Was it a mistake to buy silver now?

Too much to mention from my iPhone ... Later tonight. But I must say, nicely tee'd up for "Nube" (Spanish).

 

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It could, but still no sign nor numbers indicating that it is a forgone fact.

I can't say this isn't true, but may I also say that from my point, every other prominent economy ( Country) do exactly the same and often to a worse extent. I suspect but no one can prove, due to the lack of transparency of the government, that China and the BRIC countries deflate the bad news and inflate the positive news. No country is going to back their currency with PM. All it would do is drain such PM out of their control. The key isn't how much paper is being printed, as much as how it compares with how much is being printed by other economies. In the beginning stages of the US housing, debt, etc. problems, I, along with many, thought that the Euro or other currency would "crush" the US dollar. I really expected by now it would be $2USD=1 euro, not the $1.35 level.

I am not a PM "hater", nor a PM "Lover", I am a trader. If it is in a good pattern, I will buy. If not, I will sell and wait for the change. For me, it would have to break above 31.30 strongly to be positive again, and then nervous time. I would hope it would drop to 26 where there is good support level. If you are investing for your future, you have to be open to stocks, or you might miss an even larger gain. Currently I think that stocks or soft commodities are better than PM.

Just my opinion.

Jim

 

Jim, Being a trader. I see how you need to look at PM for trades. I'm looking at this in a short/midterm purpose. I see PM as a good choice for this time frame. I don't see "most" stocks as the option. Although, i do have stocks. I'm seeing this as a hege and protection for this time frame.
Without PM or some other commodity as backup to a currancy. It's all just a trust in the paper your given. It can work good for a long time. But, when it gets abused. That's when that currancy leads to fiat.
My "homework" leads me to believe. This is the road the "Dollar" is going. Plus the international factors, make the problem even worse. And, the human factor... Politicians will do everything to keep the "Hard" news from the voters. Thus, they will make ways to hide numbers and pass laws to make us feel good and vote for them.

 

I go with logic and history . Never has America been so broke ,and owed so much . People change with little real good information. Budget cuts are likely, but not finished . Industry could have an effect on all metals if production does not move up.
Keeping money here at home and using our own natural resources, probably will be the only way to make a huge dent in our debt service.

Pep

 

Don't know if you missed it this morning but PPI came in way hotter than expected .5% vs. .3% (6% annualized). Of course this is the Producer Price Index which tracks the rise/fall of producer input costs. Next on deck is the CPI which we will see tomorrow. It will tell us the degree to which PPI is making it's way through to consumer prices. Manufacturers have been eating rising input costs for an extended period but, as everyone knows, this will eventually be passed on to the consumer.

With regard to Euro and the Dollar, it is sovereign debt that is sinking Europe and the Euro. Unfortunately we are not in much better shape but look better by comparison, thus the "flight to quality". It will catch up with us too. If you want to appear skinnier hang out with your fat friends.

Regards,

Bluesboy65

 

A novel but very illustrative example. Then there are those that wear circus tents, so you can't tell what they are ( Chinese ).

Jim
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Confucious say: He who wears circus tent has big top.

 

Hi Happy, welcome to the fray! You will find a variety of opinion on the points you made but in short I believe you are directionally correct. If you read through some of the other threads you will find my take on things like manipulation of CPI and unemployment statistics. Things like our debt level, exporation of inflation to emerging markets, planned budget deficits, the insanity of the Fed's bailout of the Treasury (bond buying) and the debasement of the dollar. I don't want to repeat it all here but I do believe the result will be an uncomfortable rate of inflation and that hyperinflation is not beyond the realm of possibilities.

I think everyone can agree that 9% unemployment (that is really about 20%) is a bad thing. However it does create slack in the economy that can mitigate the contribution of wage pressure on CPI. I believe that inflation will be driven by an excess in liquidity circulating domestically which will be greatly exacerbated by the liquidation of US debt held by foreign govts which will come back to the US to purchase raw materials and manufactured goods. A couple of events that may kick this process into overdrive will be 1) if/when the dollar loses its reserve currency status (we will no longer have the luxury of exporting our inflation) 2) if/when foreign governments begin a dramatic pullback in their appetite for our bonds. If we do see high inflation, investments in gold and sliver should help people cope.

Once again, welcome to CoinTalk

Regards,

Bluesboy65

 

Thanks bluesboy65! A very insightful take on the triggers on how inflation in the US might come.

I look forward to your takes on the things to come. I've been drawn here because of my outlook on the future economy. While, i'm not a true coin junkie. I do appreciate the hobby of collecting. And i do own several oldies. I think we are in for a wild ride to come. I've already learned a few things today.

Thanks again.

 

Well, it broke above the 31.30 level very strongly. I did re-enter in both SLV and GLD with a portion of what I would commit to my portfolio. I think it is still middle-east fear of the newer problems there, so caution is still strong.

Jim

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Good luck with the trade. I agree with your logic.

 

Have a great weekend everyone!!

 

In a previous post (#28, this thread) I mentioned a story about the Joe Kennedy and the shoeshine boy with the hot stock tip. This was in response to someone who felt like silver was currently over bought. I read an interesting article written by James Turk this morning where Turk describes three stages of a secular bull market:

http://www.kitco.com/ind/Turk/turk_feb142011.html

Here is my summary of the stages in the article:

Stage 1 - market that is reaching historic highs and is getting “growth attention” (early adopters/visionaries)
Stage 2 - market breaks over historic high and sentiment turns to “disbelief and skepticism” that it can go higher; but it does.
Stage 3 - market is “no longer a relatively good value”. This is where the disbelievers begin to capitulate and start piling in.

