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Monday, April 29, 2013

Internet Tax Is Doing You A Favor, You Soft, Squishy Loser

Just in case you weren't paying attention, the FedGov is proposing a new Internet Tax.  Yeah, it's all in the name of freedom and fairness and, damn it, it's just good for America.


Of course, it's none of those things.  It is just another money grab.  Your money getting grabbed, of course.

The talking heads on TV talk about how it makes it fair to the little mom and pop physical store in your home town.  "They just can't compete with the's of the world.  It just ain't fair!"

Frankly, I don't give a damn about fairness.  And this is coming from a guy who owns a physical store - no Internet sales whatsoever - that has to compete against all of the massive (and I mean MASSIVE) online bullion stores., and the like.

They don't have to charge tax on any bullion they sell.  I, on the other hand, must charge 7.875% sales tax on all bullion orders under $1500 (it's California, so don't ask...).  On top of that, because they're so big, the online guys can sell their goods at a lower per-item cost.  Many times, WAY lower.

So how do I survive and thrive?

We don't compete purely on price.  It's a part of the sales component, but there are a lot more things we bring to the attention of our customers.

We make sure they add in the cost for insurance, shipping and wire or credit card fees.  Still, sometimes our price per unit is higher.

We educate the hell out of our customers.  Grab a cup of fresh brewed coffee (our machine grinds the beans and makes a cup, one cup at a time) or a cool bottle of water, plop your butt down, and let's talk bullion.  Why, how, when, where.... whatever you want to talk about.  We tell our customers what we believe, why we believe it, why we personally buy (and rarely sell), and that they need to go away and make their own decision based on their own research.

Try getting that from some guy with a script on the phone.

Next, we discuss delivery.  Give us money, walk out with gold or silver. It's a hell of  a thing looking at a stack of silver bullion, fingering it like a pirate's treasure, and then walking out empty handed for a couple of bucks.  It happens, but not often.  When the big guys tell you you can get your stuff in 4 to 10 weeks, well, some of the luster comes off the dollar per silver ounce you're saving.

I think the biggest benefit is one that actually draws most folks to physical stores like ours:  privacy.  No matter how you slice it, if you buy online, somehow, somewhere, your name is now in a database.  Entities buy those databases, including good old Uncle Sugar.

People don't like that.  I tell them that we suggest not giving us their name for their receipt when they buy bullion from us.  I ask them, "If you go into Walmart and buy underwear for cash, do you give the clerk your name?"  They get the point.  People are so used to giving away their privacy.

In short, we provide, "added value".  We work hard to define and sell the idea that value is more than just price.  It's the whole package.

It's hard, it's time consuming and it's costly.  But we've built a business around that philosophy.

Sorry to those of you out there that are business owners and think this new tax will "level the playing field" and mean your business will be saved.  You're wrong.

If your business needs a Fair Share Law, ala Atlas Shrugged, it's already dead.  That business pulse you feel is just the last drop of business blood dripping out of your system.

If your business has significant online competition, you should have changed your business model over a decade ago.  And every year since.  If you get soft and fat, your market share gets gobbled up by the competition, regardless of how fair things may or may not be.

You need to look at the weaknesses of your competition, and bring those to the forefront of the mind of your customers.  What's important to your customers?  Why are they buying this product, regardless of the source?  Sell to those emotions, and convince them that they get more value by coming to your store.

Maybe you're going to have to get off your butt and actually add some value.  No one ever said business was easy.  Feast and famine are part of the game.

Maybe you need to diversify your business. 

Like with my "gun training business".  It's much more than that.  We do emergency prep (for individuals and businesses), safety awareness training, pepper spray and stun gun, introductory pistol, advanced pistol, private lesson pistol.  Common thread:  Personal responsibility and safety.

Going back to our bullion business, we actually have 4 markets we go after.  Bullion buyers and sellers, scrap gold and silver sellers, discount jewelry buyers and numismatic (collectible) coin buyers and sellers.  They're all related (precious metals) but have separate supply and sales markets. 

