Brace Yourself!!

Discussion in 'Bullion Investing' started by yakpoo, Feb 18, 2013.

  1. yakpoo

    yakpoo Member

    I wouldn't be surprised if silver returns to $20/Oz and gold to $1000/Oz
     
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  3. 2schnauzers2luv

    2schnauzers2luv Junior Member

    Well I went to a show in Lincoln City, Oregon this past weekend over on the Oregon Coast. Wanted to spend some serious cash on some 1 oz. silver rounds and bars. How much? $35.25-$37.50 per ounce. I asked, (several times to various dealers) "Why so much?" Same old story. ("Oh well, oh, oh, I'm in to these for a lot more than todays spot. Oh, I can't sell these for $1.50 over spot. I'd be losing too much money"). I can uderstand that, I guess.

    But, so, I ask this. If silver did drop to $20 per ounce, where are you going to buy it for that price? If it goes to $50 per ounce, where are you going to sell it for that price? I don't know, maybe I'm having another "DUH Moment", but I just don't get it.
     
  4. doug444

    doug444 STAMPS and POSTCARDS too!

    If your intention is a LONG-TERM protection of your buying power, and you will be happy enough to break even as the dollar tanks, then you don't TRADE silver. You accumulate as best you can, buying on dips. Down the line, if you lose 10% while the "unprepared and clueless" lose 40%, you have succeeded. And when the crunch comes, there will be plenty of weak hands already selling silver (and gold), whether they have bought PMs at the top or the bottom, selling to buy the necessities of life, a market will exist under any circumstances. The goal is survival.
     
  5. medoraman

    medoraman Supporter! Supporter

    You are exactly right sir. I have written about this many times, why physical PM is a bad short term investment. What you describe is EXACTLY what happens. Dealers try to play the market like buyers do. They either refuse to lower their price or are "out of stock" if they believe the price will come back up. They also don't buy if they believe its going down.

    This will ALWAYS happen, and is a HUGE impediment when investing in physical PM. Honestly, its one of the reasons a paper market was created, amongst other reasons.

    Long term they will HAVE to adjust prices lower, as new product comes on the market and they lose sales. Short term, though, the dealers will suck out most potential profit from PM buyers. Capitalism is capitalism, though, it is what it is. Its just a major way physical buyers get hosed.
     
  6. Prime Mover

    Prime Mover Active Member

    Some folks, especially those that either have money to spare, or who normally buy from the TV hucksters may think that price is very reasonable and be willing to pay it. Us, we know better so we won't but at shows you have all kinds of folks. For instance, take a parent or grandparent who takes their child/grandchild to the show with them. They see a nice silver round, and the kid wants it, so they shell out the money for just the one. It may be a one time purchase, and for someone who doesn't know the current melt value of silver like we do is more inclined to pay it. Now, they won't sell a lot that way, but I can understand them wanting that price since they will indeed lose money if sold for less... they're hoping it comes back up to resell for at least what they bought it for.

    Ask those who did the same during the spike to $50. The large dealers are constantly moving volume, and thus are less susceptible to daily movement of the price, and will always be able to sell and buy at whatever price. Even at $50 a few years back there were buyers - those new to the game who didn't know the history, those with extra money to throw at it, etc.

    And that's why those looking to flip it are usually on the losing end of the stick, just like those looking to make a quick buck day trading stocks. Those who are in for the long haul, using it as a hedge, wealth preservation, those who can stand smaller fluctuations for the longer outlook are the ones who make out the best.
     
  7. medoraman

    medoraman Supporter! Supporter

    Nice post sir. :)

    I would say those buying at $50 were probably the ones believing the "silver is going to $500 an ounce SOON! articles. Remember the guy on here insisting his valuation methodology was "proving" silver cannot be lower than $110 in the near future? Anyone remember how PO'ed he was at me, calling me basically everything under the sun?
     
  8. Prime Mover

    Prime Mover Active Member

    Why thank you sir... :)

    Indeed, when you see that much of a rise, your first instinct is to think it's broken free and will run up to heights never before seen, so jump on the bandwagon and profit! I would say there's a number of folk who buy into that at one point or more during their fledgling days as an "investor", be it PM's, paper, or pork rinds, and they find themselves at the short end of the stick at the end, their big dreams fallen over the cliff and smashed on the rocks of despair. As costly as it could be, the ones that take it as a lesson and learn to think prudently turn it into long term wealth, the others lick their wounds, ignore, and gear up for the next skyrocket and possible subsequent flameout.

    There's no doubt it all makes for really good discussion and reading tho, so go grab an adult beverage of your choice, and cheers! :thumb:
     
  9. avr5700

    avr5700 Member

    This physical market versus paper market concern is interesting. Without a widely used reference, I would expect local physical markets to distort. On the other hand, if the physical market could set the price, even just locally, the argument given in related posts would tend to support price stability. So is the paper market's added volatility really a good trade for its wide scale standardization effect?

    Interesting that government had once price fixed the dollar/PM exchange rate when on the gold standard. What was it...$35/oz? Last I saw someone had posted a Saint Louis FED link where it showed gold valued at ~$42/oz.
     
