Archive for February, 2012



I usually begin each morning catching up on a couple of trusted PM blogs before turning on the early morning news.  My time invested in morning news is mostly wasted because political positioning is the flavor of the month and will be until November, nothing anyone can do about this.  I say wasted because historical events are shaping our world and nearly all have to do with you, your wealth, and our silver/gold.  During a commercial break I noticed an advertisement warning viewers to watch a doomsday video about a dollar collapse among other not so cheery but dire predictionsNow I have no clue what is in the video and to be honest don’t really care to.  Why?  Because I don’t need to be shocked into buying gold or silver.

If you take one thing from today’s post I want it to be this.  What good is it to break the grips of debt and monetary debasement only to shackle yourself with fear?  I refuse to succumb to a scared straight version of precious metal ownership and my hope is you feel the same way.  Owning PM is prudent and each day provides yet another layer of evidence of such wisdom but too many are willing to capitalize on growing fear. Today is the first part of a two-part series  (part II this Friday called Bait-n-Switch Silver & Gold) exposing those more than willing to profit first from fear and secondly from haste.  Part 2 will expose a few popular B & S techniques often used by those more concerned with a higher commission than you owning the right PM, don’t miss it.

Are bad things happening more today than ever before?  Should we prepare for a time of economic correction? The answer is yes but most issues like conflict, government overreach, and civil unrest stem from the symptoms of too much debt; this has little to do with fear.  Fear is the reaction folks experience who are unprepared for such a time.  I’m guessing since you’re taking the time to read this post this doesn’t include you. Trading currency for silver or gold must be a calculated process based less on human emotion and more on a long-term plan.  This is not the norm and unfortunately bullion dealers and media know this too well.

I have no way to prove this as fact but believe it to be as true as the nose on my face, 90% of the today’s crises news/information is primarily focused on profiting from your fear and uncertainty.  This is no different from using attractive women to sell beer or handsome men to move cologne, this form of advertising does work.  Several million people looked up JOHN 3:16 after Tim Tebow pasted the scripture on his face.  Levi pants became popular after James Dean wore them while acting like the cool guy he was.  Gold and silver sells when buyers swell with fear while looking for a monetary life preserver.  Think about this if you will, did you know gun sales grow lockstep with physical precious metal sales?

Don’t let the market dictate when or what you buy (silver and gold speaking).  My efforts on The Prospector Site are about providing useful facts based on current events and trends thus allowing you to develop a precious metal plan.  I don’t sell silver or gold, I don’t profit if you buy 1000 ounces nor do I lose if you don’t.  Take the time to research the best and most affordable methods BEFORE contacting a seller or bullion broker.  See you this Friday when we expose Bait-n-Switch pitfalls.

FLASHBACK, if you are new to silver and gold please take a minute to read First Steps to Buying Gold & Silver.



COMMENT:  While reading Real Estate in Collapse as Gold Stands Strong I noticed you stopped just short of saying a home is not an asset, I disagree.  I do agree owning gold and silver is important but far more have wealth in our homes than PM.  Real estate has, historically speaking, always been a great store of wealth and will be again someday. Still enjoy reading the site but have an issue on some real estate opinions. Thanks.

PROSPECTOR REPLY:  Wow, I published the post you mentioned in June of 2011 so you must have dug it out of the archives.  Thanks for the comment and sharing your opinion.  You are correct by mentioning the lion’s share of private wealth is in real estate, the bummer is this wealth is vanishing whether we want to admit it or not.  Not since the Great Depression have we realized such declining R.E. wealth, not my opinion but fact.  Maybe sharing a conversation with a friend will help us decide if a home is an asset.

This friend bought a new home forty years ago this June paying around $25k then.  Several houses in the neighborhood recently sold and simple math values this same home around $125k in today’s dollars. If my math is right, my family friend’s home increased 400% over 40 years.  Now I want to compare this same $25k to silver and gold but also want to disclose a family can live without PM but not a roof over their heads. My point is nothing other than comparing assets to assets in hopes of proving, or disproving a home as an asset.  The same $25k in gold is now worth around $675,000. The same $25k in silver is now worth around $603,000.

Please read carefully because my motive is not to sell you gold or silver, I don’t sell either.  My motive is to provide accurate as possible information so each of us can make the best monetary decision possible.  The concerning aspect is one asset is in major decline while the other is ascending, to make things interesting let’s extend today’s trend out five short years.  In five years it is likely my friend’s home may be worth $87,000 while an equal savings in silver/gold worth around $1,500,000.00, if our current trend continues (FYI, this puts silver around $94 per oz. and gold @ $3900, respectively).  My opinion is these trends WILL NOT continue; I honestly feel housing worth less than our trend example, in five years, and PM worth more because of worldwide ownership opportunities.  If today’s trend continues few will view a home as an asset, not at least compared to inflation resistant PM. THESE ARE ONLY TREND SUPPORTED OPINIONS, NOT PREDICTIONS!

This is why several years ago I sold a larger than needed home, downsizing, (reducing risk in a declining asset) and supported my PM holdings shortly after (supporting risk in an appreciating asset).  One last thing you pointed out, I too agree that today’s trends will someday change finding favor in R.E. values.  The question is when? I hope you agree long-term PM wealth over R.E. is something worth investing more time and research into, soon. Thanks for bringing it up, and your view.


Just as I ready to publish both metals are down around 3% which could mean a buying dip for those still on sidelines.  Worth watching if in the market to buy gold or silver.

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WRONG SILVER (and buying right)


Very sorry about losing our blog server over the last day or two. I guess this is the price for such a technology age, nevertheless, all is back in order so let’s dive deeper into silver!

