The case to be made for gold vs silver

Discussion in 'Bullion Investing' started by Jason.A, Jul 16, 2017.

  1. sakata

    sakata Devil's Advocate

    What the original poster did was to propose a topic and then try to prove it by reference to a specific, very limited example. You are very correct in your reference to comparative politics as this technique is widely used by both politicians and the media when the facts cannot be supported in the wider scenario. It is a sad reflection on today's education that people cannot discern this when it happens and the aforesaid politicians and media heavily rely on it.
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  3. Jason.A

    Jason.A Active Member

    Bring it back on topic, please.
  4. Seattlite86

    Seattlite86 Well-Known Member

    You could've simply said no, that you haven't taken a comparative politics class. Your response makes that clear. No worries though, I hope you had fun trying to win your point.
  5. kkathyl0

    kkathyl0 Active Member

    All great information but it is based on fact on the ground today not changing. Silver coins to me are a great way to get collectables that are appealing and you have many choices. Gold variety is limited. The market for silver (Available willing Buyers) is much bigger and if you want to sell off, well you limit yourself to those who can afford Gold over silver and you have to decide to sell a coin or not. If you buy Silver you can keep one for yourself and sell the others. Also your not including the cost to insure the gold vs. the silver. Market prices are what a few folks sitting around the table say it is. I think the premium on Gold right now has more to do with Inventories then anything else. Look at the units sold 2016 to 2017. A few changes in market conditions, mining issues and other political affairs and it all changes Plus we have a bubble boiling under our feet right now and it is bigger then what we have ever seen before folks are still riding the market a little taking the last of the last but how much more times earning should you see in these tech companies. What would happen if we had a Electric Pulse hit. I frankly buy both. If I like the coin, I buy it if I can, if I don't, I don't.
    Stevearino and Clawcoins like this.
  6. Jason.A

    Jason.A Active Member

    I haven't purchased any silver since posting this. I am very disappointed in myself for not paying closer attention to silver premiums vs gold premiums over the last few years. I now feel stuck with a couple thousand dollars of silver that will require me to wait until silver reaches at least $19 or $20 for me to get my money back, based on the premiums I paid. Dumb, dumb purchases.

    I hope others don't make the same mistake.

    I'm confident I'll be fine years from now when the United States has its next recession and silver perks back up, maybe reaching $30. Then I can sell back and make a profit.

    However, then I will feel only a little less stupid, because I could have put that $2000 of 15-20% premiums silver money into modest interest CDs and done even better.
    moneycostingmemoney likes this.
  7. sakata

    sakata Devil's Advocate

    One man's stupid is another man's smart. The scenario you describe sounds like a recipe for success to me.
  8. moneycostingmemoney

    moneycostingmemoney Yukon Coriolis

    This is a really interesting topic because there are so many angles that this can be approached from. I'm going to take the path less traveled with this one.
    I like silver and I like gold. Do I have triggers for buy and sell on each? I used to. When I looked at metals like stocks. I don't anymore (with gold). When I feel the price is decent (like now) I'll pick some up, but my goal isn't to have a short position in the metal. I buy to sit on it. It's a good hedge. That's not to say that I won't jump on what I feel is a good opportunity. A somewhat-recent victory I had was right before and after brexit. I heard it coming, picked up a bunch of silver and palladium at spot, waited 5 days and dumped it at a great profit. Why not gold? The average person that was unsettled by the environmental change were of lower to middle income. Silver and palladium have been the poor mans gold so if there is something coming that will make them emotional, prices will spike. The same is true for gold to a certain extent, but I can see the movement in silver (moreso) and palladium prices being more drastic than what we see with gold. I haven't really spent the time to understand the gold factors simply because I understand the silver factors enough. Gold just sits as a hedge for me because that's what I'm comfortable with.
    "The time to buy is when there's blood in the streets" would be complete if it stated "the best time to sell metals and buy stocks is when there's blood in the streets." The reciprocal holds true for just before the blood is spilled, historically.
  9. moneycostingmemoney

