Anyone care to jump in? Up to this point everything I read is that silver is being consumed at a rate faster than it can be mined. This is the second article from a difference source that says silver supply is greater than demand and that PM demand is the thing keeping it afloat. This is a big website. It won't change what I do but the urgency might change and it might go from a jog to maybe a brisk walk possibly to a stroll. Some writers make it sound like a 50 yard dash which this article seems to go against. Thoughts? http://www.bloomberg.com/news/2013-...-rising-to-70-amid-rout-chart-of-the-day.html
Thoughts? You could start out by telling us what your thoughts are and what it is you do and why you do it.
New to PM. I like the concept of something tangible to leave to children and the benefits it offers from a security stand point (both in realistic and extreme situations) What I don't like is the extremes of opinion and not a lot of middle ground. I believe in a plan that is in line with your means ( ex. 20 coins a quarter or 200 coins a quarter etc) and also a plan when things go on sale. PM is huge on the emotional side and articles up to now had me convinced that the consumption was much higher. I thought the industrial side was driving the car but this flips it.
As investments that are alternatives to PM tank, PM values rise with an abundance of demand. As investment alternatives begin to look attractive again (as they do today), PM values tank with an abundance of supply (or lack of demand). Lesson. . . IMO, if you've gotten into PMs and/or coin collecting for investment purposes, history suggests you're not going to do well.
Supply and demand is the key in my opinion. It doesn't matter how much they are pulling from the mines, if less are buying and a bunch of investors cashed in recently. You also have to watch what is going on around the world. Americans aren't the only ones who invest in silver or affect PM pricing. Sometimes you just can't explain why silver or gold are where they are. 2008 is a good example of that.
A better way to look at things would be to see PM as an insurance policy with a side benefit of something tangible you can leave to your kids or loved ones. But how much and how quick is the million dollar or 50,000 ounce question. With insurance you hope to never use it...same with PM. I hope my kids get a ton of never used coins.
If you look at the supply / demand charts on Kitco, there has been a surplus for several years. use of silver in photography has waned as mining production has increased.
Well, yes a lot of folks said that silver is being consumed at a rate that is faster than it is mined. Technically it is true, but the only people who say that are the folks trying to sell you bullion or the folks who bought into it hook line and sinker. The reason is all the scrap silver. More silver is being consumed, then is mined, but the gap is MORE than covered by the recycled scrap. Now the bullion dealers would have you believe that this scrap recycling cannot go on forever, and eventually it will run out and we will be faced with a shortage. That is most likley not the case as more "scrap" is created each year. In addition, recovery techniques are getting better so it is likley we will actually begin to see more recycled silver coming to market. There is also one more point. You statement said "that CAN be mined" The part about the CAN is not true at all. There are still closed silver mines that can be opened, and there is no shortage of new sites that new mining operations can start up if need be and there is a demand.
Thanks for the insight. I didn't know as much about the amount recycled. Never saw much reporting. I am going to continue to get PM but I think it might be wise to treat it as a marathon rather than a sprint. the 5 to 10% rule. I do think there are more dooms day people that are going at levels that might not be wise and might be beyond means. For those people looking at complete collapse then maybe cheap water and canned items with a shelf life of 2 or 3 years in bulk that are rotated might be the better route. If there is collsapse then those items will be hard to get and will be expensive.
Hows the old saying go...oh yea, The pappa bull and baby bull are walking through the pasture when they see a whole bunch of cows. The baby bull gets real excited and says lets run down there and bang that cow. The pappa Bull turns and says to the baby bull why run down there for just 1 cow when we can walk down there and do them all. Simply put no rush to build your collection...You should not do more then 10-15% of your total paycheck towards PMs. I am weird, sorry folks
To me, 2008 was more explainable than most years. PM was high, people were getting clobbered in equities and derivatives and needed cash NOW. As such, they liquidated things such as PM to hold their long term positions in other markets. Same thing happened to blue chips stocks, they went down because people needed to raise cash. 2008 was above all a liquidity crunch. Cash was king, all other assets got discounted to obtain this badly needed cash.
Actually I was referring to what a bargain silver was in 2008. I picked a lot of silver up because I could not believe it dropped like it did in August if I remember correctly. It seems to me I picked some up for under $12.00 an ounce if my memory serves me well.
So was I. 2008 was a liquidity crunch, all assets got sold cheap because of the need of cash. 2008 was a poster child how even pm will not protect you in all economic circumstances.
It also indicted that the direction of precious metal prices is not in the hands of stackers or "The USDollar is doomed" proponents, but in the same hands as all other assets, those who play on wall street, Forex, and real property. Until some event occurs which really scares them away from such towards PM, any gain would be problematic. I know some like to blame the other classes of assets as being manipulated while at the same time they may fall into the same trap
Silver has been struggling to stay just under $20 oz . That tells me there isn't even a slight shortage. Many mines in my area don't even bother with it as its value doesn't justify the added work to seperate it from the muck.