Each month thousands more continue to realize recovery is nothing more than a well frosted empty box of promises.  The sad part being this box is not entirely empty, not if we include debt as part of this illusion of wealth and prosperity.  This realization, if you will, leads many in search of things “real” like gold and silver.  This leads the same folks to sites like this one too.  Many readers visit for a week or so and then move along to other sources that glamorize gold instead of providing unbiased facts about individual ownership.  I want to be clear, we do not support agencies selling metal, only those looking for slant less value within PM.  Precious metals can easily stand on their own merit without me exaggerating true value or worthiness.  But even things so very necessary, gold and silver, can be wrongly purchased.

I’m humble enough to admit I’ve bought “wrong” gold over my ten-year dance with PM.  Gold usually is the metal wrongly purchased because gold offers more options compared to silver. Majority of our readers seem to buy what I consider correct silver because bullion style silver is abundant, at least as I write.  This will change someday soon and when it does silver will add itself to the same risk as wrong gold odds.  Maybe an eBay PM dealer can describe my point better than I can.

The company I’m describing makes a great effort by providing an accounting of how gold, silver, and copper have appreciated over the last decade.  Of course this information parlay into justification to own what this seller is selling and unfortunately what this guy is selling is questionable at best.  I have two problems with this sales approach.  One, just because an asset has inclined doesn’t mean it will continue to do so.  Two, just because an asset, like PM, is prudent doesn’t mean all ownership options are as well.  This is where I went wrong so many years ago, I thought because gold ownership was wise most gold options were equal, very costly on my part.  Not so, most sellers are in the business to profit, not necessarily sell you the best PM for your hard-earned buck.

If we are still in agreement then we must ask what the best silver is, right now, and what the wrong silver is.  The right silver is easy and most of you know it because you’re buying it.  All silver close to “spot” is good silver to own and far less risky as the one soon to be described.  I must admit, the wrong silver is much more spicy or exciting and I’m sure this is what attracts us to it.  Wrong silver, at least wrong if silver perspective is nothing more than preservation and protection, is often individually sealed in a plastic case.  The word “proof” or “rare” or “limited” or “collector” appears on this type of silver but we must understand venturing into this type adds another term we must bring into the conversation, speculation.

I don’t know about you but I have no wish to speculate on PM.  Heck, I’m still trying to clear my head of the most basic gold and silver confusion.  Sometimes keeping it simple is best even if it doesn’t offer excitement of something more expensive.  This doesn’t necessarily mean speculative silver won’t increase in value because I’m guessing it will.  The question is how much does it need to grow just to bring those who paid over market back to even?  My other concern is today’s PM trend as it relates to speculative silver.  Today’s buyers are looking for safety, value, and an easy entry into gold and silver.  Speculation is a mile from today’s overall objective but this doesn’t mean well rehearsed con artists can’t persuade some away from what they know is best. Don’t let this include you.


COMMENT: (Regarding Evaporating Wealth)

I owned an Insurance Agency and watched as the industry giants moved into my State. I watched business drop off as regulations, taxes etc. had an impact on the cost of doing business. I decided to sell. At the time I had no knowledge of the value of owning gold and silver as I do know. I can tell you I intend to up my silver and gold purchases to 3/4 of my total worth. I see that as the only way to survive what is on the horizon without loosing everything. You ask a tough question as so many factors are involved. I believe that most business owners don’t have the luxury of selling off pieces of a business. Its all or nothing. Having said that at this time and knowing what I know now I would do whatever is necessary to buy as much gold and silver as possible for chances are the U.S. dollar will be at best devalued by a minimum of 30%. Forget pensions and Social Security. Gold and silver is no guaranty but I would rather be sitting with $100,000.00 of gold and silver than the same amount in fiat paper. Time is short. P.M.’s are the way to go.

PROSPECTOR REPLY: Folks I have no idea who this reader is but I know pearls of wisdom when I see it, thanks for sharing such insight.  You also bring up a good point when you explain the all or nothing aspect of business ownership, I failed to look at liquidation from such a prospective.  Many, maybe most, businesses are all or nothing and this really complicates a decision if the business is a primary source of income.  With that said, we cannot ignore such a decline of business wealth and your point about pensions and SS are spot on.  The question is how much will pensions or SS buy in such an age of debasement, stimulus, and fiscal insanity?  I’ll roll the dice on PM, just like you said.  Great comment, thanks.


First I want to thank you for your valuable knowledge. I did similar to you. Owned a business and every year the Gov’t provided more hoops to jump through in a declining industry. I sold out and just in time. I have invested a fair sum in silver and to a lesser degree gold. Do you think that recent news of huge stashes of gold in Asia will have an impact on the price of gold. If so in what way.

PROSPECTOR REPLY: Thanks for the reply and comment.  I can tell by actions you’re ahead of the curve in many necessary ways.  Many readers are still looking over the horizon for recovery but you’ve relocated wealth into what others will realize as the asset of the decade, good for you.  Most readers will invest in silver over gold at least those somewhat new to PM.  This is one of many reasons I expect silver to continue a path upward probably closing the silver to gold ratio along the way.

Gold ownership in Asia is yet another sign how worldwide demand will affect PM values regardless if deserving or not.  I spoke to a group of businessmen in China shortly before private ownership became legal and I can tell you Asia is hungry for a Western lifestyle.  The next impact China will have on gold will be more about wealth preservation than “investing”.  My gut tells me this wave of gold buying will make the last three years look tame.  We are soon to enter a phase, worldwide phase, when deserving (I obviously feel it’s deserving but is irrelevant at this point) or not gold will find attraction of worldwide economic concern. My bet is China will heavily impact this new era of physical PM, good call on your part.

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It’s hard not to notice silver these days especially when prices are up over 25% in 2012 with ten months left on the calendar. I have no doubt some of this gain attributed to 2011′s year-end sell off  but most gain is due to folks like you realizing those behind the monetary wheel are doing no one favors, not at his point.  If you are one of the many using silver to preserve wealth I urge you to pay close attention to today’s post because buying is good but only good as an efficient means of storage.  I know by the number of comments plenty of readers are more than concerned how or where to safely store silver.  Let’s dive in.