    moneycostingmemoney Yukon Coriolis

    As for the OP with the feeling of being stuck with what you have until the prices come back up above 19... don't sweat it. It will happen. It always does. I can't say for sure when, but I'll make a prediction- when we hear less talk of the Russian scandal and more of North Korea...the prices should start coming back up.
    Since this is the investment section of the forum I'll throw my last few cents in before I step off this box. No one should put money in any type of investment that will take from what you need as liquid but only what you can imagine burned up in a fire. It helps remove the emotional tie that can lead us into spur-of-the-moment moves that always cost us. If you had a good plan to begin with this will help you stick to it. If you have the urge to take some from the liquid area to make a little money- put it in CDs. They always make more than a savings account or an über low interest checking account. Thinking those are anything other than access to funds for bills or everyday expenses is a waste. You can always break CDs if an emergency pops up and the fees and risk aren't as bad as other placement options. Start with a chunk and split it into 8 pieces- first go into 6mo, 12mo, 18mo and 24mo. Then wait 3 months and do the same thing. You'll be starting a rotation that you'll have something maturing every 3 months and can use it if need be (car, new roof, kids braces, etc) or reinvest at 24mo every time from there forward.
    I hope I didn't go too far off track with this and someone thought it useful.
    Edited to add- I just noticed you mentioned CDs in the last comment. Thumbs up!
    Last edited: Jul 24, 2017
    Stevearino likes this.
  10. sakata

    sakata Devil's Advocate

    Buying a CD is a guaranteed way to lose money. Rates are always below inflation.
  11. moneycostingmemoney

    moneycostingmemoney Yukon Coriolis

    ...anything to back this up? I've never lost vs inflation on a cd. Well, it was less prosperous the last 8 years I'd say...but loss, na.
  12. Clawcoins

    Clawcoins Well-Known Member

    "normal" rates that I've seen for low cash CDs are in the range of 1.35% for a 12 month. But then my savings account gets 1.35% right now.

    My silver - ASEs - I have a max of $20 inclusive of all costs per oz. But I try to stay well below that. But lately I've stopped and redirected more $$ into better investments.

    But most of my coin investment is mostly based on Eagle designs. The only deviation is the ASEs, which I have a good quantity on now.

    But right now I'm getting over 45% on my early buys on a stock investment just a couple months ago. Of course those "real investments" when you cash out you have to pay taxes on them.
  13. sakata

    sakata Devil's Advocate

    Sure. Just look at the numbers. Don't use official inflation figures, however, as they are distorted down. Look at real inflation. Compare the prices of everyday things to what they were 5 years ago. Don't bother with luxury items such as electronics, which drag the official numbers down but concentrate on the necessities of life. And remember, when the price of steak, for example, gets too high they replace it in the official figures with ground beef. Looking at it from this point of view and CDs don't even come close.
    Two Dogs likes this.
  14. Michael K

    Michael K Well-Known Member

    12 troy ounces to a pound. That's 1.67 pounds.
    Are you converting from troy to avoirdupois, since at 16 ounces, 20 ounces would be 1.25 pounds.
    You can always use the common denominator of grains,
    480 grains in one troy ounce. (20 pennyweights at 24 grains) which is a more accurate measurement and one that no one uses anymore, since digital scales they all use 31.1 grams for a troy ounce which is close but not exact.
    And 437.5 grains in one avoirdupois ounce (16 ounces to the pound). Or 7000 grains to the pound.
    5760 grains in one troy pound. (12x480)
    Last edited: Jul 24, 2017
    moneycostingmemoney likes this.
  15. Clawcoins

    Clawcoins Well-Known Member

    actually I think the current US inflation rate was 1.6 % for this past year.
    The 1.35% 1 yr CD is below that.

    CPI was 2.6%

    I haven't calculated anything out, but with the PM fluctuations excluding spikes, I would think PMs would be the last place one would want to put their money in direct correlation to inflation. But it all depends upon buyin price and sellout price.
  16. Michael K

    Michael K Well-Known Member

    Yes I don't think you beat inflation with PM's, unless you bought gold at $300 and sold at $1500.
    I think of it more as a hedge as it will travel in opposite direction when things move the other way, oil, stocks, interest rates, value of the US dollar.
    It's all a worthless illusion. We are kidding ourselves that any of these things have actual value.
    moneycostingmemoney likes this.
  17. moneycostingmemoney

    moneycostingmemoney Yukon Coriolis

    That's a really good, almost unheard of rate for savings right now. Would it happen to be a "virtual bank" and need above fdic insured limit to get that rate?

