Should I stop stacking silver?

Thanks Mike, you are a genius, your posts are so insightful and helpful, thanks again!

 

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who knows if you should stop. are all your eggs in one basket? do you own your home outright? own land? stocks? debt?

 

Agreed Frydaddy. Being as informed as possible about anything you invest in is wise. Blindly throwing $10,000 at an investment broker is just asking for trouble.And usually by the time PMs make the news, they have already gone through their biggest gain.

 

[quote=" I am assuming that they can't use recycled silver and need it mined.[/quote]

From the Liberty Coin Act of 1985: “The Secretary shall obtain silver for the coins minted under this title only from stockpiles established under the Strategic and Critical Materials Stock Piling Act”

From the Gold Bullion Coin Act of 1985: “The Secretary shall acquire gold for the coins issued under section 5112(i) of this title by purchase of gold mined from natural deposits in the United States, or in a territory or possession of the United States, within one year after the month in which the ore from which it is derived was mined . . . In the absence of available supplies of such gold at the average world price, the Secretary may use gold from reserves held by the United States . . .”

All of the coins minted by the United States are made only by congressional legislation, which is usually drafted to protect the constituents and interests that get the Congressmen elected. The ASE program only came about as a way to prevent the government from dumping silver reserves onto the market and depressing the price of silver, which would have been detrimental to mining interests in Idaho. You can read more about it on Wikipedia.

So Westtexasbound is right: by the authorizing legislation they can't use recycled silver or gold in US Mint coins.

 

In spite of the decline in photography demand, increases in silver demand have still occurred due to it being the second most useful industrial commodity after only crude oil with over 10,000 applications that cannot be substituted for without either an increase in cost or a loss in quality. Photography is irrelevant to the silver story.

Additionally, to say there is a silver surplus, well yes, there is, but that's misleading if it isn't quantified. The amount of silver available on the open market is less than 6 months of mining supply. What surplus is out there is being held by parties largely unwilling to part with it at these prices, so it isn't available at this time.

 

Personally I would not. Disregarding the historical GSR which makes a clear case for silver being undervalued compared to gold, over this bull market the GSR has swung between 30:1 and 100:1. The 30:1 occurred when metals took off in 2011 so even though the current GSR of 65:1 is right in the middle of the road in that regard, as the price of metals rises it will favor silver more so than gold. Gold is more of a protection play, and really if you think the price of metals will drop, and thus favor gold more than silver, you may want to examine why you are investing in metals in the first place unless you are committed to investing in metals but are expecting further downside in which case swapping into gold in the short term may be the right move.

 

I agree silver is historically more volatile. Unfortunately volatility cuts both ways. I do not think gold possibly having more downside protection than silver is a bad thing. We always invest hoping the best, but paying attention to the worst is not a fool's errand.

 

dupe post

 

Hey guys it would be smart to buy gold cause if the Senators are being told to by Obama,and Russia and China are don't you think you should have some too? Looks like to me, as I've been studying now the whole scene for a few years, we've been told to buy Silver and that's good if you can hang on through this depression long enough to still have it , don't worry the rich and wicked know how to get our silver ,there patient . That's why you need to get gold then a few years later it will be 1to 1 with Gold my friends.

 

The GSR doesn't make a case for one or the other being over or undervalued.

 

This thread is over three years old. A lot has changed in that time.

Zombie threads have been marching around all weekend.

 

Yes. I was reading some of the comments and one said that the PM market was going to go down significantly, and I thought how much more? Then I realized it was dated from 2013. Yea, I guess they were right about it going down. The question is, how low will it go? Seems to be on an uptick a little over the past month, but with the market drop I can see why. Still too short of a period to see if it goes back up. Good time to do a little reasonable investing in both Silver and Gold.

 

The GSR still favors buying silver right now. Nearly 80:1 in price but only 10:1 in mining output.

 

But what is the demand? Production ratios are meaningless unless compared to demand if you wish to understand pricing. If there is a 10:1 mining ratio, yet a 80:1 price ratio, doesn't this tell you many more people want gold than silver?