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Saturday, November 30, 2013

Buying And Selling Precious Metals On "The Spread"

[I believe you should only purchase precious metals with "non-committed" money.  Your monthly bills are paid, you've got a cash reserve available for emergencies, and things like a "new car fund" or "new house fund" are fully funded.  PM's should be a part of - and not the entirety of - your financial security plan.]

One of the most common questions I get in our Precious Metals (PM) store is, "If I buy this coin today, how much would you pay me to buy it back?"

Great damned question, and I wish more folks thought this way.  My answer usually goes something like this:.  "Well, it depends.  Grab a cup of coffee and a chair, and I'll explain."

Let's say the PM in question is a 1 ounce generic silver round.  These are private mint bullion, and very popular with buyers.  We typically sell these coins for $2 to $3 over the spot price of silver.

I tell them that if we're in a flat market (low price fluctuation over the past week or so), I'd be buying the coin back at around $2 under spot.  

If we're in a rising market, I'd be buying them for between spot and $1 under spot.  Since the market is rising, my market risk is minimized, and I pass the reduced cost of that risk on to my customers.

If we're in a declining market, I'd be buying them for anywhere between $3 and $4 below spot.  Since the market is declining, my market risk is increased, and I pass the increased cost of that risk on to my customers.

What I'm trying to do is maintain a profit margin of around $3.50 to $4 per coin.  That's how I keep my doors open.

If you walk into a PM store, and get the spread information, how do you know if it's reasonable?  You can get a feel by checking online sources.

You're going to use this information for two reasons:  To see what an online spread is, and to see what types of bullion have the smallest spread.  A smaller spread tends to indicate a coin with a more liquid market.  A more liquid market means you will be able to sell your bullion more easily in the future.

If I go to, I see that silver is $20.15 per ounce.  Here's what I can glean from the site:

At first blush, it appears as though junk silver is the clear winner.  And it is!  Its spread is $1.11 below the nearest alternative, and it's got the lowest per-ounce cost.  Over the past few years, normal spreads have been pretty close to what you see here.

[Note:  If you're going to buy junk silver for the first time, read our tutorial ("Buying 90 Percent Silver Coins") so you're going into the transaction knowing what you're talking about.]

That being said, if you were selling your stash right now, you'd be wishing you had nothing but American Silver Eagles.  They are always afforded the highest premium.

So, diversify.  Just like you don't want all of your savings in gold and silver, you don't want all of your silver, for instance, in junk silver.  When it comes time to sell, you want to be able to sell the fewest number of ounces for the greatest number of dollars.

You're buying right now to sell into an unknown future market.  You want to be able to maximize your money when it comes time to sell.

I"ll occasionally get the response, "I can get silver rounds for less than that.  Can you meet their price?"  I ask them where they saw the price, and it's always from an online source.

I tell them that if price is their only concern, they SHOULD buy online.  Their cost-per-coin savings won't be quite what they think, as they'll have to pay for shipping and insurance, but it could still be lower than my price.

I tell them that what they're buying from me is more than silver.  They're also buying peace of mind.

If they buy from an online source, their name, address, phone number, email address, credit card information, and the contents of their purchase are now on AT LEAST two lists - one with the online seller and one with the credit card company.  The delivery company will also show a transaction between Mega Bullion Dealer and you.

I tell them that if they buy from us and use cash, no one outside of the transaction knows they were even in the store.  We use the "Walmart underwear" analogy:  When you go to Walmart to buy underwear with cash, you don't give them your name.  You just buy your underwear and leave.  If you don't want your name on your PM purchase receipt, we don't put it.

If they use a debit card, there IS an electronic record that they spent money in our store, but not what they bought.  It could have been bullion or a bracelet.

Finally - and what I think is just as important as the anonymity aspect - is that they walk out with their purchase.  Their gold or silver is in their safe as soon as they get home.

So yes, peace of mind has a price, but most folks think it's a reasonable one.

Along these lines, I IMPLORE my customers to attempt to buy the highest valued gold and silver for the least amount of money.  That requires them to ask me a simple question:  "What's on sale?"

We ALWAYS have something that is priced lower than normal.  We may have bought a large lot from an estate sale or some other similar purchase.  We will see this very often when we buy foreign gold and silver.  You can at times buy foreign bullion at very near the spot price of gold or only a couple of percentage points higher.

Don't go into the store with a set item to be purchased.  Go in with a set amount you want to spend, and walk away with the largest number of ounces possible.

