How I Felt When I Bought Silver
(And a gun and cash and gold!)
Silver Stock Report
by Jason Hommel, June 28th, 2011
The next thing I did, still before I bought silver, to gain a bit more of that feeling of safety and security, and to be responsible, I began holding cash at home in a locked drawer in my desk. I held cash because I knew that the banks don't even have enough cash on hand to back up all deposits, so I only kept enough cash in my bank account to pay the bills. Sometimes, I would take out more cash than I needed, and then re-deposit it, just to make sure that the banks were honest, and that I could get my cash out, if needed. I was uneasy that banks often had trouble giving $5000 in cash to depositors, when I had from $10,000 to $20,000 in my bank account!
Taking money out of the bank, even your own money, always feels a bit weird. They make you feel weird about it, too. Propaganda goes back to textbooks in school that try to teach us that the great depression was to blame on people who stored cash in their mattress at home, since that reduced the "velocity of money". (But people should be richer if the velocity of money goes down, as the value of their money goes up.)
A customer relates her experience, as follows:
"The first few times I took $10,000 out from Wells Fargo, it was no problem. This last time, on June 9th, they only let me take out $5000, and so I had to go to two branches. And, they acted like I had to order the cash four days in advance. And, on top of all that, they wanted to know what I was going to do with my money! It's infuriating!"
"But I've found that actually buying bullion from the JH MINT is more fun, more rewarding, and less stressful than doing other things with my money, like visiting my relatives in Florida, or going to Disneyland. You guys are in such a nice place, and your parking lot feels so safe, as there is not much street traffic nearby, and it feels like nobody will know what we are doing when we are there!" (Jason notes: That's why I picked my out of the way location! I used to drive 3.5 hours, for years, to get my bullion!)
"The best part about buying silver is that you hear so many things that are infuriating, but you can't do anything about it, like the direction this nation is headed, or the budget deficit. But buying silver is a process of actually taking control, it's empowering! Buying silver is somthing you actually can do something about!"
OK, it's me, Jason again:
I first bought some gold and silver soon after I heard what I thought was a "sure thing" insider tip. I heard a customer at a gunshop say that the mines could hardly produce gold for the price it was at, which sounded like a guaranteed way to make money, simply by buying gold.
(In hindsight, he was right. Furthermore, even though we are in a bull market for gold, gold mine output is down, because many other costs, such as oil, which is a large part of mining costs, have risen faster than the price of gold, as oil has moved up from $10 barrel to over $100, now at just under $92. If gold had kept pace with oil, gold's price would be $2760 today.)
I remember my first few trips to my local coin shop, Tebo Coin in Bouler, Colorado. I bought about ten gold coins, and I ended up selling a few back, but for the longest time I held onto four different one ounce gold coins for a bit of diversity, and $400 worth of junk dimes that were so heavy they seemed like they were going to bust through the two paper bags they were put in when I bought them.
I had to ask why there was sales tax on gold, and I had a few other questions, but the dealer seemed a bit grumpy, yet he also seemed somehow proud of my wise decision, as I was younger than his typical customers he told me. He seemed a bit inconvenienced at my questions on how to know how much silver was in the silver dimes I was buying, and I felt like I just had to trust his math on it, which I didn't like.
Owning some gold felt super cool. I knew my dad was rich compared to me, but not even he had any gold coins. I felt special. Unique. Responsible.
I didn't realize how long I'd have to wait until gold prices would start going up. At first, gold prices continued to go down, and I was losing a bit of money on the gold that I held, but it didn't bother me too much to lose 5-10% on an investment that seemed like a sure thing.
I also felt a bit foolish because I had to pay the sales tax when I bought my gold, and you don't get that back when you sell the gold. An investor friend thought there should not be any sales tax on gold, and he's probably right, but he didn't know the law.
I thought that gold was probably a better investment than ever, but, not wanting to wait for gold prices to go up, or not knowing how long I would have to wait for gold to go up, I became impatient.
I wanted to have more money to be able to buy more gold, so I began looking for other investments. I put $5000 into a penny stock that made a sugar substitute from an herb in the Amazon, that was supposedly sold short more stock than was issued, and might be likely to go up a lot in a short squeeze. Later, I was lucky to get about $4000 out of it before the company went bankrupt! I then put $2500 into a small actively day-traded forex trading fund that was earning a steady 50% per year. I later took out about $3200 less than a year later, and I was very lucky then too, as that fund was later revealed to be a ponzi scheme!
In hindsight, I should have stuck with gold and silver!
Cody Roberts, who works with me at the JH MINT, relates his story:
I first bought silver in Sept 2008. When I bought silver for the first time I was very excited to be buying the silver. I had studied and I was fairly sure I was doing the right thing at the right time. However at the same time I was very nervous about my world. I was a civil engineer and knew that the housing bubble collapse was coming and the banks were already failing starting with Bear Sterns. Liberal Barack Obama was on the path to become president while our “conservative” president Bush was just signed the Banking relief package, which provided no relief or comfort top my fears. I started to stockpile food in 5 gallon buckets. I bought gas cans and had them always filled. I took our all my IRA savings with penalties and went into silver to protect me from what I was feeling which was impending doom in both my employment and my investments. One month later my company was downsizing dramatically and the company IRA plan was down about 50%, joy to me my silver was already up very much.
