Bernanke's FED Remarks and the Bulllion Market

Deflation can't happen unless the central banks destroy the money supply. If you mean price deflation then that is a very real possibility due to supply and demand since monetary inflation means higher prices and with stagnant wages it will mean less demand for goods and services.

BTW you may want to consider the off chance possibility that you won't be able to buy back your silver after that happens, at least not at a cheaper price. Any drop in silver prices will deplete the physical supply that much faster. It is a finite resource, unlike the paper contracts which control 99% of the supply and demand picture currently. At such time as the industrial demand can only be met by investors parting with their metal, most of us will laugh at anyone asking to buy our metal at the paper price.

 

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I seldom see "over production capacity" mentioned in this world economy melt down. Back in the 70s, worker productivity was the "Headlines". Saving GM was necessary because a million US retirees and the untold number of workers associated with GM not having disposable incomes would have allowed deflation to gain a foothold. But in the long run, GM is not necessary to satisfy the demand for autos. As in other sectors of manufacturering, overcapacity is a real problem that has not been addressed. I believe the only solution is to raise the level of living in third world nations which means raising wages and that has yet to happen, the greed is too great.

Printing money influences inflation, but competition for limited resources lowers the standard of living. Our demand for gasoline has declined but it has increased overseas, whereas the demand for food is increasing everywhere and both are effecting our standard of living. Those of us who blindly believe in the "normalcy bias" will soon have a rude awaking. IMO, buying PMs now or later makes little difference so long as you buy and hold them.

 

What you refer to as "over production capacity" cannot exist in a free market, which is why you don't see it mentioned often.

Raising wages in the third world is the wrong goal. The goal should be to find a way to achieve the widespread ownership of private property and the legal means to protect it. Once that is accomplished, wages will take care of themselves. It's a legal problem and not necessarily a greed problem [although greed might be a motivating factor in limiting the ownership of private property].

Competition for limited resources doesn't lower the standard of living. It generally leads to an increase in the supply of the resource. What is generally misunderstood is the nature and purpose of the price mechanism. Higher prices are a signal to the economy that additional capital is required in that sector. Take oil as an example. Higher oil prices and the resultant higher profits will [unless prevented by law or regulation] attract additional capital to the industry and lead to greater supply. Limit the price or limit the profit [as is popular in some dark age circles of thought] and all you will achieve is a shortage that will actually lower the standard of living.

 

well all I know is back in 2009 food prices dropped like a rock at wal-mart... so I stocked up on alot of stuff whether I needed it asap or not (like 6 cases of mac and cheese) and other stuff like clothing I still have jeans I bought for $8 a piece now they want $14 for the same thing...anyways as far as being able to rebuy my silver...I wouldn't be looking to buy the same exact stuff...but I'm willing to bet I would find as much as I want here and there...when times get tough sometimes you just gotta sell your silver to buy your bread and other stuff...and the local coin shop would have a bit of a surplus...and I would think as long as he 's making money...what does it matter what the price of silver is? I did it back in 2009...think it can happen as again just as easily...course I'm unsure if I want to get rid of my silver that holds a premium on it like my canadian wolves, pandas, and year of the rabbit coins...but the silver I've found roll searching and the rest of my junk silver as well as my ASE's non W marked will be sold no problem...

 

Whew! Last time I read a strategy like that, the fella was proposing trading gold for silver (and vice versa) as the gold/silver ratio moved up and down, and he would be rich before you know it. It's just that easy.

 

I hope you're claiming all this on your income tax! The price increase between the time you buy the jeans and the time you actually wear them is taxable at the Capital Gains rate. :thumb:

 

jeeze! I hope your kidding...that's insane...

 

Don't mess with Yak-facts...:yes:

 

The entire income tax system is insane...now the IRS will be enforcing healthcare. I wonder how that will work out? :scratch:

 

You might, but I remember during the last big downturn the big bullion dealers were running out of Eagles, Maples and 100oz bars, and were a little short of "junk" too. If the "paper" holders try to redeem for the real stuff, the supply will dry up immediately.

We'll see what happens when Q1 GDP is reported at the end of April. If GDP is 0 - 0.5% like some are predicting ... look out below. Even the big boys like Goldman and BofA are lowering their forecasts (to 2.0%), and they always start out too high.

 

This is a coin forum? Coulda fooled me I thought we were on a stock forum.

 

Yeah, bullion ain't coins, right? :yes:

 

Coins, bullion and stock ... one-stop shopping

.. except no one on a coin forum seems to invest in coins.

 

US Economy will have slight rebound for next 2 quarters but the problem is Europe and even slowdown in China is going to drag the whole world into another recession. US could come out of that mini recession strong and hopefully they use that as chance to raise taxes and cut down spending to cut deficits.

 

I would agree except to say that, to get the economy going, we need to raise revenues, not taxes. Revenues can be raised dramatically by expanding the tax base. This can be done by REPLACING the income tax with the FAIR TAX.

 

$4.00 gasoline says no recovery headed this way. Why is gasoline this high during a surplus situation? Because of the money printing.

 

I did the conversion this morning. Gasoline is selling for approximately $8.45/gallon in Europe. It's over $9 in Greece. Yet, there is a surplus of gasoline.

It's Federal Reserve central planning at its best.

 

It might be a good idea to consider the possibility that coins aren't always and everywhere the best, or even a good, investment. To imagine that the risk/reward situation is the same now as it was when silver was $5 and gold was below $300 might be worth reconsideration. That's why there are different conclusions on the forum.

 

Problem is attempting something as large and complicated as that will take time and of course by the time it passes will be complicated and convoluted remember how simple the original obamacare was? Focus on something simple and straight forward rather than trying to re write the tax code. Once we are in the black and deficit is coming down then we can afford to do something in larger scale.

 

Yep, that's a possibility. I haven't reached that point of consensus yet though.

Coin forums seem to be universally negative on coin investing. But you've been around the stock market long enough to understand how many "universal truths" are complete myths. Likewise, most other fields have the same problem, so I have my doubts as to whether coin investment is devoid of this issue. Therefore, I need to give it a thorough going-over before I come to a conclusion.

I've learned a ton in the last few months, mainly by reading Ganz, Bowers (my God, this guy can go off on tangents) and Travers' books, comparing auction results (I joined Teletrade, Heritage and Lawrence), comparing blue books from different years, reading the US Coin Values Web site, PCGS and NGC price guide auction results, and learning how to pick the best of two coins within the same grade, and so far I'm not convinced that "coins", in their totality, are a bad investment.

To me, it looks a lot like the stock market ... some dogs, some good 'uns. And like the stock market, there seems to be several ways you can play it. One thing I have noticed as an advantage to coins over the stock market is that whereas all Apple stock is priced the same, all 1927-S Standing Liberty quarters (or whatever) of the same quality are not. Occasionally you can pick up a real bargain. Something substantially below any recent auction price. I don't know why these get overlooked, but they do. While I'm getting my feet wet I've picked up a few of these cheaper finds.

Another interesting, but statistically-insignificant sample is how the coin market reacted to the high inflation of the late 70's. Expected future inflation is one of the reasons I started looking into coins as an investment. Coins did very well. Stocks did not.

I figure I've got a couple more months of study to devote to this.