I bought my first silver 1 oz coin just over a year ago. I ended up paying $24.25 from a local coin shop. At the time the silver spot price was $19.43. This means I paid a premium of $4.82 or 24.81%. This was actually the lowest premium I paid for quite a while until November 2022 when I found some sales on www.SDBullion.com.
By that time the silver spot price had risen to $21.43 and I paid $25.97 or $4.54 premium which was a 21% premium. The high premiums were partially because these were on sale. I was paying these 20%+ premiums because the stock market was doing poorly and people were selling out of stocks and buying into precious metals because they were seen as safe.
Today, the stock market has been roaring, most of the year. The S&P 500 is up 17% this year as I am writing this. When the stock market is going up, people often sell gold and silver, and bonds, and buy into the stock market.
When people aren’t interested in something is when you should consider buying it, if you are going to.
The best deal I found was these 1 oz Golden State mint generic silver coins. The silver spot price was 22.84 and they were selling for a $2 premium, $24.84! Or 8.7% premium. This is just a little more than the first silver I bought over 1 year ago when the spot price was $19.43 or $3.41 lower than it is today. $24.84 is also lower than I paid in November 2022!
This is a trend I’ve watched over the last year. The spot price for gold and silver has risen but the premiums have actually fallen more! This makes it possible for you to buy the same amount of silver or gold for less than was possible a year ago, despite the higher spot price.
Microstrategy is a large software analytics company. It is also the company which holds the most Bitcoin. Microstrategy currently holds 152,800 bitcoins.
This is 0.73% of all Bitcoin that will ever be created! There will be only 21 million Bitcoin ever.
It’s also estimated that perhaps 4 million bitcoin have been “lost” with old computers that people have lost so that means 152,800/17 million = 0.9% of all Bitcoin that will ever be available! Only 19 million bitcoin have been issued. The final 2 million will be issued over the next 120 years, so that means there are only about 21-2-4 = 15 million bitcoin available for purchase today. So Microstrategy owns over 1% of all Bitcoin available today!
And they are buying more!
MicroStrategy is planning to raise up to $750 million via a stock sale and says it may use the proceeds to buy more Bitcoin- Cointelegraph
The reason Microstrategy is buying more bitcoin is because they see it as the supreme ownership asset. In a world where more fiat currency (USD, Euros, Yen) are created everyday something that is ultimately scarce is valuable!
You can watch the Chairman of Microstrategy, Michael Saylor, discuss bitcoin here, for 1 hour, or if you are really interested he discusses history, energy and bitcoin here for many hours. I watched the hours and hours podcast as it’s fascinating! This development, Microstrategy, buying more and more bitcoin, is a signal in the noise of everyday life where people are talking about if you should buy bitcoin, or gold, or stocks. There are things that are signals and things that are noise. This is a signal. KPMG putting out a paper about bitcoin being ESG friendly is also a signal.
You should watch for signals and act accordingly!
Remember! Don’t FOMO buy thousands and thousands of dollars of Bitcoin unless you are ready to temporarily lose 50% or more.
https://advisory.kpmg.us/content/dam/advisory/en/pdfs/2023/bitcoins-role-esg-imperative.pdfKPMG is considered one of the “Big Four” accounting firms, it is the 4th biggest, but still pretty big in the grand scheme of things.KPMG recently released a document, linked above and here, sharing how Bitcoin fulfills all 3 values of ESG (Environmental, Social and Governance) investing. This is a pretty big change in the narrative about bitcoin in the media compared to the erroneous FUD (fear, uncertainty, doubt) that had been being spread and is still being spread about Bitcoin’s “high” energy usage. That is disputed in this article, and elsewhere. Bitcoin has a small overall energy usage compared to many other industries. It also has a greater than 50% usage of renewable energy, which is the highest of any industry in the world. There are even bitcoin mining applications that can have negative emissions such as using methane from a landfill to power the bitcoin miner. If that methane was just released into the environment, like it is at many landfills now, that methane is 80x worse for the environment than CO2.I encourage everyone to learn about bitcoin. You can read my older posts. You can also find many bitcoin books from my reading list.As Jason Maier said in his book “A Progressive’s Case for Bitcoin” – “You don’t know any intelligent person who has studied Bitcoin for 100 hours and thinks it’s a bad idea.”I encourage you to read his book.
