Q&A With The Doc: Will I Ever Get Back to Even on My 40% Underwater Gold & Silver Position?

SD reader Dave writes:

I Purchased $20,000 in gold and $60,000 in silver two years ago. I was lead to believe they were going way up due to money printing and zero interest rates. So far I am down 30-40%. All the fundamentals are right for higher prices but both metals have gone way down. Can these prices go up without a complete collapse of the dollar? I figure I only have about 10 years left to live. Will I ever get even? The only people touting the metals now are the people that make money on sales.
Thanks,  Dave.

Doc: All major secular bull markets have major corrections.  As to your bad timing of purchasing $80,000 in gold and silver 2 years ago, I believe the bull market will forgive bad timing- provided you have the intestinal fortitude to be right and sit tight.

The fundamentals that have propelled gold from $270 to $1915 and silver from under $4/oz to $49.30 have not changed- if anything they have only continued to intensify.   Only those with the intestinal fortitude and conviction to be right and sit tight throughout the duration of the secular bull market in gold and silver will reap the full benefits.  Being right is the easy part, its the sitting tight that’s difficult.

The 3 previous major corrections in the current bull market to date have all lasted in the general time frame of 2 years.  In the wake of gold’s crash to $1320 and silver’s to $22, sentiment is terrible in the sector, yet major physical shortages of silver are developing, and we are even seeing the first signs of a shortage of retail investment gold products.  Expect these shortages to exacerbate and worsen in the coming weeks.

I believe this massive take-down in gold and silver is a last ditch attempt by the cartel to save the dollar and the financial system by preventing the public from recognizing gold and silver as safe havens as the fiat world burns to the ground.
The dollar is still perceived as a safe haven, but in reality, it no longer is.  Gold and silver are the last remaining safe havens, and they will be widely viewed as such before the current bull market is completed.   Those who can endure the pain and sit tight (and even add to their positions into painful corrections) I believe will be highly rewarded and will survive the coming financial destruction as the global derivative debt bubble collapses.

All the best!

-Doc

 

 

 

Comments

  1. Oh fuck me sideways, he’s got $100k in metals, and he’s panicking.
    I’ll swap you for what I’ve got that’s not underwater!!!
    Sell it, sell it all if it puts your mind at rest. Come on ‘Dave’ we could be close to the end game and now you’re panicking!!!
    I’d love to be in your position.

    • I will swap him also! I have 100,000 NOW in a 401A that I cannot get out of. 
       
      My my Elliot, the Language! ;)
      hehee

    • @undeRGRground: My apologies ;) 
      I just wrote this to Pollo. I have no idea if I’m right or close, but no one does.
       
      I am sympathetic (even if my rant didn’t seem it!).

      But what I can’t understand is, look at the options.
      If you’re money is in FIAT, it is being killed right now.

      If it’s in a bank it is at an EXTREMELY high risk of theft.

      If it is stocks, get out now. Because when everyone else want’s out, you’ll not be able to sell as there will be no buyers.
      And you’ll be last in line anyway, the big players will liquidate first. It’s all toxic and eventually worthless.

      This is a desparate attempt to force physical owners out of their position.

      As you have always said, you have to see this as a long game. Trust yourself.
      Remember why you first bought physical.

      The fundamentals are so apparent. This shit storm will crash, they have passed the rubicon on this one.
      Europe is toast, US is toast, UK is toast. China is toast. Japan is toast. etc.

      Debt is way beyond the pale.

      Their only answer is spend more! What with, no one has any money! Oh, of course, more debt. Lol

      So now they have realised that won’t work and that governments can’t use anymore public money to pay the bankers back WHOLE! They are resorting to deposits as unsecured lenders and stealing directly to make good their casino banking mistakes.

      It’s a joke. So how can you protect yourself?

      Do as they do, not as they say.

      Central Banks buying physical gold hand over fist.

      It IS the last safe haven. It always was. They know it. I hear people say, but why gold, why not tulips for example?

      It’s a store of value that doesn’t perish, it’s easily divisible. It recognised worldwide. It’s easily transportable. It’s durable. It needs to be fungible (that one unit is equal to another – an eagle and a philharmonic). It needs to be difficult to counterfeit and recognisable as a genuine article.

      What better represents these important elements – gold and silver and have done for 5000+ years.

      I would not feel comfortable in any other vehicle for the small amount of savings I have. I just need to work on the other things I need – food, medicines – equipment etc.

      When the need arises I will trade for property and other tangible assets I require. Well that is how I see it.

      We have to hold tight right now. This is the true test.

      I may be wrong, but no one has offered up a better solution yet in my opinion. That is why I believe ‘Dave’ mustn’t worry.
      I don’t believe it will take longer than 2 years for this to all reset. It could be sooner. 

      Just my humble opinion.

    • You gave Pollo great advice! 
       
      I wouldn’t call you Elliott if you had a more pronounceable screen name,
      Jock-Jacketty is the best I can do man! 

    • @undeRGRround:
      Badly chosen I know! :)
      JC would fit, but Elliot is fine ;)

  2. Buy more now. Reduce your average cost.

    • agreed. I just have! just having to wait 5 weeks for the stuff though!

