Discussion in 'Bullion Investing' started by FryDaddyJr, Apr 18, 2020.
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As for answering your question, with physical demand obviously far outstripping supply, and mines closed worldwide, silver will not drop substantially anytime soon. If people really want silver that badly, it's probably not wise to wait to buy at least some of what you want to have, although I'd personally save some cash to cost average later, if it does present a lower buying opportunity.
It's a question of what physical silver ought to be priced at in opposition to the paper silver that has been selling off rapidly represented as "spot price."
If you mean why not wait until the panic comes off and silver premiums come down to allow for a close-to-spot purchase price, there are a lot of unknowns about that. First off, this might work against your favor -- after this paper sell-off from margin calls and ignorant financial investments is over, people may see silver as a safe haven and drive spot price up. At that point, what you now call $5 over spot may well be under spot. Look at the relevant charts on timeline from silver in the 2008 crisis and you will see that premiums were up until spot popped and shot to ridiculous heights. Second, silver's volatility is such that unless you are trading paper silver (futures, etf's, etc), you are going to lose on short-term premiums regardless. Physical silver is either a long-term investment, a long-term hedge against inflation, or a mid-term trade for crisis instability of the dollar and the market. The last, which many are pushing toward, could easily work over the next few years even buying around $20 to $25 an ounce given that the metals market performs anything like in the 2008 crisis. Is $25 silver a good buy? IMO, no, but there is an argument for it if someone thinks it will revisit previous crisis levels.
If you mean people should wait until silver premiums come down to match these low prices, I think you may be disappointed in how silver performs for your entry over the next few years. I could easily be wrong on this, but I personally do not see physical silver matching these low paper values for years to come if ever because of bullion shortages, market demand, and the rising gold/silver ratio. Silver is not low because physical silver is not desired, it is low because the paper assets based on small quantities of silver are being sold off with the market drop. Physical silver does not always follow spot price in value because of these external market factors, and this is one of those times. What I mean is, physical silver is not worth $15 spot price right now. This is a representation of silver futures that are not even based on owning the full value in actual silver, so of course the value is low. If you are finding silver at $5 over spot ($20/oz), I think you are finding the actual market value of physical silver for the present time. Wait until "premiums" come down, and you may be paying $1 over spot of $20, $25, or even higher...at which point those "$5 premiums" could look awfully attractive.
Now, this all being said, I am not buying at $20 an ounce... I bought for the past 3 years at way lower prices. I also spent time when spot was at $11 and $12 sourcing junk silver from dealers who sold $1 and $2 over spot still. All of that seems to be dried up and past at this point. For those who ignored cheap silver prior to this recession, $20 an ounce may be the best entry price they can get and still could be a good investment. If you can find it cheap, get it, but I wouldn't bank on $15 or $17 physical silver in the broader market for a long while to come.
There's certainly an ample supply in the marketplace to stand on its own 2 feet as a recognizable medium of exchange, and it is not considered contraband by the government.
As an example, if I was buying 10 gallons of gasoline from a like-minded vendor, priced at 4 gallons per $1.00 face, and paid $3.00 face, I'd get back 50 cents in 90% silver as change.
I'm not saying it would ever become mainstream practice, but I can guarantee you that there are those among us who would be willing participants.
I don't think the same can be said for other silver, be they bars or rounds, or coins of other fineness.
the old "silver dime for a loaf of bread" panic.
We could tell Homer to get lost, but I think he may be there already . . .
I don't think I went quite that far, did I? After all, I wrote 4 gallons for $1.00 face . . . that's about $4.00 of today's USD per gallon (arbitrary value for illustrative purposes only).
just kidding. I like 90 percent more than most of the pundits and bugs
Agreed. Anyone else here like war nickels and foreign silver? Those were the last great deals I found.
I'm trying to figure out how you'd work that, other than by using three silver dollars -- and you'd be a sucker to do that, because a silver dollar has 7% more silver than $1.00 worth of smaller 90% change.
You're right . . . I'd not considered the fact that I'd be giving the seller 6 half dollars and he'd give one right back to me . . . I should've taken the time to write a more realistic example.
We, as in those in my household.
LOL, and melt value of that dime might well have been $3 or more, especially in January 1980.
I wasn't paying much attention to coins or PMs in 1979-80. I still kind of wish I had been, and had sold off (say) my proudly-completed folder of silver Roosies for $150, or some of my cleaned or otherwise damaged silver. And, of course, put the money into Apple at its IPO in December 1980.
Or Walmart. Yes, I remember thinking that if anyone took the station up on the offer they would be receiving the short end. But, a fool and his/her money .....
$5 over spot ?????? Lol that's not that bad. The question is why are silvidiots paying $30 + for ASES ( double spot ).
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