Is anyone buying silver at $44.56

I remember reading about a company that tried this and ended up on the wrong end of a Federal raid and suit. If I remember correctly, it was sort of like a paypal type of account supposedly backed by precious metals. Apparently the business model failed to satisfy the Feds that sufficient protections were in place to avoid money laundering.

Not only did the business owner get shut down, but the users suffered as well because they could not access their deposits for years, and when they were permitted to apply for their funds, they had to prove where they obtained them. In other words, guilty until proven innocent. The article I read suggested that maybe there were a few money laundering users, but since I can't even remember the name of the business, I'll leave that determination up to the jury, and won't paint them with such a broad brush.

 

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So I am confused now - I think you are agreeing with me that if all debtors "took delivery" of all debts in full payment via cash, there would not be enough money to go around? I think that is what I originally posted. I also think that would be devastating to the economy.

But my point is that just like metals being traded on margin and in paper form, there isn't enough of the underlying product to go around then when everyone goes to take their chair as the music stops - uh oh! You know what I mean?

Systems like that inevitably crash. Fiat currency simply cannot last forever. It never has. In fact, what is the oldest currency still in use today? That would be interesting to know.

But when money was made out of gold and silver, there WAS enough to go around - the coins were MADE out of it! In fact, the Federal Reserve was originally designed to weigh, authenticate and coin YOUR gold and silver - not the government's. Isn't that right? I need to get out a couple of books and read about some of this again, I guess.

If memory serves, the "current" Federal Reserve is actually the third such institution in the United States. But as they say (not too loudly or often) "The Federal Reserve - it is neither Federal, nor is there a Reserve!" Heheheehee

I am surprised the Silver moved up again today, though - up 5.87% to $37.91. Wow!

 

Silver will go back up slowly. It will pass 50.00 and the major media will gloat on how they saw it coming, mention the "paraboliic" rise and fall then rise again... if that doesn't spell manipulation well i guess. M-O-O-N does. LOL

 

A Good Buy/Sell Price?

I'm pleased that many have taken your stance in purchasing PM products, as it has significantly reduced the competition for items that were relatively unavailable when spot prices were lower.

With the prevailing dealers' tactic of convincing the general public that anything other than what they sell is "junk", offering a relative pittance for quality commodities, there have been numerous Golden and Silver opportunities.

Informed buyers are searching locally for quality value items, which are exorbitantly priced by dealers, creating a great opportunity for someone willing to negotiate/sell at a reasonable price.

This PM carnival-like atmosphere has been a great arena for fair minded individuals to both buy and sell at a fair price. Like-minded individuals have created a win-win situation which generates free verbal publicity and many happy, return customers.

I hope that the atmosphere of what I believe to be irrational subjectivity continues, as I've never seen such opportunities, that seem to be spontaneously generated by the relatively wild market oscillations.

If one is willing to objectively "gamble" in the acquisition and sales of value commodities, the average return can be far better than that realized through normal investment ventures. :thumb:

 

I guess I am. On Friday I ordered 6 more 2011 ATB 5 oz'ers for a $216 each. With shipping that around $43.75/oz.
Of course it looks like there is almost always a $4 to $7 per oz premium on anything with "IN GOD WE TRUST" on it.

 

I usually pass on Cramer, but today he had the CEO of RandGold ( GOLD) on , and he asked him if the company would ever issue dividends in physical gold, and the CEO looked taken back and said no! Cash only.

Jim

 

I bought 2 rolls of ASE's as silver was dropping last week with spot at $41.50; then bought 2 more rolls of ASE's on Friday with spot at $34.25 (I think I got very close to the bottom of this correction with this last purchase, as the lowest spot price I saw was $33.75 during premarket on Friday morning). Even with that I cannot take delivery of these 4 rolls until May 27th as EVERYBODY is OUT of ASE's. Can you spell -- SHORTAGE?

If silver takes another big dip into the high $20's, I'll add more to my position.

 

No, I'm completely disagreeing. If a person "took delivery" [whatever that means] of a debt in cash, it would necessitate another investor buying it from him. No cash is created or destroyed in this transaction, only transferred. What you are missing is that there isn't $1 of currency in existence for every $1 of asset value. When a company sells stock on the NYSE, the Fed doesn't create money so it can be sold. When a contractor builds a house, the Fed doesn't print money so someone can buy it. Assets are DENOMINATED in USD because that is our currency, but it doesn't mean there should be enough currency in circulation at all times for everyone to liquidate all of their assets. And when you think about it, it would be impossible anyway. How do you liquidate stocks without selling them to someone else? Or cash? Or land? Or bonds? It can't be done. US Treasuries are non-callable and can't be liquidated on demand. I don't think you understand how money works. Even under the gold system, there isn't $1 in bullion for every $1 in assets in existence, and there doesn't need to be.

