sit and wait.

You adapt your life to spend your income immediately, and you wait, and wait, and wait some more for the strike opportunity.  As people become more and more under stress, valuable assets come up on the cheap in terms of gold/silver.  That's when you grab them up.  Notice that people are happy to sell them to you--the bankers have destroyed their lifes and they need the hard money more than anything else.  

If you think you're going to spend gold/silver on a monthly basis, you'll only be painting a huge target on your back, and your stash will be clear to everyone.

Stupidest thing I've ever read on ZH.

Sat, 11/17/2012 - 23:52 | Link to Comment Ginsengbull
Ginsengbull's picture

How much gold did they pry off the fingers of the victims of the Japanese tsunami, or scavenge from their houses during cleanup?

When the SHTF, everybody sells, and that is the best time to buy.

Sun, 11/18/2012 - 00:18 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

DoChen has a different way of looking at how much gold to own (I will limit my remarks here to gold, if possible EVERYONE here ought to own silver IN ADDITION to the gold).

There are +/- 6 billion oz of gold, approx. one oz per person in the world.  If we stipulate that Americans are 5 - 10 times "wealthier" (hey just sayin', OK?), then each American ought to own at least 5 - 10 oz each.  So, a family of three should own from 15 - 30 oz of gold.

That is the average American (family).  I would guess that your "average" ZH-er should own AT LEAST TWICE the above.

Get cracking, bitchez!

Sun, 11/18/2012 - 00:59 | Link to Comment boogerbently
boogerbently's picture

": the CPI is low; nothing is really happening with all this money printing; there has been no fallout. But I think that is the critical point. You cannot do these kinds of things we are doing forever and not experience any consequences"

Sun, 11/18/2012 - 03:55 | Link to Comment TwoShortPlanks
TwoShortPlanks's picture

IMO the secret to Gold & Silver in a major crash followed by a Depression is simple. Dig a hole and forget about it. Go through the pain like everyone else. Then, once the dust is settling, dig up your stash and buy that which reboots the economy or survival process. You need to think about the uplift AFTER the storm, when money converges again.

Yes, Gold can/will reduce pain, but you're spending something which has far more purchasing power if you can hold-off till the right time. Why hedge inflation when there's a 100-1000 bagger for your kids.

Sun, 11/18/2012 - 09:34 | Link to Comment _underscore
_underscore's picture

+1

Yes, a weird article that.  Apparently, Mr & Mrs with the 3 kids will just start using the 'gold card' once the digits start revolving like a slot-machine on prices & just carry on as before. IMHO, when high or hyper inflation starts (and assuming you're comfortable in PMs) you batten down the hatches & make sure your fiat buys (other) useful stuff - storable food, tools, materiel etc. The putative spenders in the above article would just keep going to Wendy's, the Mall & multiplex as 'normal' - a bit like people in trauma shock or something.

The ability to pick up substantial goods/materiel (in the latter stages) & when a good opportunity presents - can be the use of PMs , not buying bacon butties & plastic crap like the money's burning a hole in your pocket.

Sat, 11/17/2012 - 19:18 | Link to Comment robobbob
robobbob's picture

Is that before or after the profligate bread and circuses emperors debased the currency until it was nothing more the silver washed copper? and finally only copper?

Sat, 11/17/2012 - 19:29 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

And this was how Rome was taken.

Blessed with a strong army but most importantly knowledge of Rome's financial troubles Constantine waltzed into Rome while his troops stayed at the City-State's gates.  He met with the priest class who gave the King's their crowns and informed them that he knew they were broke and that the Treasury had been looted.  He gave them two choices:  name him God's chosen ruler of Rome and her lands or he would bring his troops in and take it.

In exchange they would work together to form a new religion, one true religion.  The priest class and he would form the Church and rule together.  The priest class agreed knowing full well they did not have the funds to fight back and must have liked the idea of having one God to collect charity in the name of.

This is the power of knowledge and money - when you have them you are on the hill and when you don't you are fighting a losing battle.

Sat, 11/17/2012 - 22:24 | Link to Comment Enslavethechild...
EnslavethechildrenforBen's picture

Enough to afford a lifetime supply of twinkies

Sat, 11/17/2012 - 19:46 | Link to Comment Peter Pan
Peter Pan's picture

You should own as many oz as you can afford, as you can defend and/or hide.

Sat, 11/17/2012 - 22:54 | Link to Comment RockyRacoon
RockyRacoon's picture

Your comment could have comprised the entire article.  Since gold has infinite marginal utility, one should own as much as can be had... period.   All computations will, as do strategies, fail after the first battle with inflation.

http://en.wikiquote.org/wiki/Helmuth_von_Moltke_the_Elder

Sat, 11/17/2012 - 18:31 | Link to Comment Metalredneck
Metalredneck's picture

Best. Post. Evar.

Sat, 11/17/2012 - 20:23 | Link to Comment WhackoWarner
WhackoWarner's picture

Maybe a good post but I take exception to the mathematics here.

As you see the tables assume a $1600 price. I would assume that my foresight at buying gold years ago with all this in mind also included the idea that gold would outperform as would silver.

As such the amount of ounces projected here to survive are vastly overstated.  I would assume as hyperinflation hits gold/silver will also increase in value (probably out-pace inflation many fold).  So this is good to get one thinking but really does not answer the question of how many ounces are adequate.

I think you have to put this in perspective as it assumes we are all millionaires already who can afford thousands of ounces of gold with the idea that all we are going to do is stand still.

Sat, 11/17/2012 - 20:33 | Link to Comment WhackoWarner
WhackoWarner's picture

And further to this.

This chart is simplistic in that it assumes you have no income flow and have been unable to prepare for some of this in advance.

Fer instance 1.5 years ago I watched the futures markets on various agri goods. I bought up every sale on large cans of coffee on sale. I hae 24 months of cheap coffee that is now 4 times the price on the shelf.

Inflation is already here and one must be astute by protecting your family through more than ounces of silver and gold.

I am still of the mind that I will pay off my debts with devalued fiat that will come from my gold/silver sales.

Got all the food etc. stashed already for a 2 year run. At least I will be able to cost average any future purchases I need.

But then I am a woman who looks at the real inflation judge; which is the supermarkets.

