is silver a bargain at $40 ?

These are times that we have never seen before in history, there has never been a scenario like the one we are looking at now. The American economy is down this has happened before and it bounced right back. But this is a different situation we are looking at, all economies are failing and this is a world wide depression. I'm willing to bet on two horses in this race. One horse is named Precious Metals and the other is named US dollars. I plan on riding both until one starts to show strength over the other. Currently Precious metal is the strong horse. When we get people in government that understand the business of America is business the business sector will start to override Precious Metals. Until I see this happening, the majority of my liquid assets are moving on Precious metals. Currently my investment is running 50% on the market and 50% PM. Currently I riding a 6% pm and want to get that up to 25% by the end of the year. There is a big dip on the market and you need to treat this the same as a big dip in spot prices, it's a buying opportunity. I'll let you know how this theory pans out in about 5 years. Until then that's the horses I'm betting on

 

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Hi, thank you for your response. But I fear I must ask a further question. You say that measuring value over time in nominal dollars is plain wrong, the question I want to ask is why? Explain to me why it's wrong, i'm not asking this for argument sake, but rather more that I would like to fully appreciate the whole argument. I have no background in finance, my degree was in history & archaeology, hence why i seek a balanced view from both sides of the fence.

The other question I feel I ought to ask (and this no doubt shows my 'greenness' in this area), why do we have to have constant inflation? As I understood it throughout the late 19th century (1870s-1890s) [basically times of peace], there were years of inflation followed by years of deflation and thus an average over the period of near 0, surely any system should attempt to balance out as near to zero as possible. Deflation should be allowed to happen as a natural correction to inflation and inflation as a natural correction to deflation.

 

I believe the reason you wouldn't want to measure in nominal dollars is because of inflation. For example $50 silver in 1980 is $128 in 2011 dollars, so to say that we were near the all time high this year is not a very accurate statement.

Without inflation we wouldn't be able to manage the debt since that's the only recourse when unwilling or unable to actually pay it back. By inflating the currency and devaluing it the outstanding debt owed remains the same (not counting for interest), but the actual value owed has decreased. Of course deflation (at healthy manageable levels) is better for the population because then the savers are rewarded with increased buying power, and the only reason we 'have to have' inflation is because TPTB want it that way.

 

I am not an expert in the historical aspects of inflation of deflation. However I wonder if in general there was less inflation and deflation when our dollar was hard -- that is, when the dollar was tied to gold and silver. Prior to 1965, you could always take your paper dollar bills and exchange them for silver coins (about 1 ounce of silver for $1). Prior to 1933, you could take your paper dollars and exchange them for either silver or gold coins (about 1 ounce of gold for $20). I think that made the value of the dollar more stable.

It's interesting but I do recall reading about how there was more inflation during the civil war. Which led to people hoarding change (silver and gold coins) ... the shortage of coins is what led to the U.S. printing Fractional Currency in the 1860's. I think for a while many people thought the Union (the North) was going to lose the war and people lost confidence in paper dollars.

 

That would make sense, if a govt defaults on its loans then it leads to loss in faith of its currency and economic consequences etc.

 

Gold is finally behaving like a currency.

 

Silver and Gold just opened in Asia ...

Silver is up another 70 cents an ounce and closing in on $44.
Gold is up another $17 to $1870 (almost to $1900).

Can you believe it?

 

Silver has now broken back above the 61.4% Fibonacci number based on the previous low of $27.

27 * 1.614 = $43.58

If it can break past the 38.2% Fibonacci number based on the more recent low of around $32 (32 *1.382 = 44.22) and hold there for a couple days I believe we will really start seeing some serious moves upward barring any manipulation or substantial changes to the market landscape which wouldn't surprise me either.

Another reason I think it's about to break out is because the MACD is crossing over to positive movement for silver on the daily, weekly, and the 8-hour silver charts (a triple cross) as outlined near the end of the 8/19 YouTube video by BrotherJohnF.

 

It isn't much different from the 1970s or 1930s.

 

Cornering the market...

Maybe this is a silly idea, but has anyone ever thought about the possibility of someone, or a small group of people cornering the market on a particular coin market, such as the recently released 2010 America the Beautiful 5 Oz silver bullion coins? There were about 33,000 of each of the 5 ounce coins that were released. Right now, if you check on eBay, there are somewhere around 100-125 of each available for sale.

Hot Springs - 104
Yosemite - 133
Yellowstone - 128
Grand Canyon - 127
Mount Hood - 72

The majority of them listed now are the uncirculated version, so there are actually fewer than half that amount listed. They would never be able to get them all, but if they were to buy all of the Yellowstone that were minted, it would cost them around 8 million, or 40 million to buy them all. From reading the threads back when these were being scarfed up, there were a lot of people that purchased several sets from different dealers, so it's likely that many of them are still holed up somewhere. How many would they have to round up before prices were effected? I guess they could do this with any coin, but it would need to be one with low mintage. Anybody else ever wonder if this could happen? I guess people with 8 million dollars have better places to invest it, huh?

 

Some have tried. All have failed.

Best to focus on your own personal market.

Nevermind the need for a place to store them all.

 

If we get a sell off in silver and gold this week ... it's just another buying opportunity.

 

I have a lot of sympathy for the concept, but it would probably be necessary to pick something with a lower mintage to execute. It might also take a decade or more [and a lot of money] until the point is reached where there is a noticable impact on availability. And once that happens, there is also the problem of how to sell without collapsing the market price.

 

ROFLMAO

I Wonder what username this guy is posting under now.

 

As long as Silver stays below a maximum of $20, I am still buying !

 

ok mpcusa. Im just saying, what makes $20 the magical point where its no longer a great buy ? If the spot price were $8 right now, people would be saying as long as it stays under 410. If spot was $37 they would still be buying as WingedLiberty said it was time to back up the truck and that silver was a HUGE BUY when it was $25 an ounce higher than it is right now.

Maybe todays $17 is a fair price, Im not saying it isn't. In fact I would say silver in the $15-$20 range and gold in the $1200-$1400 is about right. But anyone who thinks either are going to go up more much than just normal inflationary bias anytime soon is going to be proven sadly sadly wrong as wingedliberty and so so many others were.

Just don't fall into the silver bias group think that goes so deep on these boards. Everyone of them have their agendas.

 

ROFLMAO.

 

To be fair, anyone who bought in quantity at $40 and sold at close to $50 made out quite well. Plus it's easy to cherry pick threads from 2011, what's more difficult is making the correct call for the future.

 

To be fair yes yes yes anyone who buys anything and just happens to sell at whatever the top price ends up being will cone out on top.

He said buy buy buy back up the truck buy buy buy he never said sell at $50. In fact when it was $50 people who did sell were having to take $45 or less to get out so even if they bought when he said spot was $44.80 I believe then sold at the absolute top they lost a little. The only cherry picking here is you saying " sold at close to $50".

The silver is massively undervalued crowd has been wrong. Period. Its not a question of cherry picking. They have been 100% wrong. With silver at $16 whatever it is right now its pretty much exactly at $4 or $5 that it was in the 90s
Adjusted for inflation. But even with that you lose because of premiums.

But yeah if someone bought 10,000 ounces at the absolute bottom and sold them all at $49.98 or whatever the exact top was they would have made money.

I would think a commodity which is always just about to explode in value would not always be so reliant on the "well if I had sold at the absolute top. I could have made money" argument.

 

Actually, $5 in the 1990s adjusted for inflation is right around $9.50 today.