Archive for December, 2011

ARE YOU SAFE (Warning, this could be upsetting)?


Do you feel safe walking outside your home and alone?  This is a question Gallup is asking worldwide to grasp how safe folks feel.  Gallup has come to realize this is the most accurate way of asking folks from Boston to Cape Town how safe they feel.  This worldwide poll is part of 100 year research finding out why some feel safe when others don’t.  The results of this poll will provide cause for concern and urgency to become proactive.  Jim Clifton, chairman for Gallup, says it all comes down to one tiny word, JOBS.

If you’re reading today’s post asking what jobs and gold have to do with each other I understand the confusion. This site often discusses how to buy, own, store, and sell gold/silver but today we’ll look deeper into a scenario that, in all probability, will increase the value of most precious metal.  It does have a lot to do with how safe people feel around the world today.  Mr. Clifton’s newly released book called The Coming Jobs War and I recommend everyone with the slightest interest in our economic future pick up a copy soon.

Never before has this many people spent so much money trying to feel safe, safe from personal crime, safe from cyber crime, safe from economic decline, etc. Home security services are running at full capacity trying to provide a feeling of safety and calm (security companies like ADT are hiring across the U.S.).  Companies like LifeLock can barely keep up with demand as folks like us transition into a cyber world where a thief can steal from the comfort of home.  The world is in search of any product or service that can provide security even to our very own identity.

Yet even with all this technology, the war to protect you is not winning. We are more likely than ever to experience some form of crime.  Mr. Clifton says it all comes down to the hopelessness that derives from lack of jobs.  City services cut, over crowded prisons, gangs, thugs, international trade wars, you name it.  Understaffed law enforcement trying to provide law and order all while keeping the bad guys at bay without reaching overtime status.  Some of us don’t like to read facts like I’m providing but the truth is, well, true.  The same forces driving your gold up will also continue to cause negative social concerns.

I hear gold experts speak of metal trends reaching $2000, $4000, heck $10,000 per ounce and it makes my stomach hurt. We must all realize a life with gold selling at $10k is also a life of concern and conflict none of us really want.  We often picture our personal wealth multiplied by five but rarely picture our local main street silent and a fraction of what it once was.  The thought of hundreds of thousands of dollars, euros, yuan, etc, excites us as gold holders until we process what a world with such metal value will offer us, and children, as a society.

My recent two-week trip to California may have provided a peek into your future. Once a state of prosperity and hope but now a place littered with trash and broken dreams.  The Central Valley of California is full of criminals who now realize law enforcement no longer has man power to aggressively stop, or store, criminals.  Fields once littered with dormant leaves now covered with discarded sofas, TVs, and trash.  A state no longer concerned with solving crime but focused on solving pension problems and deficits.  All while our stash of gold rises another year.

The forces pushing gold upward are not pretty and we can no longer pretend they will be. The Prospector Site often receives questions asking how high gold will go or what metal will prosper most.  We never receive questions about quality of life if metal does what we feel it’s preparing to do.  As gold holders we must be ready not only for new riches gold will bring but the concerns that go with it.

Let me know what you think. Do you feel safest by owning gold?  Do you feel gold provides options that will ultimately provide safety and security to your family?  You can reach me here.


Wow, some of you had a lot to say over the last day or two, thanks.  Here are a few of your comments. Thank you for all the comments and thanks for the one’s tweeting and posting on Facebook.

YOUR COMMENT (regarding Using Home’s Equity to Buy Gold):

Your house is bought and paid for. You’ve spent a long time getting to this reasonably safe position and you are not getting any younger. Property could very well go down if real terms but that’s not the main reason you decided to buy in the first place. You wanted security as well as a place to live without a large percentage of your earnings going on rent.

Now taking out a loan is the most stupid thing you could do.
Interest rates could rise. Gold could be confiscated or taxed at 90% when you sell. It’s easy for someone to steal your Gold and Silver but not so easy to steal your home. Nobody knows what is going to happen but property will maintain a certain value during hyper inflation.

Gold and Silver are great but so is owning property. If you can afford it and can pay cash then buy a small apartment abroad and collect holiday rental income and turn this into Gold and Silver. It’s called diversification having both Gold and property.

The best position to be in at the moment is to have NO debts and slowly buy Gold and Silver. Do NOT have bank savings accounts or any type of investment portfolio.

