Size Matters

Mon, Jul 28, 2014 - 11:49pm

Are you well endowed with a large stack?

As a young ignorant professor, I accepted a position at a college that offered me a job as an "endowed chair of mass communication." They made verbal promises that the endowment would be funded. Well you know what happened… they never endowed it. The “benefactor” had not made the large donation promised and the contract specified it would not be made until she passed away. I had lunch with her one day. She was not that old and in fine health. I should have called CALawyer for advice at that point.

But that small branch of a larger university really wanted to be noticed, so they set up the position anyway. I used to ask for money each year. I told my department chair, “I have this professorship, but I am not well-endowed. He chuckled and then said, “Yes, but in this case, size matters.”

Size also matters with getting ready for the future. This past weekend Gamble put the question to everyone, “How much physical is enough? I thought I was good until I saw a picture of someone's stack, I think there was over a hundred ounces!

First of all, it is never good to compare your metal endowment to pictures others. It can be depressing and guys shouldn’t do that. When I was in college my roommate was a body-builder and he would look at pictures of the muscle-bound hunks flexing their tanned oiled bodies, and it inspired him to work out more. Well in his case, that inspiration was effective because he had a body type that responded to weight-lifting. He was born with it! In my case, no matter how much I worked out (and I did lift with him every day after class), my biceps remained “unimpressive,” as the girls termed it. But I did get strong. Some guys just have a body that will bulk up, and some do not. As for stacking silver, no matter how much I gaze at piles of the shiny metals in my monthly subscription to Stacker magazine, I am unable to get more fiat into my budget to enable a trip down to the LCS without some work or a sensible business deal.

Fortunately, our metals endowments that we are building for ourselves and our families depend not on our body type or someone else’s gift, but on our own desire, needs, and ingenuity in earning the fiat to make the endowment grow.

But a couple of members provided some concrete answers for Gamble:

Erewenguy offered a formula for old guys: “Personally, I am about 65% paper, 25% pm, 10% cash, but then, I'm an "old" guy. At this point in my life living expenses are pretty modest and most new free cash goes into metals for savings rather than for insurance.” I’ll second that formula. My budget is about the same 55% in real estate, 40% in PMs and 5% cash & prep. If the cash grows, it will be allocated appropriately

Icarus also provided a sensible formula for anyone: “your stack times 5 (the estimated appreciation in purchasing power) should be enough to cover all your expenses with a 4% withdrawal rate, assuming that all your government pensions go away.” Simply figure in how many years you’ll need to be supported by that stack and work it in the formula.

Many of us are on a budget and building up a nice stack is not easy. At least it is cheaper these days. A few months after I began in late 2010 I was lamenting that I couldn’t get any silver for under per ounce, that I would have bought much more at if I had only known. When I go to the LCS, I want to be a big player, talk about silver prices and seem important to them. I want to feel the heft of the larger bars, or inspect the gold coins. But as soon as I drift to the cull box of old Morgans or look at the odd generic rounds, they turn remind me to hurry up and make my selection.

But is having the largest stack possible always the best? My wife is far less concerned with the size of my endowment than other factors. She wants to pay off the house and store away enough food and other necessary goods so that we do not struggle to survive. She would rather stock up on toilet paper, toothpaste, her special feminine cabinet in the bathroom, cleaning supplies, an extra broom, detergent, bleach and other such stuff. But my vain heart would much rather go to the coin or gun shop to get things I may need, rather than Wal-mart to get things I will need.

Dr Jerome: Hey honey, how about tonight we go out to dinner, a movie, and then, you know, the kids will be at their friend’s apartment, and we can, you know …

Mrs Jerome: Well, Romeo, we could do that if you hadn’t spent all our money on silver, cutting short our “personal pharmaceutical” budget, you know… with the next one, you get to nurse and change all the diapers.

