Exit Strategy

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June 17, 2011 - 9:23am
#1
donpaulo
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Exit Strategy

greetings to you all. I am relatively new to the PM game but like to believe I am a quick learner. I also am hoping that one of the best ways to learn is to brain storm an idea and see where it leads.

So let me (us) know;

What is your exit strategy ?

What do you plan to do with your hoarded metals  ? I don't think it matters so much if its physically buried in a safe place or part of a silver hat or even if its held in paper or digital form. We are all buyers and long term holders of the shiny stuff but to what end ?

What do you plan to use your stored wealth for ?

looking forward to some lucid discussion

and thanks for reading

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June 17, 2011 - 11:02am
#2
SilverTree
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Hold & use as need

Hold & use as need.

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June 17, 2011 - 11:20am
#3
GuerrillaCapitalist
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Silver for Farmland

I have a long term goal to acquire farmland in order to secure food production for my extended family and clan. Also to sell and barter excess production to my neighbors.  I believe local food production will be vital as transportation either breaks down or becomes prohibitively expensive.  I also intend to build high tech, energy efficient houses on the properties to rent for income and provide housing for labor.

We have a home and land in the Ohio River Valley and are always looking to extend our holdings. I figure when the crisis is in full tilt, a little silver will buy a lot of land from the overextended, credit ravaged poor souls .

We belong to a tight knit community of like minded folks. Hardscrabble dirt farmers that are directly related to the original settlers and have survived 200 years of whatever has been tossed their way. My family's been in the area longer than the state has been an entity, so this is my niche.

I'm glad you started this thread and am looking forward to seeing where it goes.

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June 17, 2011 - 12:29pm Response to: Silver for Farmland
#4
Jake
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Gold and Silver Exit Strategy

I'll spend it as I need to. In the case of hyperinflation or hyperstagflation, I won't want to hold fiat for longer than I need in order to buy what I need.

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June 17, 2011 - 10:05pm Response to: Gold and Silver Exit Strategy
#5
donpaulo
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so spend it as one needs

so spend it as one needs it

or to acquire a "better" asset or perhaps more "functional" or something more "useful" with greater value.

Land and the food is a fine plan if you have the chops for doing the work. Fruit trees need at least a few seasons before they yield anything of value. Bees and honey are also a niche for the farmer to use as to my knowledge honey does not spoil. Brewing whiskey might also have merit as well.

cash flow via rents is also a fine idea.

life on the land can be a wonderful lifestyle but I wonder about securing the property especially come harvest time.

I decided to buy property outside the USA for my main residence. I also continue to stack physical in the hopes that property values adjust to a point where say a 1000 ounces of silver might actually be enough to buy a title outright. In the case of hyperinflation I have opened accounts in the USA, the EU and Asia hoping that by spreading my wings I can seek to purchase with whichever fiat is strong at the time. The plan also includes an imported food shop so I can access prices on the wholesale scale rather than retail one along with the unwashed masses.

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June 18, 2011 - 2:39pm Response to: so spend it as one needs
#6
Captain Silver
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It will be money

There is a growing group of informed people in the blogosphere defending the position that this time around we won't need to exit the phys PMs.  Gold and silver will be the currency.

Most people I know (including myself) are buy and hold phys until the end.  If the the S never HTF, then I'll have a wonderful investment to pass on to my children.

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June 18, 2011 - 4:38pm
#7
PastTense
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The long term physical

The long term physical holders of PMs have exactly the same exit strategy as cash holders do--convert to physical goods and services as they are needed. They simply view PMs as a better way to store their wealth than cash (cash loses value with inflation, PMs don't--and most here expect a lot of inflation)

But this forum seems to be dominated by short term traders who are trying to  get rich with trading and their exit strategies have to do with predicting exactly when PMs will reach a temporary top or bottom, they selling or buying....

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June 18, 2011 - 4:58pm Response to: The long term physical
#8
Prize Fighter
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I've already exited into PMs.

"Exit strategy" in regards to PMs to me is like asking, What are you going to do with all your money?  My silver/gold is my money.  It's a store of wealth regardless of market and political gyrations.  I think my money has a good chance to greatly increase it's purchasing power over the coming transition, but my plans for it are the same before or after the coming collapse.  Save it till I want to invest it.  I don't consider it invested right now, but I do consider it safe from counter-party risk and that's the only place I want to be.

PastTense wrote:

But this forum seems to be dominated by short term traders who are trying to  get rich with trading and their exit strategies have to do with predicting exactly when PMs will reach a temporary top or bottom, they selling or buying....

I agree with this.  A lot of smart, knowledgeable people on here but many got that way because of extensive trading and understanding of the market.  Can one honestly say they can separate a lifetime of trader mentality from sound money reasoning?  No single rain drop is responsible for the flood so just make sure you don't step over a '64 quarter to pick up a '11 dime.

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June 18, 2011 - 5:06pm
#9
Eric_2
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My long term plan

I am a long term stacker/prepper, no trading.  The way I see it, silver will at some point in the next few years become extremely valuable, either because of the true physical shortage of the metal and it's need for industrial and high tech applications, or the general public will get on board and silver will go truly parabolic.  Many experts such as Adrian Douglas of GATA see silver as high as $6,000/oz.

