TRYING TO "Play the GSR" -- HORRIBLE IDEA

Discussion in 'Bullion Investing' started by goldcollector, Apr 17, 2017.

  1. HawkeEye

    HawkeEye 1881-O VAMmer

    I hope you are right on NK. But we are talking about the person John McCain labeled the "Crazy Fat Kid." Crazy Fat Kids are Crazy Fat Kids! Certainly the markets are telling us that you are right.
     
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  3. C G Memminger

    C G Memminger Active Member

    I don't make bets on silver or gold, as market pricing can be manipulated EASILY by regulators. To me, its like betting on Bud Bowl (think: old Super Bowl commercial). The result is known to others, and unless I'm privy to the inside scoop, I'll make my bets elsewhere.

    Increasing the reserve requirement in leveraged commodity accounts will force the BIG BOYS to liquidate metal in order to comply. That forces an unnatural drop in spot.

    CME took silver from $50 to $35 in 2011 in about 2 weeks, with 3 bumps in the RR.
     
  4. V. Kurt Bellman

    V. Kurt Bellman Yes, I'm blunt! Get over your "feeeeelings".

    silver424.gif They don't get much weirder than this.
     
  5. Bman33

    Bman33 Well-Known Member

    Often times when I look at the Kitco silver charts the song "Crazy Train" goes off in my head.
     
    Garlicus likes this.
  6. lordmarcovan

    lordmarcovan Eclectic & Eccentric Moderator

    Maybe I watch too many true crime shows, but when I saw the title to this thread, I though "GSR" = gun shot residue.

    LOL
     
  7. goldcollector

    goldcollector Member

    Dude you know I have been a "naysayer" 100% of the time. $18.63 isn't much to brag about, especially with all the outrageous promises that has been made about silver for years. Of course it will have runs upward. It wont go down every single day. But it will stay in the $15-$20 range for a great great many years.
     
  8. goldcollector

    goldcollector Member


    Yeah I just cant believe that even he is that stupid. He cant reach us. What he can do is obliterate SK which would give Trump a perfect excuse and international support to destroy NK. He might be fat and crazy but for him to attack SK would be a special kind of stupid. Not to mention they say any type of nuke attack so close to home would actually kill many citizens of NK and even China. It would be lose lose for him and win win win win for Trump.
     
  9. goldcollector

    goldcollector Member

    When thread started GSR 68.93
    Now its nearing 75

    Its been 2 weeks ? Lol
     
  10. V. Kurt Bellman

    V. Kurt Bellman Yes, I'm blunt! Get over your "feeeeelings".

    That's because it is an irrelevant number. Irrelevant to what? Absolutely everything.
     
  11. sakata

    sakata Devil's Advocate

    Don't exaggerate, it is not even 74. I assume you have a point but distorting the facts tends to obliterate it.
     
  12. HawkeEye

    HawkeEye 1881-O VAMmer

    Well the GSR had great relevance when we were on a bi-metal economy and you had to establish and know exchange rates domestically and internationally. With fiat money and coins with little to no intrinsic value it seems to me that it only serves to reflect market sentiment, and perhaps to some degree production and availability for industry.

    It did little for any metal in April. ASE Mint bullion sales are normally 4 million ounces a month, and in April they were only 835k. So something is afoot with silver. But the same was true with gold where sales of gold eagles were 3,500 for the month against normal sales of 35,000.

    This is a nice synopsis http://www.coinnews.net/2017/04/28/...ver-tumbles-us-mint-gold-bullion-sales-crawl/
     
  13. sakata

    sakata Devil's Advocate

    So does this mean that 2017 will become the modern 1996 ASE and become a good buy? There does not seems to be much downside to putting assign a few rolls.
     
  14. HawkeEye

    HawkeEye 1881-O VAMmer

    I really don't know because these are only the bullion issues that dealers buy to satisfy the speculative market. But the sales trends are somewhat mystifying given the sales history. I have this philosophy of not trying to play the market in the short term and just buy a little of each issue for the long haul. Hopefully I am dollar cost averaging like a stock in the end. In all likelihood it goes to our kids and grandkids down the road and is marked to market anyway. Given that, I just enjoy the collecting and let that be their issue. It is all profit to them and it is all fun to me.
     
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  15. slackaction1

    slackaction1 Supporter! Supporter

    Thank you guys for this... I read it two three times... Its interesting... but I like what b-man said we need a list of coins for investment vehicles... to compare gold....
     
