This guy doesn't like precious metals.

Because silver and gold are fungible commodities that trade on the open market; there's too much total supply being freely traded all over the world for any one government to manipulate the price and value of them, even if they were so inclined. Besides which you give them too much credit if you think they'd try to manipulate the price of precious medals to improve confidence in their troubled currencies. If that had that much foresight, they'd adopt monetary policies to keep them from becoming troubled in the first place, not to mention that any attempt to hide the problem in this matter would be counterproductive as it would only serve to call attention to the problem you're asserting they're trying to hide.

The easiest way to disprove a conspiracy is to show that the supposed conspirators are too incompetent to pull it off (exactly the argument I use against the 9/11 truthers and other conspiracy theorists lol...).

It's worth noting that if countries' governments wanted to shore up confidence in their currency by buying up precious metals to back them up, that would drive up the prices, not lower them. Not a single country in the world does this anymore; all currencies in the world currently are fiat currencies backed up by nothing other than the faith and credit of the issuing countries. Not only is there no evidence that any country's government is doing anything to manipulate precious metal prices, there's no evidence that any of them even want to. (No country wants its hands tied by backing their currency with gold because it constrains monetary policy too much.)

To be fair it might be a good idea for governments to start doing what you think they're doing. But there's no evidence that any of them are that smart.

 

Log in or Sign up to hide this ad.

He's a fool. Without precious metals to back it up, money is just worthless paper.

 

The article made some good points. I don't necessarily agree with all of it. But I did find this tidbit entertaining.

"the only function of economic forecasting is to make astrology look respectable."

Likewise with trying to predict the price of spot silver or gold.

 

There are numerous equities traded on dozens of stock exchanges throughout the world. How are they any different from precious metals?

 

Um, point being? What do stock exchanges have to do with the supposed manipulation of precious metals prices by governments? Are you saying governments manipulate stock prices too? And even if they do, what does that have to do with the topic at hand?

I don't think it's relevant, but to answer your question: stocks and equities are an interest in a business, and their value is based on investors' appraisal of the businesses' potential profits. Precious metals are commodities that derive their value from their intrinsic worth. Both prices are determined by supply and demand, but stock has zero intrinsic value, if a company goes out of business, its stock becomes worthless. Gold has never been worth zero since humans have assigned a value to it. I suppose if someone finds a mountain made of pure gold its value would plummet, but there's no Gold Inc. that would make gold worthless if it went out of business.

Did you ever take economics in high school and/or college? This is pretty basic stuff here, just wondering.

 

I never said gold would be worthless. I'm simply saying its fair to say the fall of government would mean the fall of the internet. There will be very few people who will know that the value of gold is 1666.2. As such I doubt the common man would accept that number for the value of gold. in my opinion a flawed market will exist but the majority of people will not accept gold.

History proves otherwise? Prove it. The absence of government throughout history has led savages to break your skull away to eat a meal before you do. At least that's my understanding. Prove my wrong. Show me how the "golden" light paves the way for survival across the abyss of anarchy

 

Um,
It appears as if many people in this thread believe stocks, interest rates and currencies are manipulated by the government.
Your post claimed silver could not be manipulated because its globally traded.
I give an example stating that stocks are also traded globally to refute your post.
Whats not to understand?

I'm actually a finance major. You failed to answer my question. Ironically I did not find it relevant for you to list me where the value of precious metals and stock derive from. I was merely asking the difference based on the context you provided of the superiority of precious metals because of the fact they cannot be globally manipulated

 

I already pointed out that governments and central banks openly manipulate interest rates to manage sovereign debt, and manipulated Libor for many years before being outed. This is not a matter of theory so much as public record. So central bankers certainly are competent enough to influence the financial markets. Central banking is founded on this very premise. What I argue is that there is a limit to such manipulation, and that the suppression will bring about a belated pop in silver prices in the next decade or two.