At that point I will cash out some of my physical into other necessities or assets (such as gold, if the GSR falls below 12:1).

People around here may not admit it, but at some point silver WILL enter a bubble (not at $50, but maybe at $6,000 - $8,000 per ounce!).  When that happens, the stock market will have probably cratered big time.  Then there will be a once in a lifetime opportunity to sell some metal and get back into equities.

Mike Maloney details this particular strategy in his book about investing in gold & silver.

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June 18, 2011 - 5:14pm
#10
tmosley
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I am waiting for silver to

I am waiting for silver to reach parity with gold (and overshoot) in an industrial user panic.  Once we hit that, I will trade most of my silver for gold.

With the gold, I will wait out the dollar collapse, and inch my way into equities and real estate after those markets have collapsed and everyone wants to stay away, and everyone is scrambling for gold.  From there, I collect dividends, rent, and enjoy life as one of the world's new oligarchs.  I'll probably use much of that income to fund research into energy and food production, space travel, life extension, and other fields that interest me.

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June 18, 2011 - 6:06pm Response to: I am waiting for silver to
#11
Captain Silver
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S/G Parity

tmosley wrote:

I am waiting for silver to reach parity with gold (and overshoot) in an industrial user panic.  Once we hit that, I will trade most of my silver for gold.

With the gold, I will wait out the dollar collapse, and inch my way into equities and real estate after those markets have collapsed and everyone wants to stay away, and everyone is scrambling for gold.  From there, I collect dividends, rent, and enjoy life as one of the world's new oligarchs.  I'll probably use much of that income to fund research into energy and food production, space travel, life extension, and other fields that interest me.

Hat Tip!  Silver/Gold parity sooner than we think I suspect.

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June 19, 2011 - 3:16am
#12
donpaulo
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good stuff so far thanks so

good stuff so far thanks so much for posting.

I think the argument one could make about say a $6000 silver economy would be to ask things like "then at what price is gasoline, corn on the cob or an acre of arable land ?"

My conclusion is not so much that the PM's themselves will make massive returns but rather is a store of money for use in the future, hence the title "exit strategy".

Could silver go into a parity with gold ? sure perhaps. Unlikely but as Nassim Taleb says that anyone who forecasts the future is out to lunch.

So this idea is to either flip silver into gold and or fiat market assets at "discount" prices is a best case scenario. Nobody here will be complaining if such an instance occurs.

However this scenario, ie the fiat priced markets being way down, yet the prices of PM are to the moon seems too good to be true. I think to maximize your returns in such a scenario then timing is the critical element. It won't take a rocket scientist to decide to liquidate your PM into say DOW holdings when the ratio is 1:1. The question is how will you do it.

On the basis of chance I would say a silver parity with gold and a gold parity with the DOW are all unlikely events which many here would love to see proved true. Indeed its perhaps a driving reason behind the accumulation. Skepticism has many merits however and I remain unconvinced it will happen as simply as it is forecast or if it does happen the timing of the move will be critical to realize max gains.

What I find far more likely will be that say DOW inflation will move with PM inflation, or deflation will have a coupling move downwards. The investor will be left to time his entrance out of PM and into markets as best he can. Those who have diligently stacked will hopefully be rewarded...

The last possibility would be that DOW inflates up and somehow PM deflate downwards. Its not an impossible conclusion albeit very extremely unlikely.

If the market crashes and PM moves to the moon, then you buy in at a price that gives you a nice return.

If both the market and PM crash or alternatively hyperinflate then what is the exit strategy ?

If the market hyperinflates and PMs crash then I personally will be buying more PM.

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June 19, 2011 - 4:03am
#13
Basturd Toadflax
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Exit Strategy

I think the mistake that is being made here is the value of Silver/Gold in dollars.  Unless your exit plan is to cash in for dollars of course.  For me, real estate is the exit strategy.  I currently have a good start of rental properties but will buy far more.  So the real question is what is your Silver/Gold worth in whatever it is you plan to purchase or trade for when other currencies become worth -less to worthless.?    What allot of folks fail to understand IMO is that taxes are their #1 expense in life and they need to reduce them or eliminate them as best they can (legally of course).  You need to maximize your earnings for exponential growth.  

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June 19, 2011 - 1:32pm Response to: Exit Strategy
#14
Jake
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End Game--Become a Farmer?

Basturd Toadflax wrote:

I think the mistake that is being made here is the value of Silver/Gold in dollars. 

IMO, you will not want the FIAT in exchange for their silver or gold. Once you've given up your preservation of purchasing power, you won't want that paper. Acceleration of hyperinflation removes value so rapidly, that you'll want to spend it on what you need within minutes of exchanging your gold/silver for it. Right now, it seems as if inflation is gradual, almost invisible to your every day life. But once the confidence in FIAT is perceived to be lost, there will be no time left to prepare. The following vid describes the exponential onslaught of hyperinflation. As soon as the evil ones can no longer continue their Ponzi scheme, grocery shelves will empty and the barter value of FIAT will decline so quickly, that within days you'll want nothing except gold/silver.

