Edited December 2014: there have been some changes in reputable gold dealers; I've put strikeouts on old info and [ these brackets ] around updated info in the text below.
-Silver
I'm deliberately not going to try and convince anyone to buy gold. There's plenty of information on that topic, excellent web sites include
321Gold,
Kitco,
The Daily Reckoning especially the rantings of the Mogambo Guru (despite the name and the attitude, this guy speaks a lot of truth) and the book
Financial Reckoning Day. Just don't read the book at night, you'll have nightmares.
My premise, based on conversations and correspondence, is that there are many people who want to buy gold, but don't know how, and are afraid to make mistakes. Gold is expensive, and no one wants to lose their money. So here's a very short take on how to buy gold. I'll be glad to answer questions.
1) Buy American Eagle gold coins. Why? Well, there are the patriotic reasons, and all proceeds go to pay the national debt rather than funding new madness, and they are made from gold mined in America, and they are darn pretty. The primary reason to buy Eagles: the IRS.
Gold coin sales (TO you) are not reported to the IRS. If you redeem (sell to a dealer) more than 20 coins (the law seems to state 20 coins, not 20 troy ounces) in a year, dealers must report the transaction to the IRS, UNLESS the coins in question are Eagles. Then there is no reporting. You are still responsible for reporting the capital gains on your self-incrimination form, but the dealer won't automatically rat on you.
My second favorite, for diversity and if you have objections to Eagles, are Canadian Maple Leafs. Unlike Eagles, which are alloyed with silver and copper to make the metal harder and the coins more durable, Maple Leafs are .999 fine gold, the pure product. They are soft and easily scratched or blemished. The Eagles actually weigh more than face value; a 1 oz Eagle weighs more than 1 oz. but has exactly 1 oz of gold in it.
Krugerands are alloyed and demand less of a premium than Eagles. Gold is gold, the only difference is the tax treatment. Congress passed these laws and Congress can change them, but those are the rules today.
2) Buy from a reputable dealer. My favorite is Burt Blumert and his Camino Company. You can find his telephone numbers via
LewRockwell.com, click on "Gold Price" in the upper left corner of the page. [Burt died in 2009. Contact Camino at
www.caminocompany.com]
Why Burt? Because he is an honorable man with decades of experience in the coin business. When you send a bank check for hundreds or thousands of dollars to some stranger, you need to know that they will give you the gold, no matter what. Burt has been put to the ultimate test while shipping gold to me: the entire shipment was stolen. Camino Coin sent a replacement almost before I noticed the delay and found out what had happened. He was able to cover a $100k loss from his own pocket while the insurance claim was processed.
Most gold coin dealers play the gold market, buying futures and such. It's weird, but more of them go out of business when gold is going up (as it is today) than going down. When a small, new dealer goes belly-up, people who haven't gotten their coins are out of luck, and out of their money. Camino has been in business for years and will take care of you. You need that kind of confidence in your gold dealer.
I've bought from Cheapergold.com, Tulving, GoldMasters.net, and others. I don't recommend them. CheaperGold played games with my bank checks, cashing them but waiting up to a month, in one case, to deliver the goods. Not acceptable. Tulving sent $8,000 worth of gold coins
uninsured via UPS, who left the package laying on my front porch where anyone on the busy street could have scooped it up. (edited to add: I've since learned that Tulving carries private insurance on all shipments. I'm still chapped at UPS for leaving a lot of gold laying on my front porch, but that's not Tulving's fault. If you can swing a purchase of 20 oz of gold or 500 oz of silver, Tulving has by far the best prices.) [Tulving went bankrupt in 2014] Goldmasters has been the second best after Camino, but why compromise when there is such a great resource? The main advantage of Goldmasters is that they have a great web interface. The main drawback is that they don't mess around; you send payment in 24 hours or else.
3) Buy regularly. While I've converted a significant chunk of my liquid financial assets to gold and silver, I don't recommend that for everyone. Believe it or not, the point of owning gold is to sleep better at night. It has value that won't vanish when the American Empire collapses. A silver quarter will ALWAYS buy a loaf of bread. That's peace of mind. If you move everything into gold, you'll start watching the price like a hawk, and losing sleep. It's not worth it. Just buy a bit every month, and watch your hoard grow, and when the poop hits the propeller, you'll truly understand why owning gold is essential.
So make it a savings plan. Figure out how much you can save in gold each month. No matter how big or small that number, you can work with it. Place an order every month or three. Build your hoard.
Everyone can afford gold, its only a question of how much. Here are some current prices, approximate only:
April 27, 2004 UPDATE on April 28, after gold was hammered today
1 oz Eagle: $421 tube of 20 x 1 oz: $8,420 1 oz Eagle $404 tube of 20 x 1 oz $8,080
1 oz. Maple Leaf: $413.50 1 oz. Maple Leaf: $404
1 oz. Krugerand: $407.49 1 oz. Krugerand: $392
0.5 oz Eagle: $217
0.25 oz Eagle: $109
0.10 oz Eagle: $45
4000 pre-1964 US quarters, 90% silver, about 715 troy oz: about $5,000 delivered. Heavy!
It's easy. Camino coin doesn't even ask for bank checks, although they ship faster if you send one.
Just pick up the phone, talk to the nice folks, order your gold, send them a check redeemable for
worthless bits of green paper. In a few days, the US post office will hand deliver a lovely, heavy,
insured and registered package to your doorstep, and ask you to sign for it. You will have traded
paper for gold. There's nothing quite like it.
Peace,
Silver
[edited May 13, 2008 to correct information on Tulving, update gold prices]Gold coin price update on May 13, 2008
1 oz Eagle: $995.45 tube of 20 x 1 oz: $19,356
1 oz. Maple Leaf: $986.19
1 oz. Krugerand: $986.19
0.5 oz Eagle: $565
0.25 oz Eagle: not available
0.10 oz Eagle: $133.60
Don't you wish you had bought some gold 5 years ago, when this post was written?
Just think how you will feel in 2014, after the coming hyperinflation has done its work!
Peace,
Silver
[edited December 8, 2014 to update information on Camino and Tulving]