Trading in Gold for Silver?

With Silver prices going up the way it is, How many of you are think about trading in gold for silver or think its a good idea. Silver currently at $18.84 and dropping but as we seen over the weekend getting very close to $20.00.

 

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Joey - I'm heavily invested in silver right now. I have about 1000 oz. I have SAE's, junk silver, generic rounds and bars.

I like silver for two reasons. 1. It is a precious metal. 2. It is an industrial metal. Accordingly, if the economy doesn't improve it should increase in price as a precious metal as more people buy it as a hedge against inflation, etc. However, if the economy picks up industrial demand should also take silver higher.

I see gold as an all or nothing investment. You are betting that the economy stays the same or worsens. If it improves enough to instill current gold investors with confidence in the market, they'll dump gold and buy stocks. Gold prices will then plummet as a lot of gold is sold and floods the market.

All investments have risks. Silver is more versatile and, I think, more liquid than gold. That being said, if you do want to buy gold now, don't over look pre-1933 common date gold coins. Particularily, double eagles. Prices are dropping on some of the more common dates in MS 62 and below. If you buy these, you won't take so much of a hit (because of their numismatic value) if the economy improves and gold tumbles to $800 an ounce.

Good luck.

 

I did the opposite a few years back, silver into gold. It really helped with pulling my SDB off the shelf (it was heavy) as storage was becoming problematic. What you propose to do depends on your own mindset and personal goals that you haven't really stated.

How long do you hope to hold the silver? Going into this do you know your ideal sell price and can you hold out until that time? Why not hold the gold instead of trading it for silver, and buy only silver with other cash reserves to acquire a position in that metal. (I wouldn't go all one or the other metal, gold is also speculated to rise significantly and silver is particularly volatile when it moves.) Can you handle the volatility of silver and if you trade your gold for silver can you live with your decision to be left holding silver if it under performs and gold instead performs better? Do you have the storage space?

Regarding the industrial use of silver, gold also has industrial uses, as do platinum, palladium and other exotic PMs. People often cite this about silver but don't realize that investment in the metal itself may not really be the ideal form of investment based on silver's industrial uses. It would be prudent to investigate companies that create products, technologies, bio-tech/nano-tech and pharmaceutical products for instance that use chemical forms of silver and perhaps invest in company stock rather than physical metals to take advantage of some of silver's industrial uses and potential investment profit if successful.

 

I think Mr Myagi said it best. "You must first learn balance"....I think that applies to PM's as well.

 

"Regarding the industrial use of silver, gold also has industrial uses, as do platinum, palladium and other exotic PMs. People often cite this about silver but don't realize that investment in the metal itself may not really be the ideal form of investment based on silver's industrial uses. It would be prudent to investigate companies that create products, technologies, bio-tech/nano-tech and pharmaceutical products for instance that use chemical forms of silver and perhaps invest in company stock rather than physical metals to take advantage of some of silver's industrial uses and potential investment profit if successful. "

Read more: http://www.cointalk.com/t116015/#post933375#ixzz0sArJv92D


It is true that other metals have industrial uses. It is also true that you can invest in companies that develop technology that has silver applications.

However, if you are buying PM as a store of wealth/hedge against inflation, why would you buy stocks? By doing so, you are still a slave to the fiat currency that drives most into PM in the first place.

Plus, many of the ETF's selling PM are just moving paper around. It is the PM variant of fractional reserve banking. If you don't hold it, you don't own it.

 

Diversification.

 

Joey's question was about PM, not stocks. If you are buying PM as a hedge, then avoid stocks that are subject to devaluation because of their link with fiat currency.

If you are worried about the irresponsible debasement of our currency, why would you buy stock in anything driven by that very currency? What good is it to "diversify" your stock holdings if you are worried about currency debasement?

 

Joey asked:

I gave my input as far as I could through reasoned questions, questions the OP might himself ask of himself and determine prior to making a move in his investment idea, and what I thought was a good idea. He solicited my thoughts which I tendered.

You brought up, amongst other opinions on currency (de)valuations, 'industrial uses of silver' as a reason for buying physical PMs, as do others to justify the buying of physical silver, yet few also consider the other PMs for industrial uses nor rush to cite them for investing reasoning.

Are you also buying bottles of nano-silver in addition to your rounds and bars? It's physical after all but not necessarily useful in hand nor a store of wealth in it's industrial form, nor is your silver bar going to do a sufficient job as a anti-microbial. For this, industrial use, you may invest in company stock to take advantage of potential profit from industrial use with which you can reinvest in profits in physical PMs and hedge inflation and store your wealth.

ETFs aren't necessarily appropriate investment vehicles for every investor and their goals, but compared to other ETFs, SLV may not be a bad one to have a position in right now. It is also far easier to liquidate on a moments notice than is physical bullion and provided you have made a profit, then you can reinvest in physical PMs and hedge inflation and store your wealth.

In general, the stocks to avoid are those you don't understand, those not paying dividends and those which are not a proven value.

 

"Are you also buying bottles of nano-silver in addition to your rounds and bars? It's physical after all but not necessarily useful in hand nor a store of wealth in it's industrial form, nor is your silver bar going to do a sufficient job as a anti-microbial. For this, industrial use, you may invest in company stock to take advantage of potential profit from industrial use with which you can reinvest in profits in physical PMs and hedge inflation and store your wealth"

Read more: http://www.cointalk.com/t116015/#post933408#ixzz0sB72uZjt


PM stocks are still stocks. They don't magically become an inflation hedge because they are PM stocks.

