The case to be made for gold vs silver

I can only agree with you for everything stated here (and could also add the real estate scam that inflated a ballon just to watch it pop). I also take the bullish long position on MOST of my portfolio. Outside of the orphan pharma market I haven't put anything into anything since spring 16. Gotta love that market correction. Apple at 93? The drippers that cracked the div faucet open with lower entry point? Everything was priced to buy then. As far as the recession- had someone not uttered the word there would have been no recession, or at least anything to the scale it was. I'm sure that was the case for others prior, but it's the hype/sentiment that drives the market...why would you want to use that tool against the market? Hmmm...

 

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I don't know what you've been buying, or where. I think the Arnolds wide-pan that I used to buy (before Aldi came) was around $3 a loaf five years ago, going on sale for $2.50 often, $2 occasionally, and once in a while BOGO. Today it's maybe $4.30 retail, on sale for $2.50-$3 often, and BOGO fairly often as well. Last week Harris Teeter had it on sale for $1.88 a loaf.

I'm not seeing the wide fluctuations that you are, at least not here in central NC...?

 

IDK about commodities, I think the granaries keep stores of wheat in case this happens. I thought I recently skimmed a "bad wheat crop this year" article which will increase prices. Not too long ago there was a tremendous price increase in eggs. (Bird flu?) What was around $1+ a dozen was $3.99 if you could get them at all. So of course they have all been over producing since then to catch up and cash in, the prices have come back down and recently I bought a dozen eggs for 50 cents. Regular plain white bread is your lowest cost, but any bread worth eating is about $4 a loaf and it's going up. Where I live food prices were always lower than other parts of the country, so when the prices go up here it is a dramatic shock.

 

I hear that. But around here it's been a long time since the good bread was $1/loaf. Maybe before I started eating it; certainly more than 20 years.

 

Not sure if you have a wegmans in your area but their store brand loaf of good ole American white bread is .79 a loaf, .99 for hotdog and hamburger buns. If you're used to anyone's standard white it has the same indredients as the rest. When I'm feeling a little groggy I'll spring the extra dough (pun intended) for a loaf of martins potato wheat (no other pre-sliced bread makes my stomach smile like potato bread).

 

I feel compelled to respond after better than a half century of buying/selling/trading "tangibles", operating businesses while being gainfully employed, etc..

I've personally experienced the business, and investment cycles, having been partially liquidated by "big brother", and entities that control our finances. I believe only a fool is convinced they have control of their finances. It's reasonable to try and preserve a growing portion of "earned income", hoping to someday enjoy life "more". Enjoyment is a personal trait, where less can often bring more.

I still have many coins that were purchased during the "Hunt brothers" era, and even more that were acquired during the recent optimism pertaining to PM. I don't share your recovery thoughts, but know that change is inevitable.

I currently hold large, almost equal values of both Silver and Gold coins. I've found that "bullion" will generally always be considered that, only increasing it's price by others control of market. Coins are generally valued based also on other criteria, and can be independently individually valued, regardless of vested interest businesses and organizations dictates of worth.

I have "butt-ugly" bags of Silver AU-BU pre-1965 scarce coins that were stored as less experienced participants here have suggested. I also have >century old pre-1933 U.S. Gold coins stored under the same condition which show no ill effects. The Gold coins enjoy all of the positive factors heretofore stated, while the Silver coins experienced some unmentioned.

I believe the cost of commodities should never deter purchasing same, only frequency of acquisition. I probably wouldn't have hardly anything if I waited until conventional dictates allowed a purchase. DCA, I've found regardless of the inclination, is a good practice. Credit is based on current value and rating. A credit purchase with a premise that only "disposable income" is ventured, usually inflates purchasing power, and reduces risk of failure.

JMHO

 

@imrich can you elaborate on what you mean by control over ones finances? I have money. I choose to spend it or save it and how so. To me that's control over finances. If you mean control over risk vs mitigating it...that's another ball of wax.

 

We're away from the topic of the original post, but I agree 100% with you. For official inflation numbers, in addition to electronics (they reduce the price of watches and cameras and say that a smartphone has both...so watch and camera values go to virtually zero), they also use the price of an airplane seat; years ago that was a comfortable seat that included a meal and no charge for the suitcase, now the price is for a small seat with no extras.

 

[QUOTE="
1. Storing gold is easier than storing silver. Let's take a modest $25,000 of gold. That's a little over 20 ounces of gold, weighing about 1.37 pounds. That can be stored in 20 total coins. On the other hand, storing $25,000 of silver is 1,562 ounces, or over 107 POUNDS. That's also 1,562 one ounce coins!