So clearly we need to prepare in other ways to augment our stacks of metals. The prices of some goods will inflate as the dollar declines, but the prices of other goods may remain somewhat stable or even deflate. As a part time real estate investor, I am expecting the price of homes to continue to languish and perhaps even fall. I will be waiting with my modest stack when they hit bottom again. The family is growing. My son has a serious girlfriend. And while I may refuse to answer the door in our new economy when certain in-laws come knocking, I won’t turn away my kids and their new families. But more people under the roof will require more beds and at least a little more room. So I value diversity in investing—metals are good, but not neglecting everything else we need to feel civilized and care for those we love.

Even though I already said that size matters, it might be best to diversify rather than having the biggest stack possible, because size isn’t everything. Lately, I have had more time than fiat, so we are continuing to prepare our home, building a small storage area off the back porch, still working on my solar system. The materials can be found on Craigslist or at a used building supply near the home, making the projects very affordable. But If I drop my extra fiat for the month on metal, my tools sit idle and the home remains unfinished.

The problem of metal storage seems to be taken seriously here. In response to Gamble’s query, hindsight101 asked, “One issue for me is safe storage. Banks aren't safe. Is one's home safe? How well can it be hidden? How likely are you to reveal the hiding place with a gun to your head?

Those are good questions for all of us to think about. We have all heard the stories about home invasions. As I get older, I am not so sure I want to challenge a gang of thugs who kick down my door, even with a self-protective gear. I have been wondering if a “faux stack” (imported from China perhaps) in a poorly hidden safe would satisfy a burglar while my real stack is hidden elsewhere.

Silver stacks are heavy. Getting it off the bottom of my pond is a real chore, requiring me to dive down, feel around in the mud until I find it, come back up for another breath, go back down, tie on a rope, then get my son in a second boat to help me haul it up. The silver I hid up in the tree is easier to get down, but took me all day to get it up there. My next project is creating a watertight container that I can lower down into my septic tank. Maybe I should just install a “dummy” double switchbox labeled “security lights” by the back door and keep my gold coins in it.

My best protection is secrecy. I don’t want to call attention to my home or let anyone know I am storing anything of value in my pond, tree, or septic tank.

So we are trying to find that balance between accumulating sufficient metal of an unknown quantity that will ease our transition into the new economy. We had some wise advice posted in the thread the other night that I hope will be reiterated here. How much of stack you should have depends on several factors

  • Silver or gold? Silver has more upside potential. Gold is more stable.
  • How old are you?
  • How many people will be depending on you and how old are they?
  • Do you believe the collapse will be fast, total and disastrous? Or will it be slower, partial, and simply force us into a lower standard of living?
  • Will current debt be written off? Will you get off the hook for your mortgage, or will a bank come take your home after the new economy begins?
  • Will bankruptcy laws still apply? Better not count on it.
  • What do you want your standard of living to be?

Personally, I am working to settle my debts before a collapse. The last thing I want are banksters hounding me after a new economy begins—especially if they suspect I am holding out a stack somewhere based on my IP address and participation here. We have no guarantees that your bank loans will be forgiven or written down. If my mortgage company collapses, the note will be purchased nad the new holder will seek repayment—perhaps in revaluated currency. We should expect that the banks will survive and will still have government lapdogs to help them squeeze their debtors. And if you don’t like our government now, just wait until they improve it (for your own good) after the next collapse.

I am stacking and prepping in stages. We initially stacked with all we could (at high prices, I might add) and then started prepping. Later, after the price fell, we switched to stacking more. These days we are back to prepping for the lifestyle we want, with the perspective of our age and trajectory of our children’s lives.

As for metals trading, I have been trading JDST (short 3x ETF) and JNUG (long 3x ETF) with some success, taking profits when I call it right, holding on for the ride when I am wrong. So far so good. I just can’t seem to get trading out of my blood. It keeps me engaged in the site and the metals world more than just simply stacking. Besides, what else will I do with my employer IRA? BTATFH?* I suspect the fund will be MyRA’d* someday no matter what I do with it.

Well, I have asked more questions than I have answered here, but the answers are different for all of us.

