How to Safely Invest in Gold and Silver

Mike Pine: [00:00:00] Welcome to this episode of the Hidden Money Podcast. Kevin and I are truly excited to bring in a new guest, Dana Samuelson. We haven't had him on before. We're going to talk about precious metals. There's not a huge tax play, although there's some, and we'll go into that, but I have seen precious metals skyrocket.

I've had a lot of questions about it, and why not get someone, one of the best of the best in the United States, that can explain precious metals to us, explain to us why they're going through the roof. Maybe even get into a little bit about the quality of our currency and that whole BRICS thing that's going on.

Is America's US Dollar going to ever be demonetized, or become less worthy right now? It is the gold standard in the US, but it might not be forever. So, let's talk about real gold and the gold standard.

Dana is with the American Gold Exchange. We'll have his contact info [00:01:00] down below in the show notes, but Dana, thank you very much for being here today. We greatly appreciate you being here and we'd love to hear a little bit about your background before we get into the details of precious metals.

Dana Samuelson: Hey Mike. Hey, Kevin. Well, thanks for having me on your show. I really appreciate it. So, I've been in the precious metals space since I got out of college in 1980. I got hired to work in a vault, physically handling merchandise because I could be trusted. I spent 18 years learning the industry. I became an expert vintage US coin appraiser.

I also worked for Jim Blanchard for 10 years, who was the man that's most responsible for the private re-legalization of gold ownership in 1974. And I was Jim's senior buyer for about 3 years where I spent $50 Million of his money with the industry every year, which got me to know a lot of industry players firsthand.

[00:02:00] I started American Gold Exchange in 1998, 27 years ago. We've done almost $2 Billion in perfect, flawless business, paying for every purchase and delivering every sale. We've got an impeccable, national reputation and some of my peers back from when I started, now run US mint distributorships, so my connections in the industry are, are long and deep, and I've been doing this all my entire professional career.

It's all I know how to do. I've painted myself into a little golden corner.

Mike Pine: Not a bad corner to be in, I guess, especially these days.

Dana Samuelson: Right.

Mike Pine: So, let's talk about gold. Why does it have value? And maybe even after that, why does the US Dollar have value? And maybe some of the history between the relation between gold and the US Dollar.

Dana Samuelson: Well, I'm going to take you back to ancient times when there was a need for [00:03:00] a medium of exchange of value. And there's three attributes that gold has since early man's time that make it valuable. Number one- it's scarce to find. So, it has that scarcity in the ground. Number two- it's malleable. It's easy to make into coins or jewellery- I mean, King Tut's burial mask has 22 pounds of almost pure gold in it- Number two.

Number three, it's impervious to the elements. Nothing really causes attrition in physical gold. I mean, gold coins that have gone down to the bottom of the ocean in shipwrecks, have come back up looking just like they did when they went down, if the water is cold enough, and most of the water is, so it's scarce, malleable and impervious.

Those are the 3 attributes that have made gold currency [00:04:00] and money- 2 separate things. Money is a store value. Currency is a medium of exchange. And every country in the world, from ancient times all the way to the 1930s, had gold coins as their primary medium of exchange, and silver coins as well.

Now, silver historically has been found in the ground at about 20 parts silver equals 1 part gold. So, the monetary standard that goes back all the way to the 1500s, 1600s in Europe, and then starting in the late 1700s- 1793, with the advent of the US mint, the gold coins versus the silver coins have been on a 20 to 1 ratio- 20 parts silver equals about 1 part gold.

Now, when World War 2 came along, that ended gold as currency in the world, but prior to that the US went through the Great Depression following the Wall Street crash, and FDR wanted to print money. He wanted to [00:05:00] stimulate the economy, and you can't just print more gold coins easily, but you can print paper. So, he confiscated gold in the US- the only country that did that.

Mike Pine: What do you mean he confiscated gold? Go into that. So, if I had saved up gold and put it in my safe deposit box, he would have taken it?

Dana Samuelson: Well, gold was money back then. You had the choice in your hand between a $20 paper bill and a $20 gold piece, or a $10 gold piece or a $5 gold piece or a $2.50 gold piece. These were the coins of the realm of the United States mint from the 1790s, all the way until 1933.

So, what Roosevelt did was he made gold illegal to own, and there was about a five week window where you were required to turn your gold into the US treasury and get paper money in return, and the gold was valued what it was always valued at since 1850, on a fixed [00:06:00] price of about $20.67 an ounce.

