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Friday, February 25, 2011

Silver and Gold

A question to those of you still on the fence over buying precious metals:

With what's going on in the world, do you think silver and gold will be higher or lower?  Not today or tomorrow's prices, as they can hop all over the place when some isolated even occurs.  I'm talking about looking 6 months, a year, two years, five years into the future.


>JP Morgan is being sued for illegally "shorting" the silver market.  Basically, their actions have artificially retarded the market price of silver.  We're talking RICO lawsuits.

>Quantitative easing.  We're in the middle of the second round of our government telling us - and then acting upon a promise - to devalue our dollar.  When you create more of something - such as dollars - you make those already in existence worth less.  Now, the current plan is to produce $100 billion a month of Monopoly money between January and June of this year.  They promise, cross-their-heart-hope-to-die that this will be the last time they do this.

Let's see if this is true when no one other than the Federal Reserve bank is buying our Treasury debt...

>Civil unrest around the world, primarily in the Oil Barrel - the Middle East.   My gasoline now costs $3.69 a gallon.  If I drive across town, I can get it for $0.15 cheaper at $3.54.  If Saudi Arabia gets dragged into this mess, The Sky's The Limit on what it will cost us per gallon.

Oh, BTW, there's a planned "Day of Rage" on March 11th in the Sand Kingdom.  Mark your calendars, boys and girls, this is going to get very interesting.

>Food prices increasing at an alarming rate.  In my eyes, this is the only one that has a chance of at least partially correcting itself in the near-term.  While you can eventually plant more crops, the aforementioned gasoline prices will necessarily increase transportation costs.

So, where do you think the prices of PMs will go?  How will that compare to what you're being paid on your savings account?

Serious as a heart attack, if you have any extra cash, get some precious metals, preferably silver.

Prices continue to increase.  If you have some time, take a look at this article at Coin Update News.  It's discussing an upcoming crunch for the physical delivery of silver.  All of these folks that play, "the paper silver market" - using futures contracts - are suddenly demanding delivery of the physical silver.

Oh, my oh my.  Don't sound good.  If the stories of the Futures Market being over-sold by a factor of 100 are ANYWHERE close to being true (phantom contracts to buy or sell silver that doesn't exist), you're going to see a phenomenal spike in the price of silver as the market (COMEX) must scramble to deliver shiny metal.

A doozie of a quote -
Already we are seeing several physical silver wholesalers using a two-tier silver spot price system. If you want to sell to them, they are using spot prices derived from COMEX and other markets. On the other side, if you wish to purchase physical metals from them, they are quoting a selling spot price that is 5-10 cents higher than their buying spot price.
We're doing that in our PM store.  We absolutely cannot keep silver in our cases.  Yesterday, literally every piece of our bullion silver was sold.  Not one piece left.  I drove around the Bay Area hitting up wholesalers and other dealers to fill orders.

For the past two weeks, we've been selling our silver for a considerable premium over the price you can get it online.  Why would people pay this premium?  Immediate delivery and anonymity.

It's not Panic Buying, but I'd call it Seriously Focused Buying...

Back in August of last year, I wrote the following ("Mr. Orwell?  Paging Mr. Orwell...") -
Also, the price multiple between gold and silver has been narrowing. Just a week ago, the multiple was 68:1 (68 ounces of silver cost the same as 1 ounce of gold). As of today, that ratio has dropped to under 65:1..
What might that ratio be today? 42:1

Speaking of JP Morgan Chase, they sure seem to be attracting a bunch of high-profile lawsuits.  In addition to the silver shorting suit, they're being sued by Allstate Insurance over bad mortgage loans, by a trustee who is suing them over losses from the Bernie Madoff scandal,  and by the SEC over some shady muni bond sales.

Sucks to be them.  I'm guessing it will be a coin toss whether it is JP Morgan Chase or Bank of America that is the first Too Big To Fail, that fails...

Accept The Challenge

Wow, what an interesting couple of weeks.

After your basic preps are covered, please get some PMs.  Personally, I've actually been diverting some of my PM-buying money to more preps.  Large quantities of sugar and salt.  Canned meats as well (and canning more meats, too).

We're seeing so many people now coming into our shop with stuff they'd have never considered selling just a few months ago.  Because we genuinely believe the market will continue to advance, we've bumped up our typical pay-outs percentages.