I was recently in the hospital (that part of the story isn’t important) and had a Bitcoin book, A Progressive’s Case for Bitcoin: A Path Toward a More Just, Equitable, and Peaceful World, out on my desk to read while I was sitting around doing nothing. One of the nurses asked me if I “Was into Bitcoin?”. I naturally said “yes” enthusiastically and asked her if she wanted to talk about it. Her first comment was “Isn’t the bitcoin guy in jail?” I explained to her that “no there is no ‘bitcoin guy’” The guy who is in jail, who I’m assuming she meant Sam Bankman-Fried (SBF), although we didn’t clarify that, I explained to her, was a fraudster but not directly linked with bitcoin. I explained to her that Sam and his company FTX were more or less committing fraud on a level similar to Enron. She seemed to understand that.
Fighting basic narrative errors about bitcoin like this is important for bitcoin adoption. There is so much false news and when people don’t really have that much interest, this is the type of error they can make.
I also got to mention to her that there is a limit of 21 million bitcoin ever and it fixes the problem of governments stealing our savings via inflation. She did like that! She mentioned that she had a “lot of cash” and “wished the government would stop stealing things”. Not the most technical conversation, but I’m hoping that by.
1 . removing the connection of SBF/FTX to bitcoin and
2. Connecting the idea of bitcoin saving you from government created inflation, she might be more open to bitcoin the next time she hears about it.
She also mentioned that she “isn’t tech savvy” but somehow mentioned she has Venmo. You can buy bitcoin on Venmo (it’s not the favorite platform for the “hardcore” bitcoin folks but it works). So I did mention to her that she would be able to buy it there pretty easily.
If you read my previous post you will learn what problem bitcoin is trying to solve. But there is another thing that governments love to talk about when anyone mentions bitcoin or cryptocurrencies. To be clear on the difference between bitcoin and cryptocurrencies read this. The thing Governments love to bring up is a Central Bank Digital Currency or a CBDC for short.
What is a CBDC and what benefit does it have? The most important thing to know about a CBDC is it is 100% Government controlled, just like money today. It has no limit on how much of it there can be. Because of this they can create more new CBDC everyday and reduce the value of the ones you own. This is inflation and that is the problem that bitcoin solves by having a limit that is 21 million bitcoin ever. The fact that CBDC does not have a limit, means it is not a substitute for bitcoin and you should not be fooled by anyone on tv, or anywhere, saying a CBDC can replace bitcoin and now we don’t need bitcoin.
One thing a CBDC may do is either make settlements at the store faster or international settlements faster. Today international settlements usually go through a company like Western Union. It is very expensive to send money out of the country. Visa and Mastercard process most payments via their credit system and charge between 1.5%-4% to the businesses using their network. A CBDC could remove the need for Visa and Mastercard and for Western Union. Basically it could remove any intermediaries as a CBDC would be infinitely and immediately traceable. While to me all our money seems digital and traceable anyway, a CBDC would make it even more easily so. There may be a push from a government to use it as a form of punishment or denial of purchase for certain things which would be another option that opens up even more with the abilities of a CBDC. For example the government could say that buying meat is bad or buying more than 1000g/ month of meat is illegal and could limit your CBDC credit card to purchases of meat, or anything they wanted.
The main point I wanted to help people understand with that post is that a CBDC certainly does not do anything that would replace bitcoin or reduce inflation and could even potentially be used to control purchases by individuals.
To understand the reason behind why some people (like me) buy bitcoin you need to think about the problem we think bitcoin is trying to solve. When you use a government currency, like USD, the Government can effectively steal value from your bank account via money printing. How does this work?
To understand that you need to understand what the point of money is. Money is just a measurement of the value of something. We have all been trained that the value of things goes up over time because the price goes up over time. But just because a house rises in value by $100k over 5 years, does not mean its intrinsic value has risen. It’s the same house providing the same amount of shelter. It really shouldn’t gain value. What has really happened is the money, used to measure the value of the house, has lost value! It’d be like if you used a tape measure with 12 inches to 1 foot to measure a board and then you changed the tape measure to use 13 inches to 1 foot, where the foot is still the same length but each inch is smaller so you have “more inches”. But is the 1 foot board actually any more useful or longer if you use 13 shorter inches or 12 inches to 1 foot? No. This is how the government confuses us. They print more money and then our houses “go up” in value, but it’s because the measuring stick is changing. Why does the government do this though? They do it because that’s how they pay for the $1 trillion to $4 trillion budget deficit the Government has each year.
In WW1, while we were on the gold standard (every dollar was supposedly able to be converted back to gold at a bank), the government had to sell “war bonds” to pay for the war. This at least provided a little link between Americans turning over money for what they thought was a just cause. If people didn’t buy the bonds the government couldn’t pay for the war.