We're not trying to sell pool chemicals in an ice cream store!  We do what we know, and always look to expand or develop new, related markets.  We fail much more than we succeed, but we fail during tests, so our entire business is not placed at risk.  When we hit a homer, we hit it hard.
Nothing in this world can take the place of persistence. Talent will not; nothing is more common than unsuccessful people with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated failures. Persistence and determination alone are omnipotent.
--Calvin Coolidge

Back to the Universal National Patriotic God Bless America Sales Tax:  You know how this will be sold, right?

We're now seeing all of these small business owners on Fox and CNBC whining about how tough it will be to know the 10,000 different tax rates (a valid whine, in my eyes - but come on, Man Up).  So, Nanny McTaxYourAss will tell us, "No worries, children.  We're going to administer this new program.  Online sales will have a single tax rate (or just a couple), regardless of where the sale was made.  In the name of fairness and equality and fairness and pride and fairness, the money will come to DC, where we'll siphon off uh, take a few pennies and send the money out to all of you little towns and hollows on a fair and equitable basis."

Yeah, they'll fix your problem of having to figure out thousands local tax rates - a problem THEY created.

Ain't that big of them?

Copyright 2013 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, April 22, 2013

Get Some, If Ya Can

Marinate in this for a second -
“Perhaps more to the point for TBTF [Too Big To Fail], if a SIFI [Systematically Important Financial Institution]  does fail, I have little doubt that private investors will in fact bear the losses [emphasis added.  ed.]–even if this leads to an outcome that is messier and more costly to society than we would ideally like,” Stein said in remarks prepared for a conference sponsored by the International Monetary Fund. “Dodd-Frank is very clear in saying that the Federal Reserve and other regulators cannot use their emergency authorities to bail out an individual failing institution. And as a member of the Board, I am committed to following both the letter and the spirit of the law.”
Ok, who is this Stein fella, and why should I give a damn what he thinks.  Well, he's a governor for the Federal Reserve Bank.  You know, that group of shot-callers when it comes to our financial well-being.

In non-banker speak, he's saying that if an large American bank goes teats-up, the depositors will be footing the bill for the bailout.

What?  You didn't know that when you make a deposit in your bank, you are an investor (creditor) of that bank?  Yep. Your deposit amount is an asset on your personal balance sheet, and it's a liability on the bank's balance sheet.  An unsecured liability, by the way.

So, when the National Bank of TooBigToFailville crashes and burns, you'll be the one holding the flaming bag of dog dung.  Rest assured, though, that the friends and family members of the banksters will have already pulled their cash from the collapsing hulk.

Just like what happened in Cypress.  Hmm.  Hey, it all kinda sounds like Cypress now that you mention it.  Who'd a-thunk it?

At least in Cypress, the Little People got to keep the government guaranteed portion of their money (the equivalent of our FDIC protection).  Are we going to get the same "protections" or is Mr. Stein giving us a heads-up to the contrary with his, "messier and more costly to society" comment?

I've noted here in the recent past that there have been shortages of product to sell in our precious metals store.  For the past couple of months, getting our hands on silver, in particular, has been very difficult.

Now, it's damned near impossible.  Unless a customer comes in my store selling stuff, I've got no other avenues to obtain product for my buying customers.

Here's a screen print from a recent email from one of our regional wholesale suppliers.  These guys do half a billion dollars a year in business -

But wait, there's more!  Here's a screen print from an email I received from a national supplier we use, NTR metals.

The three products listed on top are for bars that they produce in-house!  They can't get enough raw materials to even make the stuff themselves.

At the bottom of the message, they list the other silver they're no longer making available.  Like Silver Eagle produced by our government, and Silver Maples produced by Canada.

Hey, no biggee.  It's just a blip in the market, right?

Not so much.

When this shortage first started showing its ugly head, the premium paid over the spot price for an ounce of silver stayed pretty constant.  Roughly $5 per ounce for Silver Eagles, $4 for Silver Maples, $2 for generic silver rounds (or bars) and $1.75 for junk silver (pre-1965 halves, quarters and dimes).

Folks figured this was just a market correction, and supply would re-emerge.  That's not happening.  This is a real, Honest-to-God, demand exceeding supply situation!  Premiums are going through the roof.  $9-$11 for Silver Eagles and Maples, $7-$8 for generic silver rounds, and (holy crap) upwards of $9 for junk silver and $22 for non-collectible Morgan Silver dollars (you're just buying these for their silver content).

