During a "silver panic" refined silver will be the easiest to sell

... so says Robert Mish in an interview with Chris Martenson.

I may have to rethink any future allocation. Right now I'm about 60% COMEX-approved 100 oz bars and 40% "junk."

I always looked at "junk" as being easily exchangeable in a dire situation because its value and authenticity are readily known. But dealers would likely send it to a refiner. And during the 1980 panic there was an 8-week backlog at the refiners. So the dealers didn't want to squeeze their cash flow by committing it for weeks or months, or take the risk of price movements over that time period, so they offered less for unrefined silver. Supposedly, the discount reached as much as 30%. Whereas with refined silver they could buy it right then without worry of price fluctuation.

 

Log in or Sign up to hide this ad.

The link Smitty posted is worth a listen. It is musings from a 50 year bullion and coin dealer on the current market and the differences between today and the bubble of 1980. It's a very interesting conversation.

I am in the same boat as you Smitty. I thought that junk would continue to move at a small discount to .999 and the idea that the discount is not fairly constant but can widen considerably as the silver market becomes more dynamic is something I had not considered. Very interesting indeed.

 

My comment would be that the discount in 1980 was not just on junk silver. Bullion bars were being discounted too. Its true the refiners were backed up, but dealers were paying back by quite a bit from the market due to dear of the market breaking. I agree with the 30% discount on junk versus market, but the .999 bars out there were being discounted from market too, maybe not as much but they were being discounted.

Having said that, I would agree generally if you want to be able to participate in a market top for the highest price, .999 would probably squeeze a little more out of it. I simply disagree with the extent being inferred in this interview.

Chris