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Message:: [QUOTE="Deadline, post: 2889411, member: 83423"]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.[/QUOTE]

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