PROSPECTOR SITE REPLY:  You make some good points but some I don’t entirely agree with.  Either way I appreciate you taking the time to comment.  You mention hyperinflation and this certainly is a term thrown around these days.  If we look at societies that experienced hyperinflation we see their real estate didn’t inflate anything close to currency inflation, but gold and silver certainly did.  You are correct when saying homes will maintain a “certain value”. You also mention interest rates may rise but this is a non issue if mortgage is fixed.  In fact, inflation (especially hyperinflation) allows a debtor to payoff fixed debt with inflated dollars.  I do agree a home’s primary function is security and a place to live without paying rent.  Thanks again.

YOUR COMMENT (regarding Something Strange is Happening to Gold):

Gold as investment is only as strong as the financial system. If the economy should collapse gold will collect dust. In today’s world the concept of survival in a failed society has nothing to do with gold, rather it is what you have on hand when the system falls. It depends on what you are planning on. If you are an investor,and are seeing everything as simply an economic flux, fine. If you are anticipating the need to survive that is an entirely different matter. Think about it, In 1929 most could grow their own and were in a position to “survive”, gold was for the luxuries of life. In today’s world, survival will be everything, we are not as naturally positioned to survive as our great Grandfathers.

PROSPECTOR SITE REPLY:  This is a good point, we are not as “naturally positioned to survive as our great Grandfathers”.  But we are also much wealthier than them too.  The last few decades built massive asset bubbles that have or soon will pop, but.  I’m not saying it’s a good thing but these asset bubbles have created huge wealth along the way.  If we are talking about U.S., Japan, and Europe, even our poor are far better off than most of the world.  I do agree that folks should develop more independence by learning to grow or raise their own food.

Now about gold collecting dust in a failed economy.  Please name one time when economies failed and gold collected dust.  Look as recent as Zimbabwe’s collapse under hyperinflation.  Youtube has several videos of destitute folks digging and extracting flakes of gold just to raise enough real money to eat bread (bread for one day I should add).  You are correct in saying financial systems come and go but most people are wise enough to figure a way to trade with each other.   I do agree we are heading back toward a simple and real way of life.  This is yet another reason to own real money like gold/silver.  Thanks again for your point of view and insight.


Howdy! Someone in my Facebook group shared this website with us so I came to check it out. I’m definitely loving the information. I’m book-marking and will be tweeting this to my followers! Fantastic blog and wonderful style and design.

PROSPECTOR SITE REPLY:  Great and thanks.  Let us know what you’re buying (or thinking of buying) and why.

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We received several great comments and questions over the last day or two but one stands out from the others.  By the way, we will work your comments and questions into future posts.  The goal of The Prospector Site is to build a forum where everyday gold and silver holders can discuss ideas that work (ones that don’t too) or simply state their mind.  Now if we can move back to this question for a paragraph or two. Well…take a look for yourself.


Hi, I’m brand new to your site and blog. I’m also new to investing in gold & silver, and I’d like to know what your opinion is as to which form to buy… American Eagles, or old legal tender coins? I’m thinking of future trading for supplies, should the US gov’t financial house fall down completely. Thank you in advance.


I want to answer your question and then comment on the question, thanks for asking it by the way. This question causes me to wonder how many of you own gold or silver because you honestly feel collapse is imminent (threat hanging over everyone’s head).  Hold your thought while we answer our reader’s question.  If, a big if, the U.S. Government’s financial house falls which metal is best American Eagles or old legal tender coins?  First let me say this.  Please find a copy of Aftershock and read it front to back before anything else.  This book will answer many questions and provide opportunities for your financial future.

Not that the book Aftershock will answer a question like the one above but it will give readers an idea of what the next decade or so could resemble. Both metal choices are similar in that each carries low premiums at time of purchase, I certainly like that.  The only exception is if the old coins are also uncirculated which we certainly don’t recommend as a wealth preservation metal.  Leave the high premium collector and numismatic coins to the wealthy. I would have to say either coin type will work under the circumstances described.  The trade value of any coin is within the silver or gold content not the coin itself (given the situation).


Here is what I want you to do.  Ask yourself if the goal is to preserve wealth or store nuts for financial Armageddon?  Give it some thought and then send us an email telling your take on the situation.  You can reach us here if you like.