    • This dude sounds like “B”
      Perhaps he changed his name?  :D

      Hey, edited this to be “nicer”
      I appreciate these articles, @the Doc
      and I hope they are an aggregate customer letter compilation.
      I have a letter I am about to ask a bigger Q than “B” or “Dave”

      I want help extracting my 401A. I will buy PM’s immediately :)

  3. Dave,
    You did something (buy metals) that LESS than ONE PERCENT of the population of this country EVER did.  There was a reason you did it.  That reason has only been amplified by what is befalling this country from the top of our government.
    If you are patient, you will be richly rewarded.  However, if your situation has changed, and you wish to “unload” any of your holdings, I will be glad to purchase any and all of it.  Just respond.
    Consider this:  I began buying (silver) at 6 bucks and continued to buy until it hit 30.  When it began decent below 30, I began to accumulate again.  Anyone into metals should treat a buying opportunity, which is rapidly evaporating, as a gift from God!
    Consider my offer above!  God bless you and yours.
     
     

  4. Dave
    You invested $80K in metals. Thats a very arge amount. Your evedently are well positioned in life.
    How are your other investments doing, when compared to 2007?
    Can you get at your other investments without Washington taking a slice? If not, how much are they really worth?
    What makes you feel better, reviewing a monthly investment statement, or looking at your stack?
    Me? I like the stack

  5. Dave,
    Ask yourself this question. Are you a weak hand or a strong hand? If you know how to answer this, you will be able to manage your risk well.
    P.S. Never put all your eggs in one basket unless you are a Whale!
    Have a safe trading.

  6. Dave  If you want to do this right, sell your stack and TAKE A TAX LOSS.  You might have $25,000 in losses that will shelter your capitai gains for years.  Buy silver and gold back after the 30 day wash sale waiting period. 
    Here is the best idea I can think of 
    Doc has a precious metal buy back.   Use it to harvest your losses then buy back from Doc the amount that represents your cash balance out of that trade. Since prices are low, you may want to add to your stack at that time and get the cost saving large volume discount. With your stack you would probably be well ahead of those benchmarks.
      Check with your CPA before doing this to make sure it fits your tax situation. 
    This buy back could have some real benefits in getting you on the right side of the trade, building your stack and having at least $3,000 in capital loss carryforwards for shelter to your future gains.  At current tax rates the $3,000 capital loss carry forward might yield $1,000 in tax savings. That’s worth 40 ounces of silver 
    Then continue stacking to reverse this self induced PTSD (post traumatic silver dump) and move on with a lower cost average for your metals. Then report back to tell us how this worked out.
    BTW 
    Doc told me to that I should continue selling my silver at the shows, even if its for a price less than my original buy price.  The inventory I presently use is cost averaging about 422-30 an ounce.
    I could take a loss then buy back at Doc’s reduced prices, thus dropping the average price of my silver inventory.  If I use the LIFO menthod of accounting, my profit will be more substantial in the future. Since I have mid 6 figures of loss carryforwards from a real estate sale and stock losses, I can shelter my income easily with these short and long term capital losses. Trading silver and gold was not in my plans originally but since things have changed, prices are lower, and I want to acquire other things with silver like FIAT, services, guns and ammo, this is working pretty well. 

    • Dave…Ag12K normally is solid as solid can be, but today he forgot to take his medicine.  Physical gold and silver are insurance not trading vehicles.  Don’t sell.  Don’t try to get cute with the tax code.  Just sit tight as the Doc advises and you’ll be fine.  The trend is your friend and the long term trend is up.  Governments are printing fiat hand over fist with no end in sight.  
       
      And Ag, if you are selling silver out of your SD IRA that’s a distribution and will require special tax handling. And if it’s personal silver then how can you prove it’s not your self-directed IRA silver. You’re just asking for IRS trouble.

      As a strategy selling to generate a tax loss isn’t worth the paper work.  Selling at a loss to offset realized capital gains is another story.

      But Ag, you are already skating close to the line with an SD IRA, you really want to stay below the IRS radar on any gold and silver sales. Taking a loss is like waving a red flag, “Audit me”. How do you prove what silver is personal and what silver is SD IRA? It will all look the same to the IRS. And they will take full advantage of that to your detriment. Take it from someone who takes on the IRS, being right is not enough. The IRS has unlimited resources and guys like you and me have no chance. Even if you win you lose, big time.

      Ag, let’s say you set up your SD IRA first and then bought some personal silver to sell at shows. IRS will use first in first out and deem the show silver sales were IRA sales. Hey, they’re all silver eagles. And you will not win the argument because you have a self-directed precious metal IRA and they would like nothing better than to stick it to you.

    • “How do you prove what silver is personal and what silver is SD IRA?”
       
      Present sales receipts?  I don’t know how AG does this but I keep records of all my purchases.  Proving what is what will be no problem for me, although I do not have the SD IRA system in place that AG has.  I have not queried the IRS on this but would think that any silver in a collection could be sold as of a certain date and the purchase could be selected as of a different certain date.  This would be more clear if one had serial numbered bars but receipts should be good enough.  If we cannot prove specifically that THIS stack of ASEs was bought on a certain date and then sold at a later certain date, well, then neither can the IRS.  In such cases, they should be willing to accept the tax-payer’s claim.
       
