Thunder Drake

Would it come as to any surprise that a dragon would not have an inclination towards precious metals? I’m a large, fire breathing, and some what of a fat dragon that enjoys collecting them. I’m as bland in this notion of dragon behavior as chewing on oatmeal neat from the crops in the back of my landscape.

Today, I shall elaborate upon one of my favourite components of my hoard… Precious metals.

I want you to brace yourself, ladies and gentlemen; dragons, and dragonesses… This is going to be a more lengthy elaboration. 3000 words long, to be exact. So perhaps you’ll get your silver’s worth out of this little introduction of precious metals. (Hehehehehe…)

A sliver of history on precious metals

Long before establishment of societal structures, there existed barter. This was an arduous method of trade. For example, what if cave man did not want your state of the art spear in exchange for 100 pounds of cervine meat?

It was not until centuries that civilizations took form. The usage of all metals began to emerge. They killed. Protected. Built homes. Hosted fires. They created. They destroyed. As they developed, rulers and it’s people needed to decide on a medium of exchange to minimize barter to ease the facility of trade. This was when metals were being dug, that these humans discovered a shiny, valuable, bendable, easily melted, and notably scarce series of metals. These were Gold and Silver. Later, Palladium and Platinum came into introduction, but the former two were the most prominent; timeless.

They became exceedingly sought out and valued for their scarcity and appearance. Every nation in the world wanted them. Because of it, it became the cornerstone of currency from then on.

Come to the time of now. They are still among the most sought out valuable more than anything else. To the degree that venturers are digging through the earth with powerful devices. To the degree that they are being recycled from the most peculiar of devices. Electronics, I believe they’re called. But it is this that makes precious metals so powerful; the most timeless tool of currency. They have industrial usage now.

No longer the only method of currency in this day and age, yet it still makes up one of the most favoured methods of hoarding.

Precious papers in contrast to precious metals.

I don’t hoard just precious metals. But all things of storage value. However, given the history of precious metals, it would be interesting to compare it to what I call fiat currency. The inked, colored, usually green papers that is also used for exchanges. Or as what you humans would address as.. Money.

Precious metals and precious papers serve as an interesting antithesis of one another.

- Precious metals are nature made.
- Fiat is human made. Created out of thin air.
- Precious metals are backed by the universal, worldwide demand for them.
- Fiat papers are backed by the body of a nation’s government. This paper is their foundation.
- Fiat papers is far more easily to manipulate by corrupt nations by simply creating lots of it.
- Even though metals prices can be manipulated, they are tangible, and cannot be faked or truly destroyed.
- When fiat papers inflate, the price of metals rises.
- When currency is powerful, the price of metals wane.

Precious metals serve as the endless protector of purchasing power. They will rise and fall with the times, but so long as a monetary system exists, precious metals as an instrument of trade will never go away. Let us look into them, shall we?

Gold

By and large the most sought out precious metal. Arguably, there is nothing more sought out on the face of our planet as this one little shiny yellow metal. It is the symbol of wealth. The key to prosperity in trade.

Being of it’s sought out value, people would even spend a large deal of their lives and time scavenging even the littlest of bits of gold. As of writing, a few meager pieces of gold could exchange enough food for a human being to last them months at a time. It’s that valuable. Because of it’s level of value, it became, and technically still is, a medium of large-scale trade.

Nobody could put a claw to the challenge of gold’s value. So long as money is used as the medium of exchange, or even cases of barter; gold is, and always will be, the biggest tool of exchange.

Silver

Silver has a lot of nicknames. Gold’s kid brother. The metal of second bananas. Gold’s shadow. The poor man’s gold. All of these names seem to carry a negative cannotation in contrast to the name of silver. But who are we fooling? The second bananas of gold means that silver is the second most valuable object you can amass! Did I mention that I love silver more than I love gold?

I’ve considered silver a lot more enjoyable than gold. Silver is more abundant, shiny, practical, and easily maintained than gold. It’s used in a lot of human industry as well as a form of currency. Arguably one of the most versatile forms of currency as well.

Historically those who wanted to buy smaller trinkets, like a good, a single service, food, or other small scale needs, silver was the medium. Yet it was still tradable to larger scales. You just needed to haul.. A lot of it. But silver has proven it’s versatility as a form of currency.

Perhaps my most favourite aspect, aside from trinkets and jewelry of course, is it’s behavior in the market. It spikes and drops even harder than gold. And I like this. As a dragon, this means I can trade off a lot of silver at it’s zenith, and hoard a big batch of it on it’s nadir.

Palladium and Platinum

During the large trades of precious metals, two other white metals recently came into play as valuable and precious. These two metals were known as Platinum and Palladium. These make up a tiny part of my current hoard.

Platinum is by far the precious metal with the highest level of scarcity. In fact, it’s so scarce, I would go as far as to call it the gold of gold. Hurts a cranium saying that, but.. That’s the best way this dragon can put it!

Palladium, the other white metal, is less valuable than gold, but roughly ten to fifteen times more valuable than silver.