Here is my take for what it’s worth. I think we, the world in fact, are in for a huge change of life in many ways.  I also feel most are completely oblivious to this possibility.  Governments, programs, and entitlements have grown so large they soon will collapse under their own weight.  But before they do we should expect many creative ways to pay our share and do our part. This is a nice way of saying those with wealth (regardless how much) will also have a target on their back.  Overgrown governments do not shrink and die easily, this time will be no different.

Volatility will become the norm along with anger and confusion. Blame will take many victims before it’s all over.  But I don’t feel complete breakdown will be as common as some survivalist and gold holders like to believe.  Certainly some countries, some neighborhoods will resemble breakdown but most wealthy countries will resize then rebuild by way of free market and hard work (if you want to see examples of “breakdown” don’t miss our New Year’s Eve post).  Gold, and silver, holders will have it best but have to fight to protect what’s theirs.  This is only my opinion.

Now tell us yours.  What do you think will happen over the next year, two, or ten and how gold will take part?  Reach us here. Thanks for spending 8.5 minutes with us.

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So gold, and silver, got ahead of themselves and now correction has new buyers asking, “What the heck did I get myself into?”  Some of you, if being honest that is, are thinking about cutting losses and selling short even as you read this.  So does all this mean sell, sell immediately?  Before anyone does anything lets take a breath and a deeper look at what’s happening.

I’ll be honest by saying I hate this dip in particular. Not because of the dollar sign next to my gold or silver but the time of year.  As a writer, as a consultant, I like to use calendar year as an example of year over year precious metal gain.  This year’s gold/silver value will soon move into history as a not so great year at least compared to last year. So let’s move past this timing thing and talk more about what you are doing.


Let me ask each reader a question. Do you feel (wherever you live and work) your local economy and overall wellness of your community are better?  Does your local news speak of well-funded retirement programs for public workers both working and retired?  Are schools in your area excited about new expansion, improvements, and smaller class sizes?  Are your classifieds filled with Help Wanted ads or does your paper overflow with foreclosure notices? 

I won’t insult those new to gold or silver by saying now is a great time to buy or add to your stash. I realize concern overrides timing 10 to 1.  Someone doubting a past metal purchase (because of major dip) is not thinking about adding more metal, not now at least.  Not sure why, but this is how human nature works the majority of time. Down deep most holding gold & silver think of riches, wealth, and prosperity. Few truly understand both metals as a hedge or insurance for everything wrong or manipulated.  Maybe the answer is to not worry but understand precious metal as it’s intended?


What if both metals continue to dip even lower than imagined? Is it possible this was the precious metal bubble the mainstream media has dreamed of for so long?  You know what really is amazing?  While we worry, doubt, and fret, over this dip the Chinese and other prudent buyers are gobbling metal up like it was summertime ice cream.  Americans, Europeans, etc, have become so spoiled from two decades of asset bubbles we can no longer wrap our minds around normal dips and peaks of a real asset like metal.

Here is another amazing situation.  As I write this post, our president (Obama) called home, from vacation, and the conversation went something like this. “Aloha from the islands of Hawaii.  Just wanted to touch base with Washington and say all is well here.  Oh, by the way, please deposit $1.2 trillion from our overdraft account so I can pay social security and keep the doors of Washington open.”

Do you want to hear something just as crazy? Governments around the world are doing the exact same thing.  The only thing keeping the facade vertical is debt, after debt, after more debt.  Folks one day soon the wheels will fall off this thing we call a recovery and a dip or spike will be the last of your worries.  But if you honestly feel all existing problems are soon solved then sell your gold immediately. I’ll continue to stick to the long-term plan by paying little attention to dips, spikes, and everything in between.

Please tell me what you think.  Are you halfway to your local pawn shop now and ready to sell?  Are you planning to hold metal regardless how low gold/silver dip?  Tell us what you’re thinking, and why, right here.  Thanks for spending 8.5 minutes with us today.


Your Comments (regarding using home’s equity to buy gold)

I came here after doing numerous searches on google trying to find ANYONE who is betting on a decline in gold and I couldnt find a single article or blog post about shorting gold. And lollololol you actually think it might be a good idea for some people to borrow money to buy gold. Its NOT OK FOR ANYONE except professional traders to do this. Its ridiculous to even post this. Gold is in a decade long bubble run that looks ready to pop. PLEASE dont buy gold or silver or any other worthless metal that we dont use to make anything. The media is feeding you BS that you need gold to hedge against the end of the world or hyperinflation or whatever. Its all BS. Sell SELL SEELLL please!!! I know you wont listen but you should at least post this comment for others to read. Im only trying to help. Get out while you still can. Once the price starts dropping nobody will want to hold it. As you said it doesnt pay a dividend, doesnt have cashflow and never will.