Also, each state has different rules regarding sales tax.  In California, if you buy at least $1500 worth of bullion, the entire purchase is non-taxable.  I recently found that in Nevada, if the coin has a denomination ($1, $50, etc.) they have to tax you when you buy those.  So, let's say your options are a 1 ounce American Gold Eagle versus a 1 ounce Kruggerand or a 1 ounce Pamp Suisse gold bar.  In Nevada, you'd have to pay sales tax on the Gold Eagle (with its $50 denomination), but not on the Kruggerand or the privately minted Pamp Suisse bar.

You can be talking about some serious dollars depending on how much you're buying.  I'm guessing that private mint silver and gold have a much more liquid market in Nevada than do Gold Eagles, Maple Leafs and Pandas.

Do your homework before making a purchase!  What are the rules in YOUR state?

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.

Sunday, November 24, 2013

Deadly Words

[Last week, I lost a friend and part-time employee, Leslie Pinkston.  Actually, she was taken - murdered in cold blood while she sat in her car.  I've put off writing about this because I have a "24-hour rule".  When I'm pissed off at something, I try and wait 24 hours to let the anger subside so I can look at - and react to - whatever happened more clearly.  I gave it a little bit more time.  The anger hasn't subsided.]

"There was a criminal protective order in place in the case."

On Monday, November 18, 2013, Leslie Pinkston was gunned down [link] around 9:30 in the morning as she sat in her SUV.  Her killer is a former boyfriend who had been arrested for a whole litany of domestic violence charges.

He was released from jail on November 15th, and Leslie was dead three days later on November 18th.

When I read the, "protective order" comment by the local District Attorney, I damned near puked.

How do the gun-grabbers - which includes the police, the sheriff's department, the DA and the state legislature - think Leslie should have responded to these threats?  Hold up the protective order to her murderer, and say, "Back off, asshole!  I've got the law on my side!"

I keep reading these stories on her murder, and the commentors all talk about the criminal justice system, and how animals like this should not be let out, and blah, blah, blah.  They basically want the government to be responsible for their personal safety.

That's impossible.

I wish Leslie had broken California law and kept a loaded gun with her at all times.  This guy was stalking her, threatening her, and had a record of violence.  I wish she'd said, "Go to hell, state of California!  I'm going to protect myself."

If she had made that choice - to illegally carry a loaded gun without the permission of the state - and was then caught doing so, she'd be convicted as a felon.  She would then be stripped of her right to legally purchase or possess a gun anywhere in the country.

Let that sink in:  Her affirmative act of acquiring and possessing the means to save her own life would have instead resulted in her forfeiting her liberty.

Leslie followed the letter of the law, and ended up dead.

Her county - Yolo - is one of the many "no-issue" counties in California that requires you to be threatened before they will consider allowing you to exercise your second amendment rights to self-defense.  They don't have to allow you, but they'll consider it.


I don't give a damn about interpretations for public safety.  I don't give a damn about being reasonable.  I don't give a damn that guns make some people nervous.  I don't give a damn about well-reasoned debate.

From a societal perspective, what I give a damn is about precedence.  The legal concept that a law is in effect until it is overturned or new law is written.  Well, the last time I looked, the second amendment has not  been legally altered since its ratification on December 15, 1791.  If you want to change that, the ONLY way you can do that is to get a constitutional amendment passed that grants these infringement powers to the state.

From a personal perspective, if that ever happens, then I, too, can be a criminal, because you'll never take away my chosen method of exercising my God-given right to self-defense.

California's gun laws are the number one reason why my wife and I are leaving this state (taxes and nanny state-isms are close seconds).  I'll try to, "color inside the lines" for as long as I can, but I'll NEVER place myself or my family in mortal danger because of some unconstitutional bastardization of the second amendment.

What I've read about this maggot is that he's very self-centered.  I pray with every fiber of my being that when he's finally cornered, his vanity and cockiness get the best of him, he resists arrest and is chopped down by multiple 165 grain hollow point .40 caliber pistol rounds.

My second-best alternative is that he return to the town of Winters, Ca.,  where he killed Leslie.  I believe it will be his last visit.  Anywhere.

Rest in peace, my friend.

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.

Thursday, November 21, 2013

Like A Rolling Stone

My local radio station was talking up this video-thingy about Bob Dylan's, "Like A Rolling Stone."

I don't know the deep meaning.  I don't know the message they're trying to send.  I just know I thought it was cool.

Click here.

VERY IMPORTANT:  First time through, occasionally click the "Channel" button to kind of understand what's going on.  Give each channel a bit of time to give you some context.  Then, expect to waste a good amount of time watching the whole thing a number of times!  You'll see what I mean.  Seriously, way cool.