They took it all out of circulation. Melted it into bars, and that's what those bars in Fort Knox are supposed to be- melted down old US gold coins- Number one.

And then, they issued more paper money to stimulate the economy, but by 1935, just two years later, the international gold price was revalued higher at $35 an ounce- a 75% increase, just like that, and that made all the gold coins that were in the world obsolete based on their face value.

They were now worth more as metal value than face value and that ended gold as coins in the world. Now, silver coins remained in circulation until 1964 in the United States and into the '70s, and other countries, Germany, Switzerland, Mexico, other South American countries, until the silver price took off in the late '70s, making [00:07:00] silver coinage obsolete too.

So, we are now in a complete, fiat monetary system. Following the close of World War 2, the US had three attributes really, that made it ripe to be the world's reserve currency,

So, all these other places had to rebuild, and the world agreed that the Dollar would become the world's reserve currency backed by gold. We would never print more dollars than we had ounces of gold to back it.

But that only made it till 1971 when the cumulative effects of Lyndon Johnson's Great Society programs, the Vietnam War, and the moon-shot in the '70s caused deficits in the US, which made us print more money than we had gold to back it. So, Nixon was forced to take us off the gold standard in 1971.

And since then, every other country has followed suit, and now all the paper money that we have is [00:08:00] backed by nothing but the full faith and credit of the United States government. And what we've seen over the last 20 years, we've gone through 2 bouts of economic distress that have caused the US treasury and the Fed to issue currency out of thin air.

And our debt over the last 20 years has gone from $7 Trillion in 2004 to $37 Trillion in 2025, almost a fivefold increase. And the gold price has done a little bit more than that during that same period of time.

Surprise, right?

Mike Pine: Well, is there a direct correlation there, or is that just coincidence that gold has gone up the same amount as our debt?

Dana Samuelson: Well, it's, it's not a coincidence, but it's not a direct correlation either. The gold price can get ahead of our debt accumulation or go under the rate of our debt accumulation, depending upon what's happening. So, gold tends to climb a wall of worry [00:09:00] when there's distress in the system. It runs higher and hotter in price than if everything's going well.

So, we had a red-hot gold market from 2006 to 2011. We were in Iraq. We were in Afghanistan at war. We were deficit spending. Then the great financial crisis hit, economic closures. We almost had a complete meltdown of the financial system. Our debt exploded. Well, gold doubled in price during that period of time.

Then, between 2013 and 2019, the gold price corrected back down to a lower level, hit channel, and then, we get into 2020, and what happens? COVID hits; affects the whole world. We close our economy for a period of time. Our debt exploded again, and gold almost doubled in price.

And now, since Russia invaded the Ukraine- and this is really the most fundamental factor underlying the gold price- and we sanctioned Russia and weaponized the Dollar, the [00:10:00] countries around the world that think that they could run afoul of us politically, have decided they don't want to be subject to the same potential sanctioning, or asset seizure, that we did with Russia. So, they're trying to ditch the Dollar.

But they really can't because it's embedded in the global financial system- Number one. And Number two- there's no good alternative to the Dollar because you have to have free-flow of currency over borders. You have to have free market establishment of the value of that currency, and you have to have a credit market underlying that, that's transparent, which is our bond market.

But since 2010 and the great financial crisis, and the explosion of debt globally, Central Banks began buying gold in earnest as a hedge against other countries defaulting on them because of all the debt that was created.

So, they've been buying 500 tons of gold a year from 2010 to 2021, which is about a fifth of what the mines produce- [00:11:00] 3,500 tons a year is what comes out of the ground on an annual basis. But once we weaponized the Dollar, for the last three years, Central Bank gold-buying has doubled to over 1,000 tons of gold a year.

Now, it's close to a third of what's being produced annually because gold in a vault can't be sanctioned or seized. And because there's no good alternative to the Dollar, some of these countries are now using gold as a settlement vehicle in lieu of the Dollar to close the balance that they have with each other.

And that's really the fundamental tipping factor that has driven the gold price higher than it was during the COVID era, at about $2,000 an ounce.

And now, it's $2,900 an ounce, and it's all really happened in the last year that we've gained that tipping point momentum in the price relative to the physical demand, and Chinese citizens are buying [00:12:00] gold, hand over fist. India is the world's most popular. They just had the biggest gold imports they've ever had in January, and we don't have a gold culture in this country, but many other countries do. If you've had war or a currency failure, you have a gold culture on your shores. We've never had that in our shores yet.

