Gold. Find out all you need to know about buying gold, selling gold, and why you need gold to help you stay balanced in this uncertain world.

How I bought gold

by Bix Wilson

It's kind of a funny story, actually. I was co-owner of a small web design business. My partner was the "creative" one, and I balanced the books. My partner was also obsessed with buying gold. She spent her days reading web-sites about global conspiracies, the treason of the Bush dynasty, the governmental suppression of miracle cures and fabulous technologies. She believed that the world was beginning a long and ever accelerating slide into economic, social and political chaos, the result of trade imbalances and the covert manueverings of a small cadre of superpowerful money managers, and that the only hedge against eventual famine and dislocation was to buy gold.

I was never convinced of her more extreme projections about the future, but I did let her talk me into purchasing some metals. We had just been paid a considerable sum (the only considerable sum we were ever to receive during our two year venture). The check had been opened only a few minutes before my partner suggested that we should each use our share to buy gold.

"It's incredibly undervalued right now, historically speaking," she insisted. "During the recession in the '80s it went up to over $800 an ouce practically overnight. It's down around $300 an ounce right now, but it's being artificially deflated and as soon as the controls come off, the demand is going to spike. It's the only sensible investment we can make."

I could think of some other investments that might be good, such as paying ourselves in cash so that my wife would stop thinking that I was an idiot. I had been doling out our company's cash in small amounts that were only likely to add up to an annual salary of $30,000 or so, or about a third of what I'd been making before joining the partnership. I needed cash, not a pile of metal. But my partner was persuasive if somewhat demented and she prevailed.

We took about $20,000 cash and called our bank, asking them to help us broker a purchase. We decided to buy both gold and silver as a hedge, as the two metals often traded on different waves. We bought $50 Gold Eagles, valued at about $380 each, and $1 Silver Eagles, valued at about $7 each. The banker was helpful as he could be, but challenged--no one had ever made a similar transaction through his bank that he knew of. He needed help from the branch manager to figure out where to go to obtain the coins. Eventually the deal closed and we sat back to wait.

About two weeks later things were not going well at our little company. The big job was over and nothing at all loomed on the horizon. Not even little jobs. Given our cash flow situation, we decided we had no choice but to let our only employee, a shiftless, time-wasting, overpaid complainer, go. So we sat her down and explained that we had no prospects and that we needed to lay her off. She argued some, but took it reasonably well. My partner and I left her alone in our office for a bit to collect her stuff.

While we were out the gold and silver arrived. It came, all one hundred pounds of it, on a pallette, sealed in a bright green plastic container, accompanied by a guard. Our fired employee had to sign for it in our absence. When we returned we saw the giant container of precious metals sitting on the floor in the middle of the office, and our employee sitting there staring at it. We thanked her for her assistance and escorted her from the building. Then we took all those coins to the bank and put them into the biggest safe deposit box they had.

How I sold some Silver

My partner and I dissolved the business about eight months later, having failed to obtain any other significant work. We split up our gold and silver along with our other assets. I ended up with sixteen gold eagle coins and about 500 silver dollars. 500 silver dollars takes up a lot of space, so I decided to sell them. We looked in the phone book and found a coin dealer that was willing to buy from us.

So we went to the bank and withdrew our stash, threw it in the trunk and drove about forty-five minutes to the dealer. They looked up the spot price and we saw that, although gold was in fact on the move (it had increased by about $100 per ounce), silver was a dud. I sold mine anyway because I just couldn't deal with hauling around 500 heavy silver coins any longer. Finally I had some cash to take home to my wife who was now convinced, perhaps rightly, that I was a business failure. I kept the 16 gold coins, all of which fit into a single plastic sleeve, and which were now worth close to $8000.

