Bullion Investing forum has went down hill

Palladium is a tough one. There's not a ton out there for bullion products, and the odds of moving it as easily as gold or silver in a LCS situation are slim. I'm even a little concerned about being able to use platinum in a this for that trading situation locally.

I'm not knocking the idea, but ability to move on the sell side has to be thought out in each person's situation.

 

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Also Palladium is difficult to test compared to silver and gold, especially the purity, so I would not choose it or platinum as a "doomer's" stash.

 

If you're looking to build a dooms day stack, I'd try MRE's. You can collect them by date and flavor. I'll trade you 2 1998 Ravioli's for a 2000 Mac and Cheese. Should the day come, they will be worth more than their weight in gold.
The one thing PMs respond to more than anything is economic uncertainty, and that comes along about once every 30 to 40 years. Other than that, it's a flat line losing or gaining in small increments. Once it's there, that's when you should be buying, slowly over decades. When a 1980 or 2011 comes along, enjoy the ride, cash out.

 

The price of silver is 3x cheaper than it was at the high in 1980, can any other commodity even come close to that? I don't think so.........BUY SILVER! Should break a $100 before the long term bull run is over.

But in reality no one knows anything for sure, including me.

 

I would throw the '80's price out of any statistical analysis for price. It's clear the Hunt brothers were trying to corner the market so the data point is artificial.

There are claims that current silver pricing is also being manipulated, but I don't know that for sure. All I'm saying is using an artificial data point in a statitical analysis/comparison isn't valid.

 

I wouldn't throw it out, gold was going way up at the same time so the Hunt Brothers affect on the market was probably wayyyyyyyy overstated.

Not artificial at all in my opinion but we are probably going to have to agree to disagree.

 

The Hunt Brothers did have an affect on the market. According to my brother in law, they did corner the silver market. He did have to sit with the Feds and answer questions because at the time, he was working for a firm that had direct involvement.. He's had a seat on the Chicago Mercantile Exchange since the mid '80's and has been there since the late '70's.

 

I didn't say they had no affect, I said I believe that the affect was wayyyy overstated. That's my opinion, neither of us can prove how much of an affect they had.

At the same time that silver went to $50, gold had a huge bull run and got up to $850 (after being at $35 in 1970). So gold made a similarly huge run that silver did and the Hunts didn't manipulate golds trillion+ market cap.

 

It may be hard to believe today but people were freaking out at that time over the Soviet invasion of Afganistan. They also wondered if Poland would be next since Lech Walesa and Solidarity were on the move. And would an invasion of Poland lead to a NATO/Warsaw confrontation? There was also escalating inflation that even the government admited was, if I remember right, around 12 percent when gold was spiking. And there was the Iran hostage situation. Un-bailed, enquiring minds had alot to worry about at that time. Or so they supposed.

 

I had a friend take out a 21% mortgage at the time, hoping to refinance if it dropped to the mid teens.

 

It is my understanding that you should have 10%-20% of your portfolio in PM's.

 

All I know is that I've been collecting Numismatic market desirable products for more than a half century.

I bought during the Hunt Brothers era, as before and after.

A true "collector" doesn't stop (it may be an illness) because of market "adjustments", just changes the "products" in their portfolio.

I'm purchasing more now than in the past. While liquidating less than in the past, I'm constantly contacted by buyers of like ilk, who know that I have quality products, and adjust my pricing to better than the general market.

For those that expect Coinflation pricing for quality products, there generally is disappointment. For pragmatists, I believe there are many "opportunities".

I believe there is much to be discussed, and investigated, once individuals realize that many have self serving mindsets which need to be adjusted with change.

I can personally say that my Numismatic collection has outperformed all other facets of my portfolio for ROI. It has allowed an above average return.

JMHO

 

Thanks Rich, I always enjoy your wisdom filled posts.

 

There is a lot of talk here about the bull market being over. Silver and gold are both up 300% since the bull market began. But who thought we'd see $50 oil again? Not me. Is the oil bull market over too then? It's hard to see that being the case with oil dependency still going strong. The Saudis are just trying to undermine shale oil and the Keystone Pipeline in an attempt to maintain market dominance. These are waves, short term volatility, not the tide.

Funny thing, I haven't been on forever because I thought I was banned. It turns out my browser was just outdated!

I'm still doing dollar cost averaging, and haven't sold any of my metal. Been doing that since 2008 and my average price spent is just over $20/oz for silver, but I've got plenty of coins that will sell for double or triple that, and I could definitely get my money back if I wanted to. There's a big difference between an IOU that says you own silver, and actually having a shiny element that you can feel the weight of in the palm of your hand with a great design on it. Most people only care about money though, and you have to be able to see the true value of precious metals to know that they are a steal, at any price denominated in a currency backed by broken promises.