       
       

  7. http://www.ebay.com/itm/Roll-of-20-2012-American-Silver-Eagles-Gem-Unc-/190825378012?pt=LH_DefaultDomain_0&hash=item2c6e1430dc#ht_903wt_758
    Roll of (20) 2013 ASE’s going for $33.70 each.
    So I’d say Physical Spot is $30.00.  Not CRIMEX worthless paper spot of $23.29.
    Now recalculate your current value.
    Ever hear the phrase “No Man will be able to buy or sell without the Mark”?  You’re in the right place, so shut up and enjoy the ride.

    • PLUS, @SilverHawk, many places “buy back” at just under their sell prices, ABOVE SPOT.
      My son sold some at just under premium prices (over spot). Did not get Doc’s buy back price, 
      but I’M NOT SELLING lolZ

    • APMEX is buying back ASE’s at $3.50 to $3.75 now.  Tulving only lists 2013′s at $3.00 buy back.  People selling on eBay are getting the most.  $7-10 over spot.  WAKE UP, DEALERS!
      That will change when they don’t get many sellers.  APMEX had about 4-5 Monster boxes back on the site for sale.
      Tulving still has none, and eBay had about 6 this morning.  That still isn’t much.  I, like you won’t sell either, unless my stomach starts growling. 

  8. gold & silver are moving from weak hands to strong hands now.    i remember when gold sold for $35/oz.   (i’m that old) .   thank god for that ROBERT RUBIN strong dollar policy …… i sure did get a lot of nice jewelry cheap way back in the 90′s & i’m never selling it.    it’s not the dollar amount you own, it’s the number of ounces.    this time in history will be spoken about for centuries to come.   educate your children, it is a store of wealth, no matter what dollar price is put on it.    remember, if you sell it, it is gone & you will kick yourself.   SHOULD YOU DECIDE TO SELL IT FOR PAPER MONEY, YOU’LL WISH YOU HADN’T.   the greatest lesson i’ve learned is that you do not swap out silver&gold for paper money.    this past 100 years has been abnormal.  

    • I also remember those days, although in the mid-1960s, a jeweler friend of my Mom said that it cost him $125 an oz. to buy gold to make jewelry from it.  The “official” price was $35 an oz. but it could not be bought for that.  We’re seeing some of that now with a semi-official price for silver at $23.50 or so but no one selling it for less than about $28 an oz.
       
      As to selling silver or gold now… only if you absolutely must and then just enough to pay bills or put food on the table.  Selling more than that WILL come back to bite us.

  9. Dave as for me I don’t put a dollar value on my Stack or anything else, I never have and I never will and I have been happy most of my life because of that. I read a lot of forums and listen to a lot of Gurus but I use my own thoughts to decide what to do and nobody else’s. If my feelings changed inside I would sell tomorrow with no regret but today I see what’s happening in the world, so I’m stacking for survival not profit. Keep Stacking

  10. Dave,
    lots of good advise here on your situation. If you decide to take a tax loss as AG suggests, keep in mind you are taking a risk that the train may leave the station before you are able to get back in. Better, in my opinion, to sit tight with your current DCA. When the metals explode, you will laugh at any DCA under $50. I personally believe the metals will gap up, with no offers, without warning, much like the MF Global theft, or the Cyprus disaster.
    Also, one advantage of PMs, if you choose, is that they can be a hidden asset. Purchase records are destroyed in time, and currently no 1099s are issued if you sell. All you are doing by playing the IRS game is alerting them about what you have. Better to take your ball and go home. Gov can’t steal unless you are a participant.

  11. When I started stacking metal I didn’t have 80 grand.  I had about 600 bucks.  If like you I had 80 grand to start with I would have done some research and bought a turnkey business instead.   A bike shop a bistro whatever.  Out of the revenue I would have purchased metal.  Regardless Dave do you witness the retail shortage of Silver right now?  It is astounding to me and I have little doubt that the price of metal will start ripping JP Morgan a new one in very short order.  Stand by your stack.  Give it two arms to cling to.  

  12. Dave, I feel your pain, as Billy boy once said. Maybe you would like to be in my shoes down A COOL Million with 800k left in ag. I went ALL IN at 59yrs old did my homework for 6yrs prior to pulling the trigger. Good news…still up from initial purchase. Under normal free market conditions, we would all be very rich. Years ago, it was only rumor and allegations that the 2 big banks were rigging the price. now it is all out in the open with the blessing of the Communist CFTC and DOJ, The to Big to Fail Banks and bankers are now the American Way! Fear Not. we still have Industry that will be calling for OUR SILVER for production and I feel China is a stones throw away to announce the Gold Back Yuan…GAME OVER FOR BENNY AND JAMIE AND THE REST. Rest a sure more Black Flags will be coming. The US dollar is toast. Cyprus’d is coming to a bank near you and very soon. Hopefully you will have a wonderful Christmas. hang in there….Do not think of selling until the 100 dollar range. Selling at break even will only play into the Cartels hands and give them the metal. Then you’ll really be sick in a bad time of your life.

