Monday, October 28, 2013

American Blackout: Why is Nobody Helping Us?


"Why is nobody helping us? What are we supposed to do?"

The line above is from National Geographic's "American Blackout". The teen girl uttering the words is confronted with the reality that she and her companions are indeed on their own, with no government or other help coming to her rescue during a national disaster. She looks more like a lost 4 year old in this candid moment, despite the character being of college age. You can see that this is the first time she's ever been without the psychological and sociological aid from her "Big Brother".


The program starkly depicted the fact that Americans have become a child race, dependent on our Nanny government always being there to assist us. Most folks have zero preps. If we've seen anything from Katrina and Sandy (localized disasters), it's that you're on your own for a least a few days following a destructive regional event. What would happen if a national blackout occurred? I suspect the producers of the show at NatGeo decided to end the blackout at 10 days, as taking it any further along would've lost the family-friendly Sunday night tv rating they needed to build viewership.

I think the toughest thing will be the need to shoot others in defense of your family. "American Blackout" gave us a hint of the violence that would result once Americans had missed the critical nine meals that separates our society from chaos. As law-abiding citizens we have so many inhibitions against killing that it takes weeks of Army basic training to overcome the innate and learned inhibitions against lethal violence. The old Soviet Military intelligence bureau took the anti-killing re-socialization training used by all military units to an even grimmer high. Victor Suvurov, an ex-Soviet spy, tells us he was trained to kill dogs and cats with his  bare hands for practice. Apparently, he used his thumbs on their eyes...

Food, water, medicine, self-defense for at least a few weeks are MANDATORY!

Note: have a good old-fashioned mechanical can opener. I have an industrial one. Electrical can openers aren't any use with no power. Cans are wonderful, but it's a bitch to open one with only a rock or knife.

Rick

Thursday, October 17, 2013

WTF are Zombucks?

Excuse my French, but just WTF are Zombucks? I found myself asking this very question while cruising the Provident Metals gold, silver, copper website. Apparently, they are private rounds available in silver and copper from the Provident website in one ounce form. The pricing is just a hair under an American Silver Eagle one ounce coin.

When I first saw these "rounds" I figured it was a gag coin of some sort. Certainly nothing precious that might interest me from an investment or survival standpoint. However, it turns out that they are indeed serious attempts at alternative money in a post-dollar world! Believe me, I do have a great sense of humor, and can appreciate irony and satire in all of its forms. However, we're talking about survival here, not a stand up comedy routine at your local Improv. Survival in a world with a devalued or valueless dollar is very serious, and preparations for such an occurrence are crucial. The aforesaid preps may even mean the difference between life and death for yourself and your family. I don't know about you, but I have ZERO interest in explaining to some trading partner that my money isn't a joke, but real silver, copper, etc.

I think I'll stick with junk US silver (pre-1965 dimes, quarters, halves, dollars) and American Silver Eagles. When people are hungry they're not in the mood for wry humor! Using some silver round with a zombie image on it just might get you shot by a potential trading partner who doesn't get the lame joke. As a normal living human I can die from a bullet anywhere on my body, not just the zombie kill shot to the head!

Rick



Friday, August 23, 2013

Is ebay Sniping EVIL?


Ebay Sniping - the act of bidding in the waning moments of an ebay auction in the hopes of securing the desired product at your price, while excluding other last minute competitors due to auction expiration. Bid sniping may be done manually by a buyer using the ebay bid entry system, or through a resident program or web-based service.

If there is one topic that is guaranteed to spark a lively debate whenever invoked by buyers and sellers on ebay, it's SNIPING! Snipers claim it wins them the auctions they desire at a price which they find acceptable. They further site convenience, flexibility, easy bidding discipline, and the avoidance of emotional and potentially costly bidding wars vs. other potential competitive buyers. Sellers, on the other hand, decry the system as unfair or unsportsman-like, in the belief that an earlier bid might've provoked competitive buyer-bidders to enter additional amounts, thus driving the price, (and profit margin), higher. Over the years many sellers have asked ebay to automatically extend auctions each time a high price is reached, insuring that there will always be adequate time for other bidders to decide whether to beat the new high or now out.

