Why most people buy PMs for the wrong reasons...

Discussion in 'Bullion Investing' started by NorthKorea, Sep 30, 2016.

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  1. V. Kurt Bellman

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

    sOne main Kitco analyst is calling for the $1030 range also for 2018. For me, all this chart jockey stuff is hokum anyway. I don't DO technical analysis. All fundamentals, all the time. What makes a flag shaped chart cause an asset's value to change? C'monnnn, maaaannnn!
     
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  3. Pap4tinker

    Pap4tinker Active Member

    Wow, I just wasted so much time reading all this! Glad I skipped a bunch. :banghead:
     
    Last edited by a moderator: Oct 14, 2016
  4. Santinidollar

    Santinidollar Supporter! Supporter

    Those charted patterns do affect stock prices in some ways because some buyers and sellers USE them to make their decisions or at least as one of several tools in making their decisions.

    What came first? The chicken or the egg?
     
  5. V. Kurt Bellman

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

    Not really a chicken vs. egg issue because chart watching of course came WAAAAAY after fundamental analysis. Some moron had to fully suck chart watching out of his thumb. It's also a tail wagging the dog issue, but in this case a microbe on a flea on a tail wagging the dog.
     
  6. David Setree Rare Coins

    David Setree Rare Coins Well-Known Member

    I wonder if Kitco can predict the election while they are at it.
     
  7. Danjohnson

    Danjohnson Well-Known Member

    If possible, it would certainly be a function of their finance department (partner?). "Money from thin air" being pure magic and a powerful "medium of" the decision making process. (lol)
     
    Last edited: Oct 14, 2016
  8. V. Kurt Bellman

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

    Honestly, I think predicting the outcome of this election is not hard at all; perhaps one of the easiest in our history to do so. Maybe even 1964-ish or 1984-ish.
     
  9. desertgem

    desertgem Senior Errer Collecktor

    Kurt, I am sure you are not trying to incite an outburst of political rants, but for the newbies that may not have read the rules about no political statements, please be aware of the rules. Thanks kurt for letting me interrupt here :) Jim
     
  10. V. Kurt Bellman

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

    NP :D FWIW, what I think will happen, and what I'd like to see happen, ain't the same thing.
     
  11. Clawcoins

    Clawcoins Damaging Coins Daily

    Yes, you can find opposing analysis out there for demand/supply based pricing on PMs. I suggest you track the PM Options/Futures for better price trajectories. Of course that will exclude economic shocks and everything else.

    In general though, we may just want to ignore advice from Wells Fargo ...
     
    Danjohnson likes this.
  12. Clawcoins

    Clawcoins Damaging Coins Daily

    Just call their 800 number. You can buy some advice. If it's too rich for you then just use their "bank loan" to float the funds to get their advice. :)
    They'll sell you some gold too while you are at it.
     
    Last edited: Oct 14, 2016
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  13. InfleXion

    InfleXion Wealth Preserver

    I think you are correct as to why most people buy PMs: fear (of the dollar losing value) or greed (because of the dollar losing value). I don't know whether that notion is incorrect or not, since we don't know the future, but I definitely feel that buying for either reason is foolish because it puts the buyer in a position to potentially liquidate for a loss when markets inevitably shift instead of having a strong enough reason to sit through the ups and downs to pick an ideal "exit" point. I will elaborate on why I quoted this later in the post.

    The only reason I recommend buying metals is for the purpose of owning a hard asset that is safe from counterparty risk in the financial system due to quadrillions of vacuous derivative based "assets" that don't actually have any value. The "dollar" (we don't technically have dollars today by the legal definition) is in this boat of being a vacuous derivative since it can't be redeemed for precious metals as per the various Coinage Acts, and so we no longer actually have a dollar. We have a promise to settle a debt with nothing except for more debt.

    Even if metals acquired in exchange for fiat currency amount to a perceived loss in value due to a decrease in the price of metals, the benefit of having something of real and tangible value that can't go up in smoke is immeasurable in my opinion.

    From my perspective there are a number of statements in your post that need correcting:

    1) Precious metals do more than store value relative to buying power. They are money, even if not technically a government sanctioned currency (neither is BitCoin, but it's considered a currency). Metals are divisble, durable, portable, fungible, and a store of wealth. They are eternal elements that can't be created or destroyed without a supernova scale event. They have no counterparty risk. The benefit of having precious metals isn't just to protect against hyperinflation, it's to protect against the hidden tax of general inflation, to protect against the risk of outright default and inability to settle debts with debt, and to protect against the risk of someone at a computer somewhere siphoning your wealth away with cybershenannigans. These are all risks that come with stocks, bonds, derivatives, and any other IOU based asset. These IOU based assets may be more profitable in debt based "dollar" notes, but they offer no such protection like precious metals.