  16. goldcollector

    goldcollector Member

    Yes I agree. That was the point of the thread - trying to play some irrelevant number is nonsense. Yet I constantly here the advice to "play the GSR". Buy silver then wait for the GSR TO drop then trade it for gold. Just friggin stupid like trading Tom Brady for Ryan Leaf stupid. I have seen this same advice for years and its been unbelievably bad advice. I remember them saying buy silver when GSR was 40. Its almost doubled.This thread at 2 weeks and the GSR has increased 10%.
     
  17. V. Kurt Bellman

    V. Kurt Bellman Yes, I'm blunt! Get over your "feeeeelings".

    You're a wise man regarding GSR. The GSR shows me one thing. Actually the gold/platinum ratio is my better source for it. It shows me when metals markets are being driven by speculative fervor rather than fundamentals. When the GSR or GPR are low, speculative froth is smaller.
     
  18. goldcollector

    goldcollector Member

  19. Bman33

    Bman33 Well-Known Member

    Around 75 Still
     
  20. Deadline

    Deadline Active Member

    I READ THROUGH THIS ENTIRE THREAD AND SPEAKING TO THE OP I NOTICED THERE ARE MANY ASSUMPTIONS AND COMMENTS THAT SEEM TO BE MADE BASED ON A LACK OF KNOWLEDGE. I UNDERSTAND YOUR FRUSTRATION BUT I DON’T THINK YOU ARE SEEING THE BIG PICTURE.
    FOR STARTERS YOU STATED

    “jm bullion sells that 10 ounce at spot free shipping even though its limited to 10 ounces each that clearly means they are selling it under spot when they pay shipping.”

    That statement is full of assumptions. For one you assume they are buying it at the same price they are selling it for. I assure they are not, when they offer that deal, spot is at least .75 or more higher than when they bought it. They are not stupid and are not in business to lose money or break even. Ever notice that sometimes that deal is there and sometimes it isn’t? Think about it. They know what they are doing. When the 10 oz. at spot is for sale when spot is 17.50 an oz. they picked it up a month before at 16.50 an ounce or less. Hope that makes sense.

    Also, all of the online dealers buy silver contracts which are 5000oz. a piece. They go both long and short on these contracts so it doesn’t matter whether the price of gold and silver goes up or down, they still make money. It covers their spread in either direction. When the price makes a huge drop they buy more than usual and if they end up sitting on extra inventory they will tell you it’s a “sale” off the premium to move the extra stock.

    Now to address the GSR play/swap. I think your blowing it way out of proportion. I frequent several silver forums and can only remember a handful of times when this topic actually came up. The main idea behind it is to purchase silver cheap when the GSR is high, 70:1 or higher. When and if the GSR drops to your target rate let’s say 40:1 for sake of argument, you then sell or trade your 1000 oz. of silver for gold. Bear with me here and I will use simple numbers to simplify the math. Let’s say you bought 1K ozs. of silver at $16 an ounce that’s 16K invested. Now the GSR drops to 40:1 and if it does that generally means that silver has gone up in price but so has gold its just that silver went up faster which brought the GSR down.

    So, hypothetically speaking silver is now at $35 an ounce and gold is at $1400 an ounce. Your silver is worth 35K now.
    On a side note since silver is rising you will get a better price for it. It’s called the buy sell spread and it’s what (fair dealers) use when buying PM’s. In a nutshell they don’t want to catch a falling knife which is why you NEVER sell your metals when the price is falling, ONLY when the price is rising.

    So now you take your 1K oz. and you should get spot for it since the price is currently rising and trade it for roughly 24 oz. of gold, 35K divided by 1400 minus a little for the exchange process. So now the GSR reverts back to 70:1 after a while, at this point gold is $1600 an ounce and silver is $23 an ounce.
    You sell or trade the gold which is valued at $38,400 and buy silver which gets you roughly 1600 oz. of silver, minus some exchange fees. Now that’s figuring it with a measly 1000 oz. and that’s a 600 oz. gain even with exchange fees figured in. Try the math with 5K, 10K, 20k ounces, it’s worth the swap. Granted this play doesn’t come along very often and you need to watch PM’s daily. There are other factors involved and the situation needs to align up right and you need to be ready but it can be done.

    Next time you are chatting on a forum and somebody says they are waiting for the GSR to drop to do a swap ask them how many ounces they are swapping for. IMO I wouldn’t waste my time with anything less than 500 ozs. Hope that shed some light on the subject.
     
  21. TheFinn

    TheFinn Well-Known Member

    In 1929 if you had buried a $20 gold piece and a $20 bill, and someone dug them up today, which one is worth more? Here's a clue - it isn't the one made of linen.
     
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