Happily, people are shopping prices.  They're going to our competitors to see what is being paid, and end up selling to us.  We get the "warm and fuzzies" for helping folks out, but it's also a very calculated business decision.  When things turn around, these folks will remember us as being fair, plus they're telling their friends right now that we will treat them honestly.

The whole, "Doing well while doing good" deal.

None of us has any way of knowing exactly what is going to happen with our country, prices, inflation or the price of PMs.  All we can do is look at the signs in front of us, consult our version of a Crystal Ball and hope we make the right decisions.

I'm sticking with my belief that preps and PMs are nothing more than insurance policies.  I hope I never need to cash them in, but if TSHTF, I can at least make things a bit more bearable.

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Copyright 2011 Bison Risk Management Associates. All rights reserved. Please note that in addition to owning Bison Risk Management, Chief Instructor is also a partner in a precious metals business. You are encouraged to repost this information so long as it is credited to Bison Risk Management Associates.

Monday, February 21, 2011

The Maggots of Madison

Hmm.  Things are a bit tense around the globe, huh?  Who's the latest third-world armpit to start with their own flavor of civil unrest?  Is it Libya today or was that Madison, Wisconsin?

I absolutely LOVE the idea of what's going on in Wisconsin.  People are exercising their right to public protest against what they believe to be a wrong committed by their government.  Awesome.

Now, the particulars of Wisconsin make me sick to my stomach. These Cheese-headed maggots (bloated, undulating worms feeding on a dead corpse) are happy to continue munching on your rotting remains as long as their bellies are full.

They have no concept of honor or fidelity.  Didn't they promise, in writing, as part of their employment agreement as public employees - not to strike?

These teachers, in particular, have left their students high-and-dry.  And they have no problem lying about why they're there.  I've seen a number of video clips of doctors walking through the crowds offering a Doctor's Note to the too-ill-to-work teachers.

"I'll make my protest  - and get a day off - but don't want to make any personal sacrifices.  I'll leave a paper-trail so I have yet ANOTHER reason why I can't get fired (such as abandoning my job)."

I hope some Tea Partiers go after these doctors.  As the reporter asks in the video, Isn't this fraud?  And sorry, "Doctor" Cupcake, you don't have any expectation of privacy when you have your "medical consultation" out in public.

BREAKING NEWS!  This just in - the first photos of the missing-in-action Wisconsin Democrat State Senators huddled at an undisclosed location outside of the state.

If you click the image, you can see all of the cheese head hats on the proud, honorable, law-abiding senators...

Answer me this:  If a Tea Party group had commandeered the capital building - for 10 minutes, let alone a week - would they have received this warm-and-fuzzy media treatment?

Right.  There would have been calls for public executions of the "insurgent leaders".  Racism charges would have been rampant (Why?  Just 'cuz they can.).  Eloquent on-air dissertations on how state government has come to a screeching halt because of these hateful, racist, child-endangering, puppy-kicking protesters would have been the norm.

Instead, it's all unicorns and kittens.  They're just standing up for their rights.  Yeah, the right to feast.

One of my favorite sites - The Woodpile Report - has been providing a very succinct bit of advice for the past few months:  Stay Away From Crowds.

Good advice.

This type of protest is going to spread.  Eventually, there will be vocal political resistance, and it's going to morph into violence.

Those that have been feeding at the public trough ("Troughers") are starting to realize that the Gravy Train might be ending.  And they're scared.  Free money, like an addictive drug, is hard to give up.

Those of us that have been screaming about Big Government and the lack of money to continue this government largess have said, "No more!"

If the Troughers win, more of us tax payers will simply stop paying into the system.  There will be more and more blatant disregard for our tax laws.  Starve the Beast.  Income Redistribution must end.

If the Tea Partiers win, the Troughers will resort to what they know best:  Theft (yes, I view "subsidies" of all types as theft).  Like a crack addict without a fix, if they can't get their free money, they'll simply take it.  They, too, will disregard the law.

Accept The Challenge

If you do find yourself in a rough situation - by chance or by choice - be smart.

Video record all you can.  I've mentioned Qik before.  It's a program that takes your video and immediately streams it to an Internet site.  In case your cell/smart phone gets trashed, you've at least got a copy of what happened.

It does have one weakness - if someone grabs your phone, they can delete the video - both the local copy and the online copy.  So..... be sure you have some sort of password protection on your phone.  There are a ton of free apps out there that do this very well.