By the way, congratulations to those new to silver and gold, we’ve heard from several new readers lately and nearly all trading currency for silver, you are very wise to do so I might add. Silver is the gateway to gold but I say with complete confidence silver in itself accomplishes the same protective objective as gold.  Gold is a universal currency these days but history shows silver as a legit source of money too, I doubt this will change anytime soon (silver is the most volatile).  The one obvious silver issue is storage and this is no wonder when we consider it now takes 50 times the silver to equal gold.  This creates  storage challenges, for obvious reasons, and why I recommend a few different storage remedies. I want to take the liberty to flash a question or two into our discussion on storage maybe even killing two birds today, if you will.

READER QUESTION:  I dove in. Last week placed and order for 200 ounces of bullion. 100 each in American Silver Eagles and Canadian Maples. I will definitely be buying more. My goal is to accumulate and keep accumulating over time. I currently own no gold. Silver is my first purchase in precious metals. My question to you: What are your thoughts on using bank safe deposit boxes to secure precious metals? My thoughts are that a home safe is simply not adequate protection. I feel that bank safe deposit boxes are probably the best option for most average folks. The concern however is that I have heard stories of banks making mistakes with safe deposit boxes. There have been reports of people losing the contents of a box because a bank errored and considered the box unclaimed property and turned the contents over to the state. Also… could there be a repeat of an executive order one day making silver illegal to own? Would history repeat itself where there is a three day bank holiday and boxes are audited and silver gets confiscated as what happened in 1933 with gold? (http://en.wikipedia.org/wiki/Executive_Order_6102)

Personally… I think such an executive order is highly unlikely and I am storing in a safe deposit box.  Primarily because I do not think I could adequately secure it in my own home.  But I do wonder what is the best way to secure precious metals?  Is a Safe deposit box really a risk?

PROSPECTOR REPLY & ANSWER: I love real questions like the one above (thanks for the question and comment).  Who hasn’t asked themselves the same question when first buying something so valuable and monetary relevant as physical silver?   Gold is easy to store if for no other reason than its compactness.  Some readers go as far as building a false floor or a thin vertical hang with a false front or false bottom, inside a gun safe. This can easily store tens of thousands of dollars in gold. I have readers who still store gold at home (in such a way) conjunction with decoy gold coins shelved at eye level in case of a worst case scenario.

Thieves all have two things in common.  They want to steal and they need to do it quickly.  Once you understand their weakness it’s easier to beat them at their own game.  Their goal is to quickly find and take your stash, let them.  Most PM thefts I’m aware of are nothing more than stupid luck from a thieves prospective.  A thief breaks in looking for guns, jewelry, or something simple but stumbles onto PM bullion (a gold minded thief can do much better standing in the shadows of your local high-end restaurant than torching a home safe).  Few thieves have bullion in mind since less than 1% of your neighbors own any; much less store it at home, my point, out smart the knuckleheads.  Let them accomplish such a goal (steal something and quickly), the thieves of today aren’t packing around a scale or test kit.  Let your mind run with what some will consider an out of the box solution.  One last thing on home storage.  My perspective is this; I don’t worry about metal walking away nearly as much as harm to my family.  Metal is replaceable but loved ones aren’t, do everything possible to get something that APPEARS VALUABLE into a thieves hands if the worst case scenario arises.  That is unless you’ve had firearm training since eight years old.

Now back to your question.  You bought 200 ounces of silver bullion (around $7600-$7800 worth) and now considering a bank box or third-party storage option.  Are you against splitting your storage options?  I personally use many options of storage and have used bank boxes for years with no problems.  If using a bank box, be sure to include your name and contact info INSIDE THE BOX to eliminate the confusion alluded to in your question (but only if you’re comfortable, obviously), this will remedy any identity dispute.  This is not relinquishing identity because the banking institution has your personal info on file or they wouldn’t rent to you.  Also, consider storing PM in a local bank over a larger institution (private banks are less susceptible to the government overreach you describe).

Let’s go back to the home storage alternative.  Some readers are not comfortable with home storage and this is understandable, but not necessarily justified.  You just bought $8,000 in silver bullion.  I’m guessing your car is worth 3 or 4 times the value of your silver holding but still stored at home.  My point, many assets you already store at home are worth far more than the silver bullion in question, some items protected by insurance but risk is still prevalent (Gold is rarely protected by insurance).  What you’re struggling with is something new and the anxiety that comes with what the heck to do with it, kind of like bringing home a first child!  Give it some careful thought, make a plan, implement this plan and enjoy such a wise decision to protect with silver.  Please keep this in mind; I don’t know your situation like you do.  Trust your gut, move forward accordingly, and control what you can and not worry with what you can’t (confiscation). Thanks for a great question.

One other thing worth noting and it is has to do with insurance.  Yes, PM is nearly impossible to insure unlike traditional assets, e.g., savings accounts, homes, etc.  But the truth, insurance companies are vulnerable as any other institution as we all witnessed during the 2008 crisis.  Each of us must prepare for a less than protective era as our economy continues this corrective cycle we are now living.  The same discretionary benefits we love about PM also make them nearly impossible to traditionally insure (although, some bank boxes insured).  We just can’t have it both ways.


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As I write today gold & silver prices continue to climb from last quarter’s decline.  Gold is up a respectable 13% year to date and silver an amazing 22%.  Some ask what this means so I thought today we should devote a few words putting it all into context.  Only after careful consideration can I honestly say the precious metal increase of 2012 means actually nothing.  The only exception is if February 22, 2012 is the day you decide to liquidate some or all of your personal PM holdings.  If not, then this is just another gold spike like the millions before it.  The long-term benefit of holding real assets (hard assets) continues to look favorable but short-term metal is still unpredictable.

I see no need to predict silver or gold’s future but, more importantly,  continue to provide yet another example of its worthiness.  Some of us create our own monetary obstacles by not considering something like PM diversification.  Today’s small business climate is a perfect example of what I’m describing.  Get up early, work long days, maybe even weekends, and all is okay, right?  Well maybe not.