Since the US dollar was removed from the gold standard in 1971, the Government has had no restrictions on how much money they can print. The US government is able to fund any war ad infinitum via money printing. When this new money is printed the government uses it to buy good (ships, tanks, steel, sometimes roads, etc). Since they have unlimited purchasing power they can keep printing money until they can pay for what they need. Meanwhile, the average person might be unable to buy a new truck because the price of steel was pushed up by the government demanding 200 billion tons of steel for planes and warships.
When thinking about if you should buy bitcoin this is the fundamental issue you need to consider, how is my purchasing power being diluted via inflation?
Since bitcoin has a limited supply (21 million) as more US dollars are printed a single bitcoin’s value, measured in USD, or any other currency, will continue to go up.
This is due to those countries experiencing extremely high levels of inflation 50%-100% a year. I can’t even imagine what that would be like to live in. At 100% inflation, or even 50% you need a raise every paycheck! Your money would lose 1% of its value every week at 50% inflation.
While it seems like high inflation only happens in “far away” places with bad Governments that’s not the case. It has happened thousands of times in history
We, every person in the world, is in a fight with their own government to keep as much of the value they create as they can. The government explicitly taxes you, which we can debate but at least it is obvious. But the government also stealthy steals value from your bank account or savings via inflation and money printing that you have no control over.
Because in the USA inflation has been a relatively small issue (1%-3%) for most of the last 25 years most people in the USA haven’t thought about wealth preservation much. Now that we’ve seen 10% inflation it’s new to people and they aren’t sure how to protect their purchasing power! A bond paying 5% is really losing 5% a year to inflation if inflation is 10%.
I know bitcoin is volatile but the inherent properties of it (ultimate scarcity, 21 million total coins ever), make it the best chance we have ever had to get out of the system and protect our wealth. If bitcoin doesn’t succeed then we will have lost every opportunity to preserve value!
I think that is a cause worth supporting, by buying and holding Bitcoin. And you’re not just supporting it, but you’re protecting your wealth!
I have written politicians and blog posts trying to encourage people to understand this while bitcoin is relatively cheap ($30k). I know once it is $50k or $100k more people will have Fear Of Missing Out and will buy in which could happen in the next year or 2. It’s best to learn about bitcoin when it’s price isn’t rising like crazy and you aren’t having FOMO.
If you’ve wondered this last year or 2 how to avoid losing value to inflation I’d enjoy talking to you more about bitcoin. I only recommend 1% of your net worth in it to start. So if you have $100,000 of net worth you can just buy $1,000 worth of bitcoin. That’s a small risk to be part of a monetary revolution that just might pay off.
I try to occasionally share my thoughts with politicians that represent me. Who knows how much they take heed of what we say? We all have our own pet projects that interest us and perhaps these don’t interest our politicians. I also try to share my thoughts with others through this blog and in person, in hopes that it will influence them to also come around to my way of thinking. That all being said, below is an email I recently sent to an Iowa state representative about Bitcoin. The history is this person is a Democrat. We have had a couple previous emails about Bitcoin and they were concerned about the environmental impacts of Bitcoin.
Dear Representative –
Quick thoughts for the night. I really hope you will continue to learn about bitcoin. It is a very important tool for protecting individuals’ wealth in the future. It is also helping people in developing countries today.
Perhaps you’ve seen this article sent to the US Congress by Human Rights leaders asking them to learn about how bitcoin is helping the poorest in the world.
The other point about bitcoin mining specifically is it helps reduce emissions. It does not add emissions. It uses the cheapest waste power. Most miners have load sharing agreements to turn off when excess power is needed. This is good for grid stability and for emissions reduction.
There is a bitcoin mining company in town partnering with Cedar Falls Utilities. I urge you to talk to both CFU and the miner about their agreement.
Finally, the US military paid for Jason Lowery to attend MIT for 2 years to learn about bitcoin and its national security implications. He released his thesis on this and I have read it and you can too.
Of note, I voted for Joe Biden in 2020 as we could not have another Trump. I have already decided I will not be voting for Biden again as he has proposed a 30% tax on bitcoin mining. This shows me he has no understanding of bitcoin. Or he knows it’s threatening to the USD and the government is fighting tooth and nail to ban it. Either way, I prefer freedom. I do not like the government devaluing my money every day with the $1T +deficit. I didn’t like it under, George Bush, under Obama, under Trump or under bBiden.
I hope others will consider writing to their local politicians to inform them of the good that Bitcoin does. They also need to know that they will not be getting votes if they are against something we are for. This applies to everything. It would be good for more people to write their politicians on all topics. Let this be an inspiration to you. If you want you could even copy this one and send it to your local politician.
