Fed's Irresponsiblity = High Gold Silver Prices?

HI all, I am new here and have been reading this forum for quite some time and finally joined.

I want to know what everyone thinks about the astronomical debt and runaway dollar printing the fed is doing.

Will this make gold and silver go higher than it is now?

If the dollar loses more value... and gold and silver go up... will they ever come back down?

Are the days of $5 silver never going to come back again?

Thanks for your input.

 

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Welcome to CoinTalk!

I think it is really sad and will cause another financial crisis eventually.
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yes ... count on it

silver and gold will come down when the fed stops printing money like crazy

i think what might happen is eventually we go through some sort of dollar crisis and gold and silver explode upwards parabolically.
then legilation is passed to go back to a hard dollar
that would make silver and gold drop

i SERIOUSLY doubt you will EVER see $5 silver again.

but when silver hits $100 later this decade ... i am sure people will be asking ... "will we ever see $40 silver again?"

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awesome! Thanks for these answers... i suspected them from my research and of course common sense but just wanted to make sure i was not insane LOL - so my next question is... why are some people so oblivious LOL i guess nobody can really answer that...

Well I am glad that I have recently got into collecting silver and bought my first ASE and Silver Bar yesterday, so am now a proud owner of two whole ounces yay LOL

 

From your research you should also have discovered that the debt to GDP ratio at the end of World War II was much higher than it is today. So high inflation or economic collapse is not a given. I would also say that there is an equal probability that we will suffer from deflation or inflation. If you look at other situations in history where there was high debt, the probability of massive default [i.e., delfation] is probably equal to the probability that it will be successfully inflated away. I don't think you will ever see $5 silver again because the cost of production has risen much much higher than that. So unless all industrial uses cease, silver prices will probably remain above the cost of production [my estimate is about $20] from now on. Regarding the dollar, everyone looks at the supply of dollars being provided by the Fed, but the other side is the demand for dollars created by the need to service all of the debt out there. So a falling dollar is a good bet, but far from a sure thing.

So all of those "oblivious" people out there have a lot of history and facts to support their beliefs. If it was easy to figure out, everyone would be rich.

Welcome to CoinTalk!

 

there are a lot of people on this board that think silver is in a bubble now and will drop back to $15 in the near term

you will find the full spectrum of opinions.

what you heard was just mine

 

thanks for both of your opinions.

i did not know about the Debt to GDP ratio... that is very interesting indeed... in fact gives me a bit of hope that although we are trillions in debt it may sound worse than it really is... as long as we keep producing in this country right?

so, what about this default you speak.. or massive deflation? is that basically the opposite of inflation and what would be the ramifications?

im really hoping silver does go above $50.. but if it goes down a bit in the mean time that I will definitely be buying more, the lower it goes the more i think i will buy

at the least, i will know that my money is being preserved and hopefully will grow better than if it was in a dang savings account and maybe i will even make a profit LOL

 

Inflation is already here. Hence the large increase in oil, food, and silver costs over the last year. I think you mean there is equal chance of HYPER-inflation as deflation. I'd argue that there is a 100% chance of deflation given the reduction in cheap oil available to the American masses. Oil is the main reason America has enjoyed such a relatively high standard of living to the rest of the world. We've been able to leverage our technologies and capabilities more than anyone else thanks to our Government locking down Middle Eastern oil for the last 50+ years. Now the rest of the world is catching up just in time for worldwide oil production to start decreasing.

Hyper-inflation is not an increase in prices; it is a loss in confidence of a currency. My guess for the future is that hyper-inflation will eventually arrive due to the system's addictive dependence on quantitative easing. This will occur shortly after the US Dollar officially loses it's reserve currency status. Perhaps a new currency will be introduced at a much lower value before the Federal Reserve Corporation starts printing Trillion Dollar bills (as Zimbabwe did), but either way will result in a drastic reduction in the value of your current dollars.

The hyper-inflation will then be followed by a severe deflationary depression. I certainly wouldn't be holding my dollars thinking that they are going to be MORE valuable due to the deflation that will inevitably come.

 

Deflation can be good or bad depending on circumstances [isn't that always the case?]. If it is due to increases in productivity that lower costs and increase the purchasing power of the dollar, that's good. If it is due to crashing markets that result in fast and large reductions in the money supply, that's bad. Contrary to popular belief, inflation and deflation have a lot in common. Both result in a reduction of purchasing power -- inflation because the dollar buys less, deflation because there are fewer dollars to buy with.

Eventually, the time will come to sell silver. Right now, the market is training people to buy on the dips. It is very similar to tech stocks in the 90s. Buying the dips was profitable right up to the day when the dip turned into a crash and took many people with it because they bought all the way down. Silver is highly volitile and should not be considered a substitute for savings. It might go up spectacularly, or down. I suspect it will go up first, by a lot, and eventually make the round trip to settle around $20. But that's just my working assumption. Everyone should do their own analysis and act according to their means and risk tolerance.

 

Don't get too giddy,,,, after ww2 the country was not pumping 9 trillion annually into the economy and counting it towards GDP...... try working that ratio again, less 9 Trillion.

 

Can you provide a source for your $9T number?

 

http://money.cnn.com/news/storysupplement/economy/bailouttracker/

+/- a few trillion I guess........

 

This is the piece that is most missed by those jumping on the wagon!! Read it and keep it to heart.