    • An interesting thought occurs to me.  If China does back the yuan with gold or perhaps creates a new international currency that is backed or partly backed by gold, how many people here would be willing to exchange their dollars for this new currency?  I will withhold my own comment until others respond.  :-)

    • IMO Buying a Gold/Yuan would be a wise choice. Perhaps buying NOW before the announcement is smart… ;)

    • Perhaps it would, undeRGRound.  There were some banks that were offering accounts denominated in Renminbi a year or so ago, where one could deposit other currencies to fund the account but it would be held in the Chinese currency.  I haven’t heard much about this lately, so am wondering if these are still available.  If not, then how would one go about converting USD to Renminbi?

    • @Ed_B
      I’d stay away from the FOREX. Unless you could get the notes sent over, that is. But it is a currency exchange, so like the CRIMEX, I’m purdy shure it is a criminal enterprise that will keep your gold-backed goodies when it all hits da fanZ  ;)
       
      Good Q, LMK if you find anything. I will check too. AGX might know something

  13. DON’T PANIC DAVE….
    ~
    ~
    Pull out a Silver Eagle and a 100 numerated Federal fiat note and repeat after me…
    SILVER…. paper…. SILVER…. paper x 10
    Now get a match, light it and put in under the SILVER…. hold it, hold it…. don’t light that paper yet….
    ~
    ~
    But soon you can light that paper and you’ll not shed a tear…. Have FAITH Dave
    The FIAT END is near!
     
     
     
     

  14. Doc…What did you do?  Your website is working much better.  I like it.

    • Yeah, I noticed the SDBullion is looking SHARP! 
      Hope I get my 401A out soon, Doc will have a HUGE ORDER to FILL! 
      AGXIIK gave Doc the endorsement!  ;)

    • @UglyDog : We switched hosting from HostGator to HostDime, and upgraded from a dedicated server to 2 larger dual dedicated servers with load bearing.  We should be good for awhile.  The 5x normal traffic volume we saw over the past week with the epic gold & silver smash was just too much for the one dedicated server to handle.

      @undeRGRound : Good deal, yes, Craig (AGXIIK) utilized SDBullion to convert both his and his wife’s retirement funds into phyzz.  When you’re ready, give our bullion team a call at 614.300.1094, and I’ll make sure we hook you up! :)

      -Doc

    • These changes seem to be just what the doctor ordered!  The site is working wonderfully well and the effort made to make this possible is MUCH appreciated!  :-D

    • @The Doc
      I may need me a good Investment Lawyer. I’ll PM you later with some details
       
      If I can shake this loose, others will follow

      We have a large contingent of captive folks that need release…
      Many of them know PM’s are the ONLY safe Haven 

  15. AGXIIK says:
    April 21, 2013 at 9:47 AM
    Dave  If you want to do this right, sell your stack and TAKE A TAX LOSS.  You might have $25,000 in losses that will shelter your capitai gains for years.  Buy silver and gold back after the 30 day wash sale waiting period.
    —————–
    No…  No…  No…   Usually AGXIIK has well founded and wise advice.   But I sincerely take issue with this recommendation.  We are at the point where all the chips are on the table and the guy operating the Roulette wheel is about to say “No more bets…”   There will come a Friday evening when the markets close and we hear some surprising news.  Like “Bank Holiday!”   or maybe “One time revaluation of precious metals.”
    You don’t want to be messing around trying to optimize your capital losses for tax returns right now.   This is the time to stay low in the fox hole and not sell any physical metal.   The reason is:  You very possibly won’t be able to get it back if the wrong thing happens when you don’t have possession of it.
    This down draft isn’t going to last very long.   And I know most metal heads are not where my head is at.  But if I could wave a magic wand and get my way I would have them take silver down to $18 and hold it there for a few weeks.  For sure, that would end the manipulation of silver.   But what is going on right now is very likely to end the manipulation anyway.   Just not as fast.
    We are getting very close to the fat lady singing.  Now is not the time to make careless moves.
     
     
     
     
     

    • @hunkered_down 
      I totally agree. AG is very smart and a great poster here. But I would not mess with your stack at this stage. Hold tight. Keep the faith.
      I don’t know what your ave cost is but, selling through somewhere like ebay will net you a tidy profit on current prices. Not that I recommend selling unless you have to.

    • Good points are being made here but perhaps there is some room for compromise?  Only a certain amount of tax loss harvesting can be done each year.  I suggest that whatever that is, $3,000 comes to mind but verification is needed, be harvested in 2013.  This allows Dave to get a tax deduction AND retain the majority of his phyzz.  We do not know when the great reset will come.  It is possible that it will not be for some time yet.  Given that, perhaps a step-wise selling schedule that harvests the max tax loss per year combined with retaining the majority of the stack just in case the S does HTF would be a more well rounded plan?  Hedging the bet may be a way to get the best of both worlds here.  Remember, guys, to harvest a tax loss, Dave only needs to sell his phyzz for 31 days before he can buy it back and that is a pretty small window.  It’s worth thinking about, anyway.
       

    • My deceased father-in-law taught me some about taxes (he was an accountant)
      Back then, you could take the loss all at once and then spread it out in subsequent years. 
      That sounds like what AGX was saying, might have been more detail in an email though. 
      No one should do this on anyone’s advice online, but only with the careful consideration 
      of a tax professional IN PERSON and that was what AGXIIK suggested in the first place. 
       