As for stacking, yes, bigger is better. You will be thankful for every ounce you were able to add to your endowment. But do not neglect the toilet paper and a roof over your head.

Hey honey, about that date?

* Buy the all time f---ing high.

* the act of government herding of all IRAs into T-bills someday

About the Author


Jul 30, 2014 - 2:35am

more on UCLA flood

By the way, that photo is courtesy of the Daily Bruin, official student newspaper of UCLA.

You would think this would be considered embarassing. But, they're running another few photos.

Why did these people stand around and not divert the water to empty fields and keep it out of the building?

A few inches of sand bags laid by those 100's of bystanders would have prevented ongoing flooding.

Are California tax payers now going to have bail out the LA DWP and UCLA?

Jul 30, 2014 - 2:33am

(No subject)

Atlas V rocket launches the LDCM (Landsat) spacecraft for NASA
Jul 30, 2014 - 2:32am

Look its so simple.

Look its so simple. Rothshilds via China and own private gold reserves potentially in Hong Kong under Chinese protection hold USD( Rocks ) in a thread. They showed it in 2011 by moving gold price up to 1900. That was enough for ROCKS to understand they can not really fight this game, they have to agree to share reserve currency as opposed to trying to suppress competition.

To launch Yuan as reserve currency and fasts, China needs markets within their monetary reserve curency printing which are relatively unburdened with loans, have good collateral ( resources/technology) and can not competitively opt for other (USD, EUR) finance. Which means Russia first hand, plus perhaps Central Asia and some Souht East Asia later.

The critical job- under the threat of USD value collapse vs. gold under the agreement ITS USA (ROCKS) job to provide these borrowers for Roth coming second monetary Empire ( China).

And that is EXACTLY what the USA is doing. Fighting and FINANCIAL sanctions send both capital ( Russians are moving it out of Europe USA) and debtors in need ( Russian enterprises) to into CHINAS CLAWS at rocket speed.

China does not have to do much at this stage. The work is on the USA to reduce its own sphere of influence. Europe can not object due to military weakness and USA control over it.

Gaza: Israeli (Roths) shelling leads to Anti- semitism in Europe. Jews as well will start to move assets out of Europe if things gets ( i think they will) dire. USG is not supporting ISRAEL fully. So assets may start leaving USA as well. Where to? Asia.

So these are coordinated moves to both move capital to Roth control in Asia and create debtors with good collateral for coming Eastern Money Supply Empire. Roths are back, USA delivers the influence spheres, USD stays in one piece. Obama at helm, 2 more years of time as no one knows after such performance what the next elections may bring, but for sure USG needs to prepare for mass protests. China waits to get the promised delivery of Russia and capital.


Spartacus Rex
Jul 30, 2014 - 2:27am

@ Strongsidejedi WTH?

WHO do you otherwise imagine that the derelict Janet Napolitano ANSWERS TO?

Cheers, S. Rex

StrongsidejediSpartacus Rex
Jul 30, 2014 - 2:22am

@SR - moonbeam isn't the problem

Recall who the leader of the University of California system is

Janet Napolitano.


Spartacus Rex
Jul 30, 2014 - 2:20am

@ Strongsidejedi

And that lowlife/ red diaper baby, Yaley JD Gov. Moonbeam is no doubt is simply twiddling his thumbs during all of this.

Cheers, S. Rex

Jul 30, 2014 - 2:19am

UCLA Flood photo

This photo is a remarkable testimony to the ambivalence people have during a disasterous flood at UCLA.

This photo shows the UCLA School of Management. But, look at what is going on with the students and crowd. Nothing. They are standing around as the place floods.

I can't think of a better example of ambivalence.

A 90 year old pipe broke along Sunset Blvd above the UCLA campus. 8 to 10 million gallons of water flooded down the hill into the center of UCLA's campus.

Pauley Pavilion had a 0 million renovation paid for my the State of California. Tonight, video is running on every LA area news station with waterfalls running down the hill, flooding two parking structures, destroying hundreds of vehicles, flooding multiple campus buildings including Pauley Pavilion.

