Marla asked,

“Someone whose opinion I respect says they personally hold their gold, and do not have it in a safe deposit. Is that wise? How could one possibly secure it in that way and feel that they had done a good job?”

Continuing from our mastermind meeting, Michael Maloney answers question #4:

“Well, I don’t recommend doing one thing or another. What I do is tell everybody to do their own due diligence and do some research on these things and come to their own conclusion.

For me, I do not use a safe deposit box.

I hold the bulk of my precious metals at a third party depository that specializes in doing that and it’s fully insured…and, that’s Brinks Security. The rest I hold myself. You can do a whole lot of creative things. You can hide it creatively. You can put it in a floor safe or a wall safe or something like that. I don’t recommend one particular thing over another.

I do know that during 911 the banks were closed for an entire week. I also know after gold was nationalized in 1933, the government posted Federal agents at the banks to observe people taking things out of their safe deposit boxes. I also know that when you put it in a safe deposit box it is not insured. FDIC insurance only applies to deposits in checking accounts and savings accounts. It does not cover anything in a safe deposit box. So, you need to add that to your homeowners insurance, it’s a rider on your homeowners insurance.

And, I also know some horror stories…

After a certain number of years, if you don’t have contact with the bank, the bank is supposed to turn the contents of safe deposit boxes over to the state. The state liquidates those and adds it to the general fund to help offset the deficit.

There was a newspaper article about a lady up in the Bay area in California. Her husband was dying, he told her to go to the safe deposit box to get the will, and when she went to the bank the contents were turned over to the state a few years earlier…and this was at her bank where her checking account was. She was paying the bills on that safety deposit box every month. They turned it over to the state. In there was also a bunch of her grandmother’s jewelry that was left to her that had been appraised about $80,000 before she put it in the safe deposit box years earlier. When she got back, when she tracked all of this down, the papers had all been shredded and she got a $1,800 check from the state for the contents.

My office manager and her safe deposit box…her branch closed, they moved the safe deposit box, and the bank basically lost her safe deposit box for a month. They couldn’t find what branch it was transferred to. And so, I don’t really trust safe deposit boxes that much myself.

So, I don’t use them.

You have to decide what’s best for you, though. If you’ve got a decent quantity of precious metals, if it’s more than $25,000 or $50,000, then I do suggest having some of it at a storage facility, a depository.

Thank you very much, Marla, for the question. I hope that answers it.”

Michael Maloney of www.GoldSilver.com

To Your Success,

Larry Corbi

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Jason B asked,

“What do you think silver’s real price would be right now if it was allowed to trade purely on supply and demand fundamentals and not heavily manipulated? Is the possibility of 4 digit silver in a few years realistic?”

Continuing from our mastermind meeting, Michael Maloney answers question #3:

“Yeah, the possibility is realistic, but it’s really the wrong question. The question should be ‘how much more stuff can silver buy me?’ The dollar is this moving target…it’s a smoke screen. Before 1934, the dollar was worth 1/20th the ounce of gold. After 1934, it was worth 1/35th of an ounce of gold.

Gold became free trading in 1971 and it’s value went up. It was actually the dollar’s value falling. Right now, the dollar’s value is 1/1,000th of an ounce of gold and it’s value is going to continue falling. Soon, it will be 1/10,000th of an ounce of gold.

That’s what currency does, it loses value. REAL MONEY retains its value. But, the question should be ‘how much stuff will silver buy.’ And, I know from studying past history that gold should probably one day buy 4-5 times more stuff than it does today. Silver is under valued compared to gold.

For the first time in human history there’s less silver available for investors to buy than there is gold.

This is never happened before. Currently, there’s about 5 times more gold on all of the exchanges available for investors to buy than there is silver. In the free markets, when it comes to supply and demand, and something called the ‘price discovery mechanism’ the free markets are marvelously efficient at balancing supply and demand. They do that through price.

In a gold and silver rush, when the world finds out silver is actually more rare than gold you could see silver just explode and it’s entirely possible that silver can trade at a higher price than gold. That sounds crazy. It sounds unrealistic. Google ‘tulip mania’ and take a look what happened in the year 1637. You’ll see that dumber stuff has happened and silver actually selling for a higher price than gold.

Right now it’s more rare than gold, therefore the possibility exists that in a rush when a whole bunch of investors try and buy this stuff all at once then you can see it go to prices that are higher than gold…but the real question is

‘How much stuff will it buy?’

If gold should buy somewhere between 4-5 times more real estate some day in the future say and silver is 1/60th of the price (currently), in a peak you should see silver go to at least 1/10th of gold’s price. Possibly as high as gold, but I’m thinking 1/10th is good target right now, so that means it will outperform gold by 6 fold. So, if gold can buy 4-5 times more real estate, then that means silver can buy 30 times more real estate some day in the future.

THAT IS HUGE!