What’s interesting is that these precious metals weren’t introduced until much later in the world. Could you imagine how much medieval miners were missing in value when they threw these two away? by the skies, what a loss!

However, because of that lack of demand in the two metals, it would be slightly harder to sell them for whatever price the market stands at. Keep that in mind. But they are undeniably precious.

Putting these shiny metals in your hoard

Now that you have an overlap of the glorious precious metals, I would like to share with you some methods on how to take action on adding precious metals into your dragony hoard. There are a variety of ways you can add precious metals into said hoard, and I’ll cover a few of my favourites.

1) Through imperfect jewelry and trinkets.

One method I tend to enjoy quite a lot, is to acquire the trinkets of others. One of my favourite methods of hoarding is to simply strike deals with people whom are willing to part ways with jewelry, or even scrap pieces they have lost interest in. I have been criticized for this as taking advantage of other people, but I believe the real aspect of such a deal is that both the humans I’ve traded with, and I, walk away happy. What, would you rather I broke into castles and pillaged the vaults instead? Besides, there are tons of humans doing this today at absolutely low ball prices. I try to offer these humans a far superior price. And they deserve a superior price.

This is also one of my favourite methods because the imperfections of the other metals seem to devalue the original precious somewhat, but really has little impact in the long term. Which is funny in a way. A wise human being once said “Silver is silver is silver.” What this means is that no matter what the gold or silver’s in, it can always be separated and isolated from the original metals, thus giving you the original content of the precious metals.

2) Through fine coins and bars

like #1, you can strike deals with individuals whom are willing to part ways with metals. But this is my most preferred method when I see a huge decline in the value of a metal, thus allowing me to stock up on large quantities of it in one go, therefore enabling me to spend more time in my cave.

Note that there is a difference between coins and bars. Coins have a collector’s value to them. They are usually minted and crafted to have pretty designs on them, giving them what is known as a face value. The face value is the added value of the coin for it’s rarity and collective properties.

Coins and bars are known as ‘Bullion.’ Because they have an exact weight, and a recognized decoration and stamping that helps others recognize it. Bullion is what professional markets dabble in. Bullion are usually worth more than it’s standard price because of this recognition.

My favourite method of owning fine metals is through bars. While it still has a face value, depending on the bar, this is the best way to own precious metals through the meager value of the metal’s content. I refine any excess inperfect trinkets to refineries, and have them converted into this. It allows me to simplify my treasures.

Coins however, are harder to fake. Even though their premium is higher, and their metal content not 100%, they are usually printed by a very, very familiar mint. Even though bullion is as well, there had been a recent scare going around where bars had been faked. But you could probably assuage this by buying directly from the people who mint it.

Ingots are similar to bullion, only they don’t have an exact weight. They also lack an exact purity. They are usually melted into shapes or bars, but otherwise aren’t mathematical. This dragon has fun turning jewelry into ingots.

3) Indirectly, through security papers.

Like fiat papers, you can own papers that serve as the legal right to own whichever metal it’s assigned to. One example of these papers are usually known as ETF’s. Exchange Traded Funds.

Unlike fiat papers, it’s value is in correlation with the precious metals instead. This is perhaps the best method of reducing your cave clutter, if you prefer not to be ostentatious and be more clandestine with your hoard instead. Papers run the risk of default like any other, but in owning human papers that provide you the right to own those precious metals, you’re playing a nearly identical game.

There have also been rumors that because of our economic tribulations, that many institutions who sell these papers only hold a fraction of actual precious metals than what they dole out in security papers.

… If this is true, then I would advise one to take heed when amassing these. Perhaps they would make speculations a breeze. But try not to hold them in the long term. I personally discourage it because of how institutions are acting as of the time of writing.

The benefits and pitfalls of hoarding precious metals

While you may see precious metals as the most glaring aspect of a dragon’s hoard, it’s only because I, like many other dragons, are rather ostentatious with metals. Having papers laying around in the same place as the precious metals does make the hoard look goofy and out of sync. I’ll admit there’s an emotional reason within my draconic soul that I do this as well, but I can be just as giving too. Yet while I am a bit of a show off with these metals, I must urge you travelers to take much better care of them than I do.

The benefits to owning precious metals is fairly obvious.

- You establish long term wealth. A vehicle ideal for long term hoard builders.
- You give yourself the ability to take advantage of the market when it grows.
- You protect yourself against the dangers of fiat money. Precious papers is known to become worthless in history every single time, but these metals will continue stand the test of time.
- You can make trades with individuals and go against the standing value of metals, even when precious metals reaches a zenith. You can defy the spot price.

But there are pitfalls, very dangerous, very real pitfalls in owning precious metals. Take heed, my friend.

1) One of the most common aspects is that if you own your metals directly, you are vulnerable to theft.

DON’T ROB MY METALS!