 

Wow, lots of confusion. First, on Cloud's point, there can never be enough currency to back up every asset, and doesn't need to be. There is actually too much currency right now, (including US debt, which is how ollars are traded around the world in large sums), we would be better off with less currency. When someone buys something, they trade cash for the asset, then in turn trade their cash for another asset. Having as many US dollars as assets in the country would destroy the economy.

Second, the Federal Reserve is not the US Bank. It was not created to coin money, that would be the US mint. Yes, one of the first functions of the US mint was to coin US citizens gold and silver, but its main job was to coin enough to facilitate trade. There were two Banks of the US, but both went out of business. The Fed is a separate institution with leadership appointed by the US, who remits profits to the US.

Third, there was never "enough" gold and silver to go around. Gold coins were never seen by most people. Even when our coinage was made out of gold and silver people had a strong preference for currency, as witnessed by their ready acceptance and use of it wehn they could have just as easily used gold coins. I don't see the government "taking away" gold and silver, I see people preferring paper currency for ease of use. Yes, eventually after over a century the great depression and then inflation took away our ability to use these PM in coinage effectively, but it wasn't a government conspiracy. All modern economies inflate, since deflation is so very corrosive and hard on many people, and generates a contractionary psychology in people. Given that, most governments will choose inflation if they have to.

Chris

 

Historically this just isn't true. Coins were ONLY used by people for the first 130 years of this country and paper currency was only accepted when it was forced on people who didn't want it otherwise. (namely on both sides during the Civil War) People traded the worth of the metal. The denominations by the US government of dollars, dimes, quarters, eagles, etc were nothing more than a convenient assay from a reputable source. (the US government) During this period, people could take their gold to the US Mint, and the mint would assay it and coin it into currency, free of charge. There was no inflation during this period. Even today, a silver dollar is worth about the same in goods as it was in the 1950s. (discounting manufacturing efficiencies) A gold coin represented about a weeks worth of work, silver was a way to break it down. This system works as it has been proven for over 5000 years. It's only because of the last 100 years of fiat money being forced on people by legislation that the current generations think that it has always been this way.

Now a different question is this. Is there a way for gold and silver to cover the absolutely criminal amountss of currency printed by the Federal Reserve at the behest of the corrupt government? Absolutely not and this is the dilemma. There is no way to contract the system back to something that represents the real economy without sucking billions and billions away from the very people who control all of it.

 

So when gold was $252 about a decade ago, did this represent a week's worth of work, and has the average annual wage increased from $13K to $78K in the last decade? When a silver dollar contained about $3.85 worth of silver a decade ago, did that buy what $38 buys today? This sort of nonsense is contained in many internet articles written by people with no training in economics and no knowledge of history and many people keep repeating it even though it isn't true.

 

Fatima, I strongly disagree with this statement. The reason bust halves are so abundant in high grade is that they were used to back up paper money issued by banks for decades in the early 1800's. People even back then PREFERRED paper currency for daily use. If people ONLY used gold and silver coins for the first 130 years of this country, how do you explain the tens of thousands of different bank notes printed? If people had gold and silver, then why did they accept these? Even when the US started printing paper money, after the civil war when gold and silver was available again, why did people still use US currency and not simply go back to coins? Give people a choice between coins and paper money back by gold and silver, most people will choose the latter I believe. Its true we have now removed the gold and silver backing, the last one removed in 1968, but I do not view paper money as being "forced" on people.

Chris

 

We all know (or should know) this price was achieved in part by the Bank of England dumping 1/2 it's physical gold onto the market. Other European banks were doing the same. When fiat money is in full control, they will readily try to manipulate the price of gold down to add perceived value to their own. It can't last and the state of gold returns to it's natural value.

BTW, according to the US Census, median income/person/week in 2000 was $426. Subtract out the taxation made possible by the fiat system and this number isn't far off from the $252 despite the heavy pressure from the central banks.

 

Answers to your questions:

1. How do you explain the tens of thousands of different bank notes printed? Plenty of banks would issue notes for people that deposited their gold & silver coins into banks for safety reasons. The banks would then loan out the gold many times over. These banks would often fail and the people holding the notes lost out. This is why people preferred having coins over being paid in bank notes. Contracts often stipulated payment in silver or gold coin. i.e. no paper.
2. Why did they accept paper money? Answered above. Most times they didn't, and the currency was worthless if people traveled. It was like trying to cash an out of town check.
3. On the period during and after the Civil War. During the last year or so of the Civil War, people began to panic because those who were holding paper money issued by the losing side realized the money would be worthless. This caused a run on the available gold and a gold coin became worth far far more than the paper, especially on the Confederate side. It should also be noted that a lot of this gold ended up in Europe because merchants supplying the war effort would not accept paper money from either side. After the war, people went back to gold and silver coins. However this was the trigger that started the plans for the Federal Reserve.
4. Give people a choice between silver and gold and they will choose gold. Well not when gold is 16 times the cost of silver. How do you buy a pack of bubble gum? Any currency has to be divisible. Silver works well for this purpose with gold.
5. Paper money (fiat money) has been forced on people by legislation. Exactly what else are you allowed to use in the United States? Legal Tender laws are pretty clear that the Federal Reserve now has the complete monopoly on US currency. It's enforcement is via the IRS and US Treasury and the FBI.