    Also, yes, 12mo rates aren't good. That's why you need to get everything into 24mo for it to work for you. My example was just for the startup- getting into a maturity rotation to make the funds as accessible as possible, if needed. Anything longer than that should be placed elsewhere- solid dividend stocks paying 2-4%. Because, really, at that point, you could cash out as a long position and not get gouged by the taxes and it's liquid again...if the stock didn't drop.

    I guess this all boils down to time- how much time do you have to work on it (manage) and what time frame are you looking at tying the money up for. I still say, without the flipping mindset, metals are a good long term hedge. As far as numismatic metals, that brings another element into valuation, whereas a "dumb" bar of metal...not so much.

    Personally, I collect ases, maples etc because it's what I like to do. I watch for the right time to buy, but I'm also getting a couple pieces of everything from each year because I like them. I'm not so analytical with those as with the "dumb" metal purchases. The same with the non PM coins and paper currency that I collect. I know (barring a GSA hoard release) I'll (moreso my son or his generations to come) make out with them in the long run. They aren't making them anymore, I won't buy something unless it's<70% book value or <15% below current market value no matter how much I want it and I don't buy crap. If a nice (XF or better) example is out of my budget I'll either not get it or wait till my budget matches my buy marker. Then I go to work.
  18. moneycostingmemoney

    moneycostingmemoney Yukon Coriolis

    I think your closing statement can open up a Huge discussion on the illusion of value, but as long as the system is in motion, the wagon will keep on a rollin. If you have the stomach for it, switching between stocks and PMs is the game to play. Like I posted earlier, it's all about the blood in the streets- catching the tension (or lack thereof) and the spill properly.
  19. Michael K

    Michael K Well-Known Member

    I am bullish on stocks. Long term they have only gone up. Any "corrections", 1929, 1989, (whenever the other crashes occurred) they have always recovered and gone higher.
    Let's see a chart (graph) of gold, silver and the US stock market for the last 100 years. I bet that would be interesting.
    As for these things having an illusion of value, our created for obsolescence consumer driven economy, inflation, the outsourcing of jobs to India,China and Mexico, the over printing of money with nothing backing it, the national debt which is unpayable, the social security system which is a Ponzi scheme, since new investors are required to pay in, to pay off old investors,
    is all a large pyramid scheme destined for collapse.
    In 2008 when there was a recession, I said, the worst thing that could happen was for all of these big companies to lay off workers. It is better for the economy if all of these companies, were just able to break even. Instead, concerned about their stock prices, and their "bottom line", they ALL laid off tens of thousands of workers, spiraling the recession even worse. You have to keep people employed. Once you start laying off people, then they can't afford to buy stuff which keeps this whole facade rolling. People were losing high paying jobs, and then were fighting to get jobs delivering pizza. That's not how you keep the economy from collapsing.
  20. -jeffB

    -jeffB Greshams LEO Supporter

    We can try to nail down some numbers, but we need goalposts to aim for, not squirrel tails. ;)

    Say what you want about "official inflation figures", but at at least they publish their basis of measurement, instead of saying "well, everything, except things that shouldn't count".

    At the risk of going TMI, I'm paying about the same for toilet paper as I did five years ago. Bread is probably a bit higher. Boneless chicken breasts are lower. Milk -- five years ago (and for most of the time around then), I was paying $3/gallon when it was on sale, $3.50 or so regular price; for the last couple of weeks, I've been getting it for $1.19/gallon at Aldi, and I'm guessing it'll go up when enough dairy farmers go bankrupt.

    Cars? The last time I bought a car was in 2003. I can't help you there. But I think we can all agree that gasoline pricing picks its own roller-coaster path.

    So, if you aren't willing to accept someone else's shopping basket for inflation measurement, and aren't willing to rigorously define your own...
  21. Michael K

    Michael K Well-Known Member

    Bread is going to go MUCH higher because of a bad wheat crop this year.
    And I don't think that price has been stable. It was $1 a loaf 5 years ago and it has been $4 a loaf for the last few years. I try and get it at $2+ when it's on sale.
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