Sat, 11/17/2012 - 22:04 | Link to Comment klockwerks
klockwerks's picture

Whacko, well stated as those were my exact thoughts as I read it. My advise is buy as much silver/gold as your budget can withstand and stack it for the safety of having your hedge against all future issues.

Sun, 11/18/2012 - 04:04 | Link to Comment RagnarDanneskjold
RagnarDanneskjold's picture

In The Economics of Inflation: A Study of Currency Depreciation in Post-War Germany, by Constantino Bresciani-Turroni, he had a table showing the real value of assets and goods at the end of the inflation. Stocks and real estate gained some value, but gold was at the top of the list at 200, in other words, gold doubled in real value again everything else.

The only people who will need to spend gold to finance their standard of living are retired people with no other assets.How many broke ass retired people have a stash of gold?

Anyone with income would be wise to accept a drop in their standard of living and use the gold to buy assets. It's stupid to spend your gold to keep your standard of living flat during hyperinflation, when you could at the very least double (and probably triple or quadruple) your standard of living on the other side by holding gold and swapping it for cheap assets during the inflation.

Sat, 11/17/2012 - 20:01 | Link to Comment SILVERGEDDON
SILVERGEDDON's picture

Short form of the post - buy every motherfucking ounce you can get your hands on soonest.

After all, "It only takes five dollars to get it out of the ground"

Yo, Million Dollar Bonus - crawled out from under all those long puts on Facebook paper yet, mo fo ? 

Sun, 11/18/2012 - 05:08 | Link to Comment jez
jez's picture

Correction:

~12 hours for one tenth of an oz of silver.

 

Silvertree: you're hired! USD 3.23 (at Friday's close) for 12 hours of your time. My whole house needs painting. Be here at 8am sharp, Monday morning.

 

Sun, 11/18/2012 - 10:12 | Link to Comment Vooter
Vooter's picture

Don't listen to him! I'll pay you $6.46 per 12 hours to paint my house...I might even consider jacking it up to $9.69 if you're good...

Sat, 11/17/2012 - 16:35 | Link to Comment r3phl0x
r3phl0x's picture

Good article but they forgot to include the "ounces of ammo" table.

Sat, 11/17/2012 - 19:20 | Link to Comment robobbob
robobbob's picture

you have to work that out individually

how good a shot are you?

Sat, 11/17/2012 - 19:53 | Link to Comment Peter Pan
Peter Pan's picture

The article seems very practical until you realise that there aren't enough oz around in the USA to enable preparation.

Sat, 11/17/2012 - 20:52 | Link to Comment SILVERGEDDON
SILVERGEDDON's picture

Short form of the ammo requirement - every motherfucking round you can get your hands on, times ten. Great currency after SHTF, bitchez. No short selling that shit.

Sun, 11/18/2012 - 00:47 | Link to Comment awakening
awakening's picture

Only problem with money is that it recirculates, my issue with bullets as money in this scenario is how quickly I gain repossession of it.

http://www.youtube.com/watch?v=9vxK4kf4AqA

Sat, 11/17/2012 - 21:45 | Link to Comment YC2
YC2's picture

This is a dumb article.  If the scenarios he outlines happen why would he be out spending his money as capital as if it were money as income at such an inopportune time? Actually, there is no opportune time. 

 

The long story short of it it that you go from hard assets into cash flowing, leverageable assets, and wait.  Basically buy something like real estate, wait for normalization, and you will not be worrying about cannibalizing your nut during the transition.  People that did this in argentina with dollars made out like bandits when the economy could releverage itself.

 

And, in the case you actuallt need to use metal to barter, keep some silver dimes around.  I cant wait to sell a bag of beans to this retard when he brings his krugerrands to the farmers market.  And being prepared to not run out of food staples in the first place will cost a lot less than 700 oz of gold right now.

Sat, 11/17/2012 - 22:34 | Link to Comment Money Squid
Money Squid's picture

"If anybody has any idea of hoarding our silver coins, let me say this. Treasury has a lot of silver on hand, and it can be, and it will be used to keep the price of silver in line with its value in our present silver coin. There will be no profit in holding them out of circulation for the value of their silver content" Lyndon B. Johnson

Sat, 11/17/2012 - 23:52 | Link to Comment BidnessMan
BidnessMan's picture

Really laughable. LBJ was a pompous ass on so many levels. The Fed's silver stash is long gone. A pre-1965 dime now costs $2.30. A nice profit.....

Sun, 11/18/2012 - 00:57 | Link to Comment Money Squid
Money Squid's picture

Statement of the FedGov's interest in supressing the price of silver? I believe they moved into creating paper markets (oil, gold, silver, wheat, corn) to make price manipulation easier - no need to worry about dishoarding physical into the market when you can dump paper to depress prices.

Sat, 11/17/2012 - 16:59 | Link to Comment max2205
max2205's picture

...

Sat, 11/17/2012 - 16:49 | Link to Comment Urban Redneck
Urban Redneck's picture

What is described is not "investing" it is "saving"

Similar to how a government does not "invest"  but rather "spends"

Sat, 11/17/2012 - 16:51 | Link to Comment debtor of last ...
debtor of last resort's picture

It's about how many ounces can you afford?

Sat, 11/17/2012 - 16:55 | Link to Comment fonzannoon
fonzannoon's picture

There are a few things here I have a problem with. I don't think we get high/hyper inflation with stagnating/declining wages. If we somehow get massive wage growth and hyperinflate then my monthly mortgage payment (which is mine, and I assume many on here's biggest expense) becomes a very small problem. It's the variable costs (food, fuel) that get out of hand. But those are the expenses I assume people are actually saving in metals to protect against.

It's the scenario he presents that I fear the most. Inflation at high levels but not high enough to blow a hole in the fed. Some nasty ass stagflation or biflationary scenario (Spain/Italy) that drains people of their PM's as they fight to keep their head above water. Then PM's really did not serve that much of a purpose after all.

Sat, 11/17/2012 - 18:07 | Link to Comment DosZap
DosZap's picture

fonzannoon.,

Then Pm's really did not serve that much of a purpose after all.

Well, HAD they enough of it saved it would, correct?.9 of 10 families likely had NO AU or Silver stashes, they just sold off family jewelry.

Most had NO clue how really bad it was going to be,when this crap hits(like Hyper-inflation first, then deflation), in crappy times, as he shows just a glimmer 3%, to 20%.....................that isn't close to Hyper.