Mike Pine: I would say that a lot of people in America that are avid followers of you are creating their own gold culture here in America.

Dana Samuelson: Well, we're gaining one. We're gaining one. We trained a lot of people to buy gold following the great financial crisis and following the COVID eruption.

Mike Pine: Yeah. And I should have listened to you. I don't own gold. I wish I did, especially when you told me to. So, is it an accurate statement or assumption to say one of the great things, the main thing that gives value to US currency, US dollars, is kind of like faith? Like something unseen, something that you can't prove, but it's [00:13:00] people have a faith in the Dollar?

And the less people have faith and put trust in the Dollar, the less it's worth, is it? So, there's really no intrinsic value there.,

Dana Samuelson: No, there's no intrinsic value to the Dollar past the full faith and credit of the United States government, and the transparency of our markets. We have the biggest markets in the world, our stock markets. We have the biggest credit market, which is our bond market.

And as long as those function well, and we don't get too much debt- and that's another thing that's helping to drive some of these countries to buy gold is, "Hey, our debt just keeps going higher."

Mike Pine: And they worry that we're just going to print more Dollars to pay it off, which will cause huge inflation.

Dana Samuelson: Right. Exactly. And if we go into an economic slowdown, and we go to stimulus where the interest rates drop, gold likes it when interest rates are low because gold doesn't pay a yield like a treasury does, or offer a profit like stocks [00:14:00] can when companies perform well, but when things aren't well, gold climbs the wall of worry extremely well.

And it's an insurance policy for the rest of your money, primarily because there's no counterparty risk. When you own gold, you own an asset that's internationally recognized. It's almost immediately liquid anywhere as long as it's sellable in good form that dealers or banks will accept, and you can put a lot of value in a small space.

A 100-ounce gold bar is about the size of a paperback novel, weighs about 8 pounds, and today it's worth close to $300,000.

Mike Pine: Let's say I decide I want more gold because I'm scared of the US Dollar, and I get a bunch of gold, and things get really bad like they did during the Depression days. What's to stop the government, whoever's the president at that time, doing the same thing FDR did, and seizing my gold?

Dana Samuelson: Well, we've had this question a lot over [00:15:00] the years, so there are a couple of things that I don't think will make gold confiscate-able again. Number one- when it was confiscated in 1933, it was currency. Everybody had access to it all day, every day in the monetary system, and that's not the case today in the US.

Maybe 2% to 5% of the public actually owns physical gold. And if we get into a situation where the government wants to confiscate gold as an emergency measure, I think there'll be about 20 other items above that on their checklist.

So, I don't think... and the US is in the business of making gold bullion coins today. Customers like you and me can buy all day long, trade. They're the most popular traded bullion coin in the world right now, in the US right now.

So, I don't think confiscation is a probability. That doesn't mean it's not a [00:16:00] possibility.

Kevin Schneider: So Dana, just a question for you on decentralized currencies that people are veering towards. Gold is a very good, steady, tried and true, been around since the dawn of time. Gold has been coveted and valued, but now it seems like we almost have another faith-based currency out there in crypto, like Bitcoin. What have you seen in the gold markets whenever… it's almost been, probably, 10, 15 years now that crypto and Bitcoin’s been introduced. Did you see a shift in your market?

Dana Samuelson: Yeah, there's no doubt that Bitcoin has impacted the amount of people that might buy gold, have bought Bitcoin. Especially when it runs hot, it's caught a lot of people wanting to invest in it. So, a friend of mine asked me, "About two years ago when gold was $2,000 an ounce, how much do you think Bitcoin has affected the gold price?"

And I was like, "Oh, I don't, I really don't understand [00:17:00] what that might be. What do you think?" And he said, "Probably $500 an ounce at that point in time." And I think he was right. So, there's a lot of money that might've gone into gold that has gone into Bitcoin, and Bitcoin does something exceptionally well that gold can never do, which is move real value, real money, across borders privately at the click of a button.

That's just something that no other currency, including gold, can easily do. And it's private. It's limited, which is helping to push its value higher, but it's volatile. So, it's become less of a speculation today as an investment as it's been more and more adopted, especially by the mainstream, like BlackRock, and all the other big Wall Street firms now, all have a hand in Bitcoin.

There's a Bitcoin ETF, which has helped a lot. And I do think Bitcoin's going higher in value over time, but that doesn't mean it couldn't drop 40%, 30%, 40% [00:18:00] along the way. And you’ve got to be careful when you're entering or exiting that market. Depending upon how long you want to hold it, because you might get spanked a bit, and we've seen that a couple times.