Be prepared to defend yourself.  No suggestions on how or with what self-defense tools, but don't be a victim.  Understand your local laws, as well as your physical limitations.

Match your defensive tools to your skill-set, or develop new skill-sets.

On a related note, my Introductory firearms class on Saturday was sold out, and had 4 people on the waiting list.  On Sunday, I had a private lesson.  The range where I teach was Standing Room Only:  a 45 minute wait to get one of the shooting bays.

I had a newbee NRA instructor observe the Introductory class.  He'll be observing the next class as well, then I'll have him do one or two of the lessons at the following class.  If he works out, this will allow me to increase the class size (for the classroom portion, I could do a hundred students by myself - it's the on-range portion that requires a lower student-to-instructor ratio).

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Copyright 2011 Bison Risk Management Associates. All rights reserved. Please note that in addition to owning Bison Risk Management, Chief Instructor is also a partner in a precious metals business. You are encouraged to repost this information so long as it is credited to Bison Risk Management Associates.

Monday, February 14, 2011

Female Shooters

OK, ladies, listen up! [That should endear me to my female readers ;-)]

Don't take this as some sexist, misogynist post.  Everything that follows is a generality based upon what I've witnessed in my handgun classes and one-on-one training.

When it comes to most things - but especially guns - I throw Political Correctness out the window.  I won't tip-toe around a subject to make someone feel good about themselves.

You're physically weaker than men.  Pound for pound, guys have more muscle mass.  Because of this, when firing a gun, the technique you apply to your shooting skills is more important than it is with men.

If some big old burly guy wants to stand straight up, have weak wrists, bent elbows and a crappy stance, he can "muscle" the gun to keep it from flying out of his hands.  Usually, that's not the case with most women.

Take a look at this video.  I use this in my introductory class as just about the perfect example of how NOT to shoot a gun (WARNING - inappropriate language on a T-shirt at the start of the video) -

Now, a 50 caliber gun in the hands of anyone will produce a massive recoil.  But the negative effects will be more pronounced if you have smaller muscles AND improper technique.  Not a good combination.

Read the following, then go back and view the video again -

1.  Grip.  Absolutely horrible.  WAY over-grip with her strong hand (look at the striation of the tendons in her forearm) and virtually no grip with her support hand (watch how her left hand is just left "floating" after the gun fires).  You want to have a symetrical grip where the gun is almost cradled by the two hands with equal grip pressure from both sides.

2.  Elbows - The idea is to transfer the force of the firearm recoil into your large shoulder mass, NOT your weaker elbows.  Keep those arms bolt-straight.

3.  Stance - You want to use your upper body as a spring of sorts - to absorb the recoil.  You want to lean into your shots.  This will result in the most accurate shots, and allow you to quickly regain your aim for subsequent shots.  I tell my students that you want most of your weight on the front of your feet - you should feel like you're gripping the concrete with your toes.  You don't want to be pin-wheeling forward - just weight forward.

And bend your knees, for goodness sakes!  EVERYONE wants to stand up like a statue.  Bend your knees to help relax your body and accentuate the "spring" idea.  It also makes it easier to move.  As in, when someone is shooting back, you don't want to be a stationary target.  Practice like it's for real...

4.  Face the target - whenever possible, directly face your target.  She's using some sort of a modified Weaver stance.  Hips wide open.  Use an Isosceles stance whenever possible.

If the situation requires a Weaver Stance, be sure your firing arm is bolt-straight.  Again, that's to transfer as much of the recoil into your shoulder as possible.  And DON'T pull back with your support hand!  This causes nothing but muscle tremors which screw up your aim.  Support with your support hand!

Here's what all of that should look like -


I had a one-on-one student this weekend.  She is a member of one of our Armed Services, and wants to advance her career.  She was having a problem with one portion of her firearms qualifying.  In particular,  getting lead on paper with her weak-side, one-handed shooting.  She was literally unable to hit the target.  Not just the 12" paste-on "Shoot-N-See" target, but the entire 2' x 3' target!

We started with the basics as detailed above.  One big difference when you are shooting one-handed is you want your support hand either up on your chest, or in your pocket.  You DON'T want it flailing around, messing up your aim.  Keep it still.

You also need to SLIGHTLY over-grip with your shooting hand.  The key - and where the practice comes in - is to keep your trigger finger "butter smooth" and not working in concert with the lower three fingers that are on the grip.  When you squeeze the trigger, you DON'T want to ALSO squeeze those grip fingers, as it tends to bring your shots down-and-left when shooting with your right hand (and down-and-right when shooting with your left hand).