      I’d sit tight too, especially since if we do the calendar math, “DAVE” Bought at the Peak! 
      April, 2011 :eek: It might go down a bit more, but then LOOK OUT! 
      I think our friend AGX is offering a reasonable alternative to a frantic stacker, and when he 
      starts exploring the options he will settle down. Perhaps Ed_B is right, only a little here and 
      there can be sold at a loss and claimed, so the stack reduction would be minimal… 
      $80K (now $45K) is a LOT to some, but “chump change” to others here ;)

  16. Dave
     
    Always tricky to attempt giving guidance to someone like yourself with only a basic understanding of your circumstances. You say you bought $80,000 worth 2 years ago because you we’re lead to believe they were going up!! My first question would be WHAT DID YOU FEEL? You also say you may only have 10 years of life left? Is that due to old age I wonder rather than some ailment?  If so then sounds to me you may have been hoping for a quick gain for your Golden years rather than trying to give yourself protection from what was coming then and is oh so much nearer now.  Not sure as not enough information to go on.
     
    Im in circumstances similar to yourself I also hold 6 figures predominantly in Silver with an average in the mid $30s. My plan is to buy more with another $15k of dry powder lined up for May 1st. Obviously I’m still employed and I’m presuming you are retired, therefore what I would do if I couldn’t afford to add and reduce my average and if I also didn’t need to sell to live….. then I would simply sit tight. If you are a big follower of everything Gold and Silver you must surely be feeling what we all are right now. This charade can’t carry on for much longer and looks as if it could resolve itself in months rather than years. I think most on SD would agree none of us can see this mess dragging out another 10 years. If so Ill probably feel Id want to shed my own mortal coil by then anyway. I think I’d prefer that than ending up living under a bridge.

    • IMO May 1st may be too late. Buying or ordering now (or after May1) is just as good. Stock will not be up by then, 
      so you will effectively be buying after that anyway. I like the general idea, but the window is larger than 1 day. 

  17. You can always sell, shift your money so that there is more risk in less quantity. For example, if you got 5 Kilos, in 5 bars and you sell 1 for less than you bought, you just shift the amounts that your down by, and install them in your remainder bars.
     
    example:
     
    5 bars @ £1000 per bar = £5000 in silver (2011)
     
    1 bar (2013) = £600, £400 loss.
     
     
    4 bars revalued at £1100 per bar = £4400 (assign the loss to the remainder bars).
     
    Other option is to double down. transform 5 bars into 10 and average out. still be down, but better than selling.
     
    5 bars = £5000 (2011)
     
    5 bars = £3000 (2013)
     
    10 bars = £5000 + £3000 = £8000
     
    new price per bar now is £800

  18. “I was lead to believe they were going way up due to money printing and zero interest rates.”
    Dave, Who led you? A person cannot be led unless they follow. Sounds like you may have followed bad advice. Did you see a quick buck to be made in PM’s? Did you expect to be the king of the neighborhood when SHTF? Are your friends or family calling you foolish and laughing, remind them that if you die before you realize a profit, you will be leaving it to those who did not laugh (that’ll shut em’ up.) Did you read anything that was written in the comment sections of this or any other silver or gold publication / Blog? PM’s are a long game play! You are weighing the value of your investment against against a fiat dollar system, you’d be better off weighing it versus Big Macs or Gallons of gasoline. Your investment is in Ounces and how high your stack is not in how much fiat it takes to buy it back into the system. It sounds like you are wrestling with your greed to me. A strong hand tends to a less greedy as odd as that seems. Remember sell high, buy low, live by it!