But there's no doubt that cryptocurrency is a good, viable alternative to some of gold's attributes, and it's here to stay. I think there's a place for crypto, especially Bitcoin, and gold, in a portfolio. I didn't use to think that, but I've come along. I've been dragged into the Bitcoin camp as well, so I do agree that it's a great asset.

You've got to be a little careful about timing, buying and selling it, but it's here to stay.

Kevin Schneider: Yeah. And you know, I typically don't invest in the things I don't understand or don't know. So, it's very easy to understand gold. I see a big, old brick on my desk. I know that has value now to the extent of what that is valued at. And you know, the markets fluctuate. But if I had a brick of gold [00:19:00] in front of me, and then I had a card that had Bitcoin on it, I don't know how that…

I am not a crypto guy, so I just don't know the markets, how they fluctuate. I just see all these like meme coins go out there and people getting scammed, and it's just such a weird industry to me. Gold is, it seems like it's a lot more stable and you may not have the flexibility, like you mentioned. You can't just transfer to click of a button, but it seems like it would be more stable, not as volatile.

Mike Pine: Gold also is going to stay there. It's stable. I don't know how many people have heard of the Carrington event, but it was in 1859, before we had much electricity going on in this world, but we had telegraph wires going across the country.

And there was a solar flare, a large solar flare in 1859 that some guy, who happened to be this guy named Carrington in England, had just recently built the telescope to look at the sun, and he was up there during his hobby, watching the sun and saw this huge, big flare.

Didn't know what it [00:20:00] was but it happened to be a really big flare pointed straight at the earth, and six minutes later, all of a sudden, telegraph wires all across the United States were sparking. Fires were caused in the telegraph offices. People did not know what it was, but it was crazy.

If something like that were to happen today, every bit, every 0 and 1 that's out on any server, that's not EMP shielded, it's going to go down. Gold is going to sit on your desk. I mean, it's a good conductor. It might spark a couple times, but it's going to stay there. It's going to be worth it.

We know those things happen all the time, and we even have people in Congress freaking out about it, like they should, and saying, "We should be prepared because if that happened today, we would be without anything. That kind of stuff- granted, last time it happened was 160-70 years ago, right? But it happens, and while I have pushed people not to get crypto, because I don't see its value, I have a lot of clients and friends, have made a ton of money in it. 

So, don't listen to me about it. I'm just saying, I don't get it, so I'm scared of it.

Dana Samuelson: Well, I've got two comments on the whole thing that we just talked about, Kevin. One of my best friends in the coin market, rare coin dealer, told me about Bitcoin in 2012 when it was $20 bucks, and said I should get some and I didn't understand it, so I didn't do it. And the last I heard, he had a computer that had 18 Bitcoin on it that he forgot the password to, so there's a problem there.

And Number two- there's actually an interesting TV show on Netflix called 'Zero Day', which speaks to what you're talking about as far as a power interruption that [00:22:00] could affect things. But if the power goes out, your Bitcoin's, no good.

Kevin Schneider: Yeah. Yeah, that's absolutely true. Absolutely true.

Mike Pine: In a minute, we'll talk about some of the tax. I just want to get as much background as we can on gold and coins and silver. So, we've talked mostly about gold. You mentioned silver a little bit. Explain why silver also has value, and if you're going to put precious metals in your portfolio, physical precious metals, why is silver a good thing?

Dana Samuelson: Well, silver, gold- let me back up a little bit. Gold is mostly a monetary metal, but probably 90% monetary, mainly because you can put a lot of value into a small space. So, and the other attributes we discussed earlier, it's about 10% commodity metal. Silver is about 50% each, monetary metal and commodity metal.

Mike Pine: When you say commodity, that means we use it in industries for [00:23:00] things like gold plated plugs and connectors,  right?     

Dana Samuelson: Right.  And silver is- the uses for physical silver as  a conductor are growing by the So, it's used in solar panels. It's used in electric vehicles. Samsung has a new battery that they're testing that if it's viable to mass produce will be silver-based, and it can charge an electric vehicle in about 10 minutes, and that vehicle could go 600 miles on a charge.

So, it cuts the charging time fully in half, and gives you double the mileage on one charge. If it works, it takes about 30 ounces per battery, and that's a potential game-changer for silver.

And we're actually in a structural physical supply deficit for silver right now, which is helping to buoy the price higher. And that means that the world is just [00:24:00] consuming more silver on an annual basis than it comes out of the mines. So, we have a small deficit that's growing. That means we have to supplement that by the above ground silver.