THE PROSPECTOR SITE REPLY:  Wow, just to make sure I understand, you do not recommend anyone buy gold or silver?  Thanks for reading and thanks for the comment.  I do love your passion but disagree with your entire comment.  First, the article pointed out several options but never advised anyone borrow to buy gold.  The idea here is to generate ideas that will aid people to take control of their own future.

Second issue I have with your comment relates to value.  The useless metals you describe are not as useless as you think.  Silver is the #2 most used commodity (second only to oil).  Gold is extremely rare, durable, and divisible, which makes it the oldest source of real money.  The third issue is the need to sell, sell, sell!!  If we do sell what should we do with the money?  Bonds and CDs pay near nothing not even keeping up with inflation.  Real estate is still in decline over most of the world too.  Stocks are difficult to value since many companies are so propped up from stimulus it’s nearly impossible to know if they’re profitable or not.  I’ll roll the gold/silver dice.  Thanks for commenting.

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Merry belated Christmas and happy early New Year to all our readers.  Thanks a bunch for making our last post “Something Strange is Happening with Gold” a syndication hit.  Several of you commented, thanks to all of you, and we will begin to add your comments soon.  One question that does continue to come up is if it’s wise to borrow money against a home to buy more gold or silver.  So, once again, if some are asking then many are wondering so here we go.

I won’t attempt to formulate a universal answer that fits everyone’s situation, to be honest we don’t offer pinpoint advice anyway. Each reader is different and something important as leveraging to buy gold cannot be that cut and dry.  If you would like our opinion, customized to your situation, then contact us here and we will be glad to set up an hour consultation. As with most posts, I’ll provide the facts and then you decide if borrowing to buy gold/silver is prudent.

FACT #1:

This might hurt a little but it should be said. Your home will not be worth more than it is right now for a long, long, time.  Home values had a great run but the equity in most homes is in decline across most of the world.  This is especially painful for those preparing and counting on this equity to retire (sorry to be so blunt about it).  The only way to “trap” this equity is to sell the home or borrow against it.  For those who have worked hard to cut debt this might not sound so appealing, I understand completely.

This next question is the most important part in deciding if this is right for you.  Can you easily make your new house payment considering a new refinance (pulling out equity)? The last thing we want is to create a situation where newly purchased metal has to be sold to help pay this new stroke.  Before you answer yes, please remember the trend is reduced salaries, golden handshakes, and, worst case scenario, layoffs.  If your job or business is solid then let’s continue forward to see if using your home’s equity is wise.

FACT #2:

Mortgage rates, even refinance rates, are historically low for those who have managed to maintain high FICO scores. If someone would have said 4.5% refi money would be available in 2012 I wouldn’t have believed it.  So now the only question to ask is if it’s wise to borrow  money at 4.5% fixed to buy an asset like gold/silver?  Maybe we should look closely at what gold has done over the last few years and then ask what gold has planned for the future.

Gold has averaged something like 19.5% growth each year and over the last ten. This is nothing short of a financial planners dream if you ask me.  The question is what will gold do over the next ten years?  We have been clear that gold is reactionary in nature.  This simply means gold (physical gold) will respond to inflation, debt, and deficits, by floating along but not losing value along the way.  Combine this reactionary nature with new worldwide investment demand along with fear, panic, and greed.  The long-term trend for gold looks good with all things considered.

FACT #3:

Your home’s value could dip below amount borrowed (commonly called a home underwater). Would this scenario bother you?  Can you live with the chance, good chance in fact, of your home someday worth less than the new mortgage taken to buy gold?  Here is my take on it for what’s it worth.  I don’t like debt but I hate the thought of losing equity worse.  If one asset in decline (our homes) can be leveraged to a growing asset (gold/silver) then what’s the difference?  Does it really matter if your home turns into negative equity as long as your metal is holding true value (growing)? Well, if I can answer my own question, the difference is you live in your home (more emotion attached to a home than a stack of gold bullion).

