http://the-moneychanger.com/answers/ten_commandments_for_buying_gold_and_silver
Pretty good article here.
I have been buying more silver than gold since gold ties up more of your wealth in smaller coinsm etc.
I absolutely agree with the general principles outlined in those 10 Commandments below except IV:
Ten Commandments for Buying Gold and Silver
I.Always take delivery.
II.Never buy premium if you can avoid it.
III.Buy bullion for business, numismatics for fun.
IV.Buy silver first, then gold.
V.Buy small gold first, then large.
VI.Never buy exotic coins or modern rarities or anything you don't understand.
VII.Know your dealer.
VIII.What governments can't find, they can't steal.
IX.Never swap bullion coins for U.S. $20 gold pieces.
X.Never break the law.
However, I disagree with some of their answers to their FAQs.
For one, I don't believe people should be
buying government issued gold. I prefer the term acquiring as opposed to buying, because I don't really consider it buying gold. I view it as an exchange of (bad money) for (good money). Taking one form of currency that is subject to all sorts of counter party risk (ie: inflation, devaluation, government promises, government debt, etc.,) and is rapidly loosing purchasing power, for another form of currency, one that is increasing in purchasing power, and has proven itself to be a reliable & historic store of value for the past 6,000 yrs.
But anyways, back to my point, I don't think most people understand that when they have government issued gold, they are NOT the owners of that gold. They are merely the bearers of the gold. The gold is still owned by the government and is subject to recall. If and when that were to occur, the government would only be required to compensate you for the face value listed on that coin, regardless of the value of the gold content in the coin. These days, many argue that the chances of confiscation are remote, and I may tend to agree, however, precedent for confiscation has already been set. Furthermore, we see so many things taking place that leaves a great deal of uncertainty when it comes to government issued gold. it wasn't too long ago that Saddam was getting the keys to American cities, being considered a friend and ally, next thing you know, he is an enemy. The same with OBL, Noriega, etc., and not just politicos, but also countries too. Iran, Iraq, Pakistan, South Africa etc., have all gone from friend to foe. I remember when South Africa was under sanctions. Good luck liquidating a krugerrand during those times. I believe privately issued gold is far superior to anything issued by any government.
In addition, if at any time you chose to leave a particular country, having your money in government issued gold, makes you subject to arbitrary laws, rules & regulations that may be put in place precluding your ability to take money out of the country. Try taking more than $50 out of Nigeria?
Where I most vehemently disagree with that page, is where they say that the purity of the gold makes no difference. It makes all the difference in the world. Only GOLD that is 999.9% pure can be considered monetary gold that would be recognized as a gold currency in 194 countries around the world. in addition, if the gold that you acquire is not 999.9% pure, or not LBMA certified, it is not considered monetary gold currency by banks or financial institutions around the world. It is also taxable. Furthermore, if at any time, you want to liquidate what you have and exchange it back into fiat paper currency, the burden of proof is on you to prove that what you have is genuine gold, and not something else. Gold coins can and have been counterfeited from time to time. there's plenty of gold plated tungsten out there.
I believe that there is a huge potential upside for silver, unfortunately HSBC has such a huge position in silver, and despite Andrew Mcguire's revelations 2 yrs ago, we still have not seen any CFTC action against HSBC. While silver is certainly more affordable for the average person, it is also more vulnerable to price suppression, and manipulated volatility. Don't get me wrong, I believe Gold is also manipulated & surpressed, however, its far more difficult for them to manipulated the physical market for gold than it is for silver. I'm too adverse to volatility to exchange fiat into silver at this time, ...especially not with HSBC's position in silver.
As for their assessment that gold should be acquired in smaller weights at first, I wholeheartedly agree. Smaller transaction friendly weights allow you to be far more flexible, and don't require you to liquidate a larger unit if you find yourself in a temporary cash crunch.
It doesn't even have to be a poop hits the fan scenario., it can be something as simply as having to get out of town in a hurry (a tornado or hurricane heading in). As we move closer & closer towards the centre of the galaxy, increased solar activity can wreak havoc on satellites, cause bank machines and ATM machines to go down. Last year during the riots in Egypt, authorities shut down all ATM machines. How valueable do you think a piece of certified monetary gold would have been for those who needed to get groceries during that time? And with the outright theft of customer accounts by MF Global, and the CME doing nothing about it... I don't trust banks with my money. I'd prefer to have it stored in gold and vaulted, but that's my personal preference. Others may prefer to have it stored in gold and in their own possession. But whatever you do, make sure you have options. I think Darwin was once credited with saying "It is not always the swiftest, or the strongest that survive, ...but rather those most adaptable to change" ...or something to that effect. That's why I choose the option that empowers me with the most flexibility in any potential scenario.