To date, ebay has refused to take any step to curtail bid sniping and probably never will. As the pure no reserve auction continues its decline in the face of ebay's move to a Buy it Now Amazon-type model, it's unlikely that the site ever will make the change. Simply put, ebay sees its future in competition with Amazon, not old style Saturday morning auction houses. Auctions currently represent only a third of their current income, and are slowly, but steadily, declining. Ebay's attention is focused far away from the old auction format. They're more than happy to keep banking the commissions paid to them by the Seller using the Auction format, but that's as far as I believe they're willing to go. Given this unchanging reality, let's look at the sniping issue one last time assuming the current basic bidding ground rules.

In a market-based capitalist economy represented by ebay, both buyer and seller have goals which, while similar, do in fact diverge. The buyer wants to acquire the Seller's product at the lowest possible price. The Seller wishes to find himself an interested Buyer for his wares, but desires to do so at the highest possible price. If you're someone with Communistic leanings you may find some objective evil in both or either of these motives, but I do not. In a market economy prices are set by supply and demand principles. No product or service has an inherent worth distinct from what a buyer is willing to trade or barter. In other words, it's worth what someone is willing to pay for it!

I find the Seller's best argument, that the auction should last longer by automatic extension to be more like a real auction, nonsensical. Most ebay auctions last three, five, or more days. Surely that is sufficient time for the price discovery mechanism to function adequately. The reason your item sold at ebay auction for a price lower than you wanted isn't the last five second sniper's fault, but the fault of the other bidders who procrastinated in placing their higher winning bids. For me, the situation is like the new "Nanny State" we find ourselves increasingly occupying in the US. If someone is lagging behind don't chastise them for their tardiness, slow down the rest of the group to avoid leaving the laggard behind!

The ebay Sniper is playing by the rules when he places his bid. Ebay's rule book does NOT care when or how you place your bid. The winning bidder is the person who bid the highest amount by the auction expiration dates and time. Period! Of course, ebay the company would love you to use their proxy bidding service if given the choice, because it automates the bidding war process for them. I've seen many ridiculous numbers of bids placed on auctions tht go up a few dollars at a time for days. What a bore! Who even has time to play games like that anymore? I want to win the auction, not play some extremely dull version of an online game!

As a Sniper myself, I recently secured a roll of Kennedy silver proof halves with a winning bid that was only $0.77 higher than my nearest competitor, 3 seconds before the auction expiration. Great price too! I found out afterwards that he and a few others had been fighting one another viciously for days. I hope they had some fun together, as my automated web-based Sniper service snagged the roll while I was watching TV!



Saturday, July 6, 2013

Iraqi Dinar - The Zombie Scam that Won't Die!


In early 2010, the Iraqi government announced plans to redenominate the dinar, giving rise to one of the most globally anticipated “get-rich-quick” speculations in recent times.
Three and a half years later, investors are still waiting, still hoping, and still buying more dinars. Their hope is that since Iraq has the second largest oil reserves in the world with the prospect of doubling its oil revenues over the next 10 years, any currency redenomination will be accompanied by a revaluation, resulting in a huge increase in the dinar’s value.
july 2011 new iraqi dinar
In this, there is not one but three misconceptions that may unfortunately shatter the expectations people are placing on the dinar. These misconceptions center on a) the redenomination process, b) debt forgiveness, and c) the central bank policy.