An argument can be made that a home will drop, rise, or maintain current value, regardless if leveraged or not. My opinion is gold has the best chance to grow in value if I had to pick between gold and your home. As you can plainly see, plenty of thought and discussion should be given to a decision like this before doing anything.  Let me know your opinion.  Email  The Prospector Site what you think about borrowing equity to buy something volatile as gold or silver.  You can reach us here.


One side note I thought of when rereading this post.  It could be some time before historically low interest rates and a gold dip coincide like now.  It wouldn’t surprise me if gold dipped slightly lower but it really wouldn’t surprise me if it shot up either; just something to consider.

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This opening statement  will surprise most readers, possibly scare off new ones, but it’s the truth.  Gold and silver are the most ridiculous investment sources I know of.  Neither metal pay a dividend or provides cash flow.  Once your money lands on gold or silver it usually stays put for a while which leaves most financial advisers scratching heads.  Having said that, we feel physical gold and silver ownership is as important now as ever before.  But the reason we recommend ownership is because of what some readers will see as strange.  Today we expose a strange gold trend.

Last month I completed my part of a yet to be named e-book based on a two month series of posts from The Prospector Site. On the advice from our co-author, this precious metal book is nothing more than simple reasons and ways to buy, own, store, and sell, gold and silver.  Everything you need to feel comfortable, and secure, about your first or next purchase is within the pages of this soon to be released book.  The odd part of it, the success of this book is not within its words but the message it provides.  Let me explain.

You have been doing something strange lately and we’ve noticed. Majority of new registrants, for our weekly recap newsletter, do so very late in the evening or very early in the morning.  This tells us some folks are losing sleep trying to figure out what the heck is going on with today’s crazy economy. For this awareness we congratulate you. But like Humpty Dumpty, all the president’s men can’t put our economy back together regardless how much  money thrown at it.  This really is no surprise to us, hopefully no surprise to you either, and certainly no surprise to gold or silver.

The movement into gold and silver is not about its investment power or wealth derived from it. It’s not about getting rich, it’s not about status, and it’s certainly not about keeping up with the Jones’. The trend to own gold is something entirely different but this difference is really nothing new at all.  What is driving gold, driving new readers to this very sight, are folks like you taking back control of your future (taking back control one ounce at a time). This is sweet music to our ears since this revaluation, economic revolution, has been a long time coming.

Folks are beginning to realize no one looks after your best interest like you do. Not a bigger government, not more central bank involvement, not more regulation, not more bailouts, and surely not more debt.  The trend to buy gold/silver is part of a bigger trend of modern-day independence.  People don’t read a site like this because we are good writers.  They read sites like this because we connect the dots of freedom and self-reliance.  Gold and silver play a major role in your future and independence so offering insight how to buy, what to own, and when to sell, only makes sense.

About You:

Something we hope to do soon is make this site a forum for our readers.  Think of it like a place where you can tell others what has worked for you or why you own gold or silver.  Others need to hear and read about your experiences.  You cannot believe the cloud of confession (about buying/owning gold and silver) that grips folks around the world today. If you have something to share please feel free to do it here.

Thanks for spending a few minutes of your day with us!

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A goal of this site is to provide evidence why buying gold or silver, hopefully both, is wise.  But the truth is we realize most will wait until both metal prices climb substantially before jumping in.  By nature we chase investments believing the majority brings safety and security but the opposite is true. We only have to look back a few months ago when silver spiked to near record highs as proof.  My personal phone rang off the hook when silver climbed day after day but now sits silent with silver prices discounted 30%, crazy.

If you’re new to gold and silver, thanks for spending time on our site. We understand the confusion when it comes to precious metal so hopefully this site, among others, will help clear some confusion.  We do recommend taking time to fully understand not only what and how to buy but also where and when to sell.  The selling side of gold should be way down the road but it’s possible you may sell some of your stash sooner than planned.  It’s good to know your savings is in real money like gold or silver.

If someone was to ask me what the biggest mistake a person can make, about gold/silver, I would have to say it’s chasing after gold or silver (not owning gold is the only thing worse). We realize this chasing mentality comes from an age when each person can easily be their own financial adviser.  We’re not saying taking control of your financial future is a bad thing because we advocate this type of independence.  The problem arises when our perception is to follow (financially) rather than spot a trend and react.  So how can you use this fact to further profit and save?  Well, I’m glad you asked.