The result with this student?  Weak-side, one-handed with a .40 cal pistol:  Five shots in 10 seconds inside a 12 inch target at 7 yards.  You go girl!

Accept The Challenge

I prefer female students.  As a whole, they are much more willing to take instruction, and apply it to their practice routine.  Guys seem to listen with one ear, then go back to their old ways.  Oh well.

Apply what you learn - you paid good money for the instruction.

I picked up a great tip from one of my first female students (who passed her POST academy with flying colors!).  This lady was VERY small.  She weighed maybe 110 pounds soaking wet.

She regularly does finger strength exercises.  She's got one of these devices.  The important part is getting something that exercises each finger individually - not the whole hand at once.  With the whole-hand devices, your strong fingers can "cheat" for the rest of the hand.

This will help with so many parts of using a handgun.  Stronger grip when needed, the ability to load a full magazine without using a speed loader, and the ability to quickly lock open the slide on a semi-auto.

Now, Get Thee To The Range!

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Copyright 2011 Bison Risk Management Associates. All rights reserved. Please note that in addition to owning Bison Risk Management, Chief Instructor is also a partner in a precious metals business. You are encouraged to repost this information so long as it is credited to Bison Risk Management Associates.

Saturday, February 12, 2011

Communications Planning

The Book of Army Management says:  On the field of battle, the spoken word does not carry far enough:  hence the institution of gongs and drums.  Nor can ordinary objects be seen clearly enough:  hence the institution of banners and flags.

Gongs and drums, banners and flags, are means whereby the ears and eyes of the host may be focused on one particular point.
--Sun Tzu, The Art of War
Communications were deemed important even 2,500 years ago when The Art of War was penned.  Without communications, you're operating in a vacuum.  

Look what happens regularly in China, and what worked for a short period of time in Egypt:  The government shuts down or restricts access to the Internet and other mediums of communication.

What is really a more important lesson is that these government actions regularly fail.  Why?  Because people find ways around the roadblocks.

There was a great article in PC Word ("Get Internet Access When Your Government Shuts It Down") that discusses a number of things you can do to get access to the Internet during difficult times.  Many of the options are uber-techy, some are pretty practical.

One of the key things to remember is that it is virtually impossible to fully disable the Internet.  It's not as if there is a single "kill switch" like on a lamp in your living room.  The Internet is a collection of inter-connected private networks to which the owners have decided to allow access.  It's a network of networks.

The biggest soft spots to the Internet are these massive servers called NAPs, or Network Access Points.  These act as the traffic cops to route information requests and retrievals. 

Hypothetically, the government could shut these down - at least the ones located on American soil.  This is VERY unlikely, for a number of reasons. 

First, most of the government runs and communicates via the public Internet.  Yes, some highly-secure communications are completed over private, government-only networks, but they are few and far between.

Second - and ultimately more importantly - is business.  Our commerce is now fully tied to the Internet.  Even for a business that doesn't have an online sales site, the Internet is used to transmit credit card sales to a company's bank, or send sales data to a central accounting facility, or allow for security cameras to be monitored from afar.  Hell, many business have converted from land-line telephones to VOIP (Voice Over Internet Protocol) phones (think Vonage).

If the Internet is crippled, so is American business.  That won't last for long, as even a despot needs cashflow from taxation...

So, if an Egyptian-style uprising were to occur here in the States, the Internet might be restricted, but it wouldn't be fully shut down.  My guess is that they would use technology similar to what you use on your email "spam" filter to target and reject messages from specific email addresses, IP addresses or which contained "revolutionary" key words.

They'd restrict cell phone access by phones on some secret "watch list".  They would probably shut down free, anonymous Internet access points, such as those offered at Starbucks, Barnes and Nobles and a gazillion other gathering spots.

Still, you could never restrict everything.  Ask Mubarak in Egypt how well his Internet shut down worked.  People Tweeted, Facebooked, texted, emailed and broadcast to get the information out.  It wasn't easy - at first - but information got out.  Once it got out, people with skills and knowledge made it easier for others to join these new, ad hoc networks, and it went nuts.

Accept The Challenge

As always, think PACE - Primary, Alternate, Contingency and Emergency.  Have back-ups for your back-ups!  Assume failure of at least one of your plans.

We've got a dozen or so posts on various communications ideas - from security to being clandestine - all accessible by clicking HERE.

