Precious Metals and how they can be a part of financial independence

Hello all,

One of the newer members here and thought I would throw this idea out to the community.

Its a mixed blessing as mining is often harmful to the environment, however having some physical precious metal is a wonderful way to hedge finances against a bank failure and or inflation. It has a history of exchange for thousands of years, looks beautiful and exists outside the fiat currency structure of our worlds interconnected finance system.

Its quite a rabbit hole for those who are curious about the importance of metals in our market system. It is a true store of value, of that I am very certain. While my current agriculture foothold is quite narrow, my metal security is not. Here in Japan land is so expensive that most farms and farmers are very old. The banking system stepped in about 30 years ago and propped up the property market so that land values remain at or near bubble levels. It makes it very difficult to earn a profit from farming the land. So I made the decision to focus on acquiring metal rather than land with the long term goal of returning to North America and starting a farm before I grew too old.

If we have another global financial crisis and banks are put into a position of having to seek yet another taxpayer funded bailout, its important to have at least some funds available that are not subject to overt government control. We have seen it happen already this century in places like Cyprus where there was a banking crisis on Friday, then over the weekend a new financial policy was implemented resulting in capped ATM withdrawls with an added tax imposed upon certain accounts. Let us not forget that Cyprus is in fact a member of the EU, so it can be argued that if it happened there it can happen here as well. Indeed it was less than 100 years ago that the US experienced a great bank run and ensuing depression. It may also be forgotten that in the later stages of the 19th century the US had what many call the "Long Depression". It had a terrible effect upon the farming base of the USA. Trust and monopoly controlled the government in a very similar way to the situation that exists today.

Many in the financial community believe there will be a shift to the SDR as a medium of exchange. A move away from the hegemony of the dollar could have adverse effects upon the standard of living for holders of US dollars. As homesteaders, perma-agriculturists this situation should not have as deleterious an effect as urban wage earners but an upheaval is probably baked into the cards. Anyone that cares to look at how the US government pays off its borrowing ways while spending uncounted billions on war yet denies its own citizens healthcare can see the writing on the wall. Anyone care to guess how much of our tax revenue the government spends on servicing the debt ? Its a lot. No investment for the future. Aging infrastructure. Bloated military contracts for unwanted death machines. In my view, its not something you fix with "reform". Rome is an excellent example of what can happen due to foolish govt spending.

I wasn't planning on making this a rant but rather to open someone else's eyes to the possibility of keeping at least a small portion of your money in something like silver. I think any prudent prepared person should have at least some metal in their personal possession. I do and sleep very well at night because of it. AG has been called the people's money and I believe that we the people need at least some of it as a safety net in case there is a financial blip in the future. After all cash is only as good as the confidence in the supporting system. I have little faith in that system but like most have to participate in maintaining it. Its why I have come to embrace agriculture and independence.

Hopefully this post remains on the site and I look forward to discussing this with any interested persons or critters

Best to us all
Paul

Hello friend,

It's so interesting that my first post here would be a response to this topic: I am a fan, an admirer, a contemplator
of the elements
and metals definitely qualify and represent an economic opportunity for permaculture application

As an element, metal rules wood (paper money), or weakens it, according to the energy discipline of Feng shui and natural systems
Emphasizing a metal based currency will, by the nature of the individual characteristics , hasten the weakening of the paper economy

and become grounded in real tangible goods.
When the story falls away from paper money and it no longer gives it value- what else could we do with it? what are dollar bills good for? Wiping one's butt? Taking snuff? Burning?

But if a metal based currency lost its exchange value in one way, it would retain it in another as the prime ingredient in so many human crafted items.

Only in recent generations did we move from a natural elemental economy
It is not so long ago that we cannot return to that moon time

I think your recommendation is right on, fren.

I got alerted to silver recently with the Gamestop run and then talk of a silver squeeze. I got inordinately excited by the idea of crashing the banking system and did buy some assorted sterling on eBay . Sometimes I need a few reminders to follow through and fully commit to divesting from one system for another.

It makes sense but it can feel a little daunting too to acknowledge that big changes can occur in a very short period of time.

Yet it is our task as practitioners, followers of permaculture , to perceive and acknowledge the characteristics of the different elements in a design, a system. Paper is way more ephemeral, vulnerable than metals.

Poignant to hear you reference coming back before you're too old to start on the land here...
Ive rented for a long time with various others over the years and feel the urge to claim our own land now with my man

Realistically a few months yet. So before converting paper into a house, I might have to convert it to metal first!
Maybe in a future reality we will have evolved so that we won't even need money
but as a transition to that time
I think metals are a wise bet

Thank you for the post.

Paul Canosa wrote:
So I made the decision to focus on acquiring metal rather than land with the long term goal of returning to North America and starting a farm before I grew too old.

Intriguing idea to focus on metal rather then land, when land prices are high. As with anything in life there is risk involved and one issue I see is the issue of fluctuation. How would a deep fall in the price of precious metals affect other issues around financial independence? Also would a seller want to be paid in precious metal over paper money?

T Blankinship wrote:

Paul Canosa wrote:
So I made the decision to focus on acquiring metal rather than land with the long term goal of returning to North America and starting a farm before I grew too old.

Intriguing idea to focus on metal rather then land, when land prices are high. As with anything in life there is risk involved and one issue I see is the issue of fluctuation. How would a deep fall in the price of precious metals affect other issues around financial independence? Also would a seller want to be paid in precious metal over paper money?

Good question

Fluctuation in price is indeed a risk. However if we apply a dollar cost average process over the time we acquire metals, the fluctuations become less of a hassle. So for example 1 coin at 10, another at 20 and the last at 30 puts avg cost at 20 which is an effective no brainer hedge.