Pauley Pavilion would be off the left side of this photo.

Note the hundreds of UCLA students who are simply standing around as the water floods and destroys these buildings. There is no sense of urgency. No sense of action. No sense of needing to pitch in to protect the campus.

Tonight, I just saw the Public Info Officer for LA Fire saying that he is a UCLA grad and that he has season tickets in Pauley Pavilion. But, instead of channeling the water and preventing more water from inundating these cars, buildings, and facilities; the people were told to move off, do nothing, and "stay safe".

Instead of teaching college students to do nothing and "stay safe", maybe these people should have pitched in, set up barriers and prevented the water from continuing to flood these buildings.

Instead of teaching these students to pitch in to help and take emergency steps in order to limit damage, they are taught to do stand around and do nothing as the school is literally flooded out.

Several TV news channels showed co-eds on boogie boards towing through the 1-2 feet of water. So, instead of doing something about the problem, they decide to ignore the dangers, ignore the damages, and just play as the place floods.

UCLA is saying that they will not know the damage until tomorrow.

I got news. The football field is flooded. Pauley Pavilion is flooded. Hundreds of cars are a total loss. I'm hoping that nobody drowned and died in the lower levels of these buildings and parking structures.

One person was interviewed when she tried to get her car out of the lot as the water was rising. She was told that the water was rising and she couldn't drive her car out! So, instead of driving her car out, she left her car in the structure and let her car be destroyed.

This my friends is the reason California is so messed up.

Ambivalence in the face of disaster.

Just look at the photo and tell me what UCLA teaches these young people.

"Do nothing" and "Stay Safe".

Jul 30, 2014 - 2:17am

@ RockerBoxer

Perhaps I was presumtious. Forgive me. I've reached my conclusion with a lot of study, and those conclusions are held with conviction. That said, they fit with the conviction of people much smarter than I who have gone down this road before.

Spartacus Rex
Jul 30, 2014 - 2:15am

@ Rocker Boxer- "Why Not?"

Because most herein are able to utilize their God given commonsense and recognize that it is all one giant corrupted casino / ponzi scheme and the fraudulent fiat Paper Financial Markets are totally / directly sitting under the Sword of Damocles.

Cheers, S. Rex

Jul 30, 2014 - 2:04am

"I don't think most people

"I don't think most people that frequent this site do so for trading in and out of physical metals."

Why not?

Subscribe or login to read all comments.


Donate Shop

Get Your Subscriber Benefits

Private iTunes feed for all TF Metals Report podcasts, and access to Vault member forum discussions!

Key Economic Events Week of 9/28

9/29 8:30 ET Advance trade in goods
9/29 9:00 ET Case-Shiller home prices
9/29 10:00 ET Consumer Confidence
9/30 8:15 ET ADP employment report
9/30 9:45 ET Chicago PMI
10/1 8:30 ET Personal Income and Spending
10/1 8:30 ET Core Inflation
10/1 9:45 ET Markit Manu PMI
10/1 10:00 ET ISM Manu PMI
10/2 8:30 ET BLSBS
10/2 10:00 ET Factory Orders

Key Economic Events Week of 9/21

9/21 8:00 ET Goon Kaplan
9/21 10:00 ET Goon Evans
9/21 Noon ET Goon Brainard
9/21 6:00 pm ET Goon Williams & Goon Bostic
9/22 10:30 ET Chief Goon Powell on Capitol Hill
9/22 Noon ET Goon Barkin
9/22 3:00 pm ET Goon Bostic again
9/23 9:00 ET Goon Mester
9/23 9:45 ET Markit flash PMIs for September
9/23 10:00 ET Chief Goon Powell on Capitol Hill
9/23 11:00 ET Goon Evans again
9/23 Noon ET Goon Rosengren
9/24 1:00 pm ET Goon Bostic #3
9/24 2:00 pm ET Goon Quarles
9/24 10:00 ET Chief Goon Powell on Capitol Hill
9/24 Noon ET Goon Bullard
9/24 1:00 pm ET Goon Barkin again & Goon Evans #3
9/24 2:00 pm ET Goon Bostic #4
9/25 8:30 ET Durable Goods
9/25 11:00 ET Goon Evans #4
9/25 3:00 pm ET Goon Williams again