[VERY brief tutorial on determining the equivalent spot price when buying Junk silver - which is sold by "per dollar face".  Each $1 in face amount - two halves, 4 quarters or 10 dimes, contains the same amount of silver.  0.715 of an ounce.  Mix and match any way you like - one half and two quarters, two quarters and five dimes - it doesn't matter, as long as it equals $1 face amount.

If you take the cost for $1 face, and divide it by 0.715, you'll get the dollar amount you're paying per full ounce of silver.  So, right this second, on, junk silver is selling for $23.32 per dollar face.  Divide that by 0.715 and you get $32.62.  That's what you're paying per ounce.  If you subtract the current spot price - $23.43 - you get a premium of $9.19 per ounce over spot.  You can do the same thing with the Morgan and Peace dollars, only divide by the 0.773 of pure silver per coin.

Back now, to our regularly scheduled rant.]

As you can see from the snippet taken from our regional supplier, this is now going into the gold market.  Right now, the only way I can get gold Eagles, Maples or Krugerrands is if they come through our door, or I pay retail prices from the large Internet sellers.  Not a lot of profit in that for the store!

Accept The Challenge

So, am I suggesting you go withdraw your life savings from your TBTF bank account and buy silver and gold at whatever price you can find it?

For goodness sake, no.  But open your eyes if they've been closed to what's going on.  It's REALLY time to maintain a defensive mindset with regards to money and finance.

What I AM saying is, if you've done your own personal family financial analysis, and you have a couple of bucks laying around that don't have a future purchase tied to them, get some gold and silver.  Stick it in a safe or in a can in the backyard, and don't plan on spending it for the next 5 years - minimum.

What I am saying is that if you've followed my advice and have developed new, multiple streams of income, put that money into gold and silver.

What I am saying is that if you've got some crap laying around the garage you might be able to convert into cash via a garage sale or Craigslist, put that money into gold and silver.

I probably should say that if you don't think our currency will be horribly debased by all of the Quantitative Easing good old Uncle Ben has been serving up, and by the mounds of debt being piled on by Republicans and Democrats alike, and that our government would never-ever take your money (say, via a Trading With The Enemy Act and the Emergency Banking Relief Act, Part II) then don't buy gold and silver.

But you should get that bump looked at, because clearly, you've fallen and hit your head....

Copyright 2013 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.

Friday, April 19, 2013

That Whole History Repeating Itself Thing

Today is, in my option, the most important and significant day in American history.  Not Independence Day.  Not Flag day, or Constitution Day, or Memorial Day.  No, I believe that April 19 in 1775 was the most important day.  It's the day our forefathers said, "Enough is enough" and shot back at the "powers that were" - in Lexington and Concord.   The famous, "Shot heard 'round the world."

Over gun control.

They had endured, "The Intolerable Acts" - a series of punishments put upon Massachusetts by their British overlords, primarily because of the Boston Tea Party.  They weren't happy about this series of acts, but they were still working "within the system" to get this fixed.

But when the British came for patriot's guns - at the militia weapons cache in Concord - the line had been crossed, and the Revolutionary War was on.

It looks as though the idiotic, "feel good, accomplish nothing" universal background check bill that was shot down on Wednesday in DC has put some of this post-Sandy Hook hysteria to rest.  For now.

Obama, Feinstein, Schumer and all of the cohorts were apoplectic that their bill had gone down in flames.
"All in all, this was a pretty shameful day for Washington," Obama said, accusing the gun lobby of lying about the bill.
No, Barry, what is shameful is the way you paraded the parents of the dead Sandy Hook children around Capital Hill like so many circus animals.  Sit up.  Roll over.  Good booooooy!
"There were no coherent arguments as to why we couldn't do this. It came down to politics," he said.
Barry, Barry, Barry.  I got lots.

How about the fact that is wouldn't have done one damned thing to prevent another Sandy Hook, or Virginia Tech, or Phoenix, or ANY of the mass shootings?  That's what all of the circus animals were for, right?  To make sure that the grief visited upon them was never visited upon anyone else ever again.

Tell us, Oh Wise One, which of these shooting would have been stopped if the background check had been in place.

Not a one.  You can't legislate against law abiding citizens to prevent crazy citizens from acting crazy.