Now, most of the gold that's ever been mined doesn't go anywhere. We don't lose that much of it, but there's a bigger amount of attrition in silver that's mined because of industrial uses.

Gold is a metal to store value in if we ever have an economic crisis. Silver is your trading metal for bartering. If we'd ever get into that situation today, the silver to gold ratio is about 90 to 1.

It takes 90 ounces of silver to equal the value of 1 ounce of gold, and that's very high. Historically, it was 20 to 1. Post World War 2, it was 40 to 1, and in recent times, it's been closer to 80- 90 to 1

Mike Pine: So, gold's either overvalued, or silver's undervalued, if you [00:25:00] look?

Dana Samuelson: Silver is undervalued relative to gold, while gold has continued to set a series of new highs since 2020, and especially in the last year. Silver's previous two highs in 1980 and 2011 is $50 an ounce. Today, it's about $32 an ounce, so it's less by about 30% than its two previous highs, while gold is now 30% over its last previous high.

So, silver could play catch up pretty fast, and I think we're actually into a situation like that right now, where the above-ground stockpiles of silver are being more and more consumed. So, we could be getting closer to a tipping point where the physical market makes the price go higher because there's simply not enough available silver to go around, unless we try and coax more out through more mining.

But that's going to be hard to do because silver is [00:26:00] primarily a byproduct of other mining operations- gold or copper and nickel. That's where silver comes from. There's not a lot of primary silver mines around.

Mike Pine: Gotcha. For those who might be considering getting into precious metal- I see Kevin's eyes getting bigger and bigger as you're talking about these numbers. He might be giving you a call. I will definitely be giving you a call after this. Kevin, I'm buying more silver. It's just going to have to happen.

For someone just entering the market, and they're going to go buy some gold. What are some of the pitfalls they should be cautious about? What should they be looking for? Do they buy gold bullion? Do they buy jewellery? Do they buy coins? can you kind of walk through like a 101? 

I am entering in the precious metals' market for the first time ever. What do I need to know?

Dana Samuelson: Sure, it's pretty simple. So, most people when they think of physical precious metals, they think of bars- 1-ounce gold bars, or 1-ounce silver bars, 10-ounce silver bars, 100-ounce silver bars. [00:27:00] Since the late '70s, and especially since 1986, governments around the world have been in the business of making 1 ounce gold and silver pieces.

Now, the bars come from refineries, usually in Switzerland or in Japan, where the 1-ounce gold bullion coins that government mints make come from sovereign mints, like the US mint, the Canadian mint, the Austrian mint, British Royal Mint, Australian Mint, Chinese Mint. These are the various mints that make 1-ounce gold coins.

And all they really are, are round bars instead of square ones, made by a refinery. Now, there's a couple basic red flags you need to be careful of. Number one is- we're in an unregulated market, so anybody can be a precious metals dealer, and we have opportunists that come into our marketplace.

So, you want to find long-time established dealers like myself- the guys that have a little snow on the [00:28:00] mountaintop, as I like to say. The guys have been around a while because we've been through good and bad markets, and we're survivors- Number one.

Number two- this is our livelihood. This is how we've earned our livings for years. So, it's important that we take good care of our customers, because you have choices, and you can go anywhere else with your business, and it's good to have a relationship with your dealer. I'll get into that in a minute.

So, you want to find a long time dealer who's been in business for decades. Check out their references, check out their reviews. If you see any complaints, there are other choices where you'll find people that don't have complaints- Number one.

Number two, we have a modest but growing problem with Chinese counterfeits, where the Chinese are knocking off like they knock off Rolexes and Gucci bags. They're knocking off gold bars, silver bars, and some of these mint made products, but it's easier for them to replicate [00:29:00] and fraud a 1-ounce gold bar that a refinery makes, than they are a 1-ounce sovereign minted gold coin or a silver coin, simply because the design on the bar is much plainer than the design on the coin.

Now, this little maple leaf that I showed you a little while ago, this is going to be hard for you to see, but I’ll hold it up if you can see on the back on the bottom- there's a little frosted maple leaf. It's tiny, right? That's an anti-counterfeiting design element that the Royal Canadian Mint introduced to this coin in 2016 to make it harder for the Chinese to knock it off.

And the US mint has done the same thing with their gold bullion coins or gold eagles. They've added design elements into the coin that are very, very hard to duplicate or replicate. Now, people on the street won't know the difference between a good one and a bad one, but a dealer like me, we see these things all the time. We can see them from a [00:30:00] mile away.