This site often provides the harsh reality of how much wealth is lost in today’s real estate market. This loss is measurable (Zillow, etc) and the ramifications of an uncontrolled housing bubble will have long-lasting effects for all of us.  Less noticed is a great wealth evaporation few understand and certainly rarely discussed.  This wealth loss is yet another reason to protect wealth with PM.  The great wealth evaporation few discuss is the declining value of today’s small businesses.  It is hard to put a number on such a loss because nothing really tracts business value, at least not small business values.

You may feel because you’re retired, work for a big business, or a government worker this type of loss doesn’t relate to your situation, I’m sorry but you are wrong. When small businesses struggle bad things happen and these bad things are on a local level.  Local unemployment increases, local loss of tax revenue, loss of local expansion, and worst of all, loss of a local business.  When General Motors shutters a plant in Michigan the effects of such a closure are devastating but mostly within the plant community.  When small businesses suffer on a larger scale, like today, this devastation affects communities across the board.

You won’t find much for bailout or stimulus offered to small business and to be truthful the type of folks owning small businesses aren’t receptive to gov’t handout. They’ve built businesses from hard work, honesty, customer service, and by developing a business friendly reputation.  As honorable as these traits are most small businesses fail to realize the level of wealth evaporation taking place.  Their focus is on creative ways to keep doors open and squeeze a little profit out along the way.  It’s sobering how little monetary value such a business has in today’s economy; I see little opportunistic changes anytime soon.

If you’re reading this thinking, “Yes this describes my situation perfectly but what can I do then here’s a suggestion.   We should also include independent contractors to our list of struggling small business owners to be fair. Let’s say I asked you to sit down and list each business asset and place a dollar value next to each one.  Inventory, equipment, desk, accounts receivable, cash, etc would probably all be on your list.  What’s not on your list is the #1 asset of your business, YOU.  Most small business owners fail to value themselves as an asset because they don’t see tangible value in themselves.  This is a huge underestimation of worth because it is only from your tenacity, hard work, and business principles the business prospered as it has.  These same principles can be plugged into a billion other services or ventures within growing industries.

Over the last few years I’ve sold off, piece by piece, a business in a dying industry in a heavily taxed/regulated state. My declining business had nothing to do with my staff, hard work, or ability and we left no creditors unpaid or customers unsatisfied. The business declined because our industry as a whole declined and nothing can be done to change this fact.  I realized several years ago this was coming and decided to liquidate assets while they still held real value.  Some proceeds went into gold and silver, some went into a new business plan within a growing industry.  The one constant being the same principles I used to build one business will be affective to develop another venture.  If you are stuck in a dying industry I urge you to evaluate options while they still exist.  Don’t in actively watch wealth evaporate when something can be done differently.



QUESTION:  Thank you for hard work on this site, I have a question but first want to say how much we enjoy reading your views on gold, and especially silver.  I agree, everyone should own gold (this is my goal) but many of us can hardly afford silver, much less gold.  I began buying silver in 2010 but not as much as I hoped to.  Do you think the price of silver will decline where more can afford to own it?  Do you think I should try to buy more now? I doubt I’ll ever have enough to buy gold.

PROSPECTOR ANSWER: Thanks for the kind words and your question.  You are wise to own silver and I wouldn’t sweat not owning gold if I were you.  Gold is extremely valuable in its own way but silver has the same monetary attributes but also carries commodity value far above gold.  The world is thirsty for smartphones, tablets, etc and all need silver for its conductivity.  Now, to answer your when to buy silver question and will prices come down.  I can answer your question with three words, I don’t know.  To be honest, no one honest knows either but this mustn’t distract you or anyone else from the plan.  The plan is to use personal wealth relocation in your favor and as you feel necessary.  For some this is selling a property to buy PM, for some this is selling an RV, boat, piano, you name it because for now these assets have value.  I urge you to think beyond the limits of a monthly budget and more about wealth relocation.  Thanks for the question.

QUESTION:  I’m hoping you’ll write more about gold confiscation soon, this has my husband and I sleepless?

PROSPECTOR REPLY: It must have many sleepless because we receive our share of comments about confiscation.  I just wrote a book chapter on five forms of confiscation including the one keeping your family up at night.  Let me first say worry is rarely good, this comes from a life long worrier, so trust me.  Many of us falsely believe since gold confiscation happened in 1933 it will happen again, this is not necessary true.  The gold world is vaster today than ever before and confiscating gold is nearly impossible (nothing will send PM prices skyward like a confiscation proposal).  Many readers own gold in several countries and this gold wasn’t produced, sold, or stored in the US so confiscation is unlikely, at best.

But confiscation has many definitions and any exorbitant gold tax is confiscation that is if metal changes hands.  Nothing I can think of supersedes necessity of owning precious metal, not even the many forms of confiscation.  Can you imagine the underground PM economy from just a rumor of confiscation?  Thanks for the tiny question, now go get some rest.

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The big story last week, “French Champagne Maker Finds $1 million in US Gold Coins”.  I agree, this is big news but the big story is not the find, not the number of coins either.  The big story is why the media doesn’t question how $10,000 in face value gold coins (497 coins x $20) are now worth nearly $900k in melt value gold.  If you own silver or gold, or thinking of buying PM, you must take a moment to wrap your mind around this story or better yet, lack of story.  The value of future gold is written between each line but only obvious to those willing to accept gold as money.  This type of news only proves my decision to trade dollars for PM back in 2002 was as wise now as ever before.