I think I understand where others in this forum who are "silver is money" skeptics are coming from. I suspect that this is more of a numismatic than an investment forum, and frankly I believe that many numismatists do not appreciate the fragility of our current monetary system. Sure, they know history, the kings and queens and presidents on their coins. I also think there is some merit in the view that fiat money is preferable, because, as I pointed out before, new methods in financial engineering have been developed by the high-IQ technocrats. But recent history shows us their plans can have catastrophic consequences that are unexpected.

We will have to see in the next decade or two how this system plays out.

 

Never argued that they didn't do that. You were the one who implied that they manipulated silver prices, and well, there's just no evidence that they do, want to do, or even can (to any significant degree anyway), do that. I think the limits to their supposed manipulation is even more than you think it is. You just can't corner the entire precious metals market, even if you wanted to. There's too many buyers and sellers not under the control of any government.

But governments can influence precious metal prices in a sense. If they take fiscal actions that investors think is bad for the stability of the economy, it makes precious metals a desirable alternative for investors rather than stock in companies they think will be harmed by economic weakness or poor fiscal management. High inflation caused by loose monetary policies and excessive spending and/or borrowing also makes precious metal demand go up. You want to call that manipulation, go ahead, but I doubt it's what governments are really aiming for lol... it's certainly affected by government policies, but not directly and not intentionally. I seriously doubt anyone in any country's government is thinking "let's make the economy worse so gold prices go up." Not unless there's several countries being led by James Bond villains.

 

The problem with your counter-example is that it only works if stocks are manipulated by the government. Governments can certainly take actions that influence stocks but assuming the stocks in question are traded in a free market, governments can't (or at least don't) manipulate them directly. Therefore, your refutation failed. I didn't fail to answer your question; I gave you very a very detailed answer why precious metals are different than stocks. You may as well argue there's no difference between shoes and socks because both are articles of clothing you wear on your feet. The fact they share similarities does not make them the same.

P.S. Since you brought up your education, it's fair game to mention that I'm an accounting major. We probably took very similar classes. I'm pretty sure we were both required to take macroeconomics. You may want to pull out your economics book and give it another read.

 

With all due respect, you could be right, as I am not an insider privy to information at the highest levels. But I have to take into account the wealth of data I have absorbed in the last year or so. I am concerned about the paper trading being totally out of proportion to global silver production. Also, and this issue is very important and relatively recent, much of the trading in the markets today is done by computer algorithms via high-frequency trading. Some prominent people are arguing that the markets today are broken or that the price discovery mechanism is hopelessly distorted. No longer is most of the trading done by living, breathing, sentient beings like you appear to assume. I don't know if HFT also affects commodities, but I am assuming that the distortions in stocks are affecting other markets like commodities as well, or that if manipulation is blatant in one area it is likely to exist in the other. After all, we are dealing with the same institutions. (Just Googled it: the commodities markets are affected by HFT).

I have also listened to Bill Murphy of GATA and Max Keiser, and I find their arguments persuasive. I am assuming, since you are interested in coins, that you also believe silver is a good investment or at least a hedge against inflation?

 

There' no need for personal insults we are just discussing.

- With respect to your post my apologies. We must have not understood each other well. My argument was based to prove that stocks traded in a free market as you mentioned are not manipulated as others here claimed.

Regarding education I'm a freshman. I took microeconomics last semester and am taking accounting this semester; I find it very bland and dry.

 

No, like I said, the value is perceived to be higher, I dd not say the government was manipulating it (not to say it or private concerns couldn't). I am saying for it to be currency there must be an authority. A currency only has worth if it is backed by an authority and a market. Besides decoration, gold has historically had no other use save as a measure of wealth, in other words, currency. If it was not chosen for that role it would be far less valuable as a commodity as commodities are more often valued on their practical need, the projected supply and the demand. So part of its value is as a commodity like any other...the other part is fiat...because we say its valuable. Also, historically speaking, it has been almost the sole domain of the powers that be. Today, because there is a commodities market, regular people can spend a lot of currency to buy a relatively small amount of PM from for profit businesses (who insist on the coin of the realm for payment) and put it away in the safe, sure it is the answer to economic instability.