So, you're going to get integrity of product with dealers that you may not get with pawn shops or online auction platforms. There's a big online auction platform I won't name, but you know who it is, and they've got a ton of bad merchandise on their platform, and they don't police it well.

So, you've got to be careful who you buy and sell with. And I think the sovereign minted products are better for people to buy because of this anti-counterfeiting design element technology that's in the coins themselves. They'll make them easier for you to sell in the future, than maybe bars might be saleable.

I had a very famous football player come to my office a couple years ago with 14 gold kilogram bars. Each bar is 32 ounces. They were worth about $20,000 a piece at the time, and they all weighed right. They all sounded right- when you hit them [00:31:00] against each other, they make a very specific sound.

Now, you can take tungsten- that's almost the same density as gold- and plate gold around it, and fraud-make a fake bar. One of the bars that he had, the color on the outside of the bar just wasn't right. It didn't look like the others. Pure gold has a very distinct, bright-yellow color. The bar weighed right. It tested right on my testing device. It sounded right, but it looked funny.

So, I said to him, and he was really big. He's a linebacker, like 300 pounds. I don't want to anger this guy. I said, "Look, I’ll buy this bar at the same rate I'm buying the others from you. I won't dink you, but I want to put a drill through it. I literally want to take a drill and drill a hole through the middle of the bar, and if it's gold all the way through, I'll buy it at the same rate I told you. If it's not gold, you're going to get a bar with a hole in it. It's going to be hard for you to sell anywhere else."

And he said, "Go ahead and drill it. I have [00:32:00] faith in the integrity of the supply chain I got it from." And I drilled it, and it was perfect gold. I just put the bar and the corkscrew of gold into a Ziploc bag, and instead of reselling it to the marketplace, I sent it to a refinery to be melted.

And I lost a tiny bit on that bar, but I helped him get out of a bar that I thought was a problem, which it actually wasn't. But I do think that this is a problem that will become increasingly problematic, as time passes, with refinery made bars, because they're just not doing the same due diligence on their designs, like the sovereign minted.

Mike Pine: So, from my layman's perspective, if I'm thinking.. I'm not really, currently, buying precious metals for wealth preservation. I'm doing it, but for the same reason I buy life insurance, and Kevin could tell you, I tend to be overinsured in all areas of my life, but I just sleep better and I want to have something around.

Dana Samuelson: I think the coins will serve you better. I had that question a lot [00:33:00] in 1999 leading into Y2K- "What happens if the computers fail?" Well, we're all flying by the seat of our pants in our own negotiating ability, but I do think that the sovereign minted coins are better.

And when it comes to those, the US Mint, the Canadian Mint and the Austrian Mint are the 3 most popular. The US Mint is by far the most popular. If they were ice cream- vanilla, chocolate and strawberry. It's that simple. All you really need to know are those three products.

And when there's slow demand, like there is right now in the marketplace, we have very competitive premiums. You're not going to buy these at the gold and silver spot price because you've got to pay to have a manufactured, the integrity of the product has to be perfect. There's shipping and handling, there's insurance, there's dealer profit.

Now, we make about 1% to 2% on an ounce of gold that we sell at 3% to 5% over the gold price. And we make about $1 to [00:34:00] $1.50 an ounce on silver that we sell at $3 to $4 over the silver price. That's typical. The buy-sell spread on an ounce of gold is about 4%, so it's not like buying a stock where you're going to get a very small commission.

It's going to have to go up about 4% for you to break even once you've bought it, regardless of the product. And silver is about $2 an ounce. So you've got to be prepared to buy and hold, which is why you said it best, Mike, this is really an insurance policy for the rest of your money.

If you have 5-10% of your assets in physical precious metals, primarily gold and some silver, you have an insurance policy against financial catastrophe, and it's a great counterbalance if there is times of trouble.

Plus, it's a great way to save value outside of a depreciating currency, which is what the Dollar really is. Now, when gold goes from $2,000 to $2,900 an ounce, it's like it's done in the last year, or silver goes from $22 [00:35:00] to $32 an ounce, it's not that gold and silver are that much more valuable. It's that the buying power of our currency, our Dollar is that much less. And that's what most people don't get.

It's really the inverse. It's gold and silver holding their value against the things we want- gasoline, houses, groceries, where the dollar is just not. That's really the whole point.