  19. Ugly Dog and others. Let me assure you I am on solid ground with the tax aspects of selling precious metals. The questions were popping up regularly about 18 months ago regarding tax issues with PMs. I hired my CPA to give me an overview which I posted on SD before the ‘best of’ series came out.  I can’t find it but let me assure you that my reasoning is sound. This is not to say that one should do what I suggest or stick tight but there are avenues to harvest a tax loss on the sale of silver or gold at a price lower than your acquisition cost.  And then rebuy after the wash sale rules.
     If I bought 1,500 ounces of silver for $60,000, a $40 an oz cost, and sold it at $25, I would show a $22,500 capital loss. Let’s say I bought in 2011 and sold in 2013.  My loss for 2013 would help me other shelter cap gains plus another $3,000 on the front page of my 1040.  Consulting with an accountant before this is wise and prudent.  A slip can be costly.
    I can say with confidence that my CPA is good at his job and I confirmed all these facts and figures.  The loss would show on a return and thus the IRS would see you sold silver. But if you buy back silver after the 30 day wash sale, that transaction would not be on the IRS radar until and unless you sold that new stack of silver you acquired with the money from the original sale.  Once the PM was reacquired that transaction would virtually  invisible.  
    As coexecutor of my father in law’s estate we sold about 110 oz of platinum  from the  estate in 2011 at a slight loss of about $10 an oz . That transaction loss accrued to the estate and the IRS was not in the least bit concerned.  It sheltered some gains that took place within the estate that left us with a zero tax liability.
    This  sale was done to pay some beneficiaries or I would probably not have sold the PT.  We are stackers and pa in law was a stacker since the 1960s.  I’ve not sold any phyzz that would generate taxable gains or losses thus far however in spite of my little side venture of silver selling at the gun shows. That stack was a blend of old and new silver and my sales prices were close to break ever.  It is also a very minor part of my stack. I specifically bought silver from Doc before I started that venture and actually did it to trade for other assets and to generate a bit of FIAT to stack other items like lead futures and blasters
    My total silver and gold holdings are large enough to do some side ventures of providing silver to buyers on an immediate basis and replace it with Doc’s SD bullion.   Doc and I have discussed this as well and he offered some suggestions to optimize my buy price in this venture should it expand.  I may take a  small loss of the sale,  small profit or break even as I calculate what price to accept from a buyer, some of whom like to bargain.  I have no worries about making a profit since I have well over $500,000 in loss carryforwards from the Lehman crash and the sale of a property which in which I sustained a loss.   So small capital gains are immaterial  I am doing this to test a marketing theory of mine as to what the market will bear if the paper prices disconnect from physical and the results are proving pretty interesting. I am also testing the objective of barter using silver while education some of my BOB and intimates about the value of this white metal.  They are all ears.  Call it paying forward for all the wisdom my father in law and dad passed on to me.
    I don’t want anyone to worry about my meds. I don’t take any other than a mild BP.  Gn and Tonic might qualify but I don’t have malaria.
    As for the SDIRA, I am in my second year with appropriate reporting to the Feds,  the Secretary of State for my our two LLCs in place and my fiduciary who monitors all the activities like the annual valuation, any withdrawals ( I dont plan any for at least 5 and maybe 10 years)  Since an IRA is a large visible target if in the paper market, I did the next best thing and go all physical with the SDIRA without braaking it open entirely. It would have been a 6 figure tax bill.  As it was I cashed in $150,000 before the SDIRA was completed. I was fearful of some black swan and scrambled to protect assets. It turns out I was probably a year early.   The SDIRA is held in a manner compliant with the custodian and the IRS.  I would never tap the IRA for any gold or silver to play the market, trade or sell for anything unless it was in compliance with the annual distributions one can start taking at 59 and half. Or mins after 70.
    The SDIRA stack is sequestered in a separate safe with separate key and combination.  No comingling with any other assets so there is no reason to suspect that someone would question any actions on my part. I don’t even open the safe unless it is to provde the annual count for the costodian’s paperowrk. 
    I consider myself fortunate to have done this with the help of THE DOLLAR VIGILANTE. My accounting of which stack is which is done with paid receipts, the dates of the silver and gold–all 2012.   Any other stacks of ASE’s, Maples, American Gold eagles etc have either 2013 or 2011 dates. The Maples are 1989 vintages  No other bullion is permitted in an SDIRA so there is no chance of comingling. I was extremely careful of that. The IRS may be generous with the SDIRS rules but they are not stupid.  If the iRS ever said all IRAs must be coughed up like is happening in Spain and probably Argentina as we speak, I would cash it in, take the tax hit and that would be the last oneevery heard of our IRA  Only in extreme conditions would that happen. Paper would be confiscated first so i think we would have some time.  I could cash in other PMs to pay the tax hit and then bury the PMs that are held separately.
    As to my comments about Dave taking a tax loss, I’ve been there, done that and harvested some large losses on paper investments and commercial property. I wear the investor DA hat firmly on my head but am  not selling ANY of  the core stock of silver or gold for anything.Doc knows what I have since I bought a lot from him and he knows my strategies. Stack sizes are relative so my actions are reflective of the core and the trading accounts.   Any selling comes with my wife’s approva which was  just discussed  this morning.  She asked me if I was selling out our stack. I reminded what we have in silver and gold and she was assured.  Nothing in the world would compel me to jeopardize our security.
     Selling precious metals is just another tax strategy that I thought ‘might’ work. I admit after what happened last week, I may have  came on too strong for some.   Emotions were high for many reasons, not least of which we discuss at length on this channal.  I also appreciate all the comments that counter my statements. It means we are reading other’s posts and engaging some critical thinking, giving thoughtful advice and consideration for others.  I agree that if Dave sold for a tax loss and silver did something spectacular, like go down another $4 an ounce Dave cold stack even more. But the risk of buying fter  that 30 day wash sale means if silver jumped $10 an ounce then the trade was not optimal.
       It’s my way of responding to Dave’s question based on sound, accurate and thoroughly research mechanisms but it is not the only answer.
    But even I would think twice about it  if it was me.  I have $42 an ounce silver.  At present my trading is small ball and whether I make $3 an ounce, lose $3 or break even, the reality is that my mission is to educate people of the realities of silver,put silver in their hands when no one in Northern Nevada has any for sale or the waiting list is 2-4 weeks long.   My CPA bill is in the low 4 figures due to these research projects and my normal tax filings.
    I also segregate the silver for sale by receipt so I know my buy price, sales price and expenses should I decide start accounting for the profits, losses and expenses of this venture.  What will happen after test marketing and if I see an avenue to do this jig in a more engaged manner, I will report to you fully on my findings. Some day all of us might find ourselves needing a playbook for selling and bartering.
     On a side note, I don’t talk about what I own in silver and gold  It’s not important to me what I have or what its worth any day or date.  Before I went  all in with PMs  I day traded and obsessed over the markets. It lead to too many sleepless nights. Now I sleep well, don’t really care the price of PMs on a daily basis and see our ventures and adventures on a long term scale of time.  I think the BP meds are more a result of what I see happening in the world today
    I also give a large tip of the hat to Mammoth. His strategic and thoughtful buying selling and trading his Morgans and other coins to refine and increase his stack got me working on this path. It’s fun and provides lots of entertainment to those willing to listen to me bloviate—Like you are now.  Cheers to all the Silver Doctor Irregulars.
     