The prospect of chasing today’s investment world is as vast as ever before. Literally billions of investors have entered the investment world over the last decade or so.  This means more money than ever is looking for a place to profit and save all while volatility becomes the new normal.  But what does a perfect storm of new investors, newly printed money, and volatility, mean for gold/silver?  We believe this combination equals metal prices unimaginable to most of the investment world and here is why.

Gold/silver has always been a stable source of real money and history proves this as fact. We believe both metals will trickle upward while assets and investments dependent on bailouts and stimulus continue to sputter.  The one thing all investors have in common is they want to profit.  There is little doubt most investors will liquidate bad investments (even willing to take a loss) and reinvest in gold/silver.  This is what we mean by chasing gold and silver.  So the question remains; will those chasing gold profit? Yes, but.

Just for the record we are speculating from here forward by offering our best opinion. We believe when gold/silver begin to see masses of new money (chasers) both metals will begin a bubble phase similar to American real estate early 2003. This bubble could last for years if things play out the way we believe they will.  If currencies around the world continue to print money gold/silver will continue to profit.  Never before has so many fiat based currencies attempted to print their way to prosperity and recovery.  The temptation to chase gold and silver will last at least as long as this money printing (look for creative ways to reword artificial money printing).

Now might be a good time to consider gold and silver!!

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It is imperative to understand gold now has two prices.  To lump physical gold value with paper gold prices is not only incorrect it’s inaccurate.  My concern here at The Prospector Site is some will lose faith in precious metal (PM) in times like today as gold continues to dip substantially.  To move money away from gold, or silver, is a big mistake in my opinion.  Hopefully, over the last few months we have made a good argument why gold and silver deserve your attention, and dollars.  Today we take a closer look at the two prices of gold.

This site rarely mentions the wealth potential of gold/silver and mainly focuses on its protective value. The idea is to sell you on precious metal fundamentals and value far beyond making someone rich.  Our focus is more about protection than greed.  We are convinced gold and silver will soon do both at least for those willing to stay the course and keep the faith.  But for now, gold/silver is far removed from gold’s high of $1900 and silver’s high of around $50 per ounce.  So I ask you what’s your plan from here (mine is to stay the course without hesitation)?

No one owning, who understands physical gold/silver, is selling at this time and metal dealers will confirm this as fact. Yes, you can still buy discounted gold and silver during this dip but it should be understood most of this metal is not coming from someone with cold feet but from metal mints (new metal) or inventory.  Few are willing to sell something of real value, low inventory, and high demand in times like these.  But the mainstream media fails to understand this as fact, in fact, they fail to understand gold and silver as the only true source of real money in circulation today.  This misunderstanding is causing massive wealth loss as you read this post today, very concerning.

We have spent plenty of time discussing dips and peaks of both gold and silver. A dip is no more a signal to sell than a peak is an indicator to buy.  Part of developing yourself as one educated in precious metal is fully understanding how metal bounces along from day to day.  Whether manipulation exits or not is irrelevant at least in the overall picture and plan.  Paper gold will always have the weakness of manipulation and physical gold value will not.  Our guess, it’s not long before reporting sources will define market value for paper gold right along market value for physical gold (not a moment too soon).  Until then you must make your own determination understanding a difference does exist.

It’s Christmas break so I want to keep this short so both of us can continue to spend time with family and friends. If you find yourself doubting a true difference exists between paper and physical gold I want you to do this.  Visit EBay to see how the secondary gold/silver market is trading metal.  Remember, it’s not long until the secondary market becomes a practical unit of measure determining current prices of gold and silver.  This will happen as physical gold/silver markets find themselves unable to keep up with free market demand.

Thanks for taking the time this season to visit www.theprospectorsite.com.  Please pass us along to others who can benefit from reading more about gold and silver.

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Intrinsic value of gold is becoming a hot topic these days but just because it’s a topic doesn’t mean information is correct.  The Prospector Site understands precious metal advertisers use catchy words like intrinsic to lure in both new and old buyers.  We feel many misuse the term intrinsic to sell more gold & silver. For this reason we want to define, in our opinion, what intrinsic value of gold and silver is.

