TWENTY Times FACE Reached

Standard silver coin content of silver half dimes through halves just reached 20 times face value for the first time since the Hunt Brothers tried to corner the market on silver in the 1980s (or was that the 70s).

 

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Great news! 30X face is coming soon! Let's hear it for QE2!!! $27.70 X 0.7235 = 20.04 X face!

 

I love the idiots who pay 6 times face value.... people get taken

 

it was the late 70's... the Hunt brothers made a mint on silver. and traded it all for stripes!

 

stripes?

 

I think he meant that sarcastically... they did get a pretty heavy fine, were banned from commodity trading and declared bankruptcy... but never did any jail time!

 

I do say, good luck finding anyone who will pay 20x for 90%. The most I've found is about 15X in my area, but I'm not selling either.

 

They are lagging badly. i sold about $50 worth at 12 times face a couple of months ago. I really wanted that early copper. As an investment, it was a bad move, but I got that copper.

 

I'd expect my local dealer to be at about 19X. 18X minimum

 

I bought a dollar's face value-his choice-at the shop over the weekend. A Franklin and two Washington's. I paid 21.95.

 

what was the buy price in 1980 with silver near $50 ?

not the Coinflation price, what dealers would really pay. I imagine the spread got larger near the peak ?

 

What goes up too fast usually comes down even faster. Now we're back to Friday's number. I suspect a single large purchase of silver holdings had something to do with the anomaly.

 

SELL!

Most of the price appreciation we've seen recently is due to speculation, and not physical transfer of metal, IMO.

I am starting to sell some of my silver. Think the recent growth will not last and may purchase some more after a pullback. Don't like it as a buy or hold at this value, personally.

 

My local dealer yesterday was at 17x for small transactions, 18x for larger ones, and 19x for silver dollars. If I were to find fault it is that he should be higher for silver dollars. Also, he was at $3.00 for 40% halves, which is still kinda low.

 

My recollection was that dealers paid significantly less. At the time, people were lining up to sell granny's tea set and everything they could find made from silver. Fewer people were buying. The smelters were getting more than they could handle, so the retail price lagged the futures price, which is the $50 usually quoted.

Fast forward to today. Fewer people are lining up to sell silver than to buy it. Why? Because just about all of the scrap silver that could be melted below $25 was already melted in 1980 and no longer exists. To me, this signals that the current price is reflecting a genuine shortage of physical silver in the market. Investor demand plus industrial demand for physical silver exceeds mine supply. Sure there are speculators pushing the price around, but most of that is activity in the futures market with no actual silver trading hands.

Until you see people lining up with silver to melt, and fewer takers, it's a bull market. The coin dealer price lag is just the normal discount for 90% silver when prices are rising. I doubt it is because dealers have more silver than they can sell.

 

I agree with Cloud that the smelters aren't swamped this time, and back when silver was $50 they were paying about $40 intrinsic value.

Of course I disagree with Cloud also. I think a lot of the price appreciation is being fueled by speculators, just like oil was a couple of years ago when it was about $150. They went back and proved that "non-market participants", (ie speculators), activity was up dramatically during that run. Like it or not, PM's are a thinly traded market and just a few billion extra money can dramatically affect pricing. I am not saying these prices will fall back down soon, I am just saying I am sure when the dust settles you will see that hedge funds and similar investors helped puch this market up. They didn't have hedge funds in 1980 really, which is why only the Hunt's were to blame.

 

Nothing much is getting melted - people are buying PMs as an investment and generally holding it in the same form as they purchased it.

 

i dont buy anything anymore, way too much. once it drops down to under 15 for a dollar, then i will start buying silver again.

 

It could work out the other way, and we may find out that the speculators are keeping the price DOWN, not up, and that the physical price would otherwise be much higher. This is why the CFTC is investigating the silver futures market where the largest players are concentrated short positions, not longs. Time will tell.

 

A speculator is simply one who looks for higher profits by increasing risk so they are not the ones holding down the price by definition.

The CFTC is investigating the two bullion banks for silver price suppression. The bullion banks work on behest of the Federal Reserve and other central banks in the metals market. The accusation is they are involved at metal price suppression by selling massive amounts of un-backed paper (shorts) to hold down metal prices.

The rumor is that a group of Asian buyers have called their bluff and have bought every short they can produce so far. The risk to the bullion banks is they will have to come up with the actual metal if the shorts are not bought out by delivery time. In the past, over the last 20-30 years, this has never been a problem because they had the ability, for the most part, to cover their positions. This is an unpredictable high stakes game and anyone else trying to time the market will get burnt.

The long term effect is that physical metal is flowing from the West to the East, which at this point, would seem to be the end result.