Kevin Schneider: Yeah. And typically, on our podcast, we like to get into the nuts and bolts of tax issues and tax planning, and precious metals such as gold and silver have a very unique section of the tax code, because typically, when you buy and hold an investment, and you hold it for longer than one year, a capital asset, you're going to get those favorable capital gain rates.

Now, when it comes to gold, that favorable capital gain rate actually is a little bit higher. When you sell a capital asset, you have a 20% rate, but when you sell gold or silver at a gain, the [00:36:00] IRS deems this as a collectible. Because it just seems like, what's the difference between holding gold and silver versus another stock? I mean, you're holding it as an investment. They're just deeming it a collectible. Are there any ways around that 28% top tax rate?

Dana Samuelson: No, not legal ways. We want to be above board right now. I will tell you a couple of things that are incumbent upon a dealer like myself, and I don't want to mislead people.

We have very specific reporting requirements when we buy back bullion from clients that go back to 1986. If we buy 25 ounces or more, of gold or 1,000 ounces or more, of silver, In a single or related transaction on very specific products, we have to fill out a 1099-B like you do when you sell a stock.

But some products are not on the [00:37:00] IRS's 'shopping list', so some items we don't have to file a 1099-B on for those threshold levels or higher. And anything less than those threshold levels, we don't have to fill a 1099-B out on. So, that doesn't mean you're not supposed to do the right thing with your taxes.

It just means that we don't trigger IRS knowledge of that sale under those levels or above those levels with other specific products.

Kevin Schneider: Yeah, and just like any other asset, if you hold gold or silver for under one year, you're still going to be stuck with ordinary rates, and that's true with any sort of capital assets. So, there's always ways to counteract the tax though.

I mean, that's what Mike and I love to do. If you come into a very good selling situation with some gold, there's always ways to tax-plan against that 28% gain, always. Could you offset those with capital losses?

Mike Pine: It's a separate section of the capital gain stuff. There are ways to turn it into a passive activity, though. It's not easy. But there are ways also if you want to buy gold, but you want capital gain treatment, and you're not interested in owning the physical gold.

Let's say, you're just speculating like you do in the stock market. You can buy in stocks and indexes that track gold, as well. And that gives you guaranteed capital protection. But you know what, Kevin? Regardless of whether it's portfolio or passive, we can always, always reduce that gain by active losses, which is what you and I preach every episode.

Kevin Schneider: And you still get step up in basis if you inherit it, right? So if your grandparents own gold for 50 years, and they pass away, and you inherit that gold, you get a step up in that cost basis at the fair market value of that gold at their date of death, too. So, it's not [00:39:00] a total, just like kicking the pants. They do have some of the same traditional tax planning opportunities built around them.

Dana Samuelson: Well, that is a way that some wealth gets transferred- literally that way, where it's heir's inherited, and they get the stepped up basis of cost without having to pay the gain on that cost.

Mike Pine: I'm all about deferring taxes, though. So, let me kind of round this out as we start to get to our close. So, what you've mentioned- 5-10% of your portfolio- would you consider that 5-10% in the wealth preservation range?

Or if I'm not really at the wealth preservation, I'm just getting insurance. Now, I'm in wealth generation mode in my life right now- do you still say 5-10%? Less, more?

Dana Samuelson: Well, if you want insurance, minimum 5%. 10% is a little high for insurance or wealth preservation, depending on what you're comfortable with. I've got clients that go 50% or higher in precious [00:40:00] metals because they simply don't trust the government. The World Gold Council did a study going back 25 years, and this was the question, "How much do you really need?"

They found the sweet spot was 6-8% of net assets. Because it gave you enough of a counterbalance against traditional assets, stocks and bonds in the event of a big market correction, without denying you opportunity in those other sectors, which can include real estate, and oil and gas as well.

So, really, that's why we say 5-10%. If you're going over 10%, you're really getting a little weighted in precious metals, but it's all what you're comfortable with.

Mike Pine: Yeah. I can't believe we almost started to close without discussing this opportunity. I heard, I actually heard Dana in the back of my head, Russ's voice screaming, "What about self-directed IRAs??" So, this is a really cool deal. [00:41:00] So, let's say there's a lot of reasons retirement accounts are good.

One big one is asset protection, and a lot of cases in most states, if you get sued, if you lose everything, if you go bankrupt, you're allowed to keep your retirement accounts.

What a lot of people do and recommend is creating a self-directed IRA, or you could even do it with a self-directed 401(k). But you create that, you, instead of buying stocks or equities or mutual funds in it, you can actually buy physical gold.

