Buy Gold and Silver Safely by Doug Eberhardt © Copyright 2018, Doug Eberhardt All Rights Reserved. No part of this book may be reproduced, stored in a retrieval system, or transmitted by any means, electronic, mechanical, photocopying, recording, or otherwise, without written permission from the author. ISBN: 978-0-9825861-7-4 Dedicated to Chris Furman for all you do. iv The most important aspect to learning about buying gold and silver is to know what you are doing and what you want to buy before calling a gold dealer. This is why I wrote the book; so you don’t make any mistakes. Enjoy the book! v DISCLAIMER EVERY EFFORT HAS BEEN MADE TO ACCURATELY REPRESENT THIS PRODUCT AND SERVICES OFFERED, AND ITS POTENTIAL. THERE IS NO GUARANTEE THAT YOU WILL EARN ANY MONEY USING THE TECHNIQUES AND IDEAS IN THIS BOOK. EXAMPLES IN THE BOOK ARE NOT TO BE INTERPRETED AS A PROMISE OR GUARANTEE OF EARNINGS. EARNING POTENTIAL IS ENTIRELY DEPENDENT ON THE PERSON USING THE INFORMATION INCLUDED TO THE BOOK AND THE IDEAS AND THE TECHNIQUES. WE DO NOT PURPORT THIS AS A GET RICH SCHEME. YOUR LEVEL OF SUCCESS IN ATTAINING THE RESULTS IN THIS BOOK DEPENDS ON THE TIME YOU DEVOTE TO THE IDEAS AND TECHNIQUES MENTIONED, YOUR FINANCES, KNOWLEDGE AND VARIOUS SKILLS. SINCE THESE FACTORS DIFFER ACCORDING TO INDIVIDUALS, WE CANNOT GUARANTEE YOUR SUCCESS OR PROFIT LEVEL. NOR ARE WE RESPONSIBLE FOR ANY OF YOUR ACTIONS. MATERIALS IN THIS BOOK MAY CONTAIN INFORMATION THAT INCLUDES FORWARD-LOOKING STATEMENTS THAT GIVE OUR EXPECTATIONS OR FORECASTS OF FUTURE EVENTS. YOU CAN IDENTIFY THESE STATEMENTS BY THE FACT THAT THEY DO NOT RELATE STRICTLY TO HISTORICAL OR CURRENT FACTS. THEY USE WORDS SUCH AS ANTICIPATE, ESTIMATE, EXPECT, PROJECT, INTEND, PLAN, BELIEVE, AND OTHER WORDS AND TERMS OF SIMILAR MEANING IN CONNECTION WITH A DESCRIPTION OF POTENTIAL EARNINGS OR FINANCIAL PERFORMANCE. ANY AND ALL FORWARD-LOOKING STATEMENTS IN THIS BOOK ARE INTENDED TO EXPRESS OUR OPINION OF EARNINGS POTENTIAL. MANY FACTORS WILL BE IMPORTANT IN DETERMINING YOUR ACTUAL RESULTS AND NO GUARANTEES ARE MADE THAT YOU WILL ACHIEVE RESULTS SIMILAR TO OURS OR ANYBODY ELSE’S, IN FACT NO GUARANTEES ARE MADE THAT YOU WILL ACHIEVE ANY RESULTS FROM OUR IDEAS AND TECHNIQUES IN OUR MATERIALS AT ALL. vi vii TABLE OF CONTENTS Introduction .................................................................................................... xi PART I - GOLD .............................................................................................. 1 Chapter 1 “What Backs the U.S. Dollar?” ............................................. 3 Chapter 2 A Brief History of Gold and Federal Reserve Notes ...................................................................... 22 Chapter 3 Flaws of the Financial Services Industry ............................. 31 Chapter 4 How a Deflationary Contraction Unfolds ............................ 40 Chapter 5 Common Objections to Buying Gold .................................. 81 Chapter 6 How Does Gold Fit Into A Diversified Portfolio? .............. 86 Chapter 7 Types of Gold Investments .................................................. 99 Chapter 8 Who Is Recommending Gold and Why? ........................... 118 Chapter 9 Physical Gold - A Must For Every Portfolio and Gold Investment Grid ................................................................. 132 Chapter 10 How Do You Store Your Gold? ........................................ 139 Chapter 11 Places To Purchase Physical Gold .................................... 144 Chapter 12 Investing in Gold With an IRA or 401(k) ......................... 147 Chapter 13 Where To Sell Gold ........................................................... 152 PART II - SILVER ...................................................................................... 154 Chapter 14 Silver: The Other Precious Metal ...................................... 155 Chapter 15 Silver Uses, Supply and Demand ...................................... 161 Chapter 16 Silver Is Money Today ...................................................... 169 Chapter 17 Gold/Silver Ratios ............................................................. 173 Chapter 18 Types of Silver to Invest In ............................................... 175 Chapter 19 How to Profit By Investing in Silver ................................. 179 Conclusion ................................................................................................... 184 Glossary ....................................................................................................... 189 Index ............................................................................................................ 