Friday, July 22, 2011

Q&A With The Doc: How Much Silver is Enough?

Retired Anonymous writes:
To all the Silver Docs: Thanks so much for your insights. I've been lurking here trying to find the answers to some questions, but haven't had much luck. 1) I know there is no hard/fast rule, but can someone give me a perspective on how much silver is enough to have or examples of what to shoot for? It's hard taking money out of savings to buy silver and not being able to answer the wife on this question. 2) Also, when the monetary system collapses, silver spikes to the proposed highs like so many speculate about and one is sitting on a ton of silver...what next? Who is going to be buying your silver, with what currency, do you trade it for real estate (Mike Maloney advocates this), hold on to it for barter to get you through even tougher times...I'm at a loss and have gotten off in the weeds here.

I firmly believe that ALL the present monetary systems are dysfunctional and headed for a total reset. Your thoughts or pointing in the right direction would be greatly appreciated.
For some background...I'm retired on a fixed income, my house is paid for, it's just my wife and I and we have no debt. TIA and keep up the great work!
Glad to have you lurking and learning here at SilverDoctors.
Lets start off with your question of How Much Silver is Enough?
I assume you mean "enough" as in how much is enough to sustain my family through a financial collapse.  (I assume this is what you mean, because as silver is one ever has 'enough'!)

As we have discussed previously, change your thinking to viewing silver as money.
Gold and silver are money.
Those green federal reserve notes in your wallet and bank account are DEBT NOTES TO THE FEDERAL RESERVE!
Convert as much of your paper savings to physical gold and silver as you can, leaving only 3-6 months worth of expenses in fiat cash.

As to how to answer your wife, I'd recommend showing her 3 different 10 year charts. 
First, show her a 10 year chard of the USDX. 
Second, show her a 10 year chart of gold priced in US dollars.
Finally, show her a 10 year chart of silver priced in US dollars.
Then explain to her that you are not taking money out of savings, merely exchanging saving paper dollars which have been losing value at an increasing pace, for saving silver and gold money which have been appreciating over the past 10 years. Explain to your wife that you are not taking money out of savings, you are merely changing the vehicle of your savings to a more sound, debt-free currency.
Children Use Currency As a
Toy in Weimar Germany

Next, you ask a common question- so after silver goes to the moon, what next? How do I get rid of my silver/lock in my gains?
Again, its important you change your paradigm and thinking. 
If the dollar goes though a period of hyperinflation, you will not be in a rush to exchange your silver into paper again.  Those holding paper will be the ones desperate to dump their paper cash for anything, anything.

Those who hold gold, silver, and other physical assets will be able to use them to purchase real goods and services such as food, gasoline, housing, etc.
Even today, without a currency collapse, you can exchange your gold and silver back into paper currency anywhere around the world. Your local coinshop, Ebay, Craigslist, The Doc...there are literally thousands of places you can trade your silver for either paper cash or other physical assets.  You should have a greater concern for your cash- where will you be able to use/ spend it?

The fact that you have no debt and your house is paid off is a great advantage, however the fact that you are retired means that you must plan that your current assets be enough to sustain you in the event of hyperinflation, which will quickly render your pension/ social security worthless in means of purchasing power.
The point is that if TSneverH'sTF, silver is still in a long term bull market, and you are able to exchange your silver back for paper currency anywhere in the world at any time should the need arise.
If/when TSDOESHTF, silver will be a lifeboat for your family from the devastation and destruction caused by the collapse of the fiat dollar.
And yes, at that point in time, those who hold real money such as gold and silver will find amazing opportunities to purchase real estate and other assets for pennies on the dollar.
But that's just a bonus.