As to my physical holdings of silver not "doing a sufficent job as an anti-microbial"..they can be used in that capacity if I sell those holdings. Do you think a company that needs silver to produce such a product is going to be more interested in purchasing my rounds, bars and SAE's, or a piece of paper that says I "own" silver. I'm guessing the former.

 

PM stocks are not only stocks. They may certainly be company stock in a mine or refinery, or a mutual fund composed of various compnay stocks, but an ETF is not a stock either, rather a type of mutual fund which is traded on a stock exchange. A PM ETF is a fund traded on a stock exchange and backed by physical bullion and you should check the inventories of any PM ETF you are invested as they publish lists of their physical holdings, if they don't own any holdings of physical PMs then you shouldn't own it. Being diversified in investments is prudent advice if considering the above just as you should get diversified if you have all your eggs in one basket and are only holding PMs as a hedge against inflation or as a store of wealth. If you only hold physical PMs you're isolated from investment potential. Each person must define their own goals. I think we know yours but we don't know Joey's and your insistence on your stance and penchant to convince others to agree with you isn't appropriate for every other individual investor. I was merely pointing out various options for the OP as have you willing given yours. I have defended mine and you yours.

BTW: Colloidal silver is certainly extracted from metal and it is suspended in water for applications but that process is a far cry from your stash of PMs that you think are going to be in demand when the companies that create and/or use these materials need them. They will be realizing their profits from products sold to consumers made from the metals if/when the time comes. The amount of metals they need to produce these solutions and products made from precious metals may be in far less demand than you are willing to supply the market... and when you sell those holdings 'for industrial use' you will be accepting in return the same fiat slave currency you preached against earlier.

 

I agree. If you try to keep your gold and silver at roughly the same dollar amount, the outcome will probably be good. Anything else is a guess.

 

If you think about it, the current ratio silver/gold is 66:1. So if you traded it you would get about 66oz of silver for every oz of gold. Historically speaking, I've heard anything from 10 to 16:1 has been the average. Some experts think that it might get to a 1:1 ratio (which has happened in history). If that happened you could then exchange your 66 oz of silver for anywhere between 4 to 66 oz of gold and then you would have essentially profited 400%- 6600% depending on how you look at it.

 

wicked burn

 

Hi Alex! Long time no see. Hope you are well. Welcome back. :hail:

 

yeah /I'm back been going through a bunch of crap in the past bunch of months but the clouds are finally breaking up and I'll be around here more often now

so you and Elaine still an item?

 

Krispy - When have I argued against diversification? In this post I have argued against buying an ETF PM if you want to hold PM as a hedge against inflation. I can pull more than a few of my former posts preaching diversification. Including investing in the stock market. I don't even have 10% of my portfolio in PM's. You are attempting to re-frame my argument into something it isn't.

"and when you sell those holdings 'for industrial use' you will be accepting in return the same fiat slave currency you preached against earlier."

Read more: http://www.cointalk.com/t116015/#ixzz0sBI9tygC

True, but I'll be getting a lot more of it. I'll also be immediately rolling it into something else tangible. Like gold, or palladium, or real estate.

Go back and read the first post on this thread, friend. It isn't "Hey, should I invest everything I have in silver?" The question was "do I dump my gold for silver?" My posts are responsive to that question.

 

Inseparable on bullion posts :smile LOL!

 

Indirectly, your stance on physical and physical only imparts that you are against being diversified in investments as you cast down other investment vehicles like cash, stocks, funds and ETFs, even bullion ETFs were no good. Of course, you have now entered real estate as an acceptable investment vehicle along with your physical bullion holding so I'll give you that one.

Your post (number 5) was most confusing, quoting and agreeing with my comment on industrial uses of PMs, then redirecting the discussion into an assumption of buying PMs for a hedge against inflation and a store of wealth (which the OP has yet to indicate his investment goals), firing off negative associations of stocks to fiat currencies and stating that ETFs are just moving paper around with no explanation of what you meant to back that statement up. Then you took a tangent into currency devaluation in post number 7 only to come back after posts 9 and 16 to tell us you'd accept payment in fiat currencies, and if PMs had risen significantly, you'd be an even more willing slave to those fiat currencies, which are after all, tangible too, that is, until you could acquire further MORE holdings in tangible bullion (not diversifying) and tangible real estate (finally beginning to diversify).

Your first post was the only post responsive to the OP, the successive ones were to criticize my post which included some thoughts on 'industrial uses of silver' and you inserted a few opinions about fiat currency and its devaluation... and we still haven't gotten the OPs goals to go by.

No re-framing on my behalf, just sayin'.

 

Krispy - Your post starts with "Indirectly, ...". That's another way of saying "you didn't say this, but.." You just set up the straw man and knock him down. Again, when did I say not to invest in anything but PM's? I didn't and I haven't.

We're just taking past each other at this point. I'm going to have a beer. Later, dude.

 

Oh oh, I've got a joke for you!!!

Gold walks into a bar and orders a beer. As he is drinking the beer, Silver walks into the bar and shouts at Gold, "Au, get outta here!"

Second time today I got to use this joke! Ca-Ching! :smile
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