You have to be careful to follow all the ERISA rules with a retirement account, but you can buy physical gold, put it in the safe. Russ always recommends getting a special safe just for your retirement account. Write 'Retirement Account' on the safe, but it's not yours. You can't touch it, but you put it in a retirement account and it grows tax free your entire life.

And if everything hits the fan.. you did get a tax deduction, by the way, if you did a [00:42:00] tax-deductible retirement account, then you have the safe, that you actually have physical ownership and access to in an emergency, but it is your IRA.

If you take gold out and sell it, and you're not retirement age, you're going to pay a 10% penalty and income tax, but it's a way to do it and buy it with pre-tax dollars.

Do you want to add any more of that?

Dana Samuelson: Yeah. I've got a couple of things to comment on. Number one- you've got to be careful because I'm not sure you can hold it yourself. There are special niche businesses in our marketplace that specialize in precious metals IRAs. There's a couple of companies we recommend for this reason, who are the custodians.

So, when we do the transaction, we literally buy and sell like, like I would sell to you, but instead of delivering to you, or you paying me, we would go through the IRA company. They would pay us the proceeds for the metal and we would ship it to their warehouse for them to hold it. And they use some of the big, independent warehouses to hold metal as fulfilment centers- Number 1. [00:43:00]

I don't think you can hold it yourself. You’ve got to be careful about that. Make sure you're abiding by the laws. The IRA market is a big market for precious metals because that's where a lot of the money is in the world. There are opportunistic companies who specialize in IRA precious metal sales, and when I say opportunistic, I mean it.

I literally have been an expert government witness for the CFTC and the SEC in two separate, allegedly, predatory companies that sold people metal into their IRA. It was very aggressively priced at the point of sale, and a lot of those profits just went into the company's pockets, and out of your- what you could have bought with the same amount of money.

So, you’ve got to be careful, but you've also got to make sure that you're abiding by the law. There has been one case where people had a checkbook by array and they held the metal themselves, and the IRS ruled that they, [00:44:00] had taken a distribution, and they got penalized both for the distribution and for the 10%.

Mike Pine: Yeah, I've spoken with a lawyer that specializes in pension area, a tax guy, a couple of years ago, and he said there was a way around it. You had to be very careful. You had to follow all the check marks.

So, I know there's a way to do it. You've just got to be very careful. Definitely don't go do it just based off of what you heard here. Go speak with your tax advisor or your tax attorney, please.

Dana Samuelson: Exactly.

Mike Pine: All right. Any closing thoughts, Dana? What do you think people should know if this is their first introduction into precious metals ownership?

Dana Samuelson: My closing thoughts would be as general advice. We deal in the most widely traded, competitively priced, and easily sellable products for physical precious metals, and that's American gold and silver Eagles, Canadian gold and silver Maple Leaves, Austrian gold and silver Philharmonics.

There's a lot of reasons why gold and silver are going higher in [00:45:00] currency terms. And in fact, not just setting records in the US, they're setting records in every other currency, as well. There's a lot of physical demand for gold among Central Banks, which is one of the biggest driving forces in the gold market right now.

There's also geopolitical premium in gold because of two ongoing wars. One looks like it's going to get settled, but the other may drag on for a while.

You've got just debt that's driving gold higher over time, and that's really a fundamental driver. So, and then, you've got inflation, and gold and silver are a great way to protect yourself against inflation.

Find a long-standing dealer, look for recommended, look for a reputation, duration in the business, and complaints, and go with who you're comfortable with.

Now, we're consultative in nature. We want to help people. We found that by helping people, it helps us in the long run. So, we're happy to answer any questions anyone may [00:46:00] have, and I do think gold and silver are a good thing to have.

We really don't have a culture in our country, like I said, but 5% is enough to get you that insurance policy in the event of a catastrophe.

And it's worked very well both times when we've really needed it in just the last 20 years, the great financial crisis, and when COVID hit.

Mike Pine: Yeah, I am really glad you talked me into it in 2021. I wish I would have let you talk me into the gold, but those silver coins I've got have gone up 60%, thanks to you, so I appreciate that.

I highly recommend Dana Samuelson with American Gold Exchange. You can find them at www.amergold.com. I've got a lot of friends and a lot more colleagues that have worked with them for decades.

So, you can use any other broker, but Dana has my stamp of approval.

Dana Samuelson: Thank you, Mike. Thank you, Kevin.

Kevin Schneider: Yeah, thank you. That was a very fun conversation. I enjoyed it.