To Redenomination or not to Redenominate?
In most cases, a country will redenominate its currency when inflation erodes its value to such an extent that it becomes increasingly difficult to process transactions – when there are just too many darned zeros on every bill.
To simplify matters, nations will often chop a few zeros from their currency. For example, Bolivia in 1987 and Peru in 1991 dropped 6 zeros from their currencies, a redenomination of 1 million old money to 1 new money. To avoid confusion, the currencies were renamed. In Bolivia, 1 million pesos became 1 boliviano, while in Peru, 1 million intis became 1 sol.
But no one became a millionaire. In either country, you still had the same value in USD after the conversion as you had before. When you went to a Peruvian bank to exchange 1 million intis for 1 sol, you walked in with 1 USD worth of money and you walked out with 1 USD worth of money. It was a flat exchange.
The same will be the case with the Iraqi dinar, as indicated by XE.com:
“In 2010, the Central Bank of Iraq announced their plans to redenominate the Iraqi Dinar to ease cash transactions. The intention would be to drop three zeros from the nominal value of bank notes; but the actual value of the dinar would remain unchanged.”
Debt Forgiveness - "To Forgive is Divine"
But what about foreign debt forgiveness – as much as 80% in Iraq’s case? Won’t the erasing of so much debt make the new Iraqi currency so much more powerful?
Indeed, Iraq’s debt cancellation is substantial, as a 2006 CRS report for the U.S. Congress explains:
“When fully implemented, the Paris Club’s treatment of Iraq’s debt will reduce the total debt owed to Paris Club countries from $38.9 billion to $7.8 billion. This remainder (20% of the original total), will be rescheduled over a period of 23 years with an initial six-year grace period of repayments.”
However, the report shows that this forgiveness of debt has already taken place – first by the U.S. in December 2004 and then by the remaining Paris Club member countries in December 2005.
The remainder of Iraq’s debt forgiveness has largely been completed as well, as the Central Bank of Iraq notes, “Negotiations with non-Paris Club creditors are ongoing (mainly with Gulf countries), and resolution of the commercial debt is largely complete ... This portion of the external debt has been reduced to $45 billion in 2010.”
The CBI further states that while Iraq’s debt for 2010 was estimated at $92.3 billion, its GDP for that year was $82.2 billion. While the debt is high at 112% of GDP, it is not uncommonly high, and it is manageable. It is highly doubtful that any remaining debt forgiveness will be substantial, nor that it will ever impact the currency all that much.
Central Bank Policy - "Stronger Isn't Always Better"
Another major misconception is that the Iraqi government wants a stronger currency that better reflects the wealth of its substantial oil reserves, which are currently the second largest in the world.
The CBI has been using daily currency auctions to control the amount of USD in circulation. It will allow banks, importers/exporters, and other authorized companies to buy USD at these auctions based on their trade receipts and only for the purpose of paying foreign entities.
The central bank, therefore, allows into the economy only as much USD as is going out through international trade. In so doing, it maintains a steady balance between the amounts of USD and IQD, thereby keeping the value of the dinar stable.
Time and again the chart will show how the dinar returns back to a pre-determined line, which the central bank controls simply by controlling the amount of USD in circulation. It is as close as you can get to a currency peg.
As the CBI explains, “The primary objectives of the Central Bank of Iraq is to ensure domestic price stability and foster a stable competitive market based financial system. The CBI shall also promote sustainable growth, employment and prosperity in Iraq.” This includes to “implement the monetary policy and the exchange rate policy of Iraq.”
Price stability involves ensuring the IQD remains weak. Even the wealthiest of nations are opting to devalue their currencies, such as Japan (to a greater extent), the U.S. (to a lesser extent), and a whole host of European countries in between.
A weaker currency allows a nation to earn more from its exports. As the country exchanges its goods for a higher priced foreign currency, that export income is converted into more of the local currency. And the weaker the local currency is, the more income is earned from those exports.
With extra money on its balance sheet, a government has more money to spend internally. It can hire more workers, putting the unemployed to work. It can upgrade infrastructure, expand industry, stimulate the economy, and support social services such as education and health care.
Think, too, about all that Iraqi oil still locked underground. The country needs to develop new oil fields, extend railways and pipelines, increase refining capacity, and improve its export facilities.
Iraq is in rebuilding mode. The more it puts into its oil industry now, the more it will get out later. Only by keeping its currency cheap can it maximize its oil revenues and pay for more expansion.
If even the wealthiest of countries do not want a powerful currency, why in the world would Iraq want one, given the sorrowful state it is in?

