Silver prices to the moon!!

"The future's uncertain and the end is always near........" Roadhouse Blues

 

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My take on it is you need to be comfortable with any investment or purchase that you make.If I can buy ASEs at $23 thats cool.Apmex rounds @21,-- Im in.I wont go all in for now but 5 to 10 ozs a week is good for me.

 

The price is down from the end of 2011 when gold almost hit $1850 an oz and silver almost hit $50 bucks an oz. That looks down to me.

 

Because I'm just starting in my silver and coin collecting / acquisition I know this might sound strange but I kind of am happy when I see it go down, I'll just be able to aquire more because of the prices.

Jeff

 

Well, if that is your shortsighted approach, feel free to dive in and invest to the max.

 

I started earlier this year solely for a little asset diversification (don't keep all my eggs in one basket). I bought until getting to a base amount of ounces. Now, I feel I can be more patient when looking to buy more (if any). Have other types of purchases to also consider (small farm land, etc) . I want more than just the typical basket (fiat cash, stocks, real estate). Each type of purchase serves different primary purpose and I focus on that instead of obsessing over buy low/sell high. I try and focus on what I can control.

 

Precisely my take on it. Saying it is down and low is like trying to get off a roller coaster on one of the lower loops while it is in motion. I prefer to wait until it stops completely and at the very bottom.

 

I don't know what it's doing. I think I am going to buy stuff I like and if it's really cool, I'll be happy with buying near silver price. I have gotten a lot of cool numismatic coins that way. If they are not worth as much when silver goes down they still retain their numismatic price anyway.

 

If you are good enough to catch investments at their bottom, more power too you. I have never had perfect timing like that, so when investments I like get at fair value or lower is when I start to slowly buy. I simply am not smart enough to know when they are going to bottom out.

I was buying silver when it dipped into 18's, but have not bought any lately. If gold would go into the 1100's again I would pick some more of that up.

 

These aren't exactly just any investments, we're talking precious metals, silver to be exact. It's not exactly rocket science. Two hiccups and the rest are decades of plateaus...

 

I think a mistake a lot of folks make is treating PM as a primary investment. I don't think it should be. It just is a hedge for a worst case scenario. The total global thermonuclear war scenario of my youth appears to be off the table for right now. Sure, maybe a small conflict may occur with 2 or 4 nukes hitting us here, but that is lightyears better than the old Carter and Regan era JCS war game scenarios speculating on how to cope with 2,000+ strikes getting through. So what is left as a potential worst case scenario here? Super hurricanes arriving in the midst of a super volcano eruption or an asteroid strike? One of those scenarios occurs, movement is also probably necessary and oh gee, maybe u should have also bought and loaded up with freeze dried food and a super sized ATV to carry all of your gear, weapons and PM in too.

Nah, whatever catastrophe happens will probably be more like Katrina or Haiti. A regional event from which in six months time the area will recover, or at least become somewhat normalized. You will not need tons of PM on hand to survive that, and indeed having such will probably lower your survival odds if the word gets out. You may be well served, perhaps better served by having a small stock of Augmentin, 48 (2 cases) of military MREs, a good knife (cheap K-bar vs Busse?), a canteen, a few gallons of drinking water, some first aid stuff, a Glock with some ammo and maybe a small water filter and 5 gallons of gasoline and $200 in small bills, than if all you have is 10 pounds of gold coins.

That being said, if you already have the other stuff and even a generator, then sure get 4 or 5 pounds of junk silver (what is it, 72 quarters to an av pound? just under 2 rolls of silver quarters to the pound, face values approximate, so maybe 4 rolls of silver dimes for the second pound, etc.) and maybe a pound of 1/10 ounce gold bullion coins. Now you are set. Before buying your first 1/2 ounce gold coin, take a college tradesman course (welding, carpentry, engine repair, etc.) instead. Or a cooking course. That course may prove more useful to getting by after armageddon, than a whole stack of 400 ounce platinum bricks buried in the rubble of what used to be your house.