Read jsmineset.com articles today on this very issue, and check out the scenario in place during Weimar.................blow your mind,how fast it hit, and things were crappy BEFORE it did.

MIRROR image of US now.

Sat, 11/17/2012 - 18:22 | Link to Comment fonzannoon
fonzannoon's picture

will read it thanks 

Sat, 11/17/2012 - 20:25 | Link to Comment fockewulf190
fockewulf190's picture

What is scary is that most of the sheep have already hocked whatever scrap gold they may have had laying around, and blew that cash ages ago on bills or food or booze or some chinese made trinket or two.  They will be the victims of the upcoming economic Frankenstorm that is already on the radar and marching it's way towards America.  The howling and yammering will be loud and unceasing.

For those 1% of us who are stacking, you should also be thinking ahead and planning about how you can reduce your future expenses and preserve your stack.  Count on government to want to take as much as it can from you, and then some.  Expect the unexpected such as crushing energy costs, outrageous property tax hikes, new assesments, increased garbage collection rates, local sales tax hikes, and increased fines and fees for everything...especially if your living in the northeast.   Hopefully you will have something left from your stack once the Great Reset is over.  If your close to retirement, George Carlin will be proven right...they are going to come after your Social Security and probably your pension and in the system savings as well if your lucky enough to have some. 

Sun, 11/18/2012 - 05:35 | Link to Comment bloostar
bloostar's picture

There's already the beginnings of capital controls starting in the uk. Overseas pension transfers have recently been tightened to the point of a vigorous wedgie and the requirements for reporting are more bureaucratic than a socialist's convention. It's on its way for sure.

Sat, 11/17/2012 - 18:48 | Link to Comment HungryPorkChop
HungryPorkChop's picture

Most countries that have experienced hyperinflation had declining or stagnant wages before it began.  Below is an interview from the founder of Shadowstats regarding his hyperinflation forecast:

https://www.youtube.com/watch?v=btiApeHpBWg

Sat, 11/17/2012 - 16:55 | Link to Comment Seasmoke
Seasmoke's picture

and here, i thought the 50 ounces of gold and 1000 ounces of silver i lost , was a big deal

Sat, 11/17/2012 - 16:55 | Link to Comment fonzannoon
fonzannoon's picture

If that is what you are rocking I think it is a huge deal. I think the numbers he speaks of are waaay off.

Sat, 11/17/2012 - 21:04 | Link to Comment fockewulf190
fockewulf190's picture

Thing is, most of us have never lived through truly hard times with Hooverville type depression, so we really don't know yet how bad it will be, and our debt levels are a quantum sprung higher than anything experienced during the 1930's. If we get a Greece or Spain scenaro within the US, there will be chaos....and Road Warriors.  If your a middle class stacker, I see no current reason why you should stop stacking regardless of how much you already have.

Sun, 11/18/2012 - 00:23 | Link to Comment Bobbyrib
Bobbyrib's picture

"Thing is, most of us have never lived through truly hard times with Hooverville type depression, so we really don't know yet how bad it will be, and our debt levels are a quantum sprung higher than anything experienced during the 1930's."

There are tent cities in NJ. We might be a little closer than you think.

Sun, 11/18/2012 - 05:08 | Link to Comment Tango in the Blight
Tango in the Blight's picture

Many people who ended up in Hoovervilles had carpenter skills so they built sturdy wooden houses. Look up old photo's of Hoovervilles, they looked like orderly little towns. Not as chaotic as the tent cities of today. Nearly no-one can build a house themselves these days so that's why they live in tents.

Sat, 11/17/2012 - 16:55 | Link to Comment ciscokid
ciscokid's picture

I would think you need to have 35% of your savings in physical gold or silver.

Sat, 11/17/2012 - 17:20 | Link to Comment A Lunatic
A Lunatic's picture

A half ounce then.......

Sat, 11/17/2012 - 18:08 | Link to Comment FoeHammer
FoeHammer's picture

Haa. I'm in the same boat...or ocean for that matter.

Sat, 11/17/2012 - 17:56 | Link to Comment DosZap
DosZap's picture

I would think you need to have 35% of your savings in physical gold or silver

All those #'s are just a rule of thumb, 35% of YOUR savings, for a TON of folks is less than $25k..............Ain't gonna cut it, but if your talking 3yrs, it's a WAD.(depending on what it costs you to live. Owned homes will be waled away from, trailer hitches, and small 16-24" mobile homes would make a lot more sense.............

Personally I do not plan on just meeting my expenses,better have enough to cover 100% of your total NET worth...................how many ounces u talking THEN?,sure would not be silver.........take a damn dump truck to haul it.

PLUS, the charts are based on $1,600.00 Gld,$28.00 Silvr,IF inflation is 20%+,those prices will/SHOULD  be easily double/triple that.

Sat, 11/17/2012 - 18:57 | Link to Comment moondog
moondog's picture

16-24" mobile homes...they have internet access in Lilliput?  ;-)

Seriously though, I do like the idea of a trailer, if you have the fuel available to tow it (think biodiesel or wood gasification in worse case scenario).

Sat, 11/17/2012 - 16:56 | Link to Comment Quarky Gluon
Quarky Gluon's picture

Or is he begging the question: Should you own any gold or silver at all?

Sat, 11/17/2012 - 17:00 | Link to Comment fonzannoon
fonzannoon's picture

That is a great way of thinking about it.

Sat, 11/17/2012 - 21:07 | Link to Comment fockewulf190
fockewulf190's picture

I think Occam's Razor applies here.

Sat, 11/17/2012 - 21:41 | Link to Comment Water Is Wet
Water Is Wet's picture

I hate shaving.

Sat, 11/17/2012 - 17:01 | Link to Comment Uber Vandal
Uber Vandal's picture

If one is unable to purchase silver or gold, saving one's pocket change would be a step in the right direction, and if one is fortunate, a silver coin may be in the change.

During the Weimar and Zimbabwe hyperinflation, people were not pushing wheelbarrows full of coins, and it would be a good idea to use up clad coinage before using silver or gold..

 

Sat, 11/17/2012 - 17:25 | Link to Comment CunnyFunt
CunnyFunt's picture

The last time I found a silver quarter in my change was in the mid-'80s, and I still always check. But you're right about saving change. Copper cents are each worth $0.0227 melt value and are commonly found.