If you think you have the slightest chance of having your email messages stopped, set up multiple, non-used email addresses on different ISPs.  Gmail, Yahoo, Hotmail. 

Tied to this is having a printed list of email addresses.  Why?  One of the ways the .GOV might identify which accounts to restrict would be by checking the online address books.  Got any contacts in there that might catch the attention of some bureaucrat?

Illegal?  Good luck with that while pleading your case to the FEDERAL judge hearing your case...

Pre-paid cell phones, which you keep charged, but are un-used.  I have a number of friends that have this set up.  Here's one drawback:  You must keep the phone full of minutes.  If you buy the phone, load some pre-paid minutes, then let them run out, you will lose your number.  The next time you go to load a card, you will have another phone number!

Now, if your plan is to only use it initially for outgoing calls, that's no big deal.  This also helps with your Operational Security, in that your number isn't listed in someone else's cellphone - most likely under your real name!

For family members, we have sets of walkie-talkies.  Honestly, I don't know if these things will work as advertised.  The ones I have purchased purport to work up to 35 miles.  My guess is that this is the best-case when used in a flat, open area.

To test their utility, my wife is going on a field trip with her students in March to the Marin Headlands.  It's a very hilly, uneven terrain area.  She's going to bring one set and test them over the 3 days she'll be out there.  I'll report the results.

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Copyright 2011 Bison Risk Management Associates. All rights reserved. Please note that in addition to owning Bison Risk Management, Chief Instructor is also a partner in a precious metals business. You are encouraged to repost this information so long as it is credited to Bison Risk Management Associates.

Tuesday, February 8, 2011

When Serfs Don't Play Nice? Retaliate!

Back on the last day of last year, I did a post ("Outlawing Cash") on how the government would be pleased as punch if we didn't have cash, gold and silver around as mediums of exchange.  It makes tax collection difficult at times.

Well, there's another reason:  It gets in the way of tracking your enemies.

It seems that a small town here in my neck of the woods has decided to no longer accept cash as payment for city services.
Starting in May, residents no longer will have the option of paying for town services, including public records requests, with cash.

The Discovery Bay Community Services District board voted this week to ban cash transactions for all services, including water bills and park reservations.
Of course, the official reasoning is the safety of the government workers.  Yeah.  Forget the whole, "for all debts, public and private" printed on our fiat currency -
Board members said the new policy will ensure the safety of town clerks and save the district time and money, but some say it is also a response to anonymous requests for public records the town has received. Those requesting records anonymously have been using cash to pay for the cost of copying the documents.
So what?  What could possibly be wrong with anonymous records requests?
But former director David Piepho, who retired from the board in December, a month after the no-cash policy was introduced, says the change was designed to put an end to anonymous requests, which he believes are inappropriate.

"You'll find that a lot of the rules that the CSD deals with are created because of the same four or five antagonists," he said. "They're made because people acted in such a way that a rule needed to be made."

Board member Brian Dawson called the anonymous requests "cowardly" and indicative of "bad intentions."

"It's happenstance that I don't really care for," he said.
"Cowardly."  "Bad Intentions."  "I don't really care for."

Well, Bri, we certainly wouldn't want to offend your sense of self-importance, would we?  How dare these mere common citizens want to gather information on your performance and intentions without you knowing who made the requests.  You'd think they're all paranoid that you might retaliate against them.

Just like you did with the rule changes.  Hmm.

Hey, I guess the former director didn't get the Democrat talking-points memo on non-gun references -
Piepho says he hopes the new policy will make it harder for antagonistic residents to use records requests as a weapon.

"They want to be like snipers and take shots," he said, "but they don't want the spotlight on them."
Ah.  We mustn't have antagonistic residents.  When they talk back, compare them to snipers, hiding in the shadows.  Break out the character assassinations and ad hominen attacks, big time.

We're only interested in compliant sheep.

It will be interesting to see how the local residents respond to this slap in the face when the next election rolls around.  Baaaaah, baaaaaah?

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Copyright 2011 Bison Risk Management Associates. All rights reserved. Please note that in addition to owning Bison Risk Management, Chief Instructor is also a partner in a precious metals business. You are encouraged to repost this information so long as it is credited to Bison Risk Management Associates.

Monday, February 7, 2011

Did Ya Know???