But that's not important to you, is it?  Your intent is to increase your control, and win political brownie points.  You know, those "politics" you so derisively dismissed.

I've heard others say that these background checks will keep guns out of bad guys hands.  Logic and emotion might say 'yes', but reality says 'no'.

So does your own ATF -
In fact, there are a number of sources that allow guns to fall into the wrong hands, with gun thefts at the bottom of the list. Wachtel says one of the most common ways criminals get guns is through straw purchase sales. A straw purchase occurs when someone who may not legally acquire a firearm, or who wants to do so anonymously, has a companion buy it on their behalf.
As you can see in the article by that right-wing, bible-thumpin', gun totin', tea party lovin' Public Broadcast System, the ATF agent doesn't once mention that bad guys go to gun shows or private parties to get their guns.

Strawman purchases.  Corrupt FFLs.  Illegal gun dealers.  Theft.

Not a single mention of criminals slipping through the system.  Know why?  BECAUSE THEY'RE CRIMINALS AND WORK OUTSIDE OF THE SYSTEM!  Why would they voluntarily participate in a system that could wind them in jail, when they have so many other, easier methods of obtaining their guns?

We've also had others like old soft-headed Joe Biden tell us not to be paranoid.  No one in the government is going to come grab your guns just because you're on some list somewhere.

Yeah.  Read it and weep -

For all of our more liberal leaning readers who continue to ask "what's so bad" about universal background checks before we've even seen the specifics, this is your answer. In New York, you can be placed on a "list"of people with no Second Amendment rights on the say so of any doctor who has questions. And it already happened to David Lewis. Thankfully, he's getting his guns back... for now. But what is the larger effect of this if we put it on a national scale?
Here in California, we have no law requiring guns be registered.  In fact, it's illegal to require it for purchased guns.  Yet any police officer in this state can pull up in front of any house in this state, punch in your name into his computer, and know the make, model and serial number of every gun you own.

How is that possible, when our guns aren't registered?  Because every gun purchaser in California must go through a background check for every gun they purchase.

Tidy, huh?

Oh, and if you're from out of state, have lost your mind, and decide you want to move here, don't think the list of guns you own will still be private information.  No, when you move here with handguns, the state considers you to be ... ready for this..... a firearms importer.  Seriously. 
Any person who moves into California and who brings any pistol, revolver, or other firearm capable of being concealed upon the person is considered to be a "Personal Handgun Importer"  ...
You have 60 days from your arrival date to get those nasty guns registered.  And if any of them don't pass muster with our list of authorized guns, they'll be seized and turned into plowshares.

You thought you were moving here for the sun and fun, and didn't realize you would be considered the same as an arms dealer by a totalitarian state.  Welcome, friend!


What are our modern, "Intolerable Acts"?

The Boston Tea Party was about taxation without representation.  Yep, the Tea Act actually dropped the price of tea, but patriots held to their belief in liberty.  Let that sink in:  The wouldn't be bought off.  Liberty was more important than their pocketbooks.

We can't say the same.

ObamaCare.  Thrust upon us, but not upon those who wrote it.

The Federal Reserve Bank.  An unelected bureaucracy which taxes you via inflation because of their "printing" of insane amounts of fiat currency.

We have a couple of states, and a number of cities in which no part of the Second Amendment exists.

The USA PATRIOT Act.  The NDAA.  Obscene regulation at every level of national, state and local living. Asset forfeiture laws which defy common sense and common decency.  Roadside checkpoints - in the name of safety - which fully ignore the Fourth Amendment, yet are the law of the land.

A federal Leviathan which ignores the spirit of the Constitution, and the letter of the Tenth Amendment.

We have a surveillance state which would make Orwell shudder.  All legal.  All blessed by We The People.

Is there anything that could tip us over the edge?  Drones over American?  Or would it take a drone strike over America?

No.  None of them would move us as our forefathers were moved.  We're so soft and gooey, and such well-trained poodles, we don't dare nip at master's hand.

The only history we'll be repeating will be that of former great nations that declined into oblivion.  We'll no longer proclaim, "Live Free Or Die!", instead replacing it with, "Thank You Sir, May I Have Another?"

One last thought:  The patriots were successful, in part, because they knew the British were coming to Concord, and they moved their weapons cache.

Oh, never mind.

Copyright 2013 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.