Sat, 11/17/2012 - 17:41 | Link to Comment AL_SWEARENGEN
AL_SWEARENGEN's picture

In the past two years I've been handed three Silver quarters as change (that I can remember).  It's rare, and another reason to pay in cash.  Just listen to the jingle every time you receive change.  A Silver coin against the rest will sound different.  Noticeable enough to hear if you remember to pay attention.  Nice name by the way.

Sat, 11/17/2012 - 17:51 | Link to Comment CunnyFunt
CunnyFunt's picture

Nice score.

Sat, 11/17/2012 - 17:01 | Link to Comment A Lunatic
A Lunatic's picture

Yawn.

Sat, 11/17/2012 - 17:14 | Link to Comment funthea
funthea's picture

Retarded...

In a high inflationary environment, let alone a hyperinflationary one, no one is going to be having the same monthly expenses as they did before. And gold and silver, in that environment, would go up until the paper reflection of it defaulted, thus redering it super nova. Toilet paper then becomes worth more per sheet than $100 bills, as it is easier on the keaster for wiping than the FRN's. In the end people just burn the FRN's to keep warm.

Sat, 11/17/2012 - 17:25 | Link to Comment A Lunatic
A Lunatic's picture

This whole country would be a war zone and gold/silver would be the last thing anyone but the ubergreedystupid would be worried about. Far too many people treat the possibility of this scenario like a 'Little House on the Prairie' episode. It will be anything but, and what is considered a priority today will be utterly fucking laughable should all of this unfold..............

Sat, 11/17/2012 - 17:39 | Link to Comment chubbar
chubbar's picture

I believe you are correct, but only to a point. A mad max scenario will only play out for so long. Eventually the survivors will have found a way to acquire food and shelter long term and the nation will settle into a new "normal" Of course there will be a lot of death and destruction along the way, which is why some folks on this blog say to store food, guns and ammo. The gold/silver is for AFTER this plays out and there is some sort of semblance of society that reorganizes along with a mechanism to store wealth. IMO.

Sat, 11/17/2012 - 17:42 | Link to Comment funthea
funthea's picture

In hyperinflationary events throughout history, gold and silver have done quite well. Priorities may in fact change, along with the funds allowcated to them, but gold and silver will most assuradly find favor in such an environment, just as in times past.

Sat, 11/17/2012 - 17:35 | Link to Comment bunnyswanson
bunnyswanson's picture

http://www.youtube.com/watch?v=5FPAYqU5Pj0 -

Vid 1 of 4 Inside Bank of America DOES NOT accept U.S. DOLLARS as payment on mortgages in AMERICA?!? Feb 3 2012 Bank of America Lakeport, Ca. I attempted to make a cash payment on our mortgage, the manager refused to take the cash saying it was against bank policy.

 

 

I was shocked, had no idea this would happen, since when does a bank not accept cash… Right! When I protested, the manager called the Lakeport poilce dept. After being detained for about 1/2 hour and nearly arrested for shooting video inside the bank the cops decided to let me go.

The BofA manager made a complaint against me and had the cops inform me that I am "no longer welcome inside the Lakeport branch of Bank of America." Also that if I "ever attempted to enter the branch again I WILL be arrested!"
So apparently Bank of America DOES NOT accept American cash dollars as a form of payment on mortgages in AMERICA!

PROTEST & YOU WILL BE ARRESTED!

 

http://www.morningliberty.com/2012/02/10/top-30-debt-facts-bank-of-america-refuses-to-take-dollars/

 

 

Sat, 11/17/2012 - 18:16 | Link to Comment DosZap
DosZap's picture

bunnyswanson

Then the BOA, just committed a Federal Crime, it is legal tender, for ALL Debts,you should contact the Feds.

Their POLICY cannot allow them to not accept USD's for any payment.

Sat, 11/17/2012 - 20:30 | Link to Comment UP Forester
UP Forester's picture

Try postage stamps at a different branch.

When they refuse, have them sign a refusal to accept payment form you wrote up, have it notarized on the spot, and under the Uniform Commercial Code they have just discharged your debt.

Although they already have by refusing your FRNs.

Sat, 11/17/2012 - 18:35 | Link to Comment AGuy
AGuy's picture

Ideally one would continue to horde PM's during high\hyper inflation and spend the paper currency as fast as it comes in. PMs are about preserving wealth. No point is using your hard earn currency when you can still trade paper for goods and services. Its when the Paper become worthless, then you turn to your hard currency. Its seems unlikely that the period between when paper currency fails and when something else takes over would last years.

The biggest concern is as when currencies start losing value fast, that gov't will enact laws regulating or banning the use of PMs. I think initially they will raise the capital gains tax on PMS to 90% to 95%. After that fails they will make private ownership illegal and enact Confiscation laws to denied value to the common folks. When it comes to gov't policies always consider the policies which have the least resistance for the gov't to implement (aka money printing) and which policies to keep the current leaders in power for the longest possible time.

FWIW: I think beginning in 2013, there will be a gun grap, putting in a ban of Semi-automatic rifle sales and outlaw handguns. They probably will enable laws on ammo purchases (including purchase limits and a painful sales tax on ammo). Later will come restrictions on PM's.

Sun, 11/18/2012 - 10:02 | Link to Comment Vooter
Vooter's picture

There are currently restrictions on owning marijuana. Do you see people turning in their pot?

Sat, 11/17/2012 - 18:58 | Link to Comment ParkAveFlasher
ParkAveFlasher's picture

+1 PussyCentaur

I love the "if your expenses are xxx you should have xxx ounces..." assumption that you won't be desperately searching for a crowbar to beat up your neighbor for the last potato in the bin, in a hyperinflation scenario.

RIIGHT you'll be browsing StubHub for $50,000 bleacher seats for Red Sox / Yankees and seeing if you have $8500 on the metrocard to make the trip to the stadium, or if you should take a cab ride for another $50,000.  I can see it now, the vendor throws a bag of peanuts across the row and you throw back a big wad of fifties. As the wad is in midair, the vendor receives word that the peanut growers just lobbied for a rate increase and you owe him more money, and as you throw him a brick of tens for the difference, he calls to you that his union just bartered for better pay and if you can spare a few thousand until a trainload of cash makes its way from the local Fed to the bank next to the union HQ.  Hey, keep the change, assuming you can fit it in the trunk of your nicely equipped Escalade.