    • “I was fearful of some black swan and scrambled to protect assets. It turns out I was probably a year early.”
       
      As has been said, AG, “better a year early than a day late”.  ;-)
       
      “ I would never tap the IRA for any gold or silver to play the market, trade or sell for anything unless it was in compliance with the annual distributions one can start taking at 59 and half. Or mins after 70.”
       
      Indeed so.  Between the ages of 59.5 and 70.5, is what I call ‘the golden years’.  This is the time when the rules concerning IRAs are at their minimum impact.  After age 70.5, one MUST withdraw their RMD or Required Minimum Distribution annually, whether or not you actually need it.  Uncle Sugar wants and will have the tax money he is owed after many years of tax deferral.  Fortunately, the calculation for this is simple and is well covered in the IRS pubs related to IRAs… Pub. 590 comes to mind.  Oddly enough, this amount is calculated exactly, based on various criteria, and is not as careless as the term RMD implies.  There is nothing “minimal” about it, as it IS an exact number.
       
      “I don’t even open the safe unless it is to provde the annual count for the costodian’s paperowrk. ”
       
      Could you elaborate a bit on this?  I’d like to know more about what is required here.  Is this an IRS rule?
       
      “No other bullion is permitted in an SDIRA so there is no chance of comingling. I was extremely careful of that.”
       
      Is that a SD rule?  The IRS itself actually allows several kinds of bullion in IRAs, the only 2 stipulations of which I am aware is that it be American Eagle coins OR coins, bars, and rounds of 99.9% PM assay.  Mexican gold, for example is neither of US manufacture nor of 99.9% or higher purity so cannot be placed in an IRA.  But Canadian, Austrian, Australian, and any other 99.9% pure gold, silver, platinum, or palladium can be used.
       
      “Some day all of us might find ourselves needing a playbook for selling and bartering.”
       
      Indeed so, for it is a foolish investor who puts their money into something with no thought given to their exit strategy.
       
       

    • @AGXIIK, Where is the best info on starting an SDIRA? Do I necessarily need a tax professional to start one? Thanks Tiger.

    • @AGXIIK…Point is that even if you have dotted every ‘i’ and crossed every ‘t’ you’re skating outside the norm.  IRS can make your life a literal nightmare.  Been there, done that.  Being right is not enough.  Having white papers from law firms validating everything you’re doing is not enough.  Using professionals is not enough.  Because they can destroy you just the same and they will enjoy doing it.   They have unlimited resources and a gestapo attitude.  I have never been so outright lied to as I have by IRS agents.  Best advice is to stay off their radar with your 1040.  Seriously, avoid their red flags.

    • ;) Just as I thought, but better! 
       
      UglyDog is right though, best to stay off the radar. But it seems you have a solid exit strategy 
      for that too, and when SHTF they will be too busy to come after anyone, IMO! But remember 
      that IRS is one of those heavily armed alphabet agencies of the federal govt. Along with DHS, 
      SSA, TSA and other formerly “benign” tentacles of the leviathan. They all wear brown shirts :(  

  20. With the current high premiums and unavailability of silver and gold I would sit tight. Fiat is crashing with another country almost every week going under. This is the wrong time to try to cash out or even sell and buyback.

    • It very well could be.  Or the current fiat paper scheme could rumble, stumble, and bumble its way towards extinction for the next several years… or even longer.  There is no way to know this now.  Caution, however, IS well advised.

  21. Great answer, although I don’t think they’re trying to save the USD or EUR (just look at the JPY, that’s the model). They are saving THEMSELVES. Drive the price down and buy it dirt cheap. The big banks after all *are* the big CBs. And with a rediculously low USD price they can get sovereign gold very cheapl. They want the Italian and Portugese gold just to name two biggies. And they want it cheap. IMHO.
     
    They know the derivatives shitstorm can’t be held back, and they’re jumping off ship right now and in the following months.
     
