Gold Investment

Friday came around and around 6pm I realized that I had absolutely zero fiat currency on me. I figured the better half had some cash in her purse, but she, too, was down to her last US$20 bill. Oops. One problem in not using a bank is that it can be really easy to fall short on the weekends if you tend to put all your extra cash from your paycheck into hard money cash.

We had planned on a dinner out on Friday (in celebration of winning a nice contract) as well as some grocery shopping. Both could be put off until the next Wednesday (when I was expecting another check to come in), but we had really wanted to go get a good steak and a glass of wine. I have a few restaurants that accept silver bullion in payment, but we had our hearts set on a new restaurant that I was going to review for my site that deals with restaurants in Lake County, IL, the county I live in.

6pm on Friday meant the banks were closed, anyway. We don’t use an ATM or a credit card, so there was no hope there. So I grabbed 10 ounces of silver eagles and headed off to the local mall — the local coin shop there is one of the better mall shops around.

5 minutes in and out and I had a little over US$120 in my pocket in fiat currency. It might have been faster than 5 minutes, actually, but that includes parking. The Freaky Blonde waited in the car.

I usually don’t convert from metal to paper, but in this case I knew it wouldn’t be a bad transaction. Since silver was selling for around US$12.30, I figure I was out about US$3 (I can buy silver eagles for close to spot if not below, depending on the transaction). I recall my ATM days and I usually lost about that in ATM and banking fees anyway.

In the long run, I probably should have put off the steaks and wine and groceries until Wednesday, but it was nice to know that I had the option there — and it was a quicker transaction than the bank.

Even better news: I called the shop today to find out how much it would cost to buy my silver back, and the gent was generous enough to sell it back to me for 50 cents an ounce over what he bought it for. So even if spot goes up, I’m out a maximum US$5 for the 5 day “loan” against my silver.

One nice thing about living on a personal gold standard (silver standard?) is that you can live paycheck to paycheck on fiat dollars but still have a nice nest egg you can liquidate. In MOST situations where we’ve been short of fiat dollars, though, we DON’T go out and convert metal to paper — unlike the ATM or the credit card where every weekend can be an evening of steaks and wine and more groceries than one household can handle. For me, the bullion is there for exactly these purposes — safety, protection against runaway inflation and also stability. I don’t sell metal on impulse, and I definitely don’t sell it unless I have good reason.

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