 

Sat, 11/17/2012 - 22:08 | Link to Comment BooMushroom
BooMushroom's picture

Hard to wipe your butt, or to burn to keep warm, with ones and zeros!

01001111011011100110010100100000011100010111010101100001011001000111001001101001
01101100011011000110100101101111011011100010000001001111011000100110000101101101
0110000100100000010000100111010101100011011010110111001100100001

Sat, 11/17/2012 - 17:15 | Link to Comment Pool Shark
Pool Shark's picture

 

 

 

High inflation does not automatically mean higher gold prices: gold went down for 20 years between 1981 and 2000 with high inflation raging the whole way.

Gold actually does better during deflations and financial crises:

http://globaleconomicanalysis.blogspot.com/2007/02/is-gold-inflation-hedge.html

Am I stacking? Hell yes! but not because I fear inflation. Rather because I seek to preserve purchasing power in the coming debt default/currency crisis.

Sat, 11/17/2012 - 17:18 | Link to Comment fonzannoon
fonzannoon's picture

I thought gold went down in 1980(ish) and stayed down for 20 years for the one reason that cannot possibly happen today. Interest rates shot up.

Sat, 11/17/2012 - 17:33 | Link to Comment Pool Shark
Pool Shark's picture

 

 

Exactly.

Volcker raised the prime rate to 21.5% to fight inflation. This killed gold as the carrying costs (no interest) made gold a poor investment.

If we do get high inflation again; expect interest rates to go up and we'll see a repeat of the 80's and 90's (bad for gold).

Frankly, I don't think we'll see persistently high inflation accompanied by high interest rates in the near future simply because the days of "wage-push" inflation are over. But if interest rates start to back up; it will be time to liquidate your precious metals...

As mish points out: gold is money, and money always does well in times of deflation.

Sat, 11/17/2012 - 17:40 | Link to Comment lunaticfringe
lunaticfringe's picture

That cannot possibly happen gents, so don't worry. Can you imagine the interest on Treasury debt? These fuckers have screwed the pooch. They can't jack up interest rates because they continually have to refi of all that 16 trillion worth of ass wipe they issued. How they gonna jack up rates and pay the interest on Treasury debt? Can't happen. Bernank buggered the poodle.

Sat, 11/17/2012 - 19:16 | Link to Comment A Lunatic
A Lunatic's picture

I think three things will happen; shock, denial, and wailing and gnashing of teeth when the Fed's solution to that problem become obvious. Sure it's nice to think they are ignorant buffoons that have painted themselves into a corner, but I do not seriously believe that. My guess is that deep down inside you don't either..........

Sun, 11/18/2012 - 09:59 | Link to Comment Vooter
Vooter's picture

"Sure it's nice to think they are ignorant buffoons that have painted themselves into a corner, but I do not seriously believe that. My guess is that deep down inside you don't either."

LOL...I fucking believe it. What are you talking about? These are all people that you and I went to grammar school, high school and college with--they bleed and shit their pants just like everyone else. They're only able to pull their bullshit because people like you and 99% of the rest of the U.S. population treat them like superpower-wielding wizards. THEY'RE NOT! They're just everyday assholes who have fucked up--and who will pay for their sins, just like assholes have been paying for their sins since the beginning of time...

Sun, 11/18/2012 - 00:57 | Link to Comment steve from virginia
steve from virginia's picture

 

The private sector has to continually roll over its own $40 trillion + in debt, high interest rates would bankrupt most businesses, too.

Sat, 11/17/2012 - 17:40 | Link to Comment fonzannoon
fonzannoon's picture

if rates go up again it won't be because the fed raised them (like volker) it will be because the world called bullshit on the US ability to ever pay anyone back. it's the complete opposite of the 80's and it is reasonable to think the complete opposite reaction in gold would happen compared to the 80's. You seem to be assuming higher interest rates with a strong dollar. true 30 years ago. not today.

Sat, 11/17/2012 - 18:16 | Link to Comment Pool Shark
Pool Shark's picture

 

 

Look at the period between 1985 and 1998 on this chart:

http://3.bp.blogspot.com/_nSTO-vZpSgc/Rdh85QBPcwI/AAAAAAAAAXg/f26Q-D_UcAc/s1600-h/US%24Index-vs-Gold-1970-2007.png

The US dollar depreciated significantly over this 13-year period, but gold was flat. As the article points out; there is not necessarily an inverse corelation between gold and the dollar.

Sat, 11/17/2012 - 18:25 | Link to Comment fonzannoon
fonzannoon's picture

i'm on mobile can't open the chart. the dollar in 1998 was much stronger against the CAD and AUD and almost anything i can think of. what is it measuring the dollar against? how do you account for the question regarding raising rates and funding the defecit?

Sun, 11/18/2012 - 06:23 | Link to Comment saveandsound
saveandsound's picture

Looks like there is almost no correlation between "us-dollar index" and "gold spot price".

But the time between 1985 and 1998 was called "the great moderation" - prosperity, reasonable debt levels and so forth. We are more at the eve of the 70ties. Remeber there has been a bank and financial crisis in 1966 which was covered up with liquidity after all. Read Hyman Minsky's "Can it happen again?".

To say it in a few words: I hold equities and cash (swiss francs) besides Gold and Silver. Diversify, bitchez!

Sun, 11/18/2012 - 06:08 | Link to Comment saveandsound
saveandsound's picture

Hi Pool Shark,

good to read someone's more differentiated point of view. The world isn't one-dimensional and Gold and Silver habe certainly become expensive.

However, central banks and goverments have their ways to keep interest rates low and might very well lie about consumer price inflation. For now there is no new Paul Volcker in sight. And, please do not forget, interest rates in the 70ties were high as well, but not high enough to crush inflation. If Gold is money, please keep in mind that Gold is a scarce kind of money.

As always, markets are no one way street. The question is: when will central banks change their policies? I beleive we have at least three more years to go. Probably much longer. So is it more like 1969 or more like 1973 now? What do you think?