In the article Turk says with regard to the silver market we are currently in Stage 1 and gold is in Stage 2. Of course no one wants to get caught buying in Stage 3 and this is an understandable and common fear revealed by many throughout these threads. Agree or disagree I thought the article put some nice structure around the analysis of a secular bull market.

Regards,

Bluesboy65

 

:thumb: :thumb: I agree.
Run and buy as much as you can.

 

WOW!! Silver is up to almost $33 in two days! After reading through all of this good advice I have decided to buy more too! Its just hard to decide whether to pay the premium for ASE's and Australian bullion coins which I think are cool or buy pure bullion for maximized profit?

 

It is clear that you are making plans or have done buying, based on the couple of dollars up. I think a lot of it is mid east unrest, which may escalate or resolve. Now instead of just saying " I will hold for some specific time before selling", consider at what point will I sell for my profit. And think about it each day silver changes price.

Be a silver surfer, riding the wave when its good, but jumping off before you even get close to the beach, otherwise you will have to swim all the way back to the line. JMHO.

Jim

 

If you're simply buying bullion coins, I would think the cheapest you can buy would be best, provided all you're looking for is silver content. However, as someone mentioned, you also need to consider how you'll sell them when you're ready. The more popular bullion coins (ASE and, to a lesser extent, Maple Leaves) will also sell for a premium at the other end, though I question whether one can receive the same premium when selling as one pays when one buys.

So, my thought is to buy whatever silver I can buy at spot price, or as near to spot price as possible.

Here in Guadalajara, Mexico, that is easy. In fact, one can often find silver coins (bullion rounds and even US and Canadian silver coins) for below spot price. With spot price here yesterday being $392 pesos ($32.66 US), we found three of the one ounce Libertads selling for just $220 (about $18.33 US). Of course, we grabbed them. That is the best deal we've found lately, but we can often find silver for a couple dollars less than spot price. Guadalajara sure seems to be the place to buy silver (and gold).

I really like it when we run across a more valuable US coin here, and the people sell it to us for spot price. We paid a little bit of a premium for two CC Morgans, but nowhere near what they sell for on eBay.

I have purchased on eBay many coins for just spot price, both ASEs and US silver coins. But those are usually coins that don't hold much (or any) premium over the spot price of their silver content. It takes a lot of work to find those few good deals, and you have to be more concerned with buying the silver content than improving your collection.

Another consideration is if you're going to sell for melt value. Here in GDL, the place we sell our excess silver will pay us about twelve and a half pesos (about $1 US) less per ounce for non-pure silver coins than for the pure silver coins. So, if we are going to buy to sell immediately for profit, as is the case for the three libertads we bought yesterday, we'll tend to pay a bit more for the pure silver coins than for the alloyed coins.

In conclusion, I think that as others have mentioned, simply buy a little now and then as you can afford it, called 'dollar cost averaging', so that the little ups and downs in the silver price don't matter as much.

And congratulations on the good deal you made, which you originally asked about.

 

That's a good allegory. The hardest thing in the world is to sell an investment that has worked well. It is also just as important as buying it at the right time. I hope I can do it.

 

It is a worrisome silver market. I think gold is a more stable market at the time, but one should trade what is trading well.

I wonder how many have seen the actual 1980 spike and decline on a graph. I was trading stocks then and it was ponderous for many who didn't live in an urban area with broker offices to make trades. Trades also were several times more expensive than now, with stricter regulation ( or at least it seemed that way).

Now look at today with almost instantaneous internet trading. A huge change can occur within an hour if the stimulus is a big one ( flashcrash). Precious metals ETFs and mining companies who control a large % of future contracts and may be very over extended, can wreck havoc on ones bullion investment. The CEO of I believe Kinross , although I may be mistaken on the co., it was a gold mining concern, said their cost per oz of gold was currently about $500, and that was with 1 oz gold per 10 tons. Then he said one of their mines in Russia not yet online has a test yield of 1 oz. per ton. It won't be online for a couple of years, but don't believe there is no more gold in the ground or that it is too expensive to get it, so it will continue higher. He may get his stock price higher, but it will put more pressure on increasing price as some will think, hmmm, more gold available in the future .


I am cautious, very cautious with precious metals. With stocks like BAC, GE, etc. I can take a nap during market hours, but not so when I am running silver.

Jim

 

Take it from someone that knows nothing about investing, but still does pretty well...the best time to get into an investment is "anytime". Investments are sold in a marketplace; the current price of any investment represents an equalibrium between buyers and sellers.

"If everyone bought low and sold high, the highs would become the lows and the lows would become the highs"...meaning, nobody really knows what's going to happen. An educated guess is the best you can hope for...unless you're Martha Stewart.

The best way to learn how to invest is by doing. Dollar cost averaging is a good way to get started. Dollar cost averaging keeps your mean (average) price below the median price...regardless of market movements.

Silver could go to $60/Oz or it will go to $15/Oz (personally, I think it will go lower...but what do I know?). Just dollar cost average for a while until you figure it out for yourself.