Silver Bullion Coins

Interestingly, if all of the questions are equally important, and you can answer all 13 questions with 90% confidence of being correct on each one, you only have a 25% probability of arriving at the right conclusion based on analysis. However, flipping a coin gives you a 50% chance of being right. Combine this with the fact that there are probably far more than 13 factors to consider, and the magnitude of the problem becomes apparent.

 

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Actually, I thought most of my answers supported your position...UNCLE!!
:bow:

 

Well, you see, I'm not buying it at US$. When it tanks to US$12, the exchange rate would change too ... it is not easy to get ASE and SML etc below US$20 in my country

 

I'd say for me, I like to sit on ebay and look for old foreign that doesn't have HEY LOOK I'M SILVER plastered all over the page. That tends to make it more conspicuous. I just snatched this: http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&item=280466367279 in the last 50 seconds by pure luck. Yes, I did pay about $0.70 over spot for it, but it's an old Canadian coin, and $3.25 for any old coin with a fair bit of silver is okay in my book. :hail:

 

Don't tell anybody:secret:, but I can't really analyze the fundamentals for gold at current prices. It was a layup when gold was $400 because the price was below the total cost of production plus cost of capital. Now, I just think the gold bull market will continue upward until it ends pretty much as it did in 1980 and as the tech bubble did in 2000. It's more of a bet on human behavior and the expectation that the authorities will mess up on monetary policy.

 

I think the Administration came into office thinking the trade imbalance meant the dollar was too strong.

"Hmmm...print more dollars, devalue the dollars the "bad" rich people hold (same as a progressive tax), give the dollars to the disadvantaged (in exchange for votes, of course). The weak dollar balances the trade deficit, thus creating jobs! ...perfect plan!!" :high5:

...with one exception, the Chinese don't want to play along.

Now the Administration is under pressure to defend the dollar, but there's an election coming up...what to do? what to do?

"Let's keep printing money to buy back our debt...keeping interest rates low until after the election. The GOP will likely win back a lot of seats in Congress. We'll just step back (in a Bi-Partisan spirit) and let them reduce spending and raise rates...the economy will slow, unemployment will go up, and they'll get the blame!" It's a WIN-WIN!! :high5: ...and we get re-elected in 2012! WooHoo!!! :hail:

Question: What happens to PMs in that scenario?

 

I don't think anyone knows. The US economy is ruined. It isn't coming back no matter what is done. I know more unemployed people now than I did at the peak of the Volker recession. There are no jobs. They are gone overseas and won't be coming back for generations. There won't be a recovery in the US, although some statistics will be falsified to show one. A weak dollar won't cure the trade deficit because the US doesn't have anything to export, and the weaker dollar will just increase the price of imports, worsening the trade deficit. There are incredibly strong deflationary forces at work leading toward massive defaults. The Fed is far more sophisticated than most writers give credit for, and perhaps they will be able to prevent or delay it. I just don't know. I think PMs are going to do well, if only because stocks, bonds and real estate won't and people will try to do something to preserve what is left of their wealth at some point. For them to jump on the only thing rising, gold, makes sense to me.

 

That's a mighty sobering assessment :crying:. The one bright spot is that in a Global Economy, it's in everyone's best interests to see that doesn't happen.

I think a lot of the added liquidity and stimulus is being used to shore up balance sheets and isn't making it's way back into the general economy...there's an awful lot of risk adversion these days. That's why I'm bullish on equities; I think they will continue to outperform "expectations" for some time.

If/when businesses are presented with a choice between reinvestment or higher taxes, investment will grudgingly return and the economy will start moving forward, again. We're likely at the beginning of that process now. I'll be surprised if things don't start improving by November.

The question is, "How much of that investment will stay in this country?" I don't like the idea of my tax $$ being used to stimulate other economies, but I guess that's unavoidable in a global economy. I can only hope that some of the $$ finds their way back here in one form or another.

Here's a BusinessWeek article that shows where the jobs have gone. The problem is that jobs lost are replaced with different types of jobs and the laid-off employee is left out in the cold. I think this is what Ross Perot meant when he said, "Free trade will create a great sucking sound of manufacturing jobs leaving the country."

 

Personally, I think it's too late. Sometimes bad things happen even if they aren't in everyone's best interest. It was important to never get into this position, because it is seeming more and more likely that there is no way out.

I'll be surprised if things aren't worse by November.

Old Ross was correct. Free trade works fine in subsistence level economies. In advanced economies, it is used as cover for implementing a form of monopoly capitalism through the movement of jobs to the lowest cost countries, making that the benchmark for global wages. This is why our more intelligent ancestors put chains on the behavior of large corporations through antitrust and other legislation that was unfortunately repealed.

My company recently eliminated several hundred positions, and sent several hundred remaining jobs to India. When the economy improves and the people are hired back, the hiring will be in India, not the US. Multiply this action by thousands of similar situations, and the problem becomes clear.

 

Not bullion related, but I've noticed that the last few pages weren't really bullion related. But I do have a question for Sweeper. Why does increasing interest rates kill bonds? What I don't understand is, if interest rates are going up because of inflation, why would an inflation linked bond suffer?

 

A tiny percentage of bonds are inflation protected. All other bonds decrease in value as interest rates rise with longer maturities suffering more than shorter maturities. Inflation linked bonds suffer less, but usually they do suffer because investors historically have demanded a higher real rate of return. So at low rates of inflation, an inflation adjusted bond might have a rate of return of 2% plus inflation, but at high rates of inflation, they might drop to be priced to have a return of 4% plus inflation.

 

I would stick with Silver Eagles or Maple Leafs. I believe investing in rounds don't make sense, you are paying the premium but it will be hard to get that premium back when you sell it unless silver appreciates substantially.

 

Thanks for the recap. I was not paying very good attention to the markets back then, but do recall getting 16% interests on my CD's at teh time.

The last paragraph about "savy investors" caught my attention. I think you might be right inregard to savy investors, but what about investors scared out of their wits.

I just came back from a gun/coin show. There was a fellow at the lunch table that was still bruised from the Enron deal (over 500,000). He was a nice guy. I sure felt sorry for him. At least I still have a couple hundred pounds of coins. They are not exactly enough to retire on, but at least I can sleep better knowing I have them.

 

Phils.

I noticed that Austrian Philharmonics were not on your list. Any reason why.

Thanks.

 

sorry forgot the Austrian Philharmonics, I think they are the best manufactured coins, almost perfect, we sell them but not much demand, Austrians do really nice job, I wish the ASE and the Maple Leafs had the same quality as Phils.

 

scrap silver.

How do you buy scrap silver? In what form? Jewelry? spoons?

 

Lead sounds good. I still like non-cent type "copper" as my number two choice in base metals. Number one would be nickel. But lead is a favorite too when in ammo form.

 

Your thinking appears sound to me (note: I am not a qualified investment professional, just a housewife).

The thought that lingers in the back of my mind is how does one account for the past or forecast a future price, when we have operative investment vehicles that some consider extremely manipulated already. For example, COMEX (reference GATA ORG. for more info).