Sat, 11/17/2012 - 20:31 | Link to Comment Roark12
Roark12's picture

I thought gold went down in that time period because of Treasury Inflation Protected Securities (TIPS)

Sat, 11/17/2012 - 17:17 | Link to Comment I am Jobe
I am Jobe's picture

How many Pussies for an oz of Silver?

Sat, 11/17/2012 - 17:32 | Link to Comment funthea
funthea's picture

Now you're talkin.

I once figured that an ounce of silver should be equivalent to 320 blowjobs.

A blowjob, regardless of how pleasant, is still unskilled labor. Hell, I bet 99 out of 100 women attained fruition the very first attempt. How skilled does one need to be with a success rate like that? Even at 15 minutes to completion (I'm sure I'm overstating the average time it takes... I'm usually spent in the first minute or two.), that's four an hour. If we assume 1/10 oz per 8 hour day of work (I know others have stated 10 and 12 hour days). That's still in the realm of 320 blowjobs on the low side. Could be somewhere near 500 blowjobs if we consider longer days for the 1/10 oz.

Sat, 11/17/2012 - 18:40 | Link to Comment Haole
Haole's picture

As I have enough "tangibles" to weather a scenario whereby hard assets will be the only acceptable method of exchange/commerce (~Mad Max?), the amount of premium ham wallet I could get with my "money" would likely be one of my interests.  A bit of silver they would most certainly deserve, I'm a nice a guy after all... ;)

Sun, 11/18/2012 - 13:54 | Link to Comment kwality
kwality's picture

You are underestimating a lot of factors imo.  First, a person exchanging bjs for silver would presumably try to be making a living wage.   My personal estimate would be 1 bj to 1 ounce of silver.  Maybe for a college boy crowd a 10 to 1 ratio would be more appropriate... but an older dude takes a lot longer to blow.  It's more labor/skill intensive and the wrinkly-balls risk needs consideration.  BJs for the older gentlemen would be more like 1/1...  in hypothetical terms of course. 

Sat, 11/17/2012 - 17:18 | Link to Comment Flakmeister
Flakmeister's picture

5000 oz of each ought to do fine....

Sat, 11/17/2012 - 18:16 | Link to Comment fuu
fuu's picture

How you doin'?

Sat, 11/17/2012 - 17:32 | Link to Comment cossack55
cossack55's picture

They forgot:

Can you eat gold?  Only the gluten free type.

Sat, 11/17/2012 - 17:34 | Link to Comment lunaticfringe
lunaticfringe's picture

Wow. I have half the two year amount. I thought I had an adequate amount. I have 1/4 400 oz of silver...geez...

Sat, 11/17/2012 - 17:34 | Link to Comment Essential Nexus
Essential Nexus's picture

The amount you need = the amount you can buy.  Simple.

Sat, 11/17/2012 - 17:40 | Link to Comment wcvarones
wcvarones's picture

That's a little oversimplified.

First of all, this assumes not only that your income doesn't increase with inflation, but that you have no income at all.  Yes, it's possible that you lose all capability of producing anything of value to anyone else, but if that's the case, you've got bigger problems.

Then if your monthly expenses include a fixed-rate mortgage, you're not going to have to worry about that much anymore because the payments have been devalued.  And since we're assuming you lost your job, you can forget commuting and business clothing expenses.

And in this jobless hyperinflation world, I'm guessing you're not going to feel like theatre and fine dining much, so you can probably shave your entertainment budget.

Bottom line: you're going to be fine with a lot less gold and silver than this dude says.  In the land of the 0% allocation to gold, the 5% man is king.

Related: Gold: do you have your share?

Sun, 11/18/2012 - 06:15 | Link to Comment saveandsound
saveandsound's picture

> That's a little oversimplified.

Of course, author is selling his book. Like all Guest Posts.

Sat, 11/17/2012 - 17:41 | Link to Comment Silver Garbage Man
Silver Garbage Man's picture

The answer to how much should you have is 100 % - what ever % you are willing to see vapourized when the ponzi collapses.
Once you realize this is a take down by the illuminati, it becomes obvious to hold as much as you can.

Sat, 11/17/2012 - 19:20 | Link to Comment samsara
samsara's picture

"...Once you realize this is a take down by the illuminati, it becomes obvious to hold as much as you can."

 

THAT is what to keep in mind.  Regardless of the day to day details that may confuse you.  You should have a long range stragegy.  (but the long term stategy is actually getting you through the next 10 years.  If you make it thru the other side...

Good Luck. 

 

Sat, 11/17/2012 - 17:47 | Link to Comment DowTheorist
DowTheorist's picture

One positive for gold:

The gold /dow ratio turned long term bullish for gold on Nov 7:

http://www.dowtheoryinvestment.com/2012/11/dow-theory-update-for-nov-8-s...

As important as the GOLD/DOW ratio is the BLV (long-term bond term bond) /gold ratio.

Gold will not really shine until the long-term bond /gold ratio denotes that gold is holding the upper hand. Until now, the ratio is solidly bullish, which implies treasuries being stronger than gold.

http://www.dowtheoryinvestment.com/2012/10/dow-theory-spells-trouble-for...

 

 

Sat, 11/17/2012 - 17:47 | Link to Comment Atomizer
Atomizer's picture

 

 

Asia and the Promise of Economic Cooperation - Remarks by Christine Lagarde

http://www.imf.org/external/mmedia/index.aspx

Gold in the IMF

Making Gold Mining a Force for Development – World Bank

Fast & Furious demand reduction strategy. Administration will meet brick wall, selective memory always prevails during the process of getting caught in a lie.

http://www.trilateral.org/download/video/Negroponte.html 

These fuckers are chasing their own tail.

Sat, 11/17/2012 - 17:53 | Link to Comment q99x2
q99x2's picture

Worth your weight in gold unless you're one of those fat fuckers in which case you take two onces off for every pound overweight.

Sat, 11/17/2012 - 18:03 | Link to Comment eddiebe
eddiebe's picture

 Oh come on now!!  I really don't need to have anyone to tell me how many ounces of gold I should own. I know how many ounces of gold I want to own!