“I think if everyone was to hold a little gold and silver (say 1%) it would send a message to the government that we are tired of inflation. Part of the goal of the FED raising interest rates is to get people to stop spending money and to invest it in bonds. I propose that instead of putting all your cash in bonds, what if many people considered buying just a $100 or $1,000 or $5,000 of physical gold or silver?”
The USA has ever increasing national debt. You’ve probably heard about it recently due to the silliness around raising the debt ceiling. Republicans always make a huge stink about it when they are in control of either the House or the Senate and there is a Democratic president but make no mention of deficits when a Republican is president. Anyway.
Regardless of which side of the aisle you sit on, every increasing debt is an issue because it is related to inflation. The government continually funding operations with printed money leads to inflation which reduces your purchasing power. In extreme cases this can lead to currency collapse as we have seen in Argentina, Sri Lanka and Lebanon recently.
When this happens, locals basically lose all savings they have in cash.
There are a few things to do to maintain purchasing power. One is to invest in the stock market. This has historically been a good place to hold money to maintain purchasing power over the long term. Holding German stocks after WWII, in Germany, even kept you mostly ahead of inflation!
Historically, gold and silver have been money. But in the Roman empire silver coins were subject to debasement as emperors melted down existing coins and made 2 coins with the silver previously used for 1 coin and continued for 200 years until they completely destroyed the value of their currency.
The United States did this in 3 steps. In 1930 there was Executive Order 6102 which essentially forced Americans and “gold hoarders” to turn in their gold to the US government for a set price, $20.67 (equivalent to $433 in 2021) per troy ounce. The order also permitted any person to hold up to $100 in gold coins, a face value equivalent to 5 troy ounces (160 g) of gold valued at approximately $10,000 in 2020. The 1934 Gold Reserve Act subsequently changed the statutory gold content of the U.S. Dollar from $20.67 to $35 an ounce.
So, the Government basically paid people $20.67 for their gold, then said, you can’t buy it back, but if you could it would cost you $35/oz. Seems pretty crazy!
Step 2 of United States Currency debasement happened in 1964. Up to this time half dollars, quarters and dimes were made of 90% silver. After 1964 they were made mostly of cheaper copper.
The final straw that broke the dollar’s link with gold was in August 1971 Nixon ended the convertibility of US dollars to gold on the international market. Up until this time, while much of international trade was done in US dollars, technically, anytime any nation holding US dollars could ask the USA for the equivalent value of gold. Because the USA had been printing money for years it would have been impossible to redeem all the US dollars that existed for gold, so we basically said, “you can’t”. It was technically a type of default on the US dollar!
All the above context is just for historic purposes to get around to the point below and to mention why gold and silver are not used as money today. Governments always print more money than they can pay back. It happened in Rome, it happened in America, and it will likely happen again hundreds of years in the future (unless Bitcoin takes over as hard money, but that is a topic for a different post!)
Back to government debt, “Since 1800, 51 out of 52 countries with gross government debt greater than 130% have defaulted, either through restructuring, devaluation, high inflation or outright default. The IMF expects US government (USG) debt to GDP to be a record
This was partially due to the reduced GDP from Covid but also due to increased gov spending. In 2023 you can see Debt to GDP is “down” to only 120%.
So, what is the average person to do? As mentioned above, holding stocks is a good option. I personally do hold most of my wealth in stocks. Real Estate is another option that many people use. Bitcoin is also something I personally hold. I think Bitcoin has many long term benefits for wealth preservation. You can also hold bonds. But if you are holding a bond paying 5% and inflation continues up to 10% or 100%, like Argeintia, that won’t preserve your wealth. But this post is about physical Gold and Silver. I think holding physical gold and silver probably provides a little of a long term hedge against long term inflation. In the short term it certainly can be very volatile. But holding cash is always destined to go down over time. While over time, gold and silver are destined to go up, especially gold.
If you want to learn about buying physical gold and silver there are plenty of great youtube videos. Here is a video about buying silver I listened to recently.
I am only allocating a small percentage of my net worth towards physical gold and silver about 1% of total net worth, for now. In the grand scheme of things, I think this might not be very impactful. Some data says that “12% Of All Americans Own Gold, 14.7% Own Silver” .
I think if everyone was to hold a little gold and silver (say 1%) it would send a message to the government that we are tired of inflation. Part of the goal of the FED raising interest rates is to get people to stop spending money and to invest it in bonds. I propose that instead of putting all your cash in bonds, what if many people considered buying just $100 or $1,000 or $5,000 of physical gold or silver? Buying gold and silver would achieve the same end goal the government wants of removing money from the system, but then people would end up holding something of value, physical gold and silver, instead of bonds, which are currently returning 5% while inflation is at 7% or more yet. You are losing money holding bonds.
