OPEN LETTER to Peter Schiff and Dr Paul, HELP!!!

I sent you a message basically talking about increasing your emergency fund. The emergency fund is basically just money that will cover all expenses that must be paid....the fund to be used during a loss of income.

I recommended 4 months minimum of emergency fund. And when you reach that go for 7 months total of emergency fund.

The twist though, was to start buying bullion, once the 4 month emergency fund mark was reached.

At some point a person could have 3 to 4 months of emergency fund based in cash, and 3 to 4 months of emergency fund based on bullion.

The balance of bullion to cash, could be adjusted as things changed.

A little more bullion could be useful when you feel job security is strong, and that inflation is on the horizon.

Or a little more cash, if job security is lower then usual.

Or if gold makes new highs, take some profit and apply the proceeds to your secured debt.

Here are my simple observations about selling precious metals, and debt:

-Inflation: when inflation is high, sell high, and DO use the proceeds against your fixed rate debts. Don't use the proceeds on goods, materials and services that have also inflated.

-Deflation: when inflation is low, if forced to sell low, DON'T use the proceeds against your fixed rate debts. Do use the proceeds on goods, materials and services that have also deflated.

In this way, you take advantage of gold/silver's strength during the good times.

And suffer no penalty if forced to sell during the bad times.

The reason I mentioned selling first...is that it's easier to buy. It's a little bit more challenging to know when to sell...everyone knows to buy low sell high. But what if you bought high, and are force to sell low? I'm noticing that bullion tracks other commodities. Not perfectly, but it's in the ballpark. Bullion buys as much gas, food, energy and general supplies when prices are high or low. Commodities are moving together.

But your fixed secured loan payments do not normally shrink or expand with commodities. Therefore selling gold low and using on the house payment is detrimental, and the opposite is true....selling gold high and using on the house payment is good. (selling high assumes you sold higher then you bought)

If you have no debt, you can stay in a larger percentage of bullion vs cash.

If you have a high debt, you can't go so heavy on bullion, cause in hard times, selling your bullion low and applying to a fixed rate debt is not so good. Your liquidating more metal for a single payment, then when inflation is high.

If you have high debt, but feeling confident about your job security and don't have a lot of unsecured debt......you play it by ear.

I have no debt. Over half my assets are bullion. Almost half is sitting in cash at the stock broker. And a small portion represents my emergency fund.

My emergency fund is smaller then 4 months worth, simply because I have no debt, and I'm very adaptable.

If you have family, and large debts.....then a person has a lot more to lose and requires greater stability. You need at least 4 months if not double that in emergency fund. Only cash beyond that should be used for bullion and other investments.

I do in fact hold a job that is as close to recession proof as there is... and depression resistant as there is. I am much more likely to be fired for my "extreme Constitutional views"... Ironic for one in my profession.
I will be able to pay my existing bills, but inflation, deflation, stagflation offer unknowns at this time.

Do silver rounds offer the same purchasing power as silver eagles and pre-64 US coins?

I own a rental property in a (current) boom town that I cannot seem to sell... I am afraid it may become the stone around my neck.

Thanks for the views
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“Liberty means responsibility. That is why most men dread it.” - George Bernard Shaw

wants are unlimited, means are scarce...