Did you know that Backwoods Home Magazine will take payment in silver?
We’ve been getting everything from shiny silver eagles to green silver dimes since we started taking silver coins for subscriptions and any other products we sell. Not as many people have taken advantage of the offer as I had hoped. The price of silver has been all over the place, but I think offering a subscription for a dollar in face value for silver quarters, or a single silver dollar, is a pretty good offer for us to stick with.
Very cool.  This is how I'll be renewing my subscription.

Did you know that we're saved?  Unemployment is down to 9%.  Green shoots a-plenty - Woo Hoo!

Tell that to the 300k people that have been unemployed for such a long period of time that they're no longer considered unemployed by our government.

Yeah.  About that...

Apparently, Uncle Ben Bernanke didn't get the "happy talk" memo, and had some downright negative things to say.
Until we see a sustained period of stronger job creation, we cannot consider the recovery to be truly established," he said.
No s&@t, Sherlock.  How 'bout you pass that little bit of wisdom along to the White House and the Government Scribes (the press corps)?

Did you know that the first lady is starting a new portion control push, aimed at restaurant?.  Gotta manage every part of our lives, right Michelle?

Don't let them eat cakeLook at the White House Super  Bowl menu.
- Bratwurst
- Kielbasa
- Cheeseburgers
- Deep Dish Pizza
- Buffalo Wings
- German Potato Salad
- Twice Baked Potatoes
- Snyders Potato Chips and Pretzels
- Chips and Dips
- Salad
- Ice Cream
Why isn't is all twigs, sticks and gluten-free biscuits?  Because some pigs are more equal than others.  The Elites apparently have the ability to moderate their own food intake, but need to step in and manage the rest of us poor, ignorant saps.
Did you know that yesterday was the first time in a week that the people in Egypt have been able to get money out of their banks?  Yeah, there was a week-long banker's holiday in Egypt.
Egyptian authorities opened some bank branches in the capital, Sunday, for the first time in a week, and customers lined up to withdraw money. But, the government ordered the banks to limit the size of withdrawals and limited opening hours.
Their stock market is still shut down after it cratered when the civil unrest first started.

How much cash do you have in case some natural disaster or civil unrest were to hit your hometown?

Do me a favor and take the Facebook quiz at the top of the page.  I'm trying to decide if it makes sense to incorporate this into my business.

I'm very sure that a social media tool such as Twitter is a waste of time, but I think Facebook might have a place.  Lemme know what you think.


Please click our advertiser links. They pay us so you don't have to. A click a day is all we ask!

Copyright 2011 Bison Risk Management Associates. All rights reserved. Please note that in addition to owning Bison Risk Management, Chief Instructor is also a partner in a precious metals business. You are encouraged to repost this information so long as it is credited to Bison Risk Management Associates.

Tuesday, February 1, 2011

The Inside Scoop

Sorry for the light posting, but it's been hectic the last week or so.  My gun classes are almost all sold out for February (woo hoo! only 2 openings left), and the PM store has been absolutely crazy.  
Note to those of you that have emailed me regarding mail order for our PM business:  Thanks!  At least right now, we don't have a need for adding this service.  We're adding more employees (we're up to 3 now!) and may offer this in the future, but right now, our local business is keeping our hands full!  I can see us adding a dedicated online/mail order biz not too far in the future.

Anyone whose been watching the spot price of gold and silver has seen how prices have been all over the board.  Up one day, down the next.  The intra-day movement has been absolutely insane!

I've been watching spot very closely over the past few weeks and trying to correlate it with the volumes of business in our store.  A Tale Of Two Worlds.

Spot - driven largely by the COMEX - has been a real head-scratcher.  In general, the dollar has been weakening (which would push up the price of gold), but selling (of futures contracts) has been just as strong (pushing prices down) - click to enlarge -

(You can go HERE to see this chart breaking down the components of a bunch of different commodities.)

In our store, it has been BUY, BUY, BUY!

We can't keep silver bullion coins and bars, in particular, in the store.  Our 'small gold' - quarter ounce and smaller - is selling very well also.

If you're in the market for some gold right now, and flinch at the price, ask your local shop if it has any "jewelry grade" coins.  These are real coins that have been pulled out of jewelry and as a result, have lost any possibility of numismatic (collector) value.  You can generally get these coins at or below spot prices.

A legitimate shop won't sell these as regular coins because they have (usually) small imperfections caused by being in the jewelry.