So my thought is if your goal is to have 200 pounds of Kruggerands or Eagles buried in your basement you aren't prepping for Armageddon. You are just speculating into a risky market with lots of peaks and valleys that don't coordinate their timing with when you need the money. Put the money in tax free municipals and apartment buildings instead, just my opinion.

 

I always hate the Armegeddon talk. Its so outrageous as to overshadow a good reason to invest in PM, and the one I subscribe to. There is a negative correlation between PM and financial holdings in certain market conditions. Its a similar correlation land has to financial instruments. Since I cannot predict the future, I prefer to have assets in quite a few different asset categories, on the belief that if one goes down severely, the inversely related asset might help offset those losses. Just like my stocks were a burden to my portfolio in the 2000's, and pm helped, pm has been a burden this year versus my stock returns.

My goal is not to try to hit a home run, but consistently hit singles. I believe asset diversification is a huge benefit to this goal.

 

I am probably one of the so-called to the mooners, and fundamentally nothing has changed since then except my knowledge and perception.

Considering that:

1) The price setting mechanism for silver is controlled by exchanges which
a) Are overseen by an inept governing body (CFTC)
b) Maintain their own vaults with no outside influence
c) Are known to have between 50:1 and 100:1 paper to physical metal leverage according to Adrian Douglas' congressional testimony
d) Have a steward of the SLV (JPM) which is a primary dealer of the Federal Reserve and are thus privy to limitless amounts of free money to use however they please, with the only known oversight being GAO audits years after the fact (case in point - $16 trillion in emergency loans under the table along side TARP which was a mere $700 billion and people got in an uproar about that tiny amount)

and

2) The average US citizen is a victim of undereducation and status quo indoctrination by the boob tube and thus
a) has no comprehension of the concept of real money or historical monetary cycles
b) has no desire to plan for the future with an egocentric mindset for immediate gratification
c) is in complete denial about the reality of the economy
d) does not have a clue that $4 trillion in QE has produced only $40 billion in GDP growth at the expense of their own buying power
e) in today's stagnant job market has little money to spend on their future even if they aren't ignorant

It should come as no surprise that the price of silver has underperformed rational expectations. I personally do not believe we will ever see $50 silver. The price will not be freed until the dollar collapses under the weight of an exponentially growing debt burden, since that very burden is used to control the price. If silver manages to go into a real shortage it will accelerate that process as people would notice and then abandon the inferior debt-based currency for real money as history has shown time and time again.

It has been said silver is an end game play. Anyone trying to get rich quick without providing a good or service deserves to be fleeced. Anyone storing up tangible assets for retirement will be in a position to benefit when the games being played today run their course. The benefit will not be in dollars, but rather wealth expansion through increased buying power when the scales are finally rebalanced.

The way I look at it is with the old adage "the only way to win is not to play", and by that I mean to exit the debt-based slave currency for real money. If people continue to seek dollar denominated gains then they are playing the game, but I have reversed my mindset in that I look at every metal purchase as a profit because I was able to trade in paper currency in which the value is entirely promisary that cost me nothing but my time+labor in exchange for real money with inheret value and freedom from the hidden tax of inflation. Since I didn't have to pay any money to get my paper currency my metal money is pure profit at any price.

This is the ultimate mindset everyone will come to when the facade of fiat currency runs its course, and is the standard of all monetary systems at their inception. Without metals there would be no such thing as dollars today, as dollars simply usurped the function of metals with the added absence of accountability to supply (thin air vs. mining) which is beneficial to the money masters for obvious reasons. Being ahead of the curve will help secure your financial future.

 

@InfleXion.....I completely agree with Your assessment of Our Youth today. They truly have no idea about how anything works regarding an economy. I even see massive ignorance coming from so called college educated kids as well. I still fight the good fight and try to get some of them to at least think and be objective. This of course is never easy with Our youth having an ever so dwindling attention span. (Numerous studies have proven this to be true)

I will say however, that I am hearing more and more talk regarding issues like getting the U.S. and other dollars back on either the gold or silver standard. I never heard this much talk 10+ years ago. Fiat was seen as infallible in many circles. I hope We see the "true correction" soon regarding the dollar and the markets......As they are not an accurate reflection of the economy, but who knows? Maybe the idiocy has a lot more left in the tank.

