Gold spot thoughts??

Nor do I. I never said there was a shortage. In any case, relying on people to sell for a loss is a bit silly in my book, regardless of the fact that it does happen occaisonally.

 

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Ja, das ist richtig, aber... for some odd reason, I keep reading on Kitco about new mining discoveries. Why are they mining new veins at these prices? Dunno, unless they think mid-teens for silver is the new normal. I certainly do.

 

It would be helpful to clarify what kind of mines these are. Silver is only deposited in the earth epithermally (near the crust), not mesothermally (large veins beneath the crust) like gold. Silver is primarily mined as a byproduct so I doubt it is the reason for these new mines. Silver is a truly unique metal and it's story is different from all others. Regardless, I could give you a list of links of mines being shutdown or sold, but it's easier to direct you to mineweb.com.

 

It is not always a voluntary act, that's all I'm saying. Some sales have more urgency than waiting for break even would allow.

 

Then the smart money says to take advantage and plan your exit strategy for when you hit the same age.

For someone that is strong on metrics you will also realize that the baby boomers were the "generation of saving" and a large one at that. Once the estate sales start to dry up, the next generation that starts to scrimp and save will be the recent one that came out of college with no job prospects - and sold off all of their parents' belongings to pay off that education (same set that encouraged their parents to re-fi their houses for vacation money). As the baby boomer generation starts to shrink (and it will since the birth rate fell off dramatically in the late 50's), there will be less and less opportunities.

I don't know of many modern couples that have sterling silverware and serving dishes these days. I won't even dare to guess how much is being held in scrap piles or even melted down already.

Economic prosperity is hitting in countries across the globe as the world population explodes. They aren't making any more land, and certainly aren't making any more of the minerals stored within it.

As the population grows, uncertainty hits and demand for safety increases - I see an exit strategy that will ensure my retirement goals. Every electronic device needs some amount of gold and silver to operate. That demand will forever increase. There are both metals inside the machine y'all are on right now.

Good investment isn't a short game. That's gambling in my book. For that I go to casinos where the odds don't matter - it's what color shirt I'm wearing and my horoscope predicts.

Kurt, I don't see anyone dumping on your investment strategy. Why such rhetoric and hatred for bullion? Unless you can predict the future better than the rest of us, and understand our positions in life - it's just mud slinging.

 

I'm just wondering, at what point does one become obsessed with speculation, and purchasing? Personally, about 20% of my assets are in PMs, and I am content with it, whether PMs go up, down, or stagnate.

 

That's very mature of you, even though I see 20% as pretty frighteningly high. Diff'rent strokes... As long as you're comfortable. There is a decision many people have to make - what is a reasonable insurance premium to pay for insurance against a paper currency Armaggedon? I've decided almost any premium is too high. I see it as an infinitesimal risk.

 

"Forever" is a very long time, especially when you're talking about electronic technology.

Every electronic device needed some amount of strontium, barium, or another active metal as a "getter" -- until vacuum tubes were supplanted by solid-state circuitry.

Every electronic device needed a certain amount of lead for its solder -- until enough countries banned that use of lead to keep it out of landfills.

Almost every electronic device today needs some amount of gold and silver -- but that amount grows ever smaller, and the more expensive the metals get, the more motivated manufacturers will be to find substitutes, or to do an end-run around the entire feature that demands them today.

And then there are the unforeseen changes that sweep away an entire current approach. Just ask one recent poster about the demand curve for silver in photography. (Welcome back, btw, Kurt!)

 

Depends on the individual. For me the answer is never, because my goal is not profit in debt based fiat currency. My goal is to acquire real money, and every time I trade away debt notes for real money it is 100% profit in real money since I didn't pay any real money to get those debt notes, rather only my labor.

The most recent definition of the US Dollar is in grams of gold or silver, and the most recent definition of a Federal Reserve Note says it is redeemable for metal which is no longer the case. I can't understand why anyone who knows this would care about profits in something so vacuous unless they are either greedy or have no wealth. Anyone who measures wealth in these debt notes instead of real money is at greater risk of becoming obsessed with profits and being a weak hand in the market than those who view precious metals not as an investment, but rather as a divestment out of the de facto currency we use in order to get back to a position of sound money.

I suppose for most people, they become obsessed with speculation when they prioritize greed over wealth preservation. Not a safe outlook in my opinion.

My own personal allocation is about 1/4 home equity, 1/4 ETFs, and 1/4 physical metal, and 1/4 cash. I would like to be heavier into metal, but I can't liquidate my ETFs without significant penalty as they are my retirement. However, I do hedge that with a mix of gold miners (TGLDX), S&P 2x bear (DXSSX), and basic stock and bond funds. I plan to dump the S&P bear in a few months after equity markets complete their megaphone pattern dating back to the dot com and housing bubbles.

 

Well yer splitting hairs, so I'll clarify - in my lifetime (being 40some) it will continue to grow. As will the demand for gold coins, jewelry and good old fashioned bullion for protection against inflation.