…and I’m not passing that one up. I’m buying all of the silver I can.

So, thank you very much, Jason, for your question.”

Michael Maloney of www.GoldSilver.com

To Your Success,

Larry Corbi

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Matthew Ung asked question #2:

“Have you ever traded your gold or silver for significant value-items?
(Car, appliances, services, etc.)”

Continuing from our mastermind meeting, Michael Maloney answers question #2:

“No, I’m still buying gold and silver, but I do watch some of these things. Right now, I’m watching the gold/Maserati ratio. Haha!

I intend on accumulating a lot of cash flow real estate with my precious metals. I know that right now, gold & silver are outperforming all of these other assets. If you accumulate the asset class that is rising the fastest, what will happen is you will be able to buy more of those other assets when it peaks.

Up until just a couple of years ago, we had everything rising. Back in 2007, the stock market was rising, real estate was rising and commodities/precious metals/bonds were all rising.

Well, what’s going on there? If you invest the one that’s rising the least, when you sell it, you can’t buy as much as the other two…it’s actually going down in value even though it’s going up in price. If you’re investing in the top performing one, when you sell it, you can buy more of the other two investments…so, it’s actually rising in value.

What’s happening is they’re probably printing currency at about the rate as the second (middle) investment. So, if you take the currency out of the equation and you measure how much stuff you can buy with your other stuff (for example, you measure how much your house is worth in ounces of gold, barrels of oil, tons of iron, pounds of copper, bushels of wheat, etc) what you discover is everything goes through this valuation, where it’s over valued or under valued. I try to invest in the most under valued asset class, the one that has the biggest potential of buying more of one of the other asset classes. It doesn’t matter whether everything is rising in price, it’s ‘what is the value?’

Right now, gold and silver are tremendously under valued…I don’t sell them for anything yet. I know I’m going to be able to get somewhere between 5 and 25 times more stuff for every dollar I put into precious metals today. I’m not guaranteeing this for anybody else, it’s just what I’m certain of for myself. So, thank you very much for your question Matthew.”

Michael Maloney of www.GoldSilver.com

To Your Success,

Larry Corbi

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Matthew Ung asked,
“What effect will the rise of oil have on gold and silver prices?”

On October 28th, 2009, I attended a Mastermind meeting at the Gold & Silver, Inc headquarters. Michael Maloney went over today’s precious metals market, tomorrow’s economic downturn, the transfer of wealth that we are about to embark upon in the ensuing years and what to do NOW to prepare for it. This was an exclusive group brainstorming on how to educate the world and the best means for communication.

I happened to pull Michael aside to see if he would answer some questions asked by those who submitted from the previous post. He kindly agreed and decided he wanted to answer them through a video. Here’s his answer from the first question:

“Typically they are somewhat connected, something called the gold/oil ratio and they tend to track each other. But there’s another aspect of this…mining costs are very heavily dependent on energy (60% of your mining costs is the cost of energy).

So, as the price of oil goes up, the floor underneath your investment (especially if you’re investing in silver) rises. Silver is currently below mining costs for most mining companies…there are a few that can make a profit at this price, but very, very few. On the average, most silver mining companies lose money currently.

And so, we’re talking about $17 bucks an ounce right now, and they can’t make money. If oil triples, then the floor under your investment goes up by that much also.

So, over the long period of time, silver has to rise then. The world is sort of running out of silver…there’s very little of it. It’s more rare than gold currently as far as the amount investors can buy…what’s on the exchange…what’s available to industry right now.

You can’t have a situation where the world is running out of something and it’s below production costs. That won’t last permenantly…so it means that your “safety net” is going to rise.

Thank you for the question, Matthew.”

-Michael Maloney of www.GoldSilver.com

To Your Success,

Larry Corbi

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I’m not sure if you knew that I was business partners with Michael Maloney from Gold & Silver, Inc. He’s Robert Kiyosaki’s precious metals advisor.

Well, tonight we’re meeting up for a mastermind meeting (we’re still friends even though I’m not working with him anymore) and I wanted to give my friends an opportunity to benefit from this as well.

First off, if you don’t know who the heck I’m talking about, then just go over to www.GoldSilver.com and check out more information regarding him and his business.

In this video, we were having breakfast at a luxury resort in Florida and I just grabbed my little video camera to record our conversation. No rehearsal or professional shooting, just raw in the cut style…so beware.

Anyways, I wanted to give you an opportunity here to ask Michael Maloney any burning question you have about gold, silver, monetary history, our current economic times or future outcomes, etc.

I’m going to try to show up early so I can pull him aside and get your questions answered. I’ll either get him to answer it on a video or maybe blurt out your question while the masterminding is in session…either way, submit your question to Michael Maloney below this post and I’ll do my best to make it happen.

Alright, stay tuned to hear your question get answered from the gold & silver expert at the Rich Dad Network.

See ya soon!

Larry Corbi

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