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<p>[QUOTE=&quot;clembo, post: 425868, member: 8033&quot;]As we have seen in many other different threads there are a lot of questions about the price of silver.</p><p><br /></p><p>How does one buy? What should one buy? Should one buy? Why are prices where they are?</p><p><br /></p><p>Now I am no financial wizard but I have been doing some reading, observing and listening.</p><p><br /></p><p>A thread on another forum I visit discussed Kitco and buying in &quot;pools&quot;. Basically buying silver on paper. You never have the physical product - you have it on &quot;paper&quot;. It&#039;s much cheaper and so far easy to sell. Buy why?</p><p>I figure because people are still buying the &quot;paper&quot; so the funds are there. Now, what if several thousand people demanded the physical version? Could Kitco (or any other paper seller) supply it? I tend to doubt that very much.</p><p><br /></p><p>Now look at physical silver. Let&#039;s say spot is at $11. Call a dealer that used to sell at $1 over spot and they want $4 over spot unless in very large quantities. Yes, it happens where I work everyday but why?</p><p><br /></p><p>For starters the boss has way more than that into it. People sold like crazy when it was $18+ an ounce. Dealers bought like crazy. They certainly did NOT see it dropping $6 or so in a few short months.</p><p>Although it may, and should, balance out dealers just plain don&#039;t like selling at a loss. We still sell 2008 Silver Eagles at $22. Hey, the boss shelled out nearly $19 each for them. He&#039;s not willing to take that big of a hit.</p><p><br /></p><p>Think it&#039;s just the &quot;small&quot; shops? Think again. Visit some of the bigger sites. You&#039;ll see that even buying in bulk where you once may have paid $1.75 or so over spot for silver eagles you&#039;ll now pay at least $3 over spot.</p><p><br /></p><p>The discrepancy between &quot;paper&quot; and &quot;physical&quot; is huge. Maybe there&#039;s not as much physical out there as is let on?</p><p><br /></p><p><br /></p><p>Now take a look at 90% (junk silver) coins. Some people are still lucky enough to be able to pick up junk at near spot. Is it because the supply is still there? Personally I think junk is the best route to go in the long run.</p><p>No it does not command the same premium as ASEs etc. However, it costs a fraction and is REAL.</p><p>As price rise again (and I feel they will) the proportionate premium of bullion vs. junk should close greatly. Example: If silver shoots up to $20/ounce selling ASE&#039;s at 24 or so would work for dealers.</p><p>Junk would gain proportionally. If I can buy at 8x face then sell at 16x I&#039;ve doubled my money.</p><p><br /></p><p>I also look at ratios. Last time I bought gold the ratio was roughly 45/1 silver/gold.</p><p>Today it is roughly 71/1. Why is this? It has generally been hanging about 50-55/1.</p><p><br /></p><p>Now I&#039;m considering dumping a bit of gold in a trade for junk. I don&#039;t own much gold but if I could get junk silver at a 65/1 ratio I&#039;d seriously consider it. For an ounce of gold I gain rougly 20 unces of silver&nbsp; which I feel has a lot more room to move up when all is said and done.</p><p><br /></p><p>Lots of possibilities and no one has a crystal ball.</p><p><br /></p><p>Thoughts, opinions?</p><p><br /></p><p>clembo[/QUOTE]</p><p><br /></p>

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