 

Here are the fundamentals behind PM's as I see them. I paid many tens of thousands of dollars for a degree in economics, most of it (not all) from a thoroughly Keynesian emphasis, so you decide whether that makes me more or less worth listening to. I take no responsibility for your choices. My analysis is free, and appropriately priced.

There are two kinds of significant physical delivery silver markets - industrial and let's call it monetary speculation. True numismatics, where the surfaces mean more than the metal itself, is a tiny fairly insignificant market.

Industrial - still a shrinking market. Why? Legacy uses, which were HUGE compared to anything today (i.e. silver based imaging) is still decreasing faster than the admittedly more numerous newer uses. More different applications today; less total demand.

Monetary speculation - supply is plentiful, although temporary imbalances still occur (means: sometimes there's a temporary shortage of the right kind of 1 ounce blanks). Demand is driven by both professional and amateur "marketing", often aimed at a highly unique and easily targeted politically ideological audience. This audience is very well versed in what I call "reasonable sounding but incorrect paleo-economic theory". In other words, the allegedly common-sense economics of the street. 90%+ of it is pure hogwash, but many people believe it. This school of thought is hung up on key dates in silver's, and gold's, monetary history. 1913, 1933, 1965, & 1971 can send these adherents into apoplexy.

There you have it. I see the fundamentals of silver still very bearish, even in a sub-$15 world. Silver had a glory period as "poor man's gold" when a fully justified FEAR of inflation hit in the aftermath of the 2008-09 economic crisis. As it turns out, Bernanke and the Fed were far too light on their policies. The crisis called for interest rates of NEGATIVE 6% per annum, or a huge QE. We all know which the Fed chose. It's also one part of the reason the recovery is so anemic. QE wasn't quick enough or big enough.

What's next? I personally believe even $18 trillion in debt is no big deal IF we go full bore on policies for economic GROWTH. Here's where it gets sticky. Too many people have "bought in" to a "sustainability" or "green" mindset. Yes, if you're going to go all sustainability, you can't get the growth we need to handle the debt. Thing is - if it's really a global problem, the growth may as well be here as in some third world country. If you can't avoid "green", then yes, you really need to worry about debt. I'd advocate for pure big honkin' American GROWTH.

 

Personally, I welcome, and respect people's observation on any of these topics discussed here. I am familiar with Keynes (don't support much of what he said), but still listen to what he, and people like Art Laffer etc. have to say.

 

Honestly that makes you a better man than I am, because I'm an ardent Keynesian and I hold pretty much all of Monetarism / Austrian School thinking in utter disdain, as many others here know.

 

You have to be careful. In most social sciences there is no absolute answer, with most schools of thought having valid points. This is due to human involvement. Humans are irrational creatures at times, so no overarching theory can ever hope to explain everything. I tend to be a temporal pragmatist concerning social sciences in that if it helps explain a situation today that is the best a social science theory can ever hope to do.

The closest I hold any social science issue in disdain would be the critical science epistemology, and even that has its place if the core principal assumptions are challenged enough beforehand.

So, short answer, I would not hold any in "utter disdain". All social science theories will hold at least a grain of truth, and if you cannot coolly, logically understand why you disagree how are you so sure you are right? An unchallenged belief is not worth having, right?

 

I would think the goal of having any ideals would be to arrive at contentment in life, whether those ideals support the Easter bunny, John Maynard Keynes, Jesus, Allah, or even the tooth fairy.

 

The main and principle reasons I hold Austrian School economics in "utter disdain" is that they actively reject, out of hand, econometrics and aggregate macroeconomics in favor of subjectivist "praxeology" which they use to steer them to their alleged a priori "truths". In other words, to heck with the data, we just know stuff because we subjectively feel a certain way. That kind of paradigmatic "convenience" deserves no respect, and I give it none.

The sickest part is that Austrian School is now "fashionable" in some political circles.

 

And Critical Science postulates the social scientists is the best person to accuate change in a situation. Both have aspects of them that are repugnant, but it does not mean there is not truths hidden amongst their research.

 

After reading a few websites about Critical Science, I find it encouraging if the social scientists making the decisions are legislative staffers. After all, it is we who have all the answers, right? Otherwise, I'm kind of meh on the whole idea. Sounds like a prerequisite course before diving into Marxian texts. Not Groucho, Karl.

 

Either Marxist or Feminist research. Sorry to bring up a seemingly random subject but that is my life right now, reading such "theory" in one of my doctoral classes. The point being, though, that even THAT kind of "research" has some valid points. As a whole its crap, but parts of it are valid. So no matter how bad you believe the overarching theory is, it pays to read about it to; 1. Make sure you understand what they are saying and why they are wrong, and 2. To pick out little tidbits of truth almost always found in other social science doctrines. I am not above using any "truths" I find, no matter in what pile I found them.

 

Funny how the calculus on the value of time spent looking for nuggets in piles changes the older we get, huh? Same thing applies in my case regarding roll searching - too little reward for the time spent, with a few exceptions. I'll spend an afternoon going through BU 1970-S cent rolls closely. I have a nice track record doing that. Other interesting solid date rolls too. But generic circ roll hunting? Nah.