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Right now, with the government printing money like there’s no tomorrow, it would be great to own precious metals and/or cryptocurrency.
The Federal Federal Reserve Bank is neither Federal, nor does it have reserves. The Fed is actually a private bank, just like Chase, Bank Of America, or a local/regional bank. They do have the ability to generate money from nothing and have ways of retracting currency as well. If you want to learn more about the federal reserve (every American should), look at reading “The Creature from Jekyll Island” by G. Edward Griffin. You can order it from Amazon.com by Clicking Here! If you would like to listen to the Audio Book, Click Here!
Precious Metals, mainly gold and silver, are a great add to anyone’s portfolio. Additionally, some cryptocurrencies stand to do well as the Fed’s printing will inevitably come to an end. I will cover recommended cryptocurrencies in a separate article, but for now, one of the one’s I will recommend in this article is Kinesis; an explanation as to why will follow in this article.
Although I believe everyone should own physical #Gold and #Silver, many people don’t want to hold too much physical as it’s subject to theft, hard to move, etc. Really, you should keep enough on hand for emergencies. The beauty about any precious metal is it hedges against inflation. Have you seen what inflation does to the US Dollar? If not, look at the chart below.
The largest form of taxation is inflation. Many experts believe we’re on the precipice of much higher inflation. The “Fed” says it’s transitory. Whether it is or isn’t is a prediction of the future, so if you’re the “Fed”, why not say its transitory?
So, if the dollar is being devalued and you want to improve your chances of maintaining, or even gaining wealth, why not look to precious metals. Mainly gold and silver.
Physical Gold and Silver
The best way to buy physical gold and silver would be to visit your local coin shop, also known as an “LCS” on social media posts about precious medals.
You can also buy from reputable Bullion Dealers. One of the most reputable is SDBullion.com. They are a great bullion dealer and will ship gold and silver quickly. Depending on your intent and the volume, some things to consider with physical: Can you move it (weight), can you spend it (denomination), and can you keep it safe (like in a safe!). An alternative Bullion Dealer is PriorityGold.com. They are also reputable. Check pricing at both and go where the best deal is offered!
Allocated and Unallocated Precious Metals
To talk about the future, let’s talk about the past briefly. The gold and silver markets work on a few different fronts. First, we talked about $AG. They mine the shiny silver out of the ground. Then it goes to industry, the futures market, an ETF, a bullion bank or the like. In the last several years, some bullion banks have realized they can charge storage for holding a person’s gold and silver. Gold and silver can be held “Allocated”, meaning you own the silver and has your name on it. You can also own “Unallocated” silver or gold, which means it’s not held in title to you. It is held in the bank’s name for the benefit of the owners. With regards to allocated, it’s simple. There is one owner. With unallocated, the question becomes, “How many people own this same silver?” Since there is little regulation, the answer is, we simply don’t know unless everyone owner demands their physical silver. That, I believe is happening now to the insiders and will be attempted by the masses in short order. What happens if they run out before everyone gets their previously purchased silver? Who knows? They can try to settle in cash; they could delay shipping; or they could default. If they default, nobody gets paid. That’s bad.
My Kinesis #Gold and #Silver Experience
In the past year, I began looking into gold and silver. Once the ‘dip’ of the Covid-19 scare dropped the market, I started seeing signs the government was overreaching, the economy was tanking and the risk in the future was beginning to grow. I heard “Great Reset” and terms about the end of fiat currency. I went down this rabbit hole. First, I’m interested in tempering anything ‘conspiracy’ with a more rational, pragmatic approach. To this end, I started looking into ways to invest in Gold and Silver. There is much discussion about silver manipulation. One of the best explanations is in this link from @theHappyHawaiian in the https://reddit.com/r/wallstreetsilver subreddit:
In a nutshell, $SLV, which is an ETF that ‘supposedly’ tracks silver (They changed their prospectus quietly without warning) is used to suppress silver prices while yielding a profit for the ‘big guys’. Read the article. Every American should.
Kinesis is a total money system, meaning, once “fiat” (Government) currency is onboarded, you can earn an income, known as “yields”; spend by use of a debit card; and hold (or, as the meme’s say, “HODL”) silver and gold backed cryptocurrency. What does this mean? It means for each KAU (Gold) token, it represents one gram of allocated gold. So the ownership lies with you and tracking can be done on the blockchain.