I've also been getting more diversified.. platinum, palladium, plenty of nickel (Canadian of course) and copper, and even a few gems. Call me crazy, but I even kept my 401K! Thankfully I am capable of living within my means and am in a position where I can choose my exit point, or can even choose not to exit. Let's flip the coin - I've already exited my position. Society has thus far denominated my wealth in dollars, and has paid me as such for my services. By purchasing tangible assets I have divested out of something with no intrinsic value, and acquired something of real value. What I do now is look at all assets as their own currency, not whether I am invested in something. There is no escaping being invested save having nothing to call your own, so I see no need to have an exit point or an entry point. It's simply a matter of what a person wants, and in my case trust factor is the most important consideration.

So, is it time to buy to precious metals? Putting aside that I believe it's always time to buy when you have a currency backed by trillions in debt that will never be repaid, anytime you can buy a non-renewable resource for the same price you could a few years ago amid an inflationary environment it's a good deal. Silver is still below cost of production thanks to it being mined as a byproduct. But aren't we now in a deflationary environment you say?

The Fed says they're going to raise rates at some point, which would be deflationary if they raise them high enough, but zero % interest is still inflationary because it incentivizes money creation for the purpose of new loans and arbitrage on those rates by select banks with access to this free money. They did hold true to their pledge to taper, so you have to respect the possibility they will raise rates, but what exactly is tapering? It sounds like an action, but taken in context, it wasn't. It was a trend toward inaction away from the action of Quantitative Easing. Now that the "action" of tapering has completed, there is an inaction of QE. So what did they really do? Well they stopped manipulating markets with that particular mechanism for a few months. Look where that's gotten us? The deflation boogeyman is looming, and precious metals lead the charge like they always do. Once stocks follow, the safe bet in my book is that the Fed will cave to market demands and lose their credibility. Many of us know what happened in 2008 with Hank Paulson and Congress. The amount of leverage in the financial system exceeds what it did back then when everyone should have learned their lesson. This is a bit of a lose-lose for the Fed, as their credibility now depends on not printing more money to support the financial system. Which is more important? Obviously their credibility would take a back seat when push comes to shove.

Let's say for the sake of objectivity that we are neither in an inflationary or a deflationary environment, and that markets are at a decision point. If this course continues, and the Fed does raise interest rates, and metals and commodities and equities enter a true bear market, and the already unserviceable debt burden becomes more expensive to pay off with higher interest, and the welfare state no longer has sufficient funds to support both the burdens of the populous and the financial system, do you really think you'll want to be holding paper in a default situation, or tangible assets? Alternatively, do you really think you'll want to be holding paper while the Fed prints it to infinity to sate the market monster? They are dancing the line the best they can, creating inflation when they have to, which in turn creates the feedback loop of deflationary pressure, and a vicious cycle they cannot stop but only hope to contain for as long as the mounting pressure allows. Central banks around the globe are doing this in tandem, and their capacity to extend an untenable situation has been surprisingly resilient, but the fact remains that an exponentially growing debt burden can never be alleviated in a world where growth is linear at best. There are two possible inevitabilities and numerous delay tactics to stave them off. I am thankful for the opportunity to be able to acquire things deemed as precious in exchange for something on borrowed time.

 

I find it's hard to tell what's going to happen. I did get some Canadian maple leafs at $20 a piece yesterday, and I couldn't resist it. I don't really know where silver is going, but I know I have 4 maple leafs and a bunch of silver coins I didn't have yesterday. They might come in handy some time soon.

 

I like your analysis, Inflexion.

 

I'm not a "stacker" or "doomsday" theorist. I buy silver because I like the metal. I have a tiny percentage of my portfolio in PM and I intend to keep it that way.

I have bullion collections of ASE's (raw in a Dansco & some graded), Maple Leafs (beautiful coin, but too many Privy derivatives) and Kooks. I also own some rolls of ASE's, but nothing to get excited about.

 

I agree Inflexion there was a lot of stuff happening i 1980 that started the bull run and continued it, debt, foreign insecurity, and inflation chief amongst them.

I am glad you are back but more happy you are still buying. I bet way too many believers of silver in the thirties aren't. They are burying their heads in the sand exactly when they should be buying more. I am glad you didn't fall into that trap.

 

I bought some at 13.5x face yesterday, so that's not too bad. I wonder if the price will hold or it will go up? We closed a little higher than yesterday even though oil went down again today. I think that's a good sign. Who knows? I just know that the prices seem pretty good lately, compared to the prices a couple of years ago.