Silver on its way to $80 an ounce

Since I am old enough to recall the 70s and was in the workforce at the time, I would say you waaaaay overstated the difficulties. The primary problem was unemployment, which was similar to the present. Prices went up regularly, but so did wages since employers were fearful of losing their workforce. I don't recall anyone having trouble buying food, and people continued to save and invest. It became popular to purchase a rental house to take advantage of the inflation. It would be inaccurate to make it sound like the Great Depression.

 

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I agree. While I was not in the workforce, I was a weird kid and read a lot about the economy and personally experienced it through my mother's paycheck. She got large COLA adjustments every year. They were expected by nearly everyone in the workplace. Yes, holding cash sucked, but returns from even a bank account were 10 times what they are today. I grew up poor in this environment and "finding food to eat" was not the concern.

Pep's writeup reminded me of the Soviet Union stories I read about in the same time frame. Are you sure you aren't mixing up the two countries?

 

Yes. Back then virtually everyone received COLAs and companies expected to pay them. Quite different than today when companies continuously try to take back salaries and benefits. I guess corporate management was more human and humane. And interest rates were higher so savings contributed more income each year compared to the prior year.

 

I think it's difficult to place everyone in the middle class of this country into a single group. There are those, like mentioned above, that live for the now and don't plan ahead. But then there are those who are more like their baby boomer parents who have planned long-term. While bullion may be a good part of a diversified plan, it's not a very liquid one. It's an asset that resides in a physical state, which may be good for people who constantly think every next day will be the last of civilized life. But for the people with grounded thoughts, a chained asset in later years is more burdomsome than helpful. Who wants to tote around their stash of gold when they're off enjoying their life? With a touch of my finger on my phone I can move or make liquid my money and use it at my convenience anywhere on earth I might be at any time. Thats today's middle class...or at least the ones that aren't in the red thanks to poor planning and credit card bills that exceed their incomes.
GUy

 

Guy, that is a very simple approach. The only reason baby boomers were able to prepare better (generally speaking) is because they had much better incomes and retirement plans. I am an attorney and my standard of living is nowhere near my parents or others of their generation. I do not think I will ever be able to retire and it is not because I live for the moment. It is because I do not make as much comparatively as baby boomers did and I do not have the benefits, both private and public, that boomers had and will have. As far as I am concerned, boomers sucked the economic teat dry for future generations. To put it simply.

Dave

 

I agree with that, Dave. I'm lucky in that the company I work for has a private retirement fund not connected to any federal or stock managed funds. But, I know thats the exception these days and without it I'd probably have to work longer than planned. But, there are simple ways that most anyone could plan themselves and retire comfortably. The problem is most people don't want to have to sacrifice now to benefit later.

Btw, I see you're in Vegas, right in my neighborhood (I'm near Laughlin).
GUy

 

It is nice to have someone in the neighborhood.

Though I may not have in abundance, I do have more than most. Other than a modest monthly coin/entertainment budget, my wife and I live rather modestly on the whole (just recovering from the economy like most). I still have faith that if we save what we can, I will be able to slow down in my older years. However, until things pick up even more (I expect 2-3 years), not much in the budget for savings and investment. Heck, it is my goal to upgrade from my 1986 Honda Accord by next summer.

 

Dave and Guy, I'm just across the border in CA. My financial troubles began early enough that I had time to recover. Now I get Social Security, retirement money from two companies and the California State Teachers Retirement System and I still teach part-time. Didn't plan it that way, just ended up that way.

 

What do you teach sir? I was going to be a teacher growing up but objected to the fact HS teachers didn't get a degree in what they were teaching, rather got a degree in teaching. So, I ended up teaching some graduate classes some years back, but haven't gotten back to that since I have moved to MN.

I do love teaching though. Maybe that is why I like CT and helping new members here.

Chris

 

I would love to teach. I taught English overseas many years ago and think I have a knack for it. I am sure I am qualified to teach several subjects, but not "qualified" by the school district's standards.

 

I have a PhD in chemistry and worked in industry (magnetic recording tape) for 20+ years until I was laid-off. There being no chem jobs in the area, I started teaching at a junior college part-time, but since I had two kids ready for college, I had to make more. I went back to college and got a teaching credential (You are kind of right Chris, you have to have a credential, no matter what other degree you have, and since you have to take so many "education" classes, many people just get a degree in "education".) and taught chemistry in high schools for 10 years. Currently retired from high school, I still teach part-time at the junior college. All good fun, I love chemistry as much as I love coins.

 

Weakening Chinese industrial demand outpaced by the investors (ETFs) buying? Hmmmm.
http://www.businessweek.com/news/2012-11-20/silver-trade-drops-30-percent-on-china-bourse-as-industrial-demand-ebbs

I'll play contrarian and suggest that - apart from stock mkt correction - on the first whiff of deflationary fear, we're heading below $25.
If deflation starts, Silver leads the way.

 

I teach biology. And I'm happy silver is running up!

 

Yall discussed all forms of vampire and werewolf extermination devices, but I don't think you concidered combining them. Why not inlay some silver into a stake? then you could kill two monsters with one stick. Or maybe you could creat your own ammo, with a shorter bullet so you could put a small piece of wood protruding from the bullet. Then make sure the bullet is silver, and BANG! you have ammo that could take out werewolves and vampires! Then you just have to make it a holopoint and you can take out zombies too... I over thought that so much. But it's getting more expencive. Silver at $34 an ounce today. Happy vampire hunting

 

Good predition - silver will either go down or go up.

 

Very good point numis-addict.

 

That's your prediction, not mine.

I've haven't predicted Ag is going either way.
I simply stated an opinion that any emerging deflationary concerns will send AG down -31% from the recent high @ ~$35.
Apart from the deflationary threat, I suppose Silver will match (or perhaps exceed) any US stock mkt declines.
Inexperienced PM holders who don't understand this risk will probably panic and sell at a loss, too. That's just my two cents.

 

I've indicated here for several years that I think the chances of having significant deflation or inflation are about 50/50 depending on future policy decisions. But if there is deflation, it might come in the form of crashing treasury markets due to either default or fear of default. In that case the money will have to go someplace else - one of them perhaps being silver. So it isn't clear to me that deflation will hurt PMs. We'll have to wait and see.

 

Assuming inflation hits, and the price of PMs go down, would that be concidered "hurting"? Deflation is when the value of the dollar goes UP, so if the prices do go down, would PMs not likely have similar purchasing power when you concider the deflation of the dollar itself? Or would the market dry up because of lack of fear of inflation and thus lack of need for having hedge materials such as PMs?

 

I view it a bit different. If there is deflation, it will be because the debt level becomes too high to service and investors will scramble to exit the bond market. Debtors will scramble to acquire dollars to pay down their debt and this will drive the dollar up. In that scenario, I don't necessarily see silver prices dropping because the money coming out of bonds will have to go someplace. Unlike others, I don't think the government will automatically hyperinflate to pay down debt as long as there are other options.