There are generally two ways to spot jewelry-grade gold coins - bezel or clamp marks.  A bezel is a band of metal that surrounds the coin along the rim, leaving the obverse and reverse faces of the coin visible (like in a pendant).  Sometimes, clamps (little tabs) are used on the backside of the bezel to hold the coin more securely in place.

When bezels and/or clamps are removed, they almost always leave marks on the coin.  The bezel itself will usually leave a fairly obvious "dirty ring" around the edge of the coin.  The clamps (usually 4 of them) are little tabs that are evenly spaced around the back of the bezel.

Whenever you're buying gold coins, ask to borrow (or bring) a jewelers loup to examine the rim of the coin.  Look for color differences or plain old dirt along the edge. 

Also, if you see a little nick near one edge (usually on the reverse side), look 180 degrees across the coin and see if there is another corresponding nick.  It's a dead give away the coin had clamps used.

If you see any of these indicators, ask the seller if this was in a piece of jewelry.  If they say it was, ask for their jewelry-grade pricing, and see if you can get the coin for that price.

Then never return to that store!  They're not on the up-and-up.  They've show they will screw you if given the chance.

Also, expect to take a pretty good discount when selling the coin.  It will almost always be below spot.  The value of jewelry-grade coins cuts both ways!

Please, don't get greedy.  We are seeing 2 or 3 people per day that bought gold jewelry to "flip", only to find out that it's not gold after we test it.  Craigslist, a friend-of-a-friend, or some dude on the street.

Some of this stuff is VERY good.  It's all stamped 14k.  Most also say 'Italy'.  Some of it is very highly polished brass that looks just like gold.  Some is even gold plated (but doesn't have the legally required 'GP' stamp).

If it looks like too good of a deal, I guarantee you, it is.

And don't think just because you bought it in a name-brand mall store you're getting what you paid for.

I had a lady come in last week that had just bought a gold necklace from the local mall.  Big name national brand store.

Her baby daughter had reached up and grabbed the necklace, irreparably breaking it.  She brought it in to get some cash to buy another one.

Our first test on gold jewelry is to run a rare earth magnet over the piece.  If it is some sort of plated iron, it is attracted to the magnet.  I ran the magnet near the necklace, and the lady says, "Oh, don't worry about that one, we just bought it at XYZ Jewelers".  I still had to conduct the test, and lo and behold, the necklace was ever so gently attracted to the magnet!

It was heavily plated iron.

She got on the phone with her husband, and I could nearly hear him word for word, as he was yelling so loudly!

Here's the good news:  I told her to take it back to the store with her receipt - and a magnet - and get every dime of her money back.  If they balked, I told her to make a VERY public spectical of herself until she got paid back.

Oh no, she said.  She was sending her husband to get the money back.  He just happens to be a local police officer, and he'd be going down in uniform!

I have a feeling they'll get their money back  ;-)

If you're looking for silver, you've got some ways to keep your costs down as well.  In general, that means you're going to have to buy in volume.

For instance, right now, we sell single Morgan Silver dollars for $28 and single Peace Silver dollars for $27.  We recently got in a ton of them, and are selling them at very steep discounts when bought in bulk.  We've got them packaged in 20-count tubes, and are selling them at $24 per coin for the Morgans dollars ($480 total) or $23 each for the Peace ($460 total).

I'm not sure if I've shared this before, but this is a way to determine the premium over spot you're paying for various types of bullion coins (click to enlarge) - 

Notice that the Junk Silver (1964 and older dimes, quarters and halves) has "0.715" as the amount of silver in the coins.  If you do the math (0.804 ounces x 90%) it should say 0.723.  This difference is because of the industry recognized understanding that, on average, these coins are fairly well circulated, and have lost some of their silver.

If you're going to get into buying Precious Metals, it pays to be educated.  Price and premium are two of the most important factors.  Build a similar spread sheet so that you can to shopping as an educated consumer.

Less volitile coins - small gold, Morgans and Peace silver dollars.  These tend to move up and down in price more slowly than the changing spot price

Very volitile - 100 oz bars - these things have a life of their own.  One day, they are available at spot, the next day, they're at $1.50 per ounce below, and a week later, a buck over spot.  Be very stingy when buying them, and patient when selling them.

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Copyright 2011 Bison Risk Management Associates. All rights reserved. Please note that in addition to owning Bison Risk Management, Chief Instructor is also a partner in a precious metals business. You are encouraged to repost this information so long as it is credited to Bison Risk Management Associates.