 

Well as for personal insults, what's good for the goose is good for the gander; but since you apologized I will too. I don't like ad hominem attacks anyway as it's like admitting you have no better way to make a point. And besides it looks like we agree on more things than we disagree on anyway lol...

As for accounting, I doubt many accountants would claim that accounting is a non-stop thrill ride. But well I just like organizing things, categorizing things, making sure it all adds up right and fixing it when it doesn't. If that doesn't describe you than accounting isn't for you. But if you haven't taken macroeconomics yet, I'll bet you'll find it very interesting based on your discussions here. Not sure what you're planning to do with your future finance degree but whatever it is I'm sure you'll find having an understand of how markets work and how governments, businesses, consumers, etc. influence them will be very valuable. (Heck sociology and/or psychology might not hurt either lol... if you can understand why people act the way they do you'll have a much better understanding about why the world works the way it does.)

 

Based on your description I would love accounting; it seems our personalities align. I am considering minoring in accounting but of course I have to give it more time; I just began my course.

I think I have a solid general grasp of basic financial systems and human behavior. Although it is definitely true I am by no means an expert and their is a lot to learn. It's funny you mention sociology. I am actually taking an international politics class as an elective; it certainly is giving me a better understanding of human rational lol.

Again my apologies for the confusion earlier and please just to clarify so i don't leave a bad impression I am acutely aware of the differences in the manner in which stock and pm are valued.

 

Have always wondered why so many here assume one has anything to do with the other. I'm sure there are many coin collectors who also like silver as an investment but for me at least my interest in coins has nothing to do with what I perceive as their investment potential. I collect coins because I am interested in coins, not because I see them as potential investments. If all my coins became worthless tomorrow I still have a collection of coins I like owning because I find them interesting for their own sake.

I suppose silver and gold are OK investments, they've been a pretty decent long term store of value and a pretty good hedge against inflation, but I don't have a crystal ball and if you want to know what gold or silver will be worth in 20 years, 10 years, or tomorrow, your guess is as good as mine. I'm not planning on selling any of my coins to retire off of; if anything I hope to save up enough for retirement so I can buy more. What they'll be worth in the future will be my heir's problem as I have no definite plans to sell off any of my collection while I'm still alive, if I can help it.

 

Perhaps it's because some people develop an interest in coin collecting after they start investing in silver, because junk silver is one of the best ways to start investing. That's how I started collecting coins. I like collecting and investing at the same time. That's why you may never see me writing about three-legged buffaloes and instead find me posting about my latest 8 reales acquisition. I love big, fat silver coins. I enjoy placing them on my scale and seeing the number of grams go up. But that's just me.

 

Well it's actually the reverse for me, as I became interested in coins many years before I ever thought about investing in precious metals. And my interest in coins for their own sake still greatly surpasses my interest in their investment potential. I almost never sell my coins and when I do it's usually just to get money for coins I want more.

 

And that sums up the different worldviews of silver bugs such as myself and pure numismatists. I've noticed some ribbing by veterans here toward silver bugs, but I believe over time, as my economic view is proven right (I hope!), you will see a modest increase in silver bugs infiltrating this forum and clashing with those who collect coins purely as a hobby.

 

I have to admit I started as a silverbug, and am now mildly numismatic. I like to buy something that I know has a certain value as a piece of silver and then find out that it's worth a lot more because of its numismatic value. I also have gotten into certain types of coins because I like them. Right now I am on an old coin kick. I really like the oldest stuff I can find. Some of my interests lately are Canadian tokens, transit tokens, French coins and old English pennies. They aren't worth much as far as their base metal value, but I think I have caught the bug. My numismatism is taking over....