Sat, 11/17/2012 - 18:03 | Link to Comment dinastar2
dinastar2's picture

OK high inflation is back - 1st scenario : A new Paul Volcker jacks up the interest rate (up to20-25%) to avoid a chinese-japanese manssive selling of T Bonds.So a lot of austerity , 3 years of deleveraging, massive unemployement, but the cure really works.Gold will plummet. You the savvy saviours have lost your investment

2nd scenario :   Hyperinflation and still Ben Bernanke or a clone of him at the Fed.The Fed wants to outsmart the chinese-japanese so you have more QE 4-5-6-etc... the $ dollar plummet and gold goes through the roof BUT (here is the catch ) GOLD is voted ILLEGAL as a mean of payement inside the USA .Meaning your gold really belongs to the Government.So you suffer fom high inflation but the goivt has confiscated your hedge.FDR did that in 1933.

Please vote for wich scenario you think is more credible:My opinion is scenario No.2 is the real one.

Sat, 11/17/2012 - 18:17 | Link to Comment hapless
hapless's picture

As I have always said, it will not be safe to bring out your gold until the air is filled with the stench of the rotting apparachtik. In the meantime, barter with cigarettes and hope for the best.

Sat, 11/17/2012 - 22:43 | Link to Comment Ginsengbull
Ginsengbull's picture

Everclear grain alcohol.

 

Anesthetic, antiseptic, universal solvent, emergency motor vehicle fuel, improvised incendiary device, memory eraser, truth serum....

Sun, 11/18/2012 - 02:34 | Link to Comment Real Estate Geek
Real Estate Geek's picture

. . . and a hell of a leg spreader!

Sat, 11/17/2012 - 18:34 | Link to Comment cossack55
cossack55's picture

There have been a lot of things voted illegal that the majority of citizens ignore daily.

Sat, 11/17/2012 - 22:20 | Link to Comment BooMushroom
BooMushroom's picture

There were 9 "marijuana for sale" ads on Craigslist for my area today.

Your argument is invalid.

Sun, 11/18/2012 - 09:48 | Link to Comment Vooter
Vooter's picture

"GOLD is voted ILLEGAL as a mean of payement inside the USA . Meaning your gold really belongs to the Government. So you suffer fom high inflation but the goivt has confiscated your hedge."

LOLOLOLOLOLOL!!! How's the government going to find everyone's gold so that they can confiscate it? Are they going to do a yard-by-yard search of the U.S. mainland? Plenty of people didn't "turn in" their physical gold in '33--and that was when the population actually had some (misquided) respect for the U.S. government. As I assume you're aware, marijuana has been illegal in the United States for many decades now. How many people do you think turn their pot stash into the government? LOL...wake up...

Sat, 11/17/2012 - 18:15 | Link to Comment fuu
fuu's picture

More.

Sat, 11/17/2012 - 18:23 | Link to Comment Yen Cross
Yen Cross's picture

 I need to start a pawn shop in a Farmers Market ... Pm's and Gems in, and " Fiats for Foods out...  ;-)

Sat, 11/17/2012 - 18:28 | Link to Comment fuu
fuu's picture

Cross market pollination.

Sat, 11/17/2012 - 18:40 | Link to Comment Yen Cross
Yen Cross's picture

 Hey :-) Happy Week End fuu! Hope you have been doing well...

Sat, 11/17/2012 - 18:47 | Link to Comment fuu
fuu's picture

Everything proceeds apace.

Sat, 11/17/2012 - 18:53 | Link to Comment Yen Cross
Yen Cross's picture

 As in status quo, or beating the markets like a "RED" headed stepchild? /s

Sat, 11/17/2012 - 19:17 | Link to Comment fuu
fuu's picture

"The horse walked with a patient, uncomplaining gait. It had long grown used to being wherever it was put, but for once it felt it didn’t mind this. Here, it thought, was a pleasant field. Here was grass. Here was a hedge it could look at. There was enough space that it could go for a trot later on if it felt the urge. The humans drove off and left it to its own devices, to which it was quite content to be left. It went for a little amble, and then, just for the hell of it, stopped ambling. It could do what it liked.

What pleasure.

What very great and unaccustomed pleasure."

Sat, 11/17/2012 - 19:35 | Link to Comment Yen Cross
Yen Cross's picture

 Good on you fuu. 

  JUST remember... to never !... look a gift UNICORN in the eye.

Sat, 11/17/2012 - 18:27 | Link to Comment mjorden
mjorden's picture

But our dollars are backed by the faith and credit of the United States government!

Sat, 11/17/2012 - 18:29 | Link to Comment AgShaman
AgShaman's picture

One hundred ounces of silver....and one ounce of gold

....for every year of your working adult life

Sat, 11/17/2012 - 18:40 | Link to Comment Dre4dwolf
Dre4dwolf's picture

My only argument AGAINST inflation is, that

Its easy to double 1 Million dollars 

Its hard to double 15 Trillion.

BUT since the M2 Charts are essentialy "parabolic" and we are over the curve, its QUITE POSSIBLE to happen in a short time-span.

 

Right now most of the inflation is tied up doing work running the "virtual world", stocks are in a bubble, other currencies are in a bubble, everything ins in a bubble, and housing is a sinking ship, they are just dumping money into a sinking ship that will never float again.

 

The next real-estate boom will be in large scale apartment buildings in new - developement areas (wherever people move to get away from the worst places like major city areas).

Trains might see a new boom, as fuel costs for cars rise, and airplane fuel becomes expensive / forcing the cost of flying too high for most.

I actually see high - speed rail as the "next big thing" in like... 15 ~ 20 years.

 

Sat, 11/17/2012 - 19:18 | Link to Comment Bansters-in-my-...
Bansters-in-my- feces's picture

Answer:  all of them...Haha!

Sat, 11/17/2012 - 19:18 | Link to Comment pitterrier
pitterrier's picture

If we experience significant inflation, be assured that all mortgage contracts will be modified by the banks and their lapdog politicians to inflation adjusted principle and interest payments.  There is not a chance in hell that the banks are going to allow borrowers to benefit at their expense.

Sat, 11/17/2012 - 19:44 | Link to Comment ArrestBobRubin
ArrestBobRubin's picture

Weary you say??? Who's weary?

What I am is happy: happy we're not in chaos yet. And super happy to have had yet another year to accumulate more physical silver and gold at prices that are nothing short of cray-cray.

In reality, this government subsidized bonanza has been the Bailout for the Average Joe. The only question is whether Joes (and Janes) were smart enough to see it that way, and bold enough to seize the moment.