  10. awwatchdog1

    awwatchdog1 Member

    I was in at $17/oz to $40/oz so when I have extra cash if i can get a nice .999 or .9999 round or coin under $40 I am happy. In it for the long run...
     
  11. Rono

    Rono Senior Member

    Howdy folks,

    You're all pretty much spot on in describing the situation. You've got a pm market that is subject to every trick and manipulation forcing the POG and POS down in spite of enormously bullish fundamentals. With the Fed dropping $ from B-1 bombers and keeping rates at zero, there is no option other than equities (with all indicies pushing to all time highs). This means the trading/speculative money is moving from pm's to equities AND individual traders are attempting to manipulate the market to their personal advantage. This is all in the short-run.

    In the long run the fundamentals will hold sway. In addition, even in the short run, this pullback will be more shallow and of a less duration that everyone is presently predicting. Every pullback since 2002 has been less severe than what everyone expected. It will be this time too. It's due to the folks that are investing in pm's instead of speculating in them. You've got central banks and sovereign gov'ts, you've got pension plans, you've got survivalists and you've got us coin collectors. All these good people will put a floor under the POG and it will be fun to watch.

    peace,

    rono
     
  12. Conder101

    Conder101 Numismatist

    The official government price for gold IS $42 an oz. It was $35 up until the early 1970's when it was raised to $42. Of course they won't sell it at that price, but I'm sure they would be willing to buy it at that price.
     
  13. InfleXion

    InfleXion Wealth Preserver

    This is where hedging becomes a major factor. As long as the major dealers are hedged they can sell their silver for any amount of loss because their profits are on the spread, not the price which is cancelled out by the hedge. Conversely they can increase their buy price with spot for that same reason, although you will not get fair value. Realistically the price will not go to $50+ unless people are willing to pay that, so there shouldn't be an issue selling in that case.

    As long as the dealers who hedge have available supply then the price can go lower indefinitely (APMEX, Provident, Gainesville, etc). If they run out then it will be the people who paid higher prices who will determine what the real price should be, such as your LCS who may or may not have inventory, but will certainly not be selling for a loss.
     
  14. Revi

    Revi Mildly numismatic

    I think once we get through sequestration the price will come back up. Everybody's just waiting to see what will happen. It's a buying opportunity.
     
  15. doug444

    doug444 STAMPS and POSTCARDS too!

    "...if i can get a nice .999 or .9999 round..."


    I hope in June 2017 you don't have to try to PROVE to someone that your nice round is .999 silver. Buy junk silver dimes and quarters, forget the aesthetics.


     
  16. hertsmatt

    hertsmatt New Member

    I have just started buying silver and am not that heavily invested as of yet but am looking to buy more, I'm looking to hold onto it for 10-15 years, this is probably a dumb and unanswerable question but is this a good idea? Is there really any chance of silver hitting these $100+ oz highs in your opinion?

    to add to this I'm a little more interested in stacking old dollars etc as I think is a double barrelled investment over 999 rounds due to the collector value if silver fails , do you guys do this?
     
  17. 2schnauzers2luv

    2schnauzers2luv Junior Member

    If you like silver and are buying it and you're serious about it, I think you have to think long term. I like your 10-15 year plan. Just get yourself some, store it in a safe place, don't let the day to day, week to week, month to month price swings influence you in a negative way and keep on stacking. Be strong. Be patient.

    $100 silver? Ask that question to 5 different people and you'll get 7 different answers. I keep hearing $200. But who knows? Very debatable issue. You hear lots of things in lots of different places.

    You mentioned "Double barrelled investment". First thing that comes to my mind is Barber dimes, quarters and halves. Full rims in Good 4, Good 6.
     
  18. yakpoo

    yakpoo Member

    :hail::hail::hail::hail: Here we go!!! :hail::hail::hail::hail:

    [​IMG][​IMG]
     
  19. Rono

    Rono Senior Member

    Howdy hertsmatt,

    I'm both a collector and investor. I think that everyone should have some physical bullion as part of their wealth as an investment in peace of mind. My grandkids have stuffed animals they call their bed buddies. Well, my wee stash of bullion is my bed buddy. This should be somewhere between 5-10% or so. More than this is more speculation than investment. Speculation is fine but is different. It's more geared to making wealth than to preserving wealth.

    Now what you're describing is speculation and that's OK, just don't confuse it. Will silver hit $100? I don't know. I believe that it will gain in dollar terms from today's price. I much more strongly believe it will retain its value. I also like it better than gold on a profit potential basis.

    If you want to do it, buy regularly over time and you'll average out your buying price. It's called dollar cost averaging and is an standard investment method. I'd also vary what I bought - just like you suggested. I like new bullion, world bullion, old bullion and new bullion. I like 90% and I like morgans. feh. It's all pretty. ;-)

    enjoy,

    peace,

    rono
     
  20. jolumoga

    jolumoga Active Member

    This is a hilarious photo. I don't understand the panic. If gold and silver plunge, I will happily buy more. I love this correction.


     
  21. hertsmatt

    hertsmatt New Member

    Great advice all round thanks guys!
     
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