Promises, Promises, Promises...
Sellers of the Iraqi dinar are making a killing on all this talk of a currency revaluation. DinarTrade, for one, is selling 1 million dinar for $980 USD but buys the same amount for just $810 USD. According to XE.com, the trading value for 1 million dinar is $860 USD.
According to a Salt Lake City, Utah news report, financial attorney and Forbes contributor Jay Adkisson believes there is “a proliferation of websites and social media created by scam artists pushing the dinar as an amazing investment opportunity. They tout a thousand-percent-plus return just as soon as the Iraqi Central Bank revalues the currency by resetting its exchange rate to a more favorable one.”
“There's no realistic possibility of the revaluation of the dinar anytime soon,” Adkisson dispels. “And anytime soon is within the next 10 years.”
Even the U.S. state of Washington has become alarmed enough to issue the following alert:
“The Washington State Department of Financial Institutions is warning consumers about potential scams regarding Iraqi Dinar currency exchange services … asking the consumers to send a check, wire, money order, or pay cash upon delivery of the Dinars.
“What consumers are not told is that the Dinars can be redeemed only in Iraq, as most of the established currency exchange houses and banking institutions cannot convert the Dinar to US dollars. Since no exchange exists for the Iraqi Dinar, dealers can charge whatever they want to sell and buy back the Dinars.
”In addition, most of these websites are operating illegally in Washington State, without a currency exchange or money transmission license issued by the Washington State Department of Financial Institutions. Make sure you only deal with licensed, legitimate companies when making financial decisions.”
The alert was last updated December 2012.
Time Frame
Yet some investors feel purchasing dinars is a great way to participate in the expansion of Iraq’s economy, which is set to boom over the next 10 years. As the International Energy Agency summarized in the Wall Street Journal:
“Iraq's oil output is on track to more than double in the next decade, supplying almost half the growth in world oil supply” and eventually “taking the place of Russia as the world's second-largest oil exporter.”
But there are more secure ways of benefiting from oil than the risky trading of a speculative foreign currency. Knowing how much Iraq’s central bank is involved in keeping the dinar at a steady exchange rate would make any currency trader nervous. You just don’t know what the bank will do or when.
It could be years or even a decade before the Iraqi government allows its currency to trade as freely as most other currencies do – according to the laws of supply and demand, interest rates, and economic activity. And remember, too, that a flat “redenomination” is not to be confused with an increased “revaluation”.
Better returns could be found in one’s own country or in economies where continuing stimulus will keep stocks strong for years to come. And if oil is your thing, there is no shortage of global petroleum giants that offer more tangible returns on your investments than the pie-in-the-sky promises made by dinar vendors.

Rick

Sunday, May 12, 2013

Winning ebay Silver Auctions!

I have been buying silver and silver coins on ebay since 1998. In that time I've learned a few things about winning auctions for US junk 90% silver, uncirculated, proof, and bullion coins.

Specialize

Pick a particular section of the silver coin and bullion market and become an expert. Research ebay guides, review hundreds of auctions, search the internet for every article about 90% junk silver if that's what floats your boat. If not, then become an expert in uncirculated Kennedy and Franklin halves, Morgan dollars, US Mint bullion products, etc.

The coin or bullion you decide to specialize in doesn't matter. Silver is basically silver. What matters is that if you're going to start spending hundreds or thousands of dollars that you know what you're talking about. Too many people on ebay and in other silver buying sites have more money than brain cells. I heard from one commenter about how happy he was with his purchase of old 1957-1967 Mexican peso silver coins. It broke my heart to tell him that the coins he bought weren't 90% silver as he assumed based on his experience with old US dimes, quarters, halves, dollars, but only 10% silver! He had no business dipping his toes in a pool that was to him nothing but a murky oil slick.

Counterfeits

Research the counterfeit silver sites. Learn about the counterfeits flooding the US from China. After you think you're an expert - then read some more. Our Chinese friends have no appreciation of intellectual property, copyright, or US counterfeiting laws. Morgan silver dollars are probably some of the most counterfeited coins on the planet, especially the CC Carson City, NV minted silver dollars. Based on this problem, I would strongly suggest you avoid buying very rare and expensive coins online. Even coins in PCGS and NGC holders are being counterfeited. Sometimes the holders are real and the coins are fake. Sometimes both are of Chinese manufacture. Stick with coins that have most of their value in silver content, not numismatic rarity. More common coins aren't faked as often, and potential losses are much less.