If you do not have an exit plan, figure one out before investing any more money into ANYTHING ( stocks, metals, commodities, etc). Sometime an exit plan will cost a little of your profits, leave a little money on the table, makes you question your view of the market's direction, but it should be leaving you with more profits than someone saying " no brainer, buy, buy, buy" on a forum. They have no way to know if it is going to peak tomorrow, next week, month, or year, and neither do I, but I have a stingy exit plan and so should you. Drag and modify your exit plan as silver advances.

I agree it is unrealistic to expect silver to go to single digits. I remember filling my first car with gas at under 30 cents a gallon, and don't expect that again either. Since fuel and energy costs are variable, I agree with Cloud that $20 oz. is a reasonable bottom for silver and I think $350-400 for gold. AIMO.


Welcome to the forum!

Jim


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Thanks,

So let me ask you this... right now we are in a bullish market with gold and silver, so the plan obviously would be cash in before it turns bearish right? So what do you guys think the high will be before it all goes back down?

 

You really need to preface these type of questions with a time range..... 1 yr high, 1 month high, 20 year high, etc....... As I could answer your question by say it will peak today at 1pm, and then go back down in the afternoon.

Gem makes a stong point.... establish your timeline, and then your entry & exit points. You can be up 1M bucks on the poker table, but it isn't won until you cash it out. I'm kinda stingy too.... if any of my investments score well enough I sell it,,,, then start the long and slow process of finding a new entry point,,, which is 90% of the game..... and which gets insainly hard to to when artifical stimilus $ is pumped into different sectors at the whim of a few fed firefighters. I could point to the latest activity in the stock market here in the US.... we've had terrible housing news, devastation in the worlds 3rd larges economy, and a looming nuclear disaster that could affect anything from food stocks to real estate on the west coast..... and yet the market is rallied ? !!! Why ?,, well, because during after hours the fed is pumping BIG $$'s into securities to artificially inflate them,,, the securities are them sold off during the day to john doe's at inflated prices (look at the ticker over the past few days and you can see it easily),,, prices jump overnight, then drop slowly during the day as they are sold off to sheep at inflated prices.... much of the net then goes back to big boys to help them pay off thier Billions and Trillions of bad debt..... and the wheels on the bus go round and round.

 

Jason, I'm probably going to come off as an arse saying this... This is a coin collecting board, not a commodity speculation board. Yes, this is a bullion section of the forum, but I'm pretty sure that most folks aren't experts in commodity trading. I for one don't give my advice out for free. I contribute to the coin community, as I view collecting coins as my hobby. Speculating on currency and commodities is my livelihood.

 

Ahhh ok, yes that makes sense... well I guess since i bought my first silver yesterday that the timeline would be the next few years at least. and also during this time i will be looking for low points to buy more silver, so if the price does go down... i will try to buy - when i guess most people will be selling? So if it goes right back up again and the downspike was only temporary then I will be making a good buy... but what if the downspike is a crash and silver price stays down... then if i bought at a low price... doesn't it have to go back up eventually?

 

Aha, thanks for telling me that.. i had forgotten that important fact LOL I guess maybe I am focusing too much on the monetary value a bit! LOL

 

The subforums have been set up to be more inclusive than exclusive. There are some threads that are specifically related to bullion coins, and they interest one segment of our members, some of the threads are related to monetary policy and precious metals ( as long as they minimize political rants), some are survivalist slanted threads for those who see PM as part of it, and those that are in it for the money, whether it is coins, ETFs, physical bullion, etc. As long as a thread is related to bullion metal, and members try not to put their beliefs on others as the "truth", they will generally be accepted. The rules as to conduct of each member will be followed.

There are many thread topics and many posts I personally do not agree with , nor sometimes even read, as one must pick and choose.

Jim

 

It's hard to get a feel for what your asking Jason.....
1 - If your buy timeline was in the next few months and the exit point was anytime in the next 3 years with a minimum of 20% return,, then that's one thing,,, and probably something that many of the forum members could get thier heads around and offer solid advice.
2 - but you also say your into spot buying & selling silver over time as a strategy (or at least that what is sounds like to me),,,, anyway, if your first buy is today and your last buy is 3 years from now, does the last batch have a 3 year exit time line also ? The buy on the dips and sell on the peaks game is waaay different than a definitive purchase point with defined exit, and requires a dynamic and sustained view of the market..... there are probably over 1,000 different buy/sell formulas out there.... pick one and play, but be careful playing in-out speculation because sooner or later your statistically guaranteed to loose ALL your money,,, just like gambling (where the longer you sit at the table, more certain it becomes that the house will clear you out).
.... imo, silver will see another spike as a second round of "stimulus" spending appears certain to occur,, although it may be given a new name to passify, confuse, and daze the sheeple for enough time to get it all spent,,, er, I mean given away to big individual speculators with massive dept.......

 

LOL thanks, that is helpful.. Well I guess I am mostly in this because I think silver is cool and of course for the value. Also, since i don't have much of my money tied up in silver at this point then I won't be dissapointed if the price goes down.. at that point i will probably buy more... and I guess if the price goes up and I miss my chance to sell then lets say it settles around $20 I will still be ok with that cuz again I have only just started collecting... I guess I will be happy no matter what as long as I buy low and buy coins that I like so that way even if they go down in value I will still like them right? LOL