Those same coins are now worth about $850 each, or more, making their total value about $14,000. So, in a weird way, my partner was right: It was a great investment. Gold prices have increased more than 100% since we bought it. But here's the problem. Since dissolving the company I moved away from the large metro area where we were and I now live in a much smaller city. I recently thought I would capitalize on the gains I'd made and sell some of those coins, but there is not a single dealer within three hours of here that is willing to buy loose gold coins that are not rare. So, in effect, I'm sitting on a fortune that I can do nothing with. If I really get desperate, I can drive back to the big city with the coin dealer who bought the silver, but that will take a lot of time.

My little anecdote demonstrates a few of the salient points of investing in gold, which I'll summarize for easy reference:

It's hard to buy
It's difficult to move and store
It's hard to sell

There is no doubt that I could have made more money in the same period if I had invested in Apple or Google stock, and I would now have no trouble selling it. Those are the bad points. On the other hand, the value has increased hugely, and, as my former partner believed, it can be a great hedge against a sputtering economy, a falling currency and other economic disasters.

I think I'm going to just hold onto the gold coins. They fit neatly in their plastic sleeve in a regular band safe deposit box. They are a sort of weighty insurance policy against the unthinkable. If the economy ever were to collapse and my stocks and my cash became essentially worthless, and such a thing could happen, then I'd have some small security in owning a real, solid piece of wealth. My family would not starve. At least not right away. I'd have sixteen small pieces of metal standing between me and destitution. And that's something.

by Mary Kirkpatrick

My friend to the left there had his little adventure buying gold for the heck of it during the burgeoning bubble of dot.coms and flailing web firms. But are you really ready for post apocalyptic wealth needs? History has shown that the most durable, valued, monetary unit of choice is gold. When the dollar is sunk, real estate market in the toilette, and peaked oil on it's way to hell in a hand basket, there will be one currency that people look to as the old standby, and that's GOLD.

Many years ago, oil surpassed silver and gold as a most valued commodity, but now with the knowledge that oil production has peaked and is on the decline, then perhaps it is time once again for gold to have a new hay day. Oil prices continue to rise and rise, and create a possible crisis that no one can imagine. Most of us cannot think beyond the price of the gas in our own car's gas tank. But what the inflating oil prices really indicate is that as oil supplies dwindle, it becomes more and more impossible to move our goods, to make our plastics, to power our machines. Oil props up our entire economy...what happens when that oil is gone, when we have no money to keep buying it. What happens is, we are left finding a currency that is valuable. That currency is definitely not the dollar. The looming specter of inflation means one thing...when the dollar drops, the price of gold goes up...it's going to happen, and are you going to be ready for it?

Historically gold holds us through a period of crisis,

" Gold is an excellent "crisis" hedge. Undisputed worldwide as a store of value, gold can be a form of "insurance" both in times of crisis and when there are extreme untoward movements in other asset classes. For example, during the period of hyperinflation in Germany from 1918-24, gold maintained its purchasing power while the value of bonds and stocks was catastrophically diminished."
- Gold News-http://goldnews.bullionvault.com/why_buy_gold_092220071

Convinced? How about a little gold buying 101.

The first question you have to ask yourself, is if you want to just buy shares in a gold fund, or if you want the shiny stuff in your hot little hands. Gold pools or gold funds both allow you to bet on the gold markets with easier access to your cash, but that's not what we're talking about here. The advantage to owning real gold, is when all else fails, you've got something physical to back you up. So let's look at some physical ways to buy gold...two ways are gold bullion or gold coins. Both are good starts. The key is not to try to eyeball the market and buy at a particular time, but realize regular purchases at regular intervals will help you guard against any impending disaster. Whether you buy coins or bullion, you'll have to decide whether you store it at an independent bank or you can have it delivered right to you. Either way you should store it in a safe place for a very rainy day. Your investment is guaranteed to go up over the years. Do not watch the gold market like the stock market. The gold market will dip once in awhile, and if anything, this is a time to buy more. It inevitably continues rising, and you'll be set with a great investment that can stand the test of inflation, wars, disasters, you name it.

For more information on buying gold, check out our resource and articles sections below.