Vague enough for ya?  How does it feeeeel?

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, November 11, 2013

Lots Of "Bail-In" Noise

Hmm.  Wassup with all of the breathless fear mongering on bail-ins?

In the past couple of weeks, I've been seeing article after article about, "bail-in's".  I mean tons of them.  A bail-in is when one of the Too Big To Fail (TBTF) banks fails, and instead of the FDIC and federal government riding to the rescue, the bank's depositors are held responsible for any losses.  Poland recently extended the concept to retirement accounts as well.

Yeah, they take YOUR money that you've entrusted with the bank, to cover any losses.

Now, back in April I wrote an article titled, "Get Some, If Ya Can" [link].
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.
Secured creditors get paid first.  And that ain't you.

But that's not what's got me concerned.  I want to know WHY everyone and their brother is talking about this right now, at this time.

My gut says that this is, "Big blogger Bob is talking about bail-in's, so I will, too."  Or is there more to this?  I can't find anything that would indicate the TBTF banks are any more insolvent than they were when I first wrote the article.

There IS some chatter about the Foreign Account Tax Compliance Act (FATCA).  This is a law that requires foreign banks to report the accounts they've got that are held by US citizens and companies.  The IRS just extended some deadlines [link to non-IRS website] with regards to this legislation.

A large and sudden out-flow of cash to foreign banks would indeed hurt - potentially cripple - TBTF banks.  I don't see anything indicating this is about to happen.  There was much recent discussion about JP Morgan Chase restricting international wires, but that was just hyperbole.  You can still send international wires, they're just charging certain account types for the privilege.

If you want to get some money offshore, there are sites out there that will help you get your money out of Dodge, and which are not signatories to FATCA.  Yeah, Google it.

There is also a lot of discussion about the dollar losing its place as the world's reserve currency.  This is a real threat to the stability of the US dollar, and is something outside of the direct control of the federal government.

While there's been much discussion about China, Russia, India and Iran all getting into bed together, nothing is imminent.  The dollar - as much as it has been devalued - is still the most trusted currency in the world.  I think it will eventually be replaced, or others will gain peer status as trusted reserve currencies.  But not in the next few weeks or months.

Accept The Challenge

I get nervous when lots of people are suddenly all saying the same thing.  I get more nervous when what they're saying dovetails with what I believe will (eventually) happen.

I feel like I'm being played, or led by the nose.

To me, this looks like people trying to connect dots that don't really connect.  The Preponderance of Evidence approach.  If it looks like a duck, quacks like a duck....  Well, sometimes it's a swan.

I just don't see evidence that this is imminent.  One of the Big Boys will eventually take a hit, just not right now.

That being said, I have moved virtually every dime that I've got in banks, out of TBTF banks, and into smaller, local banks and credit unions.  There is no reason not to.  Much of my reserves are in actual greenbacks and precious metals, so I'm not that worried if we have some bank failures.

Maybe I should be looking more closely at getting some money offshore.  I dunno.  If I've got money hidden in some foreign account, how do I get it?  If everything has gone sideways, the feds will likely clamp down on foreign travel, so I couldn't get to it anyways.


>>Question everything, especially when it supports your current beliefs
>>Diversify - don't keep all of your assets in one place.  Money, food, water, weapons, protection from elements.
>>Learn - if you don't understand how something works, or what likely outcomes might be with a given set of data, take the time to figure it out.  Don't be a victim.  Ever.
>>Trust your gut.  It's usually right.

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, November 8, 2013

Losing Trust and Respect

[Heads up - if you don't like swearin', don't keep reading...]

I've mentioned before that I've got a close familial and friend relationship with law enforcement.  My dad was an Oakland cop during the 1960's and then was a lieutenant with the Marin County Sheriff's department.  I've got a brother who's a senior cop with a California agency.  I've been in 3 cop weddings and attended many others.  I've hired two different retired cops in my PM business.

For the first thirty-odd years of my life I thought all cops were like my dad and my brother.  Good, decent men that loved, and lived in, the communities they served.  They were held in high esteem because they had earned that respect.

Well, 22 years ago, my bubble was burst.  I was on a jury for a meth cooker.  This guy was dirty as hell.  He did the cooking and distribution out of an auto repair shop he owned.  The irrefutable evidence found in the shop and in his home would put this 1-strike felon away for good.

During the trial, they presented evidence of gun ownership in the guy's home.  The police said they found a rifle in a back bedroom, and a pistol under the guy's bed.