 

It's not shortsighted at all. I wasn't collecting when silver was as low as $5 an oz so it doesn't pertain to me. The price is down in comparison to where it was at the end of 2011. Just the facts Bub, just the facts. If you want to throw your weight around because you think you're KingFish or something don't waste your time on me. In other words, I don't really care about the price of silver in 1980 because I wasn't in the market then.

 

I don't care about you at all. The focus here is your advice to buy and anyone new who might be reading it. People of your opinion have already caused others plenty of losses with such careless statements. I've watched it unfold from the $40/oz. range. Even Max Keiser knows when to give it up and disappear from the spotlight. Whatever delusions pertain to you, please, do not let me sidetrack you with my insignificant little opinion. You should really maintain a greater focus and attention on all those buying opportunities ahead of you, instead of addressing the KingFish.

 

What a waste of a decade...

"From 1997 until 2006, his investment fund-Berkshire Hathaway-accumulated over 37% of the world’s known silver supply-even more than the COMEX!

When Buffett started buying silver, it was just under $6 an ounce (silver now trades at over $13).

... Buffett said he sold at about $ 7.50.

“We had a lot of silver once, but we don’t have it now—and we didn’t make much on our prior holdings.” He went on to say: “I bought [silver] early and sold early. Silver was my fault. [Speculation] is wildest at the end.”

In summary, the statements Mr. Buffett made about silver in the 2006 annual meeting tells us two things: 1) Berkshire Hathaway has no current silver holdings; 2) the Mr. Buffett no longer views silver as a viable holding at current prices ($13 at that point in time).

Of course, there are other reasons to invest in silver such as hedging against inflation, portfolio risk reduction (weak or negative correlation with equities) or the continuing fundamental issues of supply and demand, but from Mr. Buffet’s value investing strategy, silver has come and gone until the price of silver comes down significantly."
http://www.silvermonthly.com/analyzing-warren-buffetts-investment-in-silver/

In other words, $7.50/oz. is steep for this commodity. Speculation about Armageddon and hoarding silver are just bad for any portfolio. The rewards are often minuscule and the opportunity to cash in on them passes in the blink of an eye. I would not invest in the potential of a hiccup, once every thirty years. Bad idea!

 

Silver is up or silver is down - only depends upon which point in time YOU or ANYONE arbitrarily chooses to measure from.

 

Good post JAF.

Looking back further, if you take a reasonable inflation number and adjust the price of silver from 1920 or 1950 to today, and guess what? Its right around today's price. So, if you had a silver dollar for the last 100 years you have basically kept your purchasing power. That is better than hiding FRN's under the mattress, about equal to bonds, and lower than returns equities would have given you.

Its about the same it has always been. Hucksters who try to tell you its going parabolic are using mathematical tricks on you. PM is not going parabolic, they won't go parabolic unless something gamechanging happens like they find out a pound of silver will cure cancer or something.

So, do you like silver and think its pretty? Buy it. You want to put some money aside to make sure you have a set amount of purchasing power in the future? Buy it. For those two reasons I have bought, and continue to buy, silver. If you want to believe pm pushers that every other asset will collapse and ONLY pm will be valuable, or believe silver will go to $500 an ounce in a year or two and you should put all your assets in it, to be blunt I will say that is just plain stupid. My silver has lost about 30% or more this year, and my equities hav gained 40% or more this year. That is a combined differential of 70%!!! That is about the most massive return differential I have ever seen two assets have in a single year's time. If I had all of my assets in silver, I would feel wiped out right now, (maybe feeling bad enough to wistfully speculate that only I am right about the future, and all of those "idiots" in equities will "pay someday").

 

Frankly, if the world's economy improves, or at least the American economy does, I would expect the price of silver to dip more as investors shift their focus to better markets.