Obviously one should never buy or acquire more metal than they can afford to lose money on. Perhaps a 5 or 10% stake might be prudent. Think of it as a slow drip flowing into your savings then sitting there as insurance in case of trouble. Even 1 ounce of silver a month is better than zero. IMHO.

I think the challenge to financial independence is from fiat currency, not the metals but again that is just one humans opinion. A deep fall in precious metals prices are a buying opportunity, rather than a source of worry. This is (at risk of repeating myself) why one does not "over" invest in metal. So if my dollar cost average of acquisition is at X and the price dips to X-y, then its a chance to lower my cost of acquisition. Prices will return to higher levels, the question is how long it takes to get there.

The flip side of this position is what to do with ones holding when prices rocket ? Sell and take a cash profit is a happy problem to have.

This century alone, silver has fluctuated from as low as $5 to a high around $50. Today its hovering around $25. My cost of acquisition is below 25 so I COULD sell now and take some profit, but I believe prices will go much higher.

I don't want to turn this thread into a why I am bullish silver. Rather to keep it simple and suggest that a small holding in silver is probably in everyone's best interest. We stack wood for fire, bolt or buy seeds to sow and should also consider metal as part of that "weathering" process.

For me the issue is more about the exit strategy than the process of acquisition. Perhaps that is an issue for another day... Thanks for asking TB

Paul Canosa wrote:I think the challenge to financial independence is from fiat currency

I skimmed through this thread and noticed that everyone is thinking in fiat paper.   As a thought exercise start pricing the things in your life in Silver, Gold, Corn, or Porkbellies for that matter.

Do that a few times and you will see how the value of your labor, intuition, intelligence, and time in this life is "diluted".


"The Creature from Jekyll Island" by G.E. Griffin makes for interesting reading.


https://archive.org/details/isbn_9780912986166


Hope this helps

Mark Cunningham wrote:

Paul Canosa wrote:I think the challenge to financial independence is from fiat currency

"The Creature from Jekyll Island" by G.E. Griffin makes for interesting reading.


https://archive.org/details/isbn_9780912986166


Hope this helps

It does help

My uncle ended up retiring and living on Jeckyll Island. At the time as a 20 something and going to visit my fathers brother, I had to show ID to get onto the island, tell them who I was visiting and their address. Hindsight often being 20-20 I understand why they required it.

GE Griffon talks about the book

We can even go a step farther and take a look at how wages were paid in silver over the history of humankind.
A good example in Charles Dickens’ 1843 novella, A Christmas Story, Scrooge paid Bob Cratchit 15 silver shillings per week. A silver shilling at that time had a silver content of about 5.2 grams — which means Cratchit received 133 troy ounces of silver annually as an accounting clerk.
The Romans and Greeks have numerous mentions of wages paid in silver.
The French paid US continental army forces much of their back pay in silver just prior to the Yorktown campaign. Without French silver, who knows what would have happened.

Cash and modern monetary finance have done wonders for convenience and portability, of that there is no doubt. However there is a cost involved in utilizing that system.

Another very informative book is Jim Rickards "Currency Wars" which I highly recommend.

My final point is a short story about a trip I took back in the late 80s to what was then Yugoslavia, now Croatia. At the time they had 2 different kinds of currency in use, the old notes with 1 zero on it, and the new notes with 3 zeroes on it. Both were accepted at the store but a 20 note and 2000 note had the SAME VALUE
2+ years ago before Covid hit, I took my wife to the city of Dubrovnik which is a lovely place that dates back many centuries. Many films and TV shows were filmed there including Robinhood, Star Wars and Game of Thrones. When we arrived the airport bus would only accept the local currency KUNA. No Euros or Dollars. I found it amusing. I asked the driver if he would accept a silver coin. He said "show me". I didn't have a coin at the time but it shows that he knew the value of real money and at least wanted to see it, rather than outright refusing the usual compensation.

We are putting the money we are saving for land into gold and silver.
We think it is a safer store of value than a savings account at the bank.

It took us a while to figure out how we wanted to buy the metal.
I didn't want to do it long distance and I wanted the metal in my hand.
DOH we finally hit on a small pawn shop in our area that specializes
in buying/selling metal and has for decades. It is fun to make a trip
every 4-6 weeks and figure out what we can get for the dollars we
put back.

Great news that you found a relatively local source of metals

I agree that unless you hold the metal in your hands, it isn't yours

Most services or "paper" metal products sales contract states somewhere in the fine print that they can settle in fiat currency to maintain market dynamics. What does that mean ? It means that they can sell our paper metal for dollars or euros or whatever currency you bank in. Further the ratio of paper metal to the real stuff is in the hundreds to one. If and when a market moves against a commodity such as precious metals, all those who have invested in paper metal products will find their account empty of metal and full of currency.

What does that mean ?

Well it means that the bank or government can impose a tax on the sale of it. They can also set a withdraw limit on your THEIR money. Its happened before. Look up the Cyprus bank crisis from 2012 to 2013.
Its not your money.
Its not your metal.

While I do keep money in a bank, we have most of our savings into a local credit union. Its just as likely in danger as a major bank, but I feel better with it invested in the local community.

best of luck to us all

Karen McVause wrote:We are putting the money we are saving for land into gold and silver.
We think it is a safer store of value than a savings account at the bank.

It took us a while to figure out how we wanted to buy the metal.
I didn't want to do it long distance and I wanted the metal in my hand.
DOH we finally hit on a small pawn shop in our area that specializes
in buying/selling metal and has for decades. It is fun to make a trip
every 4-6 weeks and figure out what we can get for the dollars we
put back.