The DA was questioning the guy about the guns.  He admitted to the rifle in the back bedroom - a felony by itself (convicted felons cannot knowingly possess any weapons).  When she got to the gun under the bed, he said, "No damned way, ma'am."  Not his, had never seen it, not a clue where it came from.

I think it would be safe to say that, at this point, all of us on the jury thought, "bullshit."

The DA finished up with the cooker, and brought up a cop.  A very special cop.  He was a member of some multi-jurisdictional, soooooper dooooper drug unit.  All decked out in the (now common) black cop jump suit.  Everything was either black cloth, black leather or polished chrome.  Very tacti-cool looking, and made him seem more "elite" that a regular beat cop.  This dude means business.

The DA asked him where the rifle was found, and he gave very detailed, very precise information.  When she got to the pistol, he described the make, model and caliber, how it was approximately 2 to 3 feet under the bed and would be easily accessible by anyone laying in the bed.

She finished up and handed him off to the defense attorney.  They jabbered back and forth, and this cop never wavered.  His story never veered.

They then got to the pistol.  The attorney asked to cop to refresh the jury's memory on what kind of gun was found and its location.  The cop repeated his testimony verbatim.

The attorney then flipped on an overhead projector.  On the screen was a picture of the bed.  The cop was asked if this was the bed under which the gun was found.  He examined the screen, noted the headboard, night stand, bed spread and some other items he remembered from the arrest.

Yep, that was the bed.

The attorney asked the cop to repeat where he found the gun.  Two to three feet under the bed.  He asked the cop to show on his arm how far under the bed he had to reach to get the gun.  The cop held out his arm, and motioned to his arm pit.  "About this far."

As the cop motioned to his arm pit, the attorney pushed a button and the image on the screen changed.  It now showed the same bed, except the bed spread was now pulled back.  The judge, jury and courtroom could see that the bed in question was a platform bed.  There were perhaps 4 or 6 inches of space under the bed.

There was literally a gasp from the audience!

The attorney asked the cop if he'd like to change any or all of his testimony.  He declined, explaining he stood by his earlier testimony.

Excuse my language, but my thought was, "That piece of shit just looked us in the eye and lied like a mother fucker."  When we got back for deliberations the next day, every single one of us on the jury said we were ignoring every single bit of evidence presented by that asshole (no worries - scumbag meth cooker was still convicted for the rifle and the cooking).

The arrogance of this bastard was shocking.  Having been around "good cops" my entire life, this was a gut-punch.  How could someone who had sworn an oath, "to serve and protect" devolve into such a lying piece of crap?

This rocked my world, and forever changed my impression of cops.  They were human, like the rest of us, no longer granted respect simply because of their choice of profession.  Background check and vetting or not, there were criminals among their ranks, just like society at large.

Over the past 22 years, this problem has gotten worse, not better.  This arrogance, this feeling of superiority by sworn officers seems to be growing.  It is becoming the rule, and not the exception.

I've written a number of times about all of the military equipment and para-military training domestic police services attend.  It's all under the "terrorist threat" and public safety umbrella.  Sadly, most Americans accept the, "freedom for safety" trade quite readily.

I remember heated arguments with folks over DUI checkpoints.  For God's Sake, there could not be a more blatant disregard for the fourth amendment.  But the public accepted it with open arms, the Supreme's gave their stamp of legitimacy, and it's been downhill ever since.

No need to change the Constitution when it's easier to just ignore it.

Law enforcement and virtually all government entities now regularly act unchecked.  NSA spying.  The President enforcing some parts of a law, ignoring others for political favors.  IRS abuses.  Government agencies shutting down whole industries because they're not "green".  TSA checkpoints.  VIPR Checkpoints.  DUI checkpoints.  Obscene abuses of citizens and their rights.  Color Of Authority abuses that regularly go unpunished.  Procedure was followed, dear citizens.

We're no longer a constitutional republic.  Not even close.  At best, we're a monarchy.  The king, and the earls, and the dukes get to make the rules, and decide who must follow them.

A case in point [link]:
D.C. law requires residents to register every firearm with the police, and only registered gun owners can possess ammunition, which includes spent shells and casings. The maximum penalty for violating these laws is a $1,000 fine and a year in jail.
On its face, this is insane.  Spent shells and casings are considered ammunition?  But let's say the police believe someone has broken this law.  How would you respond?  Like this?
The police banged on the front door of Mr. Witaschek’s Georgetown home at 8:20 p.m. on July 7, 2012, to execute a search warrant for “firearms and ammunition … gun cleaning equipment, holsters, bullet holders and ammunition receipts.” 
Mr. Witaschek’s 14-year-old daughter let inside some 30 armed officers in full tactical gear
His 16-year-old son was in the shower when the police arrived. “They used a battering ram to bash down the bathroom door and pull him out of the shower, naked,” said his father. “The police put all the children together in a room, while we were handcuffed upstairs. I could hear them crying, not knowing what was happening.”
These are the tactics you use against hardened Al Qaeda terrorists in Afghanistan, not Americans that may be subject to a thousand dollar fine.  There is not a single, rational justification for this use of force.