Would you read such an article if the headlines said, “$10k In US Dollars Found in Champagne Maker’s Attic”, why not? After all, a $20 Liberty coin or $20 Gauden both had a face value and dollar value of twenty bucks up until a tragic day in 1933.  Twenty bucks, the same gold coins that recently rained down on a French construction crew worth $1,000,000.00.  I searched the internet looking for one article willing to explain why or how $10k in gold coins turned into $1 million over eighty years, nothing.  Not one reporter, or editor, rolled the dice on such a delicious backstory as the one you’re reading today. It is important to understand that the person stashing 497 $20 gold coins was not hiding a million USDs; they were hiding $10,000 at the time (it’s believed gold coins were stashed in the 1930s).

So many questions run through my head with a find like this one.  Why did someone hide US gold coins in a French warehouse many years ago? Was it because of US gold confiscation? Was it to pay a foreign debt?  We’ll never know the answers to these question but the one I most want to ask is not to the construction crew, not the Champagne profiteer either, the question I want to ask is to non other than Mr. Bernanke (Federal Chief) himself.  The question, “Mr. Bernanke, why is it after eighty years the same 10,000 (in US dollars) is worth around $1500 today but the same $10,000 in gold is worth nearly $1,000,000 now?” Then just one other follow-up question, “How can you repeatedly say gold is not money when this find proves a true value of 100 times face value?”

It is imperative to comprehend how willingly citizens and media accept dollars as money when a find like this proves exactly otherwise. Mr. Bernanke can’t admit his monetary beliefs are jeopardizing a worldwide economy because this is validating decades of monetary mistakes.  We must also realize, just as our dollars continue to decline, the fault will lie with someone else well before admitting a fiat currency exists to empower government, not its people. I’m not sure why most refuse to connect obvious dots but keep buying metal until they do.  So now we must ask what a media awakening will do for metal prices and when will this revelation take place?

Today’s media age is much more about sensationalized news than reporting. We live an age of confetti and balloons which is unfortunate for things real like precious metals.  Our media will eventually find the story of gold but my guess is not approach it as worthy but popular.  The disadvantage of such a presentation is misleading and will drive uneducated buyers (gold ignorant) into a metal they know little about, this will push PM prices far above intrinsic value. The age of social networking will spread news of the next gold rush like 60 mph winds spread fire but, unfortunately, the masses won’t understand coming in too late is worse than not buying at all.  I see today’s prices as nothing more than fraction of future values but who truly knows for sure?

Timing of such an event is impossible and in all probability will take place over many phases before turning straight vertically, like 1979, 80. A conflict in Iran or a disruption in oil that leads to a spike are all reasonable explanations how something can trigger gold’s run.  A slow continuation of dollar devaluation, with inflation, could easily turn the pack toward PM.  The timing is far less important than an exit plan. Those who truly understand how masses fighting over a limited supply will drive any asset well beyond true value will profit most.  We know this to be true when we recall dot.com and housing bubbles of not so long ago.



Thanks for such a Great Website,

I check for updates everyday.You are right on with your message about Gold & Silver. I started with buying Junk Silver, then added Silver Eagles and then some smaller size Gold Eagles.  I will continue to buy some of each of the Gold & Silver Eagles as I’m able. My reasoning on owning Gold & Silver is it’s all part of a well rounded survival plan.  Having some sort of short and long term food stored. Having some protection in the form or guns and ammunition. Paying off debt, keeping some cash were you can get at it. And having a variety of PMs just makes sense.  Thanks Again for all the great information

PROSPECTOR REPLY:  Thanks for the comment.  You are wise to own both gold and silver as part of a bigger protection plan.  My understanding is Gold and Silver Eagles (that you now own) are the most popular bullion coins available since both have a guarantee of authenticity from the US Mint. You mentioned “Junk Silver” and I”m glad you did since we often overlook the value of bags of old silver coins.  If others are looking to find an easy entry into silver then I urge you to look into junk silver as one of today’s most affordable options.  Many online bullion dealers also sell bags of junk silver in several different sizes, many times at low premium over spot.  If any of our readers have more info on this type of physical silver (junk silver) please pass it along.  Thanks again for the comment.

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It is understated to describe silver as on fire, silver comments now lead gold comments 10 to 1 at least on The Prospector Site.  It is exciting to see silver find its place in the sun and something tells me that today’s demand is nothing compared to tomorrows.  My time consulting (by phone) new PM buyers primarily consist of discussing silver’s potential far over gold’s.  Silver has grown into a leading commodity with amazing monetary value, all simultaneously.  I want to use today’s post to explain why so many are moving into silver and what this trend means for those willing to trade currency for real money like silver.

For the record, I often say gold but assume readers understand silver as part of most discussion. Silver usually shadows gold’s movements but now is a good time to clear the gold & silver confusion; several have asked why we mention gold far over silver and I apologize for not making myself clear. It is safe to say we have only two types of readers, those that own silver and those that are researching silver.  Just this week we included a reader’s comment from a gentleman yet to buy silver but working toward it.  A new feature we hope to add to The Prospector Site is a survey option; one question I’m dying to ask is how many own both silver and gold.  My bet, from conversations with you, many start with gold but soon add silver, we don’t see the opposite as often.  I don’t know this for sure so I’m looking forward to the survey feature coming someday soon.

If building wealth via silver is part of your plan I have good news for you. Silver inventories are very low, silver demand is growing (US Mint so far this February has silver outselling gold 45 to 1), you already know low supply/high demand equals taller prices.  Most experts believe silver inventories have fallen to all time lows; lower than gold inventories.  This coincides with an increasing demand for silver’s industrial demand which only puts more pressure on such a limited resource.  Only to make matters worse, industries using silver continue to see increasing demand for their products.  Popular items like smart phones and tablets only compound the challenges of an already limited supply of silver.  Such quality is only possible because of silver and nothing appears on the horizon able to replace silver’s industrial capabilities.

Well all this sounds great, right? Not so fast because other aspects of silver must be understood and planned for.  Silver is the cheapest toy in the precious metal toy store and like all things affordable, demand can mislead.  What I’m about to describe has little effect on long-term silver value but will play into everything in between.  Silver is easily manipulated on Wall Street and, now, paper silver and physical silver have little separating their value.  It is worth noting Wall Street can easily stir the silver market and then profit from several forms of manipulation (futures).