Buy from Auctions:

Auctions have been shrinking for years now as ebay tries to compete in Amazon's playground. But all the Buy it Nows and ebay stores in the world can't beat the sheer exhilaration of winning that last minute auction. Moreover, the chance of winning a steal in a "Buy it Now" environment is virtually eliminated. For my money, if I want to just outright purchase something at the going rate I'll click on Amazon.

Just last week I won a roll of 20 2004-S Kennedy 90% silver proof halves that some entrepreneur liberated from proof set packaging for $176. The going rate is $250 and up!

Having an Edge

I'm a silver coin bargain hunter, and I win 20% of the auctions I select to bid on. That's pretty darn good with a category as hot as US silver coins! How do I do it? I use sites like Coinflation.com, Fatfingers.com, Photograde.com, WatchCount.com and various Sniper sites. My attitude is if it's allowed by ebay's rules, then take advantage of it. Of all the sites I listed above, the ones that really get ebay user's juices flowing are sniper sites and sniping. Many feel it's unfair or ineffective. Well, I snipe, and I do pretty darn well. Sniping keeps you out of bidding wars and last minute foolish bidding. I set the sniping program clock for 5 seconds, and my bid hits automatically at that preselected time. No muss, no fuss. I can watch the auctions or I can sleep, work, watch TV, etc. Using the ebay automated prebid system is like telegraphing your punches. All a competitive bidder has to do is to continue to bid to expose your high mark. Heck, I've seen my share of what looks suspiciously like the ebay sellers bidding on their own auctions to get the bids up. I have no interest in playing their little games - just winning silver coins auctions.

Auction Hunting

Use your Watch List to store and manage your selected auctions. Do your homework, and don't wait until the last second to locate and auction and bid. That leads to sloppiness and wasted money. Many auctions are straightforward, but others are either intentionally or unintentionally vague. If you're not sure if the proof coin is clad or silver, DON'T BID. If the photos are blurry, non existent, stock, or don't match the heading, DON'T BID. Chances are, something is fishy in the State of Denmark.

Do look for auctions with low bids & views, misspellings, and incorrect categories. Bidding during the week can be inconvenient, but usually nets lower competitive bidders than does a weekend night between 8-10 pm. Watchcount.com can help you discover low bid auctions even when there is no counter on the auction page.

Selecting the Seller

Sometimes for fun I'll read negative comments left for some sellers. They can be quite entertaining, from a grammatical, as well as a sociological, psychological, and sometimes pathological viewpoint. However, I have zero sympathy when I see a buyer leaving a negative comment for a seller that has already racked up hundreds of negative feedback! Why would you buy from a seller like that? I can only conclude that the buyer didn't do their due diligence on the seller before bidding - caveat emptor my brothers and sisters! I remember one buyer left negative feedback because he didn't get silver in his "unsearched roll". When I was five my father told me you don't get something in this world for nothing. The unsearched rolls are probably the biggest coin scam on ebay today, and this seller had hundreds of negative feedback from other disappointed, if na├»ve, buyers to his discredit. If you willingly swim with sharks, you WILL GET BITTEN!

Make sure your seller has over a hundred positive feedback, and at least 2 years with ebay. Check their feedback and look for anything weird or off. Do they have 50 recent positive feedbacks from folks to whom they sold a $1 worth of crap? If so, avoid them. They're covering up something, or setting themselves up for a major score at your expense. Instead, look for the experienced seller with a plain no nonsense auction, good pictures and clear description, reasonable shipping, and a past history of selling coins. If your roll of uncirculated Franklin halves are more AU than BU, then don't blame the dilettante seller - blame yourself!

Finally, I want to re-emphasize that I buy coins on ebay whose value is primarily due to their silver content. They may be junk silver or uncirculated 1963 Franklin halves, but at least 85% of their value is silver-related. Some "super counterfeits" being turned out by the Chinese can only be detected by an expert with a magnifying glass, caliper, and a scale. Amateur photos taken of coins on the kitchen table under glaring light will never expose the tiny flaws in these clever fakes. Moreover, if the price is way to good to be true...

Rick