2. Premiums on gold are much lower than premiums on silver. In order to recoup your premium in the future, the price of each commodity must rise by at least that much for you to get your money back. Let's say you are deciding between gold and silver American Eagles.
You will pay approximately:
American Silver Eagle $19.50 per coin You are paying 21% over spot
1 ounce Gold Eagle $1300.00 per coin You are paying 5% over spot

On your $25,000, you will have paid around $1,250 premiums on the gold vs over $5,000 of premium into the silver![/QUOTE]

I also wonder whether gold or silver is the best precious metal to purchase. I've been able to buy each for about 5% over spot. It sure does take less space to store gold; if you are using a bank safe deposit box, then that makes the decision easy to go for gold. If you store at home, the bulk of silver makes it tougher for a thief to carry away.
A more important factor to me is what we think the metals will do over the long run. If one metal goes up 5X in the next ten years and the other goes up 10X, then all the other factors being discussed here don't look so important.

 

SILVER

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GOLD

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DOW

 

personally I don't like 100 year charts. They don't show the economic climate changes. Such as when globalization affected the way companies operated in more than just one economic zone. Or how, when China quickly modernized most everything they do up to around 2008 how it affected oil, steal and tons of other commodity prices. Or how companies change the way they perceive making money and are driven by same store sales increase over the same period last year, or tons of other variables on how the stock market changes it's components to keep that number driving upwards all the time. etc.

But these are the charts I like to see compared to the DOW which is the yellow line.

 

The mention of the premiums is a valid argument, but if you buy enough at one time the seller should be open for negotiation. If not, they're not the only ones selling the stuff.
Each metal moves for different reasons, the least drastic (imho) being industrial need. That may help gauge long-term, but even figuring that out will require a well cleaned and calibrated crystal ball. I guess the best thing as far as Au vs Ag is just pick one and study it. I don't think it's safe to assume that they are a lateral choice. Learn one and if you don't feel good about it go to the next. "Do one thing and do it well."
As far as using a safe deposit box at a bank...if you took what you are paying for something you can only access during their business hours, and are in public bringing a heavy bag in and leaving light, over the time you use it you'd probably just be better off (over all) spending the money on a large (1600-2000lb, empty) safe and have it delivered. Once it's in place it doesn't matter if it's empty or not it ain't going nowhere. Paired with a dog and a gun you'll be more than good to go.
Also, it's smart to photocopy your drivers license and add your phone number and email to it with something along the lines of "This safe and all contents are sole legal possessions of x. If opened for anyone other than, please contact myself at x and x and the police. All costs for opening will be paid after myself and the authorities are notified." This is good for safes of all sizes because ETHICAL locksmiths will see it, and if it's not that person having it opened the door gets shut and locked and the police are called. It's the cops job to determine valid power of attorney or inheritance. We've had to do it a few times. But I will admit that my opinion is biased since that is my industry and that's how my gears turn- toward safe self sufficiency.

 

Thank you for that. I think just the past 25 years would be better to analyze because the spikes and dips are more drastic and faded out in the 100yr. But, overall, it's easier to see the inverse relationship between PM and the stock market.

 

Yes the price of PMs, should also contain the price of storage especially if it's an ongoing costs

make up your mind ... LOL
oh, the recessions are the grey areas.

SILVER

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GOLD

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DOW

 

Lol sorry. I meant that the 100yr shows the movement of PM vs Stocks very well, but the past 25 years is probably more pertinent for analyzing and using the data for future moves. Thanks again

 

In the chart where the Dow is the yellow line, what is the blue area? PM's?
Last January gold bottomed in the 1100 area so that would be a little misleading on the chart. Before that it was 1300-1500 and currently it is 1200-1300. It has been pretty flat for almost 10 years.
The Dow is only 30 stocks, the market is much broader than that.
And maybe it was the corn crop. Although the corn here is always plentiful and inexpensive.

 

Its all one big basket and our slices keep shrinking no matter if it is the size of the loaf of bread or the metal of a nickel. We are not better off now then our parents as we require 2 times the labor per household for less. No more retirement plans, no more vacations. No it does not cost the same it is more for less just different wrapping.

 

I don't know about you, but when I see a profile like that for a route I'm planning to ride on my bike, "flat" is not the term that comes to mind...

 

Blue area is my latest individual stock investment ... compared to the DOW.


It's how I make money. Can't make money in PMs .. lol .. you can, but it's harder.

 

I remember selling gold at 1300-1500 I thought it was 10 years ago. The chart says that's not the case. Must have been around 2011.