Silver’s erratic nature is expected when we factor Wall Street’s willingness to use silver like a rigged card game. Those not understanding silver will panic or, worst yet, dive headfirst into silver not understanding the greatest time to buy silver.  Silver will dip and to not take advantage of discount pricing will limit volume as well as long-term profit (it is not about buying cheap, it’s about buying more because it’s cheap).  Nope, most silver owners have little idea how silver reacts to other forces or what motivates silver pricing.  This is why many silver buyers flee at first turbulence only to curse the very metal each person should own (my opinion).

I believe silver is not the metal to plant and watch grow. Silver owners must prepare themselves for great volatility and I recommend checking prices annually and then paying little attention to movements in between.  This is hard to do if nervous, regardless of asset, and why we feel most buyers are not ready to own silver, not yet.  But a level of preparedness rarely stops the “pack” and this decade’s silver buyers will be no different.  I recommend using both misunderstanding and manipulation to your benefit if seriously considering physical silver.  If you’re not sure how, call or email me to find out exactly why & how  (I don’t sell PM, only information)!



QUESTION:  I understand and agree with silver prices increasing but don’t understand how silver (or gold) will help during a complete monetary collapse.  It’s true, you can’t eat silver so why own it over food storage, land, etc?

PROSPECTOR REPLY: Thanks for the question and to be honest this is the second time this week I’ve been asked this.  We must realize great wealth exists in our country (United States) and this wealth will never completely leave.  Yes, most wealth is here because of debt and asset bubbles but nevertheless it is here.  I don’t see such a collapse as imminent but see a scenario where folks lose faith in our USD and slowly gravitate to real money like gold & silver as an interim currency.  We have to view this time in history as a transitional period between today’s currency working toward devaluation and tomorrows currency backed by gold or something of real value.

No one knows how bad some regions will digress but complete breakdown doesn’t sound likely from my perspective. This country still has the drive and spirit to build from the ashes, and will.  Does this mean you shouldn’t create levels of independence like you’re describing?  Of course you should, no one should ever assume somebody else will provide food, shelter, or financial & physical security for them!  Let me ask you, do you think your future will benefit from owning PM?  Most realistic folks will say yes.  Silver, like gold, is the perfect wealth transport until fiscal sanity returns.

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It is not often we associate poverty with power but this presidential election is shaping into such a relationship.  If you’re asking what gold has to do with such an event I understand your confusion but gold’s future is 100% connected to both (greed & poverty). My personal political beliefs have nothing to do with either since my goal here is to not flex party muscle but simply explain how today’s political winds affect the value of your stash.  This election is nothing more than keeping the wealthy rich and the poor fed/sheltered and ability to do both.  If you own gold or silver it is imperative to understand how this type of political elitism will drive PM far above current prices.

Over the last few weeks we have posted thought and evidence how the recovery of 2012 is an illusion. It is now important to understand why political trickery is so important that most running for election is willing to compromise truth and prosperity of our children.  It is even more important for you to understand how owning gold now will provide opportunities for your children and theirs.  Owning PM now goes far beyond making money or owning nice things, this is all about protection of liberty, freedom, and future. To view this as overreaction is to underestimate the power of inflation and politics.

The political age of scratch my back and I’ll scratch yours has entered a dangerous point of necessary far beyond normal political relationships. Over half of US citizens not only agree with debt infested government help but depend on it to survive.  The poor view handouts as necessary, even entitled, and those politically motivated are more than willing to toss scraps to the peasants in exchange for appeasement, and support.  Only a conservative fringe would disagree with providing housing, phones, food, health care, etc for the poor and dependent. Shame on you for arguing programs supported by nonstop debt only drive up the protection big government argues as necessary.

In an odd way Wall Street is now in the same boat of dependency as our poor. This may strike a nerve but if your retirement plans call Wall Street home then please include you in the above statement.  Big government has this shell game down to a tee and few running Wall Street will argue we have entered an age of nonstop stimulus as necessary to keep imaginary wealth supported.   Wall Street understands that Washington must support such a shell game or values of everything dollar dependent decline, including Wall Street salaries, and donations.  You won’t support such stimulus (or support those running for election or re-election) without first believing in recovery, job growth, and Cinderella.

Most Americans still feel this next election is between Democrat vs. Republican but this is far from true. At this point, 90% campaigning only give lip service to controlling debt or understand how it will soon flood all other issues of the day.  The fact meter still points toward continued status quo which will help short term but compound economic correction over long term.  Even leaders who understand such ill effects of debt will succumb to poverty cries and Wall Street intimidation especially if an opponent drums a perfect rhythm of blame and recovery. This is why I feel the debt way of life is no where close to over, this is why I still buy both gold and silver today.  New readers might read a post like today thinking this gold thing is confusing or complicated, it is neither.  Gold will increase as long as a debt based society solves economic issues with more printing, that simple.



I just wanted to drop a note to say thank you for the time you put into this site.  I only recently stumbled upon it while researching silver as a hedge against inflation and wealth protection.   I have yet to take the plunge, but your site has been a great resource!  So Thank you!

One suggestion I would like to make.   I ask if you would consider the format of your pages.   The white text on brown background is quite difficult on the eyes to read.  Perhaps a dark font on a white, or light colored background would be something to consider?   I know with my aging eyes, it would certainly be easier.

Something I hope you may consider.

Thanks again for the site!  I hope to be a frequent visitor!

PROSPECTOR REPLY: Thank you for the comment and suggestion.  Like many other readers you’re wise to consider silver as a hedge against inflation or anything else unforeseen.  Silver has the amazing ability to preserve wealth when dollar related assets fall victim to devaluation derived from debasement.  I doubt either will end anytime soon and this is why I continue to buy silver to this day.  We often hear readers ask if silver has peaked or how we know silver will rise but in all honesty PM is only holding true value while our USD loses buying power.

