Brace Yourself!!

I think the answer to this question is yes - someday. The bigger question that should be asked is - When we see $100 silver, will that also mean we have $20/gallon gas and $10/gallon milk to go along with it? I think that separates the question as whether you see this as a growth investment, or a preservation of buying power. I'm more counting on the latter since in that case the same 1oz round that buys me 5 gallons of gas today will still buy me 5 gallons of gas then, but that same $20 of paper money if held under your mattress from today may only get you 1 gallon at that time. Am I hoping for the former? Sure, who wouldn't. I love silver so to me stacking is a good idea, but I also know I've got other investments to help out if silver doesn't pan out as lucrative over the long haul so it makes my decision to stack a lot easier.

Stack what you like, but you'll pay a bit of a premium on those dollars over the long run, so here as well I'd suggest stacking it all, dimes, quarters, halves, dollars and standard rounds and bars. To me it doesn't matter what form the silver is in, as long as I can get it for the best price I can whenever it is that I buy it.

 

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To put it in perspective, has anyone looked at the relationship between say, gasoline and silver? I am old enough to remember when change was referred to as 'silver', well, because it was. Back then, it wasn't unusual to be able to buy a gallon of gas for 19.9 cents, or, two silver dimes. Right now, at melt, approximately how many of those silver dimes does it take to buy a gallon of gas?

Has the actual value of the silver changed, or is a currency based on, uh, faith in the government or whatever, a little too volatile to have any consistency of value?

 

not about aesthetics... so how i read this you are saying that we are selling to people that do not know about precious metals which would be most people. I think i will have an easier time selling off some thing that is marked 999 silver then you would try to selling a 1964 dime for $2.50.

 

A forger, or a jeweler, or a Chinese bucket shop, can mark ANYTHING .999 silver. And there will be a great incentive for them to do so. You might find a bar or round with some off-metal inside, but not an old U.S. dime or quarter. Finally, when SHTF, you will be dealing with a lot more farmers, re-loaders, mechanics, and people WHO KNOW HOW TO DO SOMETHING than you will with precious metal dealers or coin shops (who, after all, can only pay you with depreciating Federal Reserve notes).

The final consideration is "making change" -- which is easier, a "maybe-so" bar or round (or even an ASE), or a silver dime with 1/14th (one fourteenth = 0.072 vs. 1.000) as much silver content? Gold and silver are the MONEY you don't have to apologize for.

 

My opinion is that Gold has been unsustainable for a long time. Like the real estate market in 2005-6, people kept searching for the peak, despite warnings by all economists that the bubble would burst. All the naysayers got trapped in upside down mortgage situations, and you know the rest of the story. Gold has had an incredible run, but it looks like the down swing of the cycle may have started. The positive note is the inverse relationship between Gold and Silver exists--as Gold drops, Silver rises. People have to put their money somewhere, and since interest rates are low--expect a shift to Silver, gradually, as it is cheap now.

 

To the question of $100 silver, I don't know if that is the best question to be asking. If silver breaks $50 with authority it could spell a run out of the USD potentially and undermine the valuation method before it ever approaches that price point. Or maybe we get a new currency first. Or maybe the price stays where it is but one day you just can't get your hands on any. No guarantees, just possibilities.

The question I would ask is will there come a day when an ounce of silver will have the same buying power as $100 does today? In my mind there is no question based simply on available silver supply and mining supply not meeting yearly demand.

By the time silver returns to fair value we will probably be using it (and more so gold) as the measuring stick once again so I am not very concerned with dollar price as just getting my stack built up in preparation for when value is determined not by smoke and mirrors but by tangible assets.

 

As Fed Defends QE, Traders Get Bullish On Gold




Hopefully, QE won't last and PMs will (once again) become fairly valued.

 

It is IMPOSSIBLE to stop QE; the country would collapse. And it's full speed ahead with QE (in its various names and flavors) all around the world. Interest rates would soar, and bond interest (on new issues) would become the largest component of GDP. There's no turning back.

Incidentally, a chart without year(s) and numerical scale(s) means nothing. Also, for the foreseeable future, demand is not from traders, it's from central banks getting rid of unwanted dollars to buy gold bullion.

 

LOL...what do you think it was meant to mean?

Btw, I found a good illustration of our current energy policy...

 

I don't know. Something to do with animal rights?