By definition, intrinsic value is nothing more than the true worth of an asset or product. But this is misleading and I want to further define intrinsic as it relates to gold and silver.  Here we go.  Let’s say I decide to take a break from writing by stepping outside my home taking a walk around the ranch.  What if while stumbling around I kick up a baseball size rock that turns out to be gold (pretty cool, right?).  The first question to come to mind is, of course, how much is this baseball size rock of gold worth?  I doubt I would ask myself what the intrinsic value of it is?  If I did ask myself I would have bad news for me.  The intrinsic value, in my opinion, is near zero and here is why.

Gold and silver are expensive to pull out of the ground. Environmental implications and regulations, labor cost, equipment, restoration, and payoffs, all add to the price of extracting yellow and white metal from God’s earth.  If you add up all these costs, add transportation, add taxes, add minting cost, add broker fees, you have the intrinsic value of gold and silver.  Now let’s talk more about my recent imaginary find (baseball size gold rock).  It cost me exactly zero dollars to find my gold.  My wife and I own the property so I don’t owe anyone or surface right fees.  I didn’t have to have a bulldozer help excavate the earth so I don’t owe a dozer fee.  The gold rock cost me nothing, up till this point at least, to find and posses therefor its real intrinsic value (in my opinion) is zero.  No, I won’t sell you my imaginary rock of gold.

Now we all know a baseball size gold mass is worth plenty more than zero. Buyers will certainly pay me thousands maybe millions for a find like such.  But that someone will pay me a bundle doesn’t mean this mass of gold is truly worth it.  Eventually we must realize demand, speculation, and intrinsic value all add up to a whole lot of bucks.  If you want to know what the base value (intrinsic value) of your bullion, bar, or round, here is a way to find it.  Research what your gold/silver bar, bullion, or round cost is to mine, transport, mint, and sell; this is the actual intrinsic value of your metal. If I decide to mint my massive gold rock into bullion coins then it too will develop an intrinsic value the same as any American bullion. I realize some are jumping up and down in disagreement but, in my opinion, all other costs to own gold/silver are over true intrinsic value.

Does this mean you paid too much for your gold? Probably not and here is why.  Free market is the best indicator of current value.  Five minutes on EBay will show anyone free market value.  What is important to realize is any value over intrinsic can and will fluctuate according to demand, speculation, manipulation, greed, and fear.  This is why we feel somewhere way down the road gold will bubble and then burst.

As I write, as you read, folks are buying Christmas trees preparing for the Christmas season of 2011. Do you think the value of a Christmas tree will be the same on December 26th as 24th?  Even live Christmas trees will see big declines after the season, after demand diminishes.  A live Christmas tree will return to a closer version of intrinsic after Christmas than before, simple concept.  Someday gold will explode in price making realistic minded investors ask why buy gold, at crazy prices, when other assets are all on sale (real estate, stocks, bonds, etc).  At this time, money will flow away from gold and silver back into undervalued assets like mentioned above.  Gold will return to intrinsic value, maybe under it for a while, because of this natural occurrence.

Sorry it took 737 words to define intrinsic value of gold/silver.  I think I’ll stop writing and take a walk around the ranch.

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This Christmas season is panning out to be a boon for online shopping.  Holiday season shopping numbers are showing yet another huge increase in online shopping year over year. E-commerce has created a perfect shopping situation all without leaving the comfort of home, but.  What might surprise you is even with this trend we don’t recommend strictly buying gold or silver online, especially if new to gold and silver.  Today we’ll look at a good reason to buy gold and silver locally.

Last month we ran a post how buying gold & silver will change in the year 2012 and beyond (read it here). We mentioned a worldwide trend of jewelry stores slowly transitioning from selling artistic creations of metal to bars, rounds, and coins of value.  Foreseeing this gold/silver trend is easy considering many jewelry stores today now offer cash for scrap gold.  Progressing to selling investment type gold and silver, low premium gold/silver, seems natural and resourceful to this writer.  This should be good news to most readers since online shopping for gold/silver does have its disadvantages (I personally use both online and brick & mortar).


You don’t need me tell you the banking industry is slowly becoming another extension of government. For those shaking heads in disagreement, imagine how many of today’s banks still financially strong, even solvent, if unsupported by bailout or Federal Reserve Bank loans.  Boarded up banks would be as common as boarded up businesses if not for government help by way of more debt & deficits.  The strength of your bank is as strong as the one supporting it.  The one supporting it is doing so by using new borrowed money to pay interest on old debt.  Does this sound like strong economic principles for long-term prosperity to you?