You’re not the first to comment on text and background so I will bring it up with our web designer.  If anyone else is having trouble please comment too.  I appreciate all comments and suggestions so feel free to reach me here.  Thanks again for commenting.

QUESTION:  Hello, I used The Prospector Site while researching a paper on gold.  I mentioned how gold is real money and dollars are not but my teacher didn’t agree.  He said dollars are money and gold is hard to spend, trade at banks, or use like money (dollars).  Do I have this wrong?

ANSWER: Thanks for the comment.  Hardly a week goes by without a student, like you, using this site as project research.  No, you are not wrong,in fact, you’re absolutely correct as far as I see.  Gold is real money as defined by our Constitution and fiat (dollar) is nothing more than Federal Reserve Notes or IOU s.  The teacher is correct about banks not trading gold but gold is not hard to spend, it is the only worldwide universal currency to exist.  It sounds like our teacher needs a history lesson on all things monetary. You, however, sound wise beyond your years. Keep up the good work and thanks for the question.

PS:  Here is a link to the US Constitution (maybe our teacher should focus on Article I, Section 10)

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Wouldn’t it be nice to believe in things we know not true?  Who wouldn’t want to believe in a Santa flying around in a sled dumping off awesome gifts while we sleep?  As adults, when we believe in something too much we sometimes find ourselves willing to overlook counter support or even realistic proof otherwise.  As a gold advocate I often challenge myself to read articles counter to gold rising.  To only study supporting information is nothing more than following masses and the gold masses usually sell gold (sometimes their opinions are bias if not scripted).  The United States is slow to find physical gold and I can only attribute this to a false perception of recovery.

Last night (2/12/2012) 60 Minutes ran a segment on India’s physical gold thirst that every gold holder will find interesting. Physical gold in the form of jewelry is not only ceremonial it’s their savings.  Jewelers find it easy to sell gold jewelry because each buyer views it as a savings account one can wear.  Our Indian neighbors have a solid perception of gold’s power as real wealth, both in jewelry and bullion. But Americans can’t see the need for something so idle like physical gold or silver.  We thirst for the good old days of new cars, houses, and vacations and to be honest gold doesn’t fit well into our consumer lifestyle.  We hear recovery because we want to see recovery, but this doesn’t change improvement supported by never-ending debt.

Most Americans want to perceive recovery because of a desire to return to “normal” debt based spending. From now until November we will continue to look at “recovery” closely.  Those seeking re-election are quick to offer such a perception but even a fool knows this as risky, at best, if not unlikely.  No doubt recovery will happen but what we have entered is a correction phase that will exhale plenty of air before improving.  The price for believing in a perception over reality will play costly for most Americans and no gold justification on my part can win over what you want to hear as recovery.  Gold is something many turn to as last resort or ultimate protection when all else seems risky or ambiguous. 

Few of us are willing to ask how much a perception of recovery will cost our children because another trillion is impossible to comprehend. Since comprehending is nearly impossible why not believe what we perceive as those in control, right?  If we can’t trust elected officials and masterminds in the Federal Reserve than whom can we trust?  Not many will stop and question a fiat (currency) plan that has never worked or a worldwide scenario with as much debt.  I’m not sure how high gold and silver will climb when this false perception shows itself as, well, false but I’ll bet it will be far over today’s prices.  I doubt $38 silver or $1810 gold (physical) will be an option but time will tell soon enough.

This could sound odd but the same false perception of recovery will find its way into a false security within gold. As a founder of this site I have little doubt folks will eventually find gold but few will understand its value as they should.  Yes, gold will find the same ill-conceived perception someday pushing PM far beyond true value.  I’m sure many years from now I’ll write not about a false perception of recovery but a false perception of gold & silver, kind of ironic wouldn’t you say?



COMMENT (Regarding “Creating Your Own Gold Standard”): This article caught my attention. I have been a coin and bullion collector since 2000.  I have often said that I am my own IMF (Individual Monetary Fund). I do not save Federal Debt Notes, I exchange them for something of value, bullion, stored food, firearms, ammunition, gasoline, etc. Great Web-Site keep up the good work!

PROSPECTOR REPLY: Thanks for the comment and congrats on such vision back in the year 2000.  Love the idea of your own IMF because you, like other readers, understand the importance to distance from the illusion of wealth and false prosperity.  Others are slow to awaken but will soon and when they do the value of things necessary and real will remain while debt supported assets decline.  Those prudent enough to physically own now will inherit the wealth of tomorrow (nothing new here just history repeating).  Your comment plays into today’s post perfectly because many are still willing to believe buying from our own child’s lemonade stand is somehow profitable for our kid even though we borrowed the currency to do so.  Good for you and thanks for the comment.

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We hear it often asked, what’s next?  Everyone wants to know what is next; from the evening news to the man on the street, all asking what’s around the next economic corner.  One expert has his opinion then the next expert (economists) has a completely contradictory take on what is next. Most agree gold will go higher, inflation higher, and once solid assets lower, but how do we really know how to react with such conflicting views and instability.   Is it a wonder why so many do nothing all while hoping “normal” presents itself in the near future? I see very little hope that traditional forms of saving or investing will work over the long term and this is why I own PM. We recently heard from a young couple asking what is next in their own sort of way, here it is.

QUESTION:  My wife and I will soon receive what we consider a nice hunk of money from a settlement and  wonder if you could offer some investment help.  We are in our late twenties and have two small children and two good jobs.  We currently rent a home and considering buying since prices are as cheap as we have seen in years.  Our settlement will more than cover a down payment still leaving plenty for a rainy day.  We are also considering gold & stock investing but a little confused with today’s investment world. We’re hoping to get a few other opinions if you feel comfortable offering, thanks.

First, thanks for sending over your question and thanks for reading our site. Since I don’t offer pinpoint advice I want to toss out a few options but ultimately the decision is yours.  The purpose of this site is to not recommend but offer a broader perspective to the confusing world of gold and how current events prove it as necessary.