IMO, unless you're prepared to be a farmer where your food comes from your own land, even then, you'll need to buy seed and fertilizer with something, the end-game will be one of spending gold/silver rather than exchanging it for something that appears to be cheap in relative value to what you've always been used to. This vid also describes the "Triple-Curve". It's an excellent way to understand how hyperinflation accelerates so rapidly. 

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June 19, 2011 - 3:28pm
#15
Eric_2
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Donpaulo, I too am enjoying

Donpaulo, I too am enjoying and learning from this conversatio, thanks.for getting it.started.

The important thing to realize about silver is it gets USED UP. At high enough prices I'm sure people will begin to recycle, but that is a ways off. I saw an article some months ago that the USGS predicts that silver will be the first element on the periodic chart that gets completely used up (about 20 years hence is the estimate). I'll see if I can find that article and post a link.

So if the economy goes to hell silver will increase in value. But if by some bizarre miracle, we stumble through somehow without collapse, silver still stands to go to the moon due to the shortage and it's need for so many applications, where there are no other elements that can replace it.

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June 19, 2011 - 3:59pm Response to: Donpaulo, I too am enjoying
#16
Jake
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This might be the Article Eric

Eric_2 wrote:
I saw an article some months ago that the USGS predicts that silver will be the first element on the periodic chart that gets completely used up (about 20 years hence is the estimate). I'll see if I can find that article and post a link.

This might be it:

http://www.rapidtrends.com/2009/09/30/some-interesting-thoughs-on-silver...

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June 20, 2011 - 5:58am Response to: End Game--Become a Farmer?
#17
donpaulo
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becoming a farmer

Jake wrote:

Basturd Toadflax wrote:

I think the mistake that is being made here is the value of Silver/Gold in dollars. 

IMO, unless you're prepared to be a farmer where your food comes from your own land, even then, you'll need to buy seed and fertilizer with something, the end-game will be one of spending gold/silver rather than exchanging it for something that appears to be cheap in relative value to what you've always been used to. This vid also describes the "Triple-Curve". It's an excellent way to understand how hyperinflation accelerates so rapidly.

Thanks for posting the video.

As a student of History I think that the some of the major factors differentiating todays scenario and that of 1920s Germany were simply glossed over in that presentation. However its unpossible to cover all aspects of that era in a 20 minute speech despite its good intentions.

I think for lack of a better tool for measuring gold and precious metals we are forced into the dollar system. Far superior to measuring in Yen or Renminbi. I guess to some degree they are all fatally flawed in one way or another.

Regarding farmers I think the fulcrum will be securing ones harvest and getting it to market. Transportation systems the world over are based on abundant cheap oil which is fine until oil is no longer abundant or cheap. Since oil at present is finite I think its a fair assumption to make until such time as a black swan event proves such conclusions false. (algae oil, mushrooms sugars etc etc)

As far as seeds and fertilizer go, there are always alternatives. Crop rotation is a proven method of producing caloric capacity sufficient to feed pre industrial England. Perennials are also a viable option to annuals in terms of yield, and perhaps most importantly use of water to bring the crop to harvest. Although perennials fly in the face of the rotation system however an orchard can have sufficient NPK delivered by the farmer adapting a chicken farm and by collecting "night soil".

I don't even want to go into how many calories of plant material go into making 1 calorie of meat but its a losing formula. With ratios of 20:1 meat may quickly find itself as rare on our dinner tables as it historically has been.

anyway I have gotten enough off topic to make a thread jack which I don't want to do.

I think we all agree that the problem does not appear to be getting better any time soon and that stacking is a time proven way to ensure purchasing power. If any additional benefits can be gained through stacking we here will be all the better. Perhaps at another time we can discuss what happens to farming cultures in a world of violence.

keep stacking ya'll

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June 20, 2011 - 6:57pm Response to: becoming a farmer
#18
Zwipped
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Convert silver to gold

20% when GSR is 25

20% when GSR is 20

30% when GSR is 15

20% when GSR is 10

Hold 10%: You never know

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June 20, 2011 - 7:24pm
#19
Bill Brasky
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Hookers & Blow

I only hold physical for the worst case scenario. If we don't get to the  worst case I will leave it to my nephews and when I die they can fly to Vegas and binge on hookers and blow.

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June 20, 2011 - 8:30pm Response to: Hookers & Blow
#20
Jake
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Don't Be Silly

Bill Brasky wrote:

I only hold physical for the worst case scenario. If we don't get to the  worst case I will leave it to my nephews and when I die they can fly to Vegas and binge on hookers and blow.

Pete Rose Never Did Anything Like That! Get with the Program!

He Just Wanted To Smell Like a Man:

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June 20, 2011 - 9:40pm
#21
Bill Brasky
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Charlie Hustle

He got his nickname for more than one reason. One of the greatest human beings I've ever met.

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