    Best all,
     
    R3K

  22. Tiger
    I used the Self Directed IRA services of The Dollar Vigilante.  Ken Johnson was my rep.   We completed the process about a year ago.  In our case, we used Nevada since that is our domicile state. NV is particularly expensive in registering the LLCs needed for the SDRIA but it is convenient to drop by the friendly Sec of State and render unto Caeser.  Each costs $325 a year and we just paid that for our two SDIRA. NV has no income tax so they make up the lack of that revenue with business taxes. Oh well, less costly than a tax hit.  Dollar Vigilante is well known and you can find them on the web. Jeff Berwick heads up that group. They are one of my favorite reads.  After a solid year plus of research and false startes with two other firms, i completed the process. Use caution when dealing with purported SDIRA professionals. If they want you to store with their vaulting services, you may want to look elsewhere. Even TDV recommends you offshore your IRA. I did not consult with my CPA or tax atty since the legal aspects of the SDIRA was pretty solid. SDIRAs can be used to buy many direct investments from farm land, investment properties, paper trades and bullion.  As much as I find the  tax slave masters at the IRS distaasteful, this one narrow channel to get down to the road to a personally held bullion retirement account; for this I am grateful to the boffin in the bowels of the IRS who processed this system
    TDV used me as Whitey the Lab Rat in their early works to perfecting this system. I am also grateful for their patience inworking with me and some of the first adopters of this system. My one variation to the norm is that I keep my phyzz in a home safe and not a safe deposit box. Doc’s rule always prevails in my opinion. The IRS’s ruling on this facility is a gray area so I chose to hold it personally.
    Ed B
    The RMD is something that my custodian, Sunwest Bank, does when we get to that golden time period when we can uncork the PM and start spending the dubloons.  This pivotal date depends on the price of phyzz and an optimal time to sell gold and silver, allocate to another investment medium through the LLC checking accounts, and if the time is optimal, rotate back into phyzz. It might be a matter of waiting until that magic 70.5 age.
    The timing of these events is going to be tricky. I’ll be relying on this site for some timing tips so you need to stick around for at least another 5 years, but it is not difficult to sell these bullion items and have the FIAT (Yuck) wired into the checking account used for the normal retirement age expenditures.
    As for the composition of the bullion, SD Bullion had some nice gold eagles and monster box prices at that moment when we did the buying.  I preferred the US coinage since it is the IRS’s coin of the realm but I have heard others country coins can be used.I like other coinages but there is something about the elegance of those Eagles that appeals to us. Using other coins was not something I researched since my focus was getting this done in a timely manner and well within the legal and tax channel.
    The safe is only opened occasionally for a couple of reasons.  Unlike paper assets, the phyzz does not evaporate .Moths? Yes. Evaporation–no. I know when I opened the safe this year to do a quick asset and inventory evaluation for the custodian, the same number would be in there as last year.  Even my OCD nature does not dictate I check what’s in there year over year.  It is a bit of a comfort to know that there will be no changes in the number of coins, even if the value does change occasionally or even hourly. I don’t think about values of our PM holdings either, which offers a great peace of mind. It beats the heck out of obsessively check stock and portfolio values hourly on Fidelity.

    • @AGXIIK, Thanks for your reply. I absolutely am looking for a way to hang onto my PMs while in an IRA, but much the info online can be confusing. Will be looking at TDV very closely. Tiger

    • AWESOME! Between TDV, my friend’s Brother (local retirement guru) who has already told me MORE thru his brother than EVERYONE ELSE I have contacted on my own, and AGXIIK’s Road Map, I feel like this “lost cause” is now BACK IN PLAY! 
       
      Thx AGX, your guidance and experience will eventually get me where I want to be! SDIRA, Here I COME! 

  23. Dave, you did great. You miss the whole point on gold and silver. These are true wealth and to measure them in dollars is ridiculous. Only for buying on dips is how you should correlate the two. Look at it this way- as time goes on and the dollar goes away, your purchasing power will multiply exponentially. In history, a man worked for a month for one silver ounce and a year for an ounce of gold. I’m not saying this will happen again, but I am pretty certain the 1/12 ratio will return and you will see multi- hundred dollar silver. In the future, you will need to compare gold to other asset classes to gauge purchasing power. I’m buying every ounce I can get right know. I started buying at $30 and all the way up to $39 and am double hand stacking here in the low 20′s.
     

  24. Roger your comments Ugly Dog I always savor and weigh your commentary  It does not go unnoticed and it is added to my methodologies.  As a business owner for 20 years and seeing the damage the tax nazis can do, I like to operate like Obi Wan Kenobi. “Those aren’t the droids you’re looking for’  I work at being invisible to the IRS  My CPA in San Diego was so good the IRS hated to challenge any of her returns  She worked for one of the big 8.  She was my IRS kryptonite.  In the ‘vil I have a CPA that would rather do battle with the IRS than eat.
    Like all bullies and cowards, the IRS likes soft targets.  Pick on the little guy.  So with some strategic moves, a low profile and staying within the lines that are established by the Tax Payers Compliance Audit software, I’ve been fortunate to never have had the IRS climb up my tan track. Not saying that it could not happen and if the worst occured I can sell my phyzz, take the hit and move on.
    Thank you for keeping your eyes on my posts. Who knows.  If I fall of the wagon I know you’ll set me straight. 
    I did find the long essay I did about 1 year ago when I hired my CPA to give me the full overview of phyzz tax rules  When I get a moment to post it we can check to see how it might affect any one of us  Cheers.  Now I need to take my red pills. 

  25. RGR  I think discretion is the betterpart of valor with these three letter agencies.  I could get all Braveheart and tell them they better wear their ‘brown pants’ too but that just invites unwarranted attention. 
      How I proceed Depends on many factors.
    Sometimes hiding in plain sight works.  Don’t call the witch doctor an SOB until you’re well past his tent.  Smile and nod
    It’s also kind of funny that the iRS will be furloughing their agents several days in the incoming months. Couldn’t happen to nicer folks. LOL

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