You must first realize how fortunate your family is to have financial options in such a time since you’re both relatively young, have good incomes, and soon some investment dough. As you will see by the end of this post we are not living in typical times by a long shot, this opportunity is one no one should take lightly (it sounds like you are taking this seriously, congratulations).  The fact you’re looking to save is extraordinary considering the number of consumer influences these days.  There are plenty willing to offer spending advice and one hour watching any TV channel will prove this as true.  Advertisers bombard us with discounted family vacations, new car promotions, gold advertisements, the choices are endless along with the temptations too.

It is key to realize once this currency is gone it’s not coming back anytime soon. It is also important to understand windfall profit is quickly becoming a thing of the past.  Once ballooning assets (like real estate & stocks) are now in jeopardy of declining more.  Both small and large businesses are struggling to stay afloat and this explains major downsizing.  The economic climate presents not an opportunity to grow an investment like yours but a need to protect it for a better day.  This is very important to understand sooner than down the road since your windfall must be guarded to keep it. I’m not saying it can’t grow but the primary purpose should be protection or preservation, this is why my savings is in PM (precious metal).

You mentioned buying a home and I completely understand your thinking (this is what I would be thinking if still your age), but I have concerns. The American housing market is still in decline and this trend appears far from ending anytime soon.  Real estate has the illusion of affordable because we’re comparing it to record values of 2006 (value supported by easy credit) and record low mortgage rates.  You mentioned a down payment but what I’m describing is home ownership, if this is what you decide, without ever having a mortgage or payment (you must still pay property taxes, insurance , and maintenance). 

Things like homes are getting cheaper, millions of homes in distress will continue to decline and will present great buying opportunities for the few buyers left standing (regardless what commissioned salespeople say). If a home is your goal then consider parking your windfall into something safe all while being patient.  Trading it from a currency (USD) into something real like gold or silver is wise because the risk of inflation will not erode your savings.  Everything carries risk but the trend for gold is much more positive than other traditional forms of investing or saving, at least as I see it.  Sometime down the road your PM is easily sold (converted back to USD) allowing you to pay cash for a home or reinvest as you decide prudent.  Believe me when saying, sometime down the road most assets will seem really cheap compared to gold or silver.


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Does today’s economic mess confuse you, it certainly does me?  Is it possible we over complicate some issues when a simple understanding is the most obvious?  The internet is full of economists explaining inflation, explaining deficits, justifying gold, even ridiculing gold.  Majority of Americans are in search of whatever it takes to return to “normal” but you and I know this is no longer rational thinking. We can’t wish back a strong consumer based economy based on more debt, just not possible.  It angers us few with political power refuse to accept this but the truth is political leaders only react to political forces.  My question for you today is why not creating your own gold standard?

I have no idea what motivates you to read a site like this or own gold. I do know, regardless of reason, you will benefit by participating in a mini version of a monetary structure backed by something real like PM.  For the record, any reference to “gold” assumes silver included because sometimes I condense both metals in one word, GOLD.  Several readers have asked so I’m clearing the air right here.  Yes I own and still buying both metals but what I’m doing is of no value to you unless you’re buying as well! Since this site doesn’t sell PM I can safely say my only interest is to give information and council to those who choose to no longer accept the status quo.

Maybe we should define a few common terms before I launch into this personal gold standard thought. For the record, when a political force promotes “investing” they actually mean “spend (usually by borrowing)”.  When political forces mention “fair share” they actually mean you paying “more taxes”.  It is now common to rephrase terms that sour us which somehow allows us to stomach the same nastiness as before.  The end is the same and this brings me right back to gold and silver.  Most political forces dislike gold because of its “spin” resistance (gold is the one constant for over 5000 years…..real money), since PM debasement is impossible it must be removed from the table of trickery and finally was in 1971 (last nail for the gold standard).

This time, 1971, was the most pivotal point in our monetary history. Individuals who adopted gold set a course for prosperity while the rest involuntarily agreed to a life of devaluation while relinquishing control along the way. Actually the end to the gold standard alone had little to do with our mess of today since without a lack of fiscal restraint even a fiat currency can flutter along.  This is no different from blaming credit card misuse on the card company when actually the card user is the root, cause, and abuser.  The point, by nature we will borrow (we as in the masses or political forces) if borrowing is an option and this often leads to bankruptcy.

The moment one trades currency for gold a personal version of a gold standard begins. Actually two major accomplishments begin and both benefit you as the gold owner greatly.  Once your currency leaves the monetary status quo a point is made by you joining the masses who no longer accept fiscal irresponsibility.  Of course, at least right now, the Fed pumps $180,000,000.00 per hour into our money supply so this pumping more than compensates for your bucks traded to gold.  But even Mr. Bernanke admits this can not go on forever but if it does you are protected, and wealthy.  Creating your personal gold standard is nothing more than refusing to accept fiscal recklessness and proving it by owning gold.  We really need only understand this one point about gold, at least in 2012.



It’s easy to be caught up in today’s political rhetoric and I have to admit it can be entertaining.  From my prospective very little content from either party is in real discussion on what it will take to fix major cracks in our monetary system.  Most issues are irrelevant if we can’t improve or debt dependency and secure our USD simultaneously.  Front runners only argue trivial issues because the masses have not caught on to how dire today’s economic situation is.  This will change over time but for now I see very little attention on the one true snowball of not stop debt.

We often hear from our readers asking why fiscal insanity hasn’t grasped attention of more in leadership roles. My opinion is we are so far removed from “real money” that few grasp the long-term effects of a huge government dependent on never-ending debt.  In other words, we have to stop the leak before we can fix the damages from flooding and this will take time and gold will grow until then.  One other point, have we stopped to consider that a debt declaration as #1 priority is an admission to a 40 year fiat failure.  Political power doesn’t go away that easily, and it won’t.  Please consider PM soon.

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