Where is Silver going?

Look at food, oil, and education.

 

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C'mon Chris, You know exactly what the reason is. A stacker will stop at nothing to justify his stack. It make no difference if it is true or not, just as long as it is a reason to buy more . Bullion sellers, newsletter writers, and the like, have made millions knowing this fact and perpetuating the myths. It really is that simple.

 

Commodities do go up when the dollar goes down. :just-sign:

 

You are right inflation isn't as bad as the 70s and 80s if it were silver would be $130 an ounce. It hit $48.70 in the 80s. That would be $130 in today's money.

 

Agreed, but I never said that our dollars being worth less was the only factor

Reality is that ever since the dollar was decoupled from gold, dollars started becoming worth less and less. The more of them they print, the less they are worth in terms of their purchasing power.

For fun I just did some quick math along with the help of the website i'll link to below... with our current debt of $16.4 Trillion, that is roughly 305,450 TONS of gold at $1670/oz... We have about 8,133 tons in the US reserves~

It would seem that all of the gold EVER MINED EVER is only 166,500 Tons! Take a look at it as visualized in 400oz bars! http://demonocracy.info/infographics/world/gold/gold.html

Personally that scares the heck outta me... our goverment has a drug problem, and their drug of choice is spending money!

 

It is good that you recognize the magnitude of the problem; many folks here don't.

It is now mathematically impossible to pay off the national debt, and virtually impossible to reduce upcoming budget deficits. In your lifetime, the money in your pocket will become worthless. No one believes that.

Hyperinflation is coming, and there is only one category of money without counterparty risk -- PM. Physical, in your hand.

 

Yes it is sad that most people don't see outside of the box that the US Govt. wants you to see~ To shift this convo back on topic, personally I believe silver is going to go through the roof for many reasons, devaluation of the dollar, shortage of the metal and increases in industrial applications. I have been researching many financial websites, not just gold and silver bug websites and I see silver hitting $150/oz within 5 years.

$.02
J

 

"Step outside the box, you might be surprised by what you see" one of my personal quotes. That goes way beyond coins/investing... it totally changed and saved my life. It wouldn't surprise me if silver breaks $100 in next couple years, but who knows. Either way I don't mind if silver drops, I will just keep buying anyway, because eventually it will go up, I have no question in my mind about that. Plug my fortune cookie just told me so ...

 

I'm selling my stack to buy a house sometime in the next calendar year, in all probability. Housing prices are starting to rise around here as the economy improves. Economy improves, you ask? Well, I have a much better job than I did two years ago, and so do most of my friends... so yes, the economy is improving locally, and the economy is what drives housing prices...

 

While this is true, I would estimate that the dollar is still losing about 5% annually from my personal observations about what things cost around here. So it isn't insignificant in light of the fact that almost nobody gets that sort of annual raise anymore and it isn't possible to earn a risk free rate of return anything close to that. It's still a problem.

 

I think silver and gold are doing some ups and downs, but it still amazes me that a silver dollar is going for $30 now, when it seems like just a year or two ago it was around $15. It seemed expensive to buy them at that price then, but when it hit over $40 I wasn't buying. Now that it's gone back to around $30 it doesn't seem as shocking to pay that price anymore.

I really don't know if we'll have hyperinflation or default, but either way our silver retains some value, so I'm okay with owning some, just in case things look bad. I am not a goldbug, but if things get really bad it's not a bad idea to have a little. I think of the PM's as insurance. If we never need them, then they still do their job as insurance.

 

I never talked about relative devaluation of the dollar versus a person's salary, nor do I dispute the fact that it IS declining. I am just amazed when I read people talking all doomsday about the dollar, knowing the devaluation was much worst in the 70's and 80's, but to hear them talk you would think its unprecedented.

Also talking about not being unprecedented, I remember tons of people in the same timeframe saying we would NEVER be able to pay off the debt. Same same to me. As for hyperinflation, IDK. Could be, but I would bet more strongly on simply a "haircut" being imposed on Treasury bond holders ala Greece. That I believe would be deflationary. Or it could be a combination of inflationary and deflationary pressures puts us back around where we are now. Way too many variables for me at least to clearly see the outcome. Given that, I simply diversify and try to pay off debt and build assets of all sorts.

Maybe I am just simple and cannot understand the arguments clearer.

 

I just bought a house last year. I wish I had the stack that you have posted when I bought the house.

 

I agree that the current situation is not unprecedented. But the debt will not be paid off. I also don't think there would be hyperinflation because it would hurt the banks and debt holders, and they largely call the shots. So there will have to be some restructuring at some point and closet defaults such as the $1T coin suggestion. One thing for certain, the debt can't rise by $1T per year forever.

 

For Revi, "I really don't know if we'll have hyperinflation or default,"


It's not an either-or situation. You can have both at the same time. The present "Fed" thinking is that we will never default as long as we can create money out of nothing, blah, blah, blah.

As the money supply surges (only a small portion of which is coin and currency), it's the middle class whose savings and equity are wiped out; on average, households in general have already taken a 25% haircut since 2007.

Wikipedia:

Household net worth fell from 2007 to 2009 by a total of $17.5 trillion or 25.5%. This was the equivalent loss of one year of GDP.

By the fourth quarter of 2010, the household net worth had recovered by a growth of 1.3 percent to a total of $56.8 trillion. An additional growth of 15.7 percent is needed just to bring the value to where it was before the recession started in December 2007
​

 

But to be fair, the stock market has largely recovered, bond are probably a bit higher in price, and most of the drop is in residential real estate. Since there was a sharp rise in real estate prices for a few years prior to 2007, the loss is almost entirely in the outsized gains in the prior years. This undoubtedly hurt some people who bought at the top, but probably doesn't affect most homeowners.

 

The bottom line is that even though it looks like the stock market and housing market is making a small come back, this is just a smoke screen. The economy is still collapsing and there are still less and less jobs as more and more go to China. The gov't is doing a great job of trying to put a band-aid over a gunshot wound, it's just a matter of time. They put out numbers and reports, but this is nothing compared to reality. In my opinion, everyone should have some silver and it wouldn't hurt if you can make some profits in the process. If the edited! Rules do not allow this .hits the fan, it's going to be hard to buy things with gold, and the mark up on smaller gold pieces is ridiculous.

 

Precisely why "junk silver" is my PM of choice. It's convenient for barter and small transactions, and unlike bars and rounds, you don't have to "prove" them to anybody. Also, a much smaller risk of confiscation.

I have a few ASEs, in case I might want to buy something big, like a Corvette. Trouble is, I could buy the Corvette or the gasoline to run it, but not both.

Look at current prices, and ask yourself, "which is going to double first, gold or silver...?"

 

Or equities, or land.

Don't get me wrong, I lilke junk silver as well. I have always preferred it to ASE's, since you buy more silver per dollar because lower premiums. Plus, junk silver are actually coins, something I simply do not consider ASE's to be. Yes, by definition they are, but to me a coin struck with no intention to circulate is not something I really wish to collect.

 

"...but probably doesn't affect most homeowners."

Sorry, Cloud, but you are 100% wrong. The HOUSE is the primary asset of the middle class. Even the (most optimistic) decline of 10% amounts to thousands of dollars vaporized from your net worth and your retirement resources. In some cities like Boston, Phoenix, and Las Vegas, the average loss was more like 30%.

Why do you think the rental market is exploding? Because the houses are foreclosed and sold (or sitting vacant), and the only thing the ex-homeowner can afford is an apartment. And that LOSS will NEVER be recovered.