Key Economic Events Week of 9/14

9/15 8:30 ET Empire State and Import Price Idx
9/15 9:15 ET Cap Ute and Ind Prod
9/16 8:30 ET Retail Sales
9/16 10:00 ET Business Inventories
9/16 2:00 ET FOMC Fedlines
9/16 2:30 ET Powell Presser
9/17 8:30 ET Philly Fed
9/18 8:30 ET Current Acct Deficit

Key Economic Events Week of 9/7

9/9 10:00 ET JOLTS job openings
9/10 8:30 ET Initial jobless claims
9/10 8:30 ET PPI
9/10 10:00 ET Wholesale Inventories
9/11 8:30 ET CPI
9/11 9:45 ET Core CPI

Key Economic Events Week of 8/31

9/1 9:45 ET Markit Manu Index
9/1 10:00 ET ISM Manu Index
9/1 10:00 ET Construction Spending
9/2 8:15 ET ADP employment
9/2 10:00 ET Goon Williams
9/2 10:00 ET Factory Orders
9/3 8:30 ET Initial jobless claims
9/3 8:30 ET Trade Deficit
9/3 12:30 ET Goon Evans
9/4 8:30 ET BLSBS

Key Economic Events Week of 8/24

8/24 8:30 ET Chicago Fed Idx
8/25 10:00 ET Consumer Confidence
8/26 8:30 ET Durable Goods
8/27 8:30 ET Q2 GDP 2nd guess
8/27 9:10 ET Chief Goon Powell Jackson Hole
8/28 8:30 ET Pers Inc and Consumer Spend
8/28 8:30 ET Core Inflation
8/28 9:45 ET Chicago PMI

Key Economic Events Week of 8/17

8/17 8:30 ET Empire State Manu Idx
8/17 Noon ET Goon Bostic
8/18 8:30 ET Housing Starts
8/19 2:00 pm ET July FOMC minutes
8/20 8:30 ET Jobless claims
8/20 8:30 ET Philly Fed
8/20 10:00 ET LEIII
8/21 9:45 ET Markit flash PMIs July

Key Economic Events Week of 8/10

8/10 10:00 ET Job openings
8/11 8:30 ET Producer Price Idx
8/12 8:30 ET Consumer Price Idx
8/13 8:30 ET Initial jobless claims
8/13 8:30 ET Import Price Idx
8/14 8:30 ET Retail Sales
8/14 8:30 ET Productivity & Unit Labor Costs
8/14 8:30 ET Cap Ute and Ind Prod
8/14 10:00 ET Business Inventories

Key Economic Events Week of 8/3

8/3 9:45 ET Markit Manu PMI July
8/3 10:00 ET ISM Manu PMI July
8/3 10:00 ET Construction Spending
8/4 10:00 ET Factory Orders
8/5 8:15 ET ADP employment July
8/5 9:45 ET Markit Service PMI
8/5 10:00 ET ISM Service PMI
8/6 8:30 ET Initial jobless claims
8/7 8:30 ET BLSBS for July
8/7 10:00 ET Wholesale Inventories

Key Economic Events Week of 7/27

7/27 8:30 ET Durable Goods
7/28 9:00 ET Case-Shiller home prices
7/29 8:30 ET Advance trade in goods
7/29 2:00 ET FOMC Fedlines
7/29 2:30 ET CGP presser
7/30 8:30 ET Q2 GDP first guess
7/31 8:30 ET Personal Income and Spending
7/31 8:30 ET Core inflation
7/31 9:45 ET Chicago PMI

Recent Comments

by ipreferPHYS, 10 min 4 sec ago
by ricardofunk, 29 min 31 sec ago
by surfeitndearth, 32 min 37 sec ago
by matt_, 37 min 25 sec ago