I may look like a powerful red and yellow dragon who can incinerate everyone in my lair with a single breath, but take this scenario. What would happen if hundreds of human soldiers from a powerful government, dressed in the most powerful of armors and damascus steel weapons sought to conspire against me and pillage everything my cunning has earned me? All which I spent my life labouring for can be taken away from me by crooks. As sad as that may be, that is the reality. Precious metals are scarce, and incredibly sought out. Humans beings, even dragons among me, will go to even violent means to obtain them.

Another method of theft is theft by national intervention. I only recall this happening in one point at history, but I fool you not. The leaders of your country can confiscate your metals. Or more likely, they can force you to sell them at it’s current value.  This has happened before with gold. And this is actually why I prefer silver. But history can repeat itself, especially during tough times in human markets. This leaves you in a moral situation. Relenquish your metals for nothing.. Relenquish your metals for the spot price.. Or bury it in your garden with the risk of getting jailed. Evil, evil!

2) Precious metals can be played for fraud.

While I like to buy other people’s metals, it is still quite possible for people to make a fraud of this instrument. It’s important to study the properties of the metals themselves. For example, a common metal can be simply layered in a precious one, rendering the content beneath it a dud. To be safe, bust out your little science studies and look up the properties of the metal. One of my check favourites is taking a wee magnet to it. Fine gold or silver is non-magnetic. When combined into jewelry, like a 12K-22K, the magnetism is weak. Sterling Silver is usually weakly magnetic, due to it’s small concentration of copper or other metals.

Covering the genuine-ness of a metal is a scientific study in and of itself, so if you want to dabble in your metals with unique angles like I do, you should be wary of scandals. I do like catching liars though. It gives me a reason to hurl them against the wall and get away with it.

Sometimes shinyness usually isn’t a factor, since it gathers dirt like all other metals do. But it can still be refined to become good as new.

There are other more sophisticated ways to check it’s properties, like flexibility, melting point, acidity tests, and more.

Perhaps I should be studying more about these properties myself..

3) Buying from the open market at the wrong time.

It’s important to collect these four metals into your hoard. But it’s equally important to know when NOT to buy your metals from the market. As of speaking at this time, all four metals are at prices I’ve never seen before. It scares me in a way. While it means that I can capitalize on this and sell some (Which I have, but only a bit) It means that it’s also a rather risky prospect to buy it straight from the marketplace at this particular moment. Conversely, at the time of writing this, there’s been a lot of.. Interesting matters regarding precious metals. Political interferences in a lot of things. Let’s just say that even at these high prices, buying bullion straight from the market isn’t a bad idea after all.

For all I know, they could continue to rise, but not even the most psychic and godliest of mind reading dragons can predict the demand of the human market. What if all of my prediction of this economic apocalypse has been for naught? The price of metals could steadily drop. You would need a hedge!

If acquiring metals directly from the market, don’t worry about timing the market. Most usually can’t. It requires a bit of creativity, but with homework and diligence you should find a good time to purchase it. Do what we dragons do. Sit on it.

You wouldn’t want to stand around and speculate a time when it immediately get rid of it. That’s what the stock market’s for. Unless you dabble in options, of course. But that implies not owning the metal.

Final disciplines for adding precious metals to the hoard.

Having covered all of this to help build a hoard for yourself, you now know that these precious and splendid little shinies are not without their financial risk. Yet as ironic as that may sound, It’s their timeless value is what makes these metals a safe haven. This is what allows you to grow your wealth in passive means. Paper money can diminish worthless, but metals will never lose value, as long as we rely on money. When it comes to developing your wealth, here are some suggestions.

1) Don’t put all your eggs in one basket, but don’t put few eggs in a thousand baskets.

If you stick strictly to the metals, your entire hoard can be validated by those metals alone. Conversely, if you own a hundred other treasures that are not precious metals, the growth may be all too low.

To summarize, put a healthy portion of your hoard into these precious metals, and focus on acquiring other valuables as well. I put 35% of my hoard into these valuables. You just don’t see my unshiny papers.

2) Be patient and make friends with the nadirs.

Twenty years ago, my precious metals made very little value in contrast to my hoardable papers. What did I do? I Bought.. Waited.. Bought.. And waited. Commodities are best played like this. Because now they’ve exploded in value to absolutely absurd levels, and the wealth of them has grown exponentially.

A hoard is for life. Particularly when you buy commodities.. Find something when it’s price is low.. And wait. Even if you have to wait a decade or two. For the returns will make you grin as toothily as I am now.

Ending the lecture

Thank you for listening to me, traveler. While precious metals may be my most favourite vehicle, I am interested to learn more about them in regards to hoarding. I am also interested in furthering my studies in other treasures. Soon, I will cover bonds.. And even the infamous market of stocks. A market which I happen to love. These three treasures make up a large focus on my hoard. I shall cover those two treasures soon, and where they stand in my hoard. If you have any say, do share! I like to listen as much as I like to speak.

If you bear any questions on the aforementioned metals, or cover any other subject in regards to hoarding, such as where to begin, I would be glad to oblige.