To be absolutely clear, I don’t think everyone should go sell all their stocks and put 100% into physical gold. But I think allocating 1% smartly for the reasons above is a pretty good idea.
I don’t have time here to review why I have been specifically saying “physical gold and silver” so many times. But this has been reviewed in many places.
Here is a good video and here is a good article about why physical gold or silver over paper gold and silver.
Personally I have used https://sdbullion.com/ to buy gold and silver online and always check their deals page. https://sdbullion.com/deals I get no commission off this, just sharing my experience. This guy also made a ranking of many of the online bullion dealers.
I have tried bringing up bitcoin to quite a few people over the last year (2022) and haven’t had much interest. I have finally realized that 99.9% of people won’t have any interest in Bitcoin until the price starts going up dramatically, perhaps around $100k people will start being interested again. I have decided that is fine. I am going to write this for people whenever they start becoming interested and wonder “How do I buy bitcoin?”
If you have recently seen Bitcoins price rise from $30,000 to $100,000 or more and are now having FOMO (fear of missing out) and you need to buy bitcoin NOW! Here is what you should do.
Go to the google play store (or apple store) on your phone and download “Cash App”.
Link your bank account.
Click “Buy bitcoin”.
Boom, you now own some bitcoin!
I recommend Cash App because they are a Bitcoin only company. There are many copies of Bitcoin like Bitcoin Cash (BCH), Bitcoin Satoshi Vision (BSV) and many others. Don’t be fooled. Only buy Bitcoin (BTC ticker symbol). Since Cash App only sells Bitcoin (BTC) this is not a problem. That is why I recommend Cash App for starting.
Now you can start learning about bitcoin. Luckily Cashapp also has news articles about bitcoin linked in it’s app so you can read there.
You can also follow Michael Saylor on Twitter. He has a lot of great information about bitcoin.
Now, owning bitcoin and holding it on the Cash App app isn’t the safest way to hold bitcoin. While Cashapp is relatively safe, there is still risk that Cashapp goes under.
An option now is to download Muun Wallet, also from the google play store. You can then transfer your bitcoin from Cashapp to Muun, if you want. You don’t have to do this. You can keep your money on Cash App. It’s like keeping money at a bank. Using Muun wallet is like keeping cash in a safe at your home.
Continue to learn more about Bitcoin through various articles. Don’t panic sell your Bitcoin if the price goes down from $100k to $50k or even $30k again! This is the nature of bitcoin, it is volatile.
Don’t FOMO into thousands and thousands of dollars of Bitcoin unless you are ready to temporarily lose 50% or more.
Don’t invest any more into Bitcoin than you are willing to lose. While I think it will be fine, it’s always possible something wild could happen and it could go to $0 (I doubt this but keeping all possibilities open).
Welcome to Bitcoin!
Oh, and you can always contact me with Bitcoin questions!
Through 1964 American quarters and dimes were made of 90% silver. Starting in 1965 the inner core is pure copper and the outer covering is copper mixed with nickel. I was discussing this with some friends so I decided to look up some history I recalled about Rome’s debasement of their currency. The first link I found was the below comment and this link to a FEDERAL RESERVE BANK OF ST. LOUIS work book for kids grade 8-12.
“Commodus (AD 177–AD 192) debased the Roman denarius to about 70 percent silver. Septimius Severus (AD 193–AD 211) debased the Roman denarius to about 50 percent silver. With the added currency, the government could pay for more soldiers and pay existing soldiers more.”
What is incredible is that the Romans “slowly” debased their currency by recalling the money, melting it down and reissuing with a lower percentage of silver. The US government did it quickly by going from 90% to 0% in 1 year! Subsequent dollars were created by adding numbers in the Fed ledger with nothing backing the new money!
Fort Knox holds about 4,580 metric tons of gold which is worth about $250 billion dollars. The US government budget was $6.27 trillion in 2022.
The Government budget deficit in 2022 was $1.38 trillion in 2022.
“A Cantillon effect is a change in relative prices resulting from a change in money supply.” –SWFI
Be Close to the President and Congress
Cantillon also had a theory in which the beneficiaries of the state creating the currency is based on the institutional setup of that state. This essentially means, “he who was close to the king and the wealthy”, likely benefited from the distributional choices of currency through the system. –SWFI
Realizing that the government is constantly creating new money and decreasing the purchasing power of the money you hold in your bank account, what is the average person to do?
MyWheelLife.com 