 

silver is down to $35.73 down $2.82...

alright who hit it with the baseball bat this time?

 

But the point was, if there was adequate gold and silver, why would any of these notes have been printed at all if people "always" prefer gold and silver? Why would they not reject the notes and not accept them in commerce? I have read a lot about the broken bank period notes, and it seems there was ready acceptance of the notes within range of the bank. This is why so many were printed and are so worn now. If human beings "always" prefer PM over paper notes, then these notes would not exist.

Yes, what you say about not being accepted far from the bank is true, as well as during the civil war, but wars tend to do that. After the war, when gold and silver were amply available due to all of our new mines, the new US notes were even more popular than before. Why would that be, and why would anyone accept them if they "always" prefer PM? The US struck hundreds of millions of Morgans that sat in the vault. One of the reasons was to back US silver certificates. People wanted the paper money backed by silver, but not the silver dollars themselves seems to me.

Yes, nowadays there is no currency except fiat currency, I am just saying its a stretch to say the US "imposed" this on people. I think people have always liked the convenience of just a few ounces of paper money over pounds and pounds worth of metal for commerce. Has it changed from back by PM to just the US backing now? Yeah, but it was a gradual transition that people could have changed by changing politicians if they were that upset about it.

Chris

 

It's as, as always, people looking to make money from nothing. Paper money allows for all kinds of promises that can't be kept. This article is proof enough that even as recent as 1968 people preferred the real metal over the paper representing it. This was the last generation to understand. See the photo.

On the day before the final deadline for redeeming silver certificates (dollars) people waited for hours outside the New York Assay Office. They came from as far as Texas and camped overnight in their cars.....​

http://books.google.com/books?id=ST8EAAAAMBAJ&lpg=PA53&ots=oOqR5NaS3w&dq=silver%20certificate%20redemption%201968%20long%20lines&pg=PA54#v=onepage&q&f=false

By this point however the forced conversion to fiat was almost complete. Even Life joined in the propaganda, like most of the US media, and refereed to it as bygone era despite the fact it's own photograph shows otherwise. The brilliant thing about the current obfuscation of currency over the last century is it proves that people can be made to convince themselves not to believe what their eyes are telling them. Remember this is the US government telling its people that it will no longer honor the promises made on the currency it printed.

 

Let's accept you numbers for a moment, even though I believe they are wrong. Are you saying that the median income/person/week is now $1,500 and that it has risen 3.5X during the past decade? If it isn't, then you probably just proved to yourself that gold is overvalued by 65% and you should sell.

This is the sort of nonsense and twisted logic you are forced to believe once you think the garbage on the internet is true.

Edit: I think I see what you are doing now. You are using the entire population base, whether they work or not. Using that technique, the median income in the 2010 census was $510. Subtract the taxation and you are saying that the correct price for gold is now around $300. It's a pretty useless analytical technique IMO.

 

Just got an email from Gainesville Coins. There selling 2011 ASE's at $825 for 20 coin tube. That's $41.25 ea. But kicker is it
is for a $2000 buy using a bank draft. I don't know if they'll lock in this price on a phone call. And I wonder whether a money order would suffice in place of a bank draft. I'll call and find out what's what. zeke

After waiting 15 mi.(I was 7th in cue) I found out they don't accept money orders.
They do lock-in a price on a call in. The deal for the $2000 is:
1) They take a 5% charge on your credit card
2) The bank draft covers the 95% of the rest of the transaction

Is this done with other companies?

 

Did you factor into the fact that the silver in silver coins by then was worth more than $1? This was the reason people bought up silver certificates to redeem, my uncle did it as well. He took a few days off of work to redeem them, because of the profit.

Free money always draws crowds, I don't think that episode proves either of our points. The silver released was numismatically more valuable than the value of the silver cert, so people just accepted the free money.

We will disagree on this one Fatima, just like we agree on other points. I just think its too strong to say humans always prefer PM to paper money. I think you underestimate the convenience of paper money. US citizens were not "forced" to use paper money in the 1800's or early 1900's versus only using PM, they CHOSE to use the paper money because its more convenient. I don't disagree that from 1968 we only have fiat FRN's, but I don't see people lining up to convert their paychecks every week into gold bars nowadays either.