195 ix x Introduction Where does gold fit into a diversified investment? People have worked hard to accumulate wealth and can’t afford to make mistakes that would cause them to lose on their investments. All they want is some peace of mind with their investments moving forward; confident they are making the best investment decisions. Reading a book about investing in gold won’t give you all the answers you need on where to invest and that is why I wrote a second book called Illusions of Wealth which you can find on Amazon.com. That book is a reference guide for new or old investors, something you can refer back to time and time again on investment strategies. This book is the updated second version of the first book Buy Gold and Silver Safely first written in 2010. Times change and the investment climate changes with it along with monetary and political decisions which means the information about gold needs to be updated from time to time. But two things that don’t change are accumulated National Debt and gold. An ounce of gold is always an ounce of gold, but government always adds to the National Debt and the paper money called dollars will buy you less and less over time (also known as inflation). The advice investors relied on in the past didn’t protect them from the 2008/2009 market decline. After that episode the stock market skyrocketed. President Barack Obama during his Presidential campaign called then current President George W. Bush “unpatriotic” for raising the debt limit from $4 trillion to $8 trillion. While in office, President Obama raised the national debt by $9 trillion. Some might question how patriotic that was, but this isn’t a political book, although politicians on both sides are responsible for today’s debt which is now north of $20 Trillion. It is a disease perpetrated on us by congress that is out of control and can spread economic havoc at some point in the future. What President Trump or any future President can do is unknown, but can we really expect austerity? What insurance do you have to counter this potential monetary disaster when interest rates xi increase the interest on the debt to where Congress can’t help but inflate away their problems by printing even more money? That insurance is gold. Today people find themselves having recovered from one market decline but always asking, “is the next collapse around the corner?” Can my portfolio afford to experience another decline like we had in 2008/2009? Financial advisors were never taught the significance of gold and silver in one’s portfolio. It’s no wonder, as the entire financial and educational systems are biased against gold and silver. I have even heard CNBC commentators ask the question; “What is gold?” But I also based this analysis on the books provided to Certified Financial Planners (CFP) candidates and the complicity of the media, government and Federal Reserve, who all want you to believe in a system that is flawed at its core because governments don’t stop spending but granted it has worked since 1971 when we went of the gold standard. Thinking about it another way, if President Bush throws $4 trillion into the economy and President Obama $9 trillion, there can be and has been some good that came out of it. But at what expense. For every action there is a reaction. And if you spend more money that what you have your credit card companies stop giving you credit. So what could go wrong with government spending more money than what they have? How long can they print money before everyone realizes that our money is not keeping up with the prices of things? How many of you even know what a super inflation can do to your portfolio? You don’t unless you lived in the 70’s. We’ve had quite a ride the last 40/50 year, but it won’t last. But here is the key that most don’t understand about money and inflation. We here in the U.S. have a central bank called the Federal Reserve that has as a mandate to have 2% inflation. This means they want the price of things to go up by 2% a year. Your dollars have to grow by 2% a year to keep pace with this goal. In the 1970’s, after Nixon took us off the gold standard, dollars couldn’t keep up with inflation, but gold did. The crazy part about this mandate though is in xii 10 years you must pay 20% more for things than today if they maintain their mandate. Why would anyone want to do that? The answer is so the Federal Reserve System works to benefit them, not you. It’s how our whole monetary system works which you’ll learn later in this book and how gold can counteract their monetary mayhem policies of inflation targeting. Our financial system is based on blind faith in a piece of paper that has 46 short years of existence without a relationship to gold. Let that sink in for a moment. All Central Banks in the world hold gold to give the illusion that the currencies they print are backed by gold. If all Central Banks hold gold, why is it mocked by CNBC as “just a shiny rock?” CNBC commentators can’t even get that last statement straight, as gold isn’t even a rock, but a metal; a “precious” metal with over 5,000 years of history being utilized as money all over the world. The same can be said of silver, as it has a similar history as money. This may come as a shock to most gold bugs out there; gold is just a shiny metal. That’s right, bury it in your backyard 10 years ago, dig it up today, clean it up, and it’s still a shiny metal. But that metal is worth much more today as it was 10 years ago. Why? Because it’s what the shiny metal is priced in—U.S.