How about you call the guy and tell him you need to discuss something (like his ex-wife's false accusations)?  Send three cops to his house.  As he comes out of the house, have one cop give him the warrant to search his property, have the other two go in, clear everybody out, and search the joint.

Why would you feel the need to employ this level of violence for this potential offense?

[This came to my attention while I was writing this piece]

My condensed version [full version and entire dash cam footage here]:  Dad and son have argument over dad's refusal to buy son some cigarettes.  Son takes dad's work truck.  Dad calls cops "to teach his son a lesson".  Cop sees truck, starts pursuit.  Cop lights up son, son does not respond.  Son backs truck/trailer into front of cop car.  Son races through town, dispatch suggests cop stop pursuit.  He continues pursuit, and notes that the son is on the wrong side of the road, blowing thru red lights, etc.  Dispatch, again, suggests he break off pursuit because, "we know who he is."  Cop catches up with son, son rams him again, another cop shows up, they chase him around, cops ram him, son crashes into a tree.  Cop gets out and shoots him 6 times when he refuses to turn off and exit the truck.  Son is dead.

Good God Almighty.  While the son had earlier attacked the officer with a deadly weapon (the truck), after that point in time (around 1:57 in the video), he was told to stop his pursuit, and chose not to do so.  At around 3 minutes, the cop was again told to "back it off".  No deal.  One minute later, the kid was dead.  At the time of the shooting, the kids truck was stopped, was apparently disabled, and could no longer be used as a weapon.  Even if it wasn't disabled, it was not in a position to put either of the officers in harm's way.

With the information at hand, this is murder.  You and I are held to a standard of, "threat of imminent death or grave bodily harm" if we make the decision to fire our gun in self defense.  At the time the shots were fired, no threat was present.  If it is shown that, off camera, the kid was pulling out a gun or something that would threaten the lives of the officers, that would obviously change things.

[I just participated in a rather heated discussion over at Claire's place regarding the recent shooting of a 13 year old by a Sonoma County deputy.  With the evidence and information that is now publicly available, I continue to believe that the shooting was legitimate.  Horrible, tragic, but legitimate.  If information changes, I'll modify my opinion as I see necessary.  I'll likely discuss that case here at a later date.]

These actions by government employees have serious implications.  I could fill ten post with nothing more than links to articles about abusive government and police tactics.

I don't have to.  The Cato Institute is on the job with the National Police Misconduct Reporting Project [link].   They list 10 to 20 incidents.  Each day!

But, there is some push back.  And, I predict, if the police and bureaucrats don't start policing themselves, I believe hell is going to rain down on their heads.  The push back will become more common, more covert and more aggressive.

It is already happening on a sporadic basis.  The recent shooting at LAX was by a guy pissed off at TSA tactics.  There was just some guy in Arkansas that was caught blowing up electrical transmission lines.  Christopher Dorner - the former LA cop - went off on a killing spree because he felt the system was being stacked against him.

This government 'superiority complex' is out of control.

You can't buy a big soda.  You can't buy trans-fats.  You can't buy your own health insurance.  You can't buy a gun, drive a car, start a business, cut down a tree or add a room to your house without first getting permission.  You can't catch a flight, catch a train or drive your car without the potential to be subjected to unconstitutional searches.

Land Of The Free?  My ass.

When abuses happen, government officials need to ensure punishment is administered quickly, publicly and unambiguously.  And this 'government immunity' crap has got to be dismantled.  A municipality, state or federal agency that allows its employees to display this type of conduct needs to be held accountable.

But we all know nothing will change.  In fact, it will get worse.  If, as I predicted, people start shooting back,  sabotaging government facilities and assets, and in general, making life unpleasant for TPTB, the police and government officials will only clamp down even tighter.  We'll have more restrictions, more intrusions, more checkpoints, more abuse.  This will bring more retribution.

It will be a vicious, vicious circle.

My advice?  Right now, I've got no idea.  I'd seen the financial storm that is now upon us, and have planned and acted accordingly.  I don't know what to do about this tyranny.  There are lots of moving parts, and there are truly life-or-death consequences for making a wrong move.

This is going to take some noodling.  More to come.

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.