 

Is it just me, or does it really seem assinine to hope that the economy stays in the tank so that bullion prices don't fall? Do people really put token metals above living standards and economic vitality? I don't even know what to think about some people's views.
Guy

 

There's virtually NO connection between the two. This country is bankrupt now, and its economy can grow and grow and grow and it will still be bankrupt. The beginning of hyperinflation derives from a persistent decline in the purchasing power of the dollar, not from the weakness (or strength) of the economy. And PMs, because they are "denominated" in dollars, will react accordingly. Stocks already have; the share that "cost" $22 in 2007, at the trough, might now "cost" $28. Is that 2013 share intrinsically worth 27% more? In the current environment, I don't think so.

PMs have increased well over 27% -- are they intrinsically worth "more" now? No. They just cost more, and sell for more, of your inflated dollars. You hold them to minimize your loss, as compared to holding Federal Reserve Notes and their equivalents like bonds and IRA's.

Chairman Bernanke pointed out yesterday that the $85 billion sequester would cause a drop in the growth of the economy of 0.6% in the next 12 months. What he's really saying is that a drop of $85 billion injected into the economy causes that lag in growth.

There is now little alternative to "QE almost-forever," not only by the United States, but every other major industrial nation in the world. It will end badly. All that money created out of thin air, that money has no choice but to encourage hyperinflation, regardless of the growth of the economy, regardless of the unemployment rate, regardless of austerity.

 

That may be correct theoretically, but thats not how people come across on here.
Guy

 

People "here" are either PRO or CON on PMs, and they can cite all kinds of facile arguments to back their beliefs. All I know is that folks who concentrate their wealth in dollars and dollar-denominated assets, and do not diversify, are going to have a rude awakening before the next election.

In general, coin collectors will probably do all right, whether holding numismatic coins or bullion.

 

I agree with diversification of assets. However, what do people think they will be trading in that gold for? Last I looked Safeway and Chevron weren't accepting gold for payment, so one is still storing wealth in dollars. True, bullion may hold that wealth better than say a stack of bills. But, realistically, it has proven no better than a stack of stocks. Investors can hide behind gold all they want, but they are still going to have to rely on standard currency to make that metal work for them. I think anyone who doesn't want a good balance of monetary worth and stable bullion is deluded in their thinking on how money and assets work.
Guy

 

Guy...I agree completely...that's the whole point of the thread! :hail:

I hope we reduce spending, I hope we lower taxes, I hope we replace the Income Tax with a Consumption Tax, I hope stocks rise and PMs fall...I hope we right the ship and grow a strong economy! :thumb:

That's the best possible scenario for both the truly needy and the "pseudo" needy alike.

 

I don't see it that way sir. I would say there are those here who believe only PM will protect them from the coming economic disaster, and those of us who buy PM as an asset diversification tool. I cannot think of anyone on here who "hates" PM and doesn't own any at all. It is a coin board, after all, and coin collectors are usually more well read concerning PM than most Americans.

Many here would call me CON PM according to your definition, yet I own over 1000 ounces of just junk silver, not even counting numismatic coins. Why would I be CON and still own quite a bit of silver?

Undoubtedly, there are those who believe PM is a horribly stupid investment. I have just not read of any on CT.

 

I would give up all of my stack in a heartbeat in return for a healthy job market and a free market financial system. I have metals for protection, and I hope the price goes up, but I don't know anybody who wants the economy to do poorly just so they can make a buck. Anybody who does deserves a swift kick in the...

As for the pro and con arguments with owning silver, I have seen 2 extremes detailed but I have not seen anyone mention what I perceive to be the reality which is that a number of people on this site advocate owning a portion of precious metals, but are very keen on not having people own too much.

Most of us know that the financial system would crumble if everybody went all in on silver, and that gold and silver would return to money and fair value in that case. Like it or not there are some people with very deep pockets who would lose out bigtime if everyone did buy silver, and they have the means and the vested interest to steer people away from it.

If you don't like metals more than bonds from bankrupt governments that will never pay off their debt, or derivatives that are repackaged and resold with highly leveraged counter party risk chains to infinity (this is fraud, pure and simple), yet you tell people you should own metals as well as diversify in all these things, well that's being a wolf in sheep's clothing as far as I am concerned.

 

A consumption tax is less fair than what we have now. The poor spend all of their money on consumables, the middle class spends most of their money on consumables and the rich spend very little of their money on consumables. A consumables tax puts more of the tax burden on lower income people. A graduated income tax, at the same rate for all income, is much more fair in my opinion.

 

A pretty strong jobs report came out on Friday...+236,000 jobs! ...and there's talk of falling energy prices over the next few months. This should increase downward pressure on PMs.