(Jason says: As an aside, for people with 401k's or IRA's. If you are retired, or if you quit your job, you can roll your 401k into an IRA with no penalty. You can use any brokerage, but many people open IRA's with a broker called tdameritrade.com for convenience. Once you have an IRA, your choice are not limited as they are in a company 401k. You can buy anything, any stock you want, and much more. I recommend, as short term moves, CEF or PSLV, both bullion funds. CEF holds 50 oz. of silver for every 1 oz. of gold, and has about 97% of assets in silver and gold. PSLV is a silver only fund, run by guys many in the metals industry trust. After that, you can take it a step further, and gain more control if you open up an IRA with checkbookira.com. They will let you be your own custodian of our own IRA, and you can actually buy physical silver Eagles and store them in your own IRA approved vault, with no penalty!)
OK, it's back to Jason's story again:
I convinced my dad to buy some gold and silver, far more than I had bought. He wisely avoided the forex trading scam, as he didn't understand it. He did understand how cool and awesome it was to hold gold coins in your hands. He loved how heavy they were, how real they felt, and how they would warm up in his hands. He remarked how the gold coins were like they were a thousand times better than the most awesome stone he ever found and kept for a rock collection. They were unique. Special. Super cool.
My dad had a funny realization that he, being way more wealthy than me, did not have more gold than me. In fact, he had none. I think he felt like I had shown him up or something in some sort of competition.
And so, my dad wanted to just buy my gold from me! No sir, get your own! Ah, another one up for me!
So my dad asked me to look for a dealer where he could buy some, and we decided on mail order from one of the largest dealers in the USA, Investment Rarities. (Hint, our prices at jhmint.com are usually lower than theirs!) They delivered, in about two weeks or so. We also deliver in about 2-4 days!
It was shocking to get a package worth $10,000 in the mail, delivered incorrectly. It was sent registered, insured, signature required, but we live on a training route at the post office, and our house was the last delivery of the day for the newbies, and so, the post office goofed, and they put the package into our mail box out on the street! And we lived next to St. Anthony's Church in the Bay area, that gives out free food to homeless people who wander by our box! We were outraged at the post office, not the dealer, and I marched on into the post office demanding to see the head guy to tell him about his horrible goof, and how I never signed for it, and that if it was lost, they would be on the hook for the $10,000 loss! I chewed him out good, showed him the gold, and he was very apologetic. It felt kind of oddly powerful that a government official would take such an angry complaint, and be so apologetic and thankful, but there you go. The power of gold!
It took a few years of hard work, discussions, arguments, and persistence to get my dad fully into gold, and then, later silver. He went through many of the same emotions I did. Before he bought, he had concerns over whether it was real. He had concerns that the advertisers were telling the truth of the supply and demand factors. He finally realized that the government was lying far more than the dealers. The supply and demand numbers for silver were so positive for silver, it was almost impossible to believe the numbers!
At first after buying, my father felt a bit of elation over how easy it was to get it. And he felt that he would be able to rest easy from more of my convincing talk. "Don't confuse me with the facts, boy" he'd half-jokingly say when he wanted to shut me up. Oh how wrong he was. I only pestered him to buy more silver!
So, we next had the usual problem. Where were we supposed to put it? For a while, we began piling the silver up in the bedroom closet. We had two places, a hidden cubby above the door, way out of easy reach for a usual in/out thief, and second, underneath the dirty underwear! Next, we got a sold wooden door for the closet, with a dead bolt on it. Later, we got some custom built large gun vaults with sold steel shelving inside, designed to hold all the weight so we would not have to just stack it so high that it would crush itself all down. After getting vaults, it felt a lot more safe and secure to have the bullion all locked down, all safe and secure. We covered the vaults with tarps, and simply kept them in the garage. That was enough for my dad. He discussed having cabinets built around the vaults, but never went through with his plan.
Eventually, I had cabinets built around my vaults, and I think that's the best way to go, after you bolt them down. After all, a thief cannot steal what he doesn't know is there.
At one point, I had a lot of silver, so much, I split it up, in case of theft. I split the silver into two piles, and I had some stored in another location, on property not registered in my name, but on property I could have access to at any time. And yes, in cabinets in vaults, bolted down. After all, as a writer who advocated ownership of silver and gold, I would not want the majority of my stash around where I lived, just in case a reader of my newsletter decided to hunt me down.
The only silver that's ever been stolen from me was that which I put into the trust of other men. Do you see now, why I advocate personal responsibility, and personal ownership?
Get silver and gold, while they are available. Take responsibility for yourself. Like me, you will be glad you did. Having silver safely stored will give you peace of mind.
But the only real peace, I have found, lies in trusting God, not in gold. But until our Lord Yeshua (Jesus) Messiah (Christ) returns, guns and gold and silver will have to do.
You can buy silver from us at www.jhmint.com