We can disagree on gold or silver, rounds or bullion, but we must agree the old way of saving or storing money is in serious jeopardy. Gold is and silver is becoming a great source for saving but must convert to cash if we need to pay a bill or buy something.  Sure a growing trend is to barter gold to another asset but not all commerce will work this way anytime soon.  I’m not sure what my bank would say if I pulled a gold coin from one of their deposit boxes and asked to trade it for cash?  I’m guessing they would have no idea what it’s worth but my local coin shop sure does.

You need, we all need, local coin shops or brick & mortar stores to trade precious metal to cash. The only way for these businesses to develop and prosper is for those trading gold and silver trading local.  There is something to be said for a trading situation that allows a gold holder to walk out with cash/check in less than five minutes.  We truly believe coin shops and other brick and mortar stores will become financial institutions in and of themselves. We must continue to support local gold/silver trade especially in times like today.


The news is full of jobless recovery talk and unemployment. If this describes you please listen closely.  Your community will need a place to trade physical gold and silver if the precious metal trend continues.  The only way it won’t continue is if metal regulation or an economic correction hit the scene first (we doubt the later will happen anytime soon).  This leaves us asking if you’re a good candidate for running a gold/silver brick and mortar store.  Several things should be part of your decision long before.  Security, cash reserves, inventory, and local market, should all be considered.  Make no mistake about it, coin shops are prospering and we feel they will continue to do so.

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GOLD & SILVER, GOLD AND MONEY   No comments yet

Living in a fly over state my family has plenty of time to travel together to go anywhere. During a recent road trip my wife noticed a string of cattle following one after another heading only God knows where.  My wife commented, almost under her breath, that she wondered why and where the cattle were headed.  Many of us live our lives the same way when you think about it.  The assets we buy, the way we invest, even our education, all typical follow the next guy fashion.  The fact is, just like the cattle, the one in front has a plan but the rest are followers.  Followers’ hoping the one with a plan has a good one.

It is no secret that we are an advocate of owning gold and silver. The fact you are reading this is odd in itself seeing less than 1 or 2% of other human beings own physical gold/silver.  This tells me you are working your way to the front of the pack no longer content to follow, good for you! Unless reading by syndication, there are two boxes to your right identifying current dollar values of gold and silver.  By the way, thanks Gold Shark for providing them.  This may come as a shock but the dollar number represents very little as related to gold/silver’s true worth.

Modern day economics likes to put a number next to all assets. I’m guessing this is somehow meant to be an accurate gauge.  The problem is this “gauge of value” is misleading, manipulated, and out dated.  Gold and silver want no part of this false gauge of value and for good reason, it’s not accurate.  How’s it possible to use currencies like dollars or euros as an accurate indicator of value when twice as many now flow through our economy than just a few short years ago?  Do you want something as inaccurate as currencies to ride herd of your economic plan?  I don’t.

By nature we are naturally drawn to things that are real; real people, real diamonds, real good cooking, etc. Folks across the world are finding themselves questioning this “follow in place and don’t ask questions” way of investing and earning.  This is exactly why the numbers on the chart to your right are growing year after year.  Gold value will not double over the next few years because its intrinsic worth is increasing.  Gold will double over the next few years because more folks around the world will realize it to be a real source of savings and money.  Factor this realization with a limited supply and now you know why prices of metals will soar.

Kyle Bass is a very interesting character to say the least. If not familiar please Google his name and prepare to be entertained. Mr. Bass has made a fortune for both himself and investors by betting against the herd.  He’s candid how Europe’s crisis made him more money than most small towns earn in a year.  Kyle Bass made a killing investing in things that are real and betting against things not, all while knowing things government supported will crumble. If gold is not part of your plan I would like to ask one question.  Why?


I just can’t get past paying $1800 dollars for a tiny piece of gold.  I kick myself for not buying when it was $800 dollars but realize those days are long gone.  How do you know for sure gold will go up like it has over the last couple of years?


Thanks for the question. I don’t know what gold will do for sure (no one honest does) but do understand trends and the obvious.  You’re questioning gold’s unlikely big decline when other assets, in reality, are declining.  Think about this for a moment.  You are unwilling to buy gold because it might not meet expectations all while now invested (saving) in assets not meeting expectations.  The answer to your question is in the five paragraphs above it.

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