If 2013 brings another year of artificially supressed paper metal prices that allow me to swap less trash fiat paper for more Hard Assets and Real Money, so be it. Because one of these days that's all going to change, and it will change in a big way. Until then? Disciplined accumulation via Dollar Cost Averaging is the name of the tune we dance to.

Keep your head down, and just keep stacking. Month in, and month out. The rest will take care of itself in due time.

Weary's got nothing to do with it. It just.... is. You take what the defense gives you.

Sun, 11/18/2012 - 10:28 | Link to Comment Absinthe Minded
Absinthe Minded's picture

Bingo! You better take advantage of it while you still can. Let these clowns blow their cash on big screen TVs or the new Dodge Dart. What a joke this world has become, it is like a caricature of what life used to be. So sad.

Sat, 11/17/2012 - 19:41 | Link to Comment Supernova Born
Supernova Born's picture

All I need is lead, brass, water and a freight train to move it all around.

Sat, 11/17/2012 - 20:02 | Link to Comment ArrestBobRubin
ArrestBobRubin's picture

One thing ZH still stuggles to understand overall: what people need to be doing is SAVING in gold and silver. "Investing" in it has its benefits but is NOT a substitute or replacement for saving wealth and savings in metal form.

Just because gold has been the best performing asset class over the past 12 years does not mean one should only "invest" in it. Until you undertand that the real imperative is to SAVE in a form of money that cannot be debased, you really don't understand the need for (or the benefits of) gold and silver ownership.

This is exacty what Jeff Clark says in this chat with Chris Martenson. To protect ones wealth and purchasing power via the ownership of gold and silver. In short, it's Standard of Living insurance.

All here would do well to embrace this knowledge and act on it while supply is easy and prices remain low. Dilettantes and lightweights "invest" in PM, mostly via trading in GLD and SLV (paper metal) shares. Those in the know SAVE their wealth in physical gold and silver.

The difference is night and day.

Sat, 11/17/2012 - 20:11 | Link to Comment Benjamin Glutton
Benjamin Glutton's picture

no more than I can sew into my clothing?

 

“… [G]old is a great thing to sew onto your garments if you’re a Jewish family in Vienna in 1939 but civilized people don’t buy gold – they invest in productive businesses.”— Charlie Munger.

Sat, 11/17/2012 - 22:31 | Link to Comment BooMushroom
BooMushroom's picture
“… [G]old is a great thing to sew onto your garments if you’re a Jewish family in Vienna in 1939 but civilized people don’t buy gold – they invest in productive businesses.”— Charlie Munger.

He's begging the question: are we a Jewish family in Vienna in 1939?

Sat, 11/17/2012 - 20:31 | Link to Comment Wave-Tech
Wave-Tech's picture

Low end: 10% of NET WORTH / Mid-Range: 15% NET WORTH  / High-end: 20%+

Do what you must to make it so ASAP - hope you never need to spend it - and rebalance your hard-money to Net Worth Ratio every year or so...

Download the excel spread sheet on this bonus page to play with budgeting for essential allocations beyond that of Gold/Silver as there are a few more MUST-HAVE tangible assets that one must have at the ready.  Without them, all the gold in the world is worthless....

http://prudentmeasures.blogspot.com/p/bonus.html

Sun, 11/18/2012 - 10:22 | Link to Comment Absinthe Minded
Absinthe Minded's picture

Interesting worksheet, but going by their projections shouldn't we all be buying Silver? Projected increase in fiat value seems way more desirable than Gold. To think, I was buying Silver all this time because I could afford it easier. I didn't know I was an investment genius.I know, even a blind squirrel finds a nut once in a while.

Sat, 11/17/2012 - 21:58 | Link to Comment Never One Roach
Never One Roach's picture

Lets look at it this way. My house value is down 38%, my dollar purchasing power is down about 40% over the past five years and my GLD and SLV are up over 250%.

 

'nuff said.

Sat, 11/17/2012 - 22:25 | Link to Comment Cabreado
Cabreado's picture

This article is disturbing on many levels, it's simplicity and shallowness first.

Mr. Clark, I'm sure you mean well, but there will be no charts to guide us from here to there.

 

Sat, 11/17/2012 - 23:10 | Link to Comment RockyRacoon
RockyRacoon's picture

That would be correct.  All this goes out the window in the real world.  "Accumulate!" is the only relevant phrase.

Sun, 11/18/2012 - 00:06 | Link to Comment egoist
egoist's picture

Key take away: I'm screwed.

Sun, 11/18/2012 - 01:26 | Link to Comment Manic by Proxy
Manic by Proxy's picture

In discussing the topic of stacking incessantly with Mrs. Manic, we have covered food, ammo, silver, gold, water, seeds and even soap, toothpaste, shampoo and detergent. When the topic of toiletpaper arose, she sagely observed that you needn't have more toiletpaper than food. Thus proving (once again, dammit) her superior analytic acumen.

Sun, 11/18/2012 - 01:37 | Link to Comment mt paul
mt paul's picture

i stack

therefore i am ...

Sun, 11/18/2012 - 03:11 | Link to Comment Rick Blaine
Rick Blaine's picture

If you think you REALLY "need" gold (or silver), you really need lead.

Sun, 11/18/2012 - 03:31 | Link to Comment Silvertrader
Silvertrader's picture

I own gold and silver but also trade it using CFD's.

Sun, 11/18/2012 - 11:56 | Link to Comment Sudden Debt
Sudden Debt's picture

actually, 4 years ago I calculated that I would need 8000 ounces of silver. Do Did Done.
But I do think this calc is wrong. the price stays at 28 dollars? that means only the dollar would drop and demand for the metals would not increase.
So I think in such a scenario, demand will go thermo nuclear propping up the price to at least 500 inflated dollars versus inflated global currencies.
remember, the euro is also death, china is only maximum 6 months aways from hyperinflation and also has a 22% unemployment rate which will cause their real estate bubble to explode and with 64 million vacant appartments versus 650.000 in the US, that bubble will be epic.

I think that Joe average should own at least 250/500 ounces. and that is so he or she can buy a ticket out of that mess and go international for a year. not in the barbados of saint johns but in a comfortable place with plenty of food and a climate that allows a lesses luxurious lifestyle.

remember, the guy who has 250 or 500 ounces has about 250 to 500 times more than the guy who sells everything to get one.

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