Like KAU, the KAG coin is a silver token which represents one ounce of fine silver. Again, your silver ownership is allocated and tracked via the blockchain. The system is interesting in that a portion of any transaction fees, which are very low at .45%, are pooled. A portion of the pool goes to the following yields:
- Minter’s Yield – Those who “mint’ are essentially registering new silver or gold into the Kinesis Money System(KMS)
- Holder’s Yield – A yield paid to those who simply ‘hold’ (HODL) silver or gold
- Depositor’s Yield – A yield paid for depositing currency – limited to the first two weeks of funding your account
- Referrer’s Yield – A built in affiliate program where you receive a portion of the yield for referring friends and family
- Kinesis Velocity Token Yield (KVT) – More on this in another post, but basically an early adoption investment to raise capital.
What’s most interesting about the “yield engine” is it opens up the opportunity of having ‘allocated’ and ‘audited’ precious metals without storage fees. To go from paying storage fees to receiving a yield is a big move in the industry. There are other ways to get a yield on gold without paying storage. Again, this will be another discussion.
Signup into the Kinesis Money System is free and is fairly easy to do. Before you get full access, you will have to complete the “Know Your Customer” (KYC) onboarding process. This is a very common task for cryptocurrency and online banking systems these days. If you are interested in KMS, and everything Kinesis has to offer:
Click here to sign up today!
Silver and Options
Of course, we are options traders, so let me tell you about my options trading experience. I was heavy with trades in the $SLV ETF. However, a few months ago they changed the margin requirements on $SLV, which caused a bit on consternation. I hedged out of the $SLV only when I could leave a profit. I still have several contracts, which is tying up a little more margin than other, more competitive options.
I am concerned, but not surprised at the manipulation. The margin changes occurred inline with the #SilverSqueeze movement in the earlier part of 2021. Additionally, when people start talking silver, many investors and traders go to $SLV, because they think it’s the best ETF to trade as a representation of silver. According to the WallStreetSilver gang, it is not. They recommend $PSLV. $PSLV requires Sprott to obtain hard silver in exchange for new shares. If they cannot support new silver in the vault, then the price will start going up. There is talk that soon the COMEX, where big-time buyers of silver can buy silver futures and take physical possession on assignment, go to get their silver. Since silver is used in electronics, think $AAPL (Apple), $TSLA (Tesla) and so on. Silver is used manufacturing, including green products, like solar panels.
I got away from $SLV. In accounts where I cannot trade options, like deferred compensation plans, I have decided to buy $PSLV, $CEF, and $GGN. $CEF is a combination of gold and silver purchases, similar to $PSLV. $GGN is a dividend paying closed end fund, which invests mainly in gold miners and sells calls against their inventory. $GGN currently pays 9+% dividend.
Getting back to options, I have found $AG, First Majestic, to be a good proxy for $SLV with regards to options trading. Maybe even a little better, with one exception. Single-stock risk. That is the risk of things like earnings calls, dividends, etc. For now, it is the best option. I also trade some $GDX, but this doesn’t have the exposure to silver I’m looking for; at least right now. Once silver’s price is more accurate to the realities of the world, I will consider more exposure to $GDX. One final note on $AG, recently they decided to hold silver until the price more accurately reflects the physical demand of silver. Low-and-behold, the short interest has gone up. Who could be trying to suppress everything silver?
So, the trade you can make is a covered call on $AG. The stock as of this writing is $17.47, but let’s call it $17.50. That would be $1750 ($875 in margin). If you sold a call above the price of the stock, you should make about $.45 per contract or $45 per month, give or take. $45×12 months would yield $540 per year, or roughly 30% return. This $540 then can go to physical currency. I’m not talking going to your local coin store (LCS), but to the Kinesis exchange. What is Kinesis?
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Kinesis Monetary System (https://kinesis.global)
Now that we’ve talked about how to make some money trading options with a covered call on $AG, how do we get physical silver? Can we get a physical silver we can use to buy things like pizza and beer? Enter, Kinesis. Kinesis is simply a bullion bank who has mastered many problems with money and added a crypto system. Kinesis is essentially a silver and/or gold backed crypto currency with an entire eco-system to be implemented. I am impressed with Kinesis, although my chief complaint is the onboarding process. They recently terminated an agreement with the debit card supplier and the replacement is not online yet. It makes it very difficult to bring money into the Kinesis system, at least in the US. This will hopefully be fixed in the 4th Quarter of 2021. It should be fixed soon!