    2) To say that PMs cost money is a logical fallacy. PMs are money, and they cost currency to acquire. We are by default invested into a de facto currency becuase that is what our government requires to settle debts and thus what our employers give to us in exchange for our labor cost. This is why I quoted "exit" earlier. Buying PMs with debt based currency is the "exit point". It is exiting out of investment in IOUs in exchange for real money. That's what I call 100% profit, because it didn't cost me any real money to get those debt notes. To trade real money for debt based currency would be more accurately described as a "re-entry point". The sad truth is that most people don't even know the history of money or that what we think of as money today doesn't even meet the legal definition.

    3) "Over the long run" is not a quantifiable period of time and has no value as a point of reference. Timeframes can be cherry picked to paint any picture we want. The only truth is that prices ebb and flow. Sometimes the DOW:Gold ratio in the past has been 2:1 and other times it's been over 40:1. This variance clearly illustrates that sometimes stocks are the better investment, and sometimes gold is the better investment.

    4) To use history as a guide in a hyperinflation is unwise in the current scenario, because we've never had a hyperinflation of a global reserve currency to look back on as an example. Hyperinflations have historically happened in a vacuum with an isolated currency, not one where the majority of the currency has already been exported to other nations due to being the standard medium of exchange for oil, thus putting pretty much every other western nation at risk of contagion in that scenario, especially those that take direction from Basel and have been engaging in dollar swap lines with the Federal Reserve for many years now (mainly the EU).

    Considering the vast amount of counterparty risk in the financial system and its inherent risk of failure to repay infinitely rehypothecated IOU based assets (loaned, re-loaned, and re-loaned assets with no limit to how many times the same "asset" can be re-loaned in order to boost balance sheets with a vacuous holding), it would behoove people to consider that risk, and not to be driven purely by motives of profit.

    After all, buying stocks because of greed is the exact same thing as buying metals because of fear of what will happen to the "dollar" or as buying metals because of greed in a rising market. All these reasons are driven by the love of money, which is the root of all evil, instead of the desire to have the safety and security that only metals can provide. When buying for this reason alone, one can safely choose their "re-entry" point back into the currency du jour without fear or greed forcing an early hand.
     
    Last edited: Oct 18, 2016
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  14. -jeffB

    -jeffB Greshams LEO Supporter

    Then your "100% profit" remains unchanged whether you buy your metal, er, "exit" at spot price, or half spot, or twenty times spot.

    If you really believe that, you should be willing to buy PMs at any price, independent of spot.

    If a significant number of others really believed that, you should be able to sell PMs at whatever price you want.

    While I don't want to get in trouble with the mods by making an inappropriate buy or sell offer, I'm betting that neither you nor anyone else really believe that, because nobody's offering to buy my metals at (say) 3x spot.
     
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  15. Brett_in_Sacto

    Brett_in_Sacto Well-Known Member

    I'm not so sure. But ask Kurt, he knows everything - and he'll be sure to tell you - whether you ask or not, even when he's wrong - he'll be able to change the facts and use fuzzy math until he's right. :rolleyes:
     
    DUNK 2 likes this.
  16. V. Kurt Bellman

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

    Does it hurt a lot to be this big of a jack-donkey, Brett? Try a non-opioid prescription pain med. I feel I need one for my backside every time you post.
     
  17. InfleXion

    InfleXion Wealth Preserver

    It doesn't really matter what I believe. Facts are facts. I already gave you the definition of money and explained the logic. You can ignore that information and continue to falsely measure your wealth in debt if that's what you prefer. Debt is not wealth. Land is wealth. Metals come from land.

    So yes, it is 100% profit in real money. If I trade $20 for an ounce of silver my profit was 1 ounce of silver. Remember that dollars only came into existence as weight in metal.

    Obviously most people do not see the truth in what I'm saying, because most people are slaves to greed and prioritize that above protection from financial thuggery. So you don't need to worry.
     
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  18. -jeffB

    -jeffB Greshams LEO Supporter

    Interesting idea, and probably not too controversial. But what exactly does it mean to "own land"? Particularly in light of property taxes, easements, eminent domain, and (when all else fails) military force?
     
  19. V. Kurt Bellman

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

    Man, you are just TOO darned funny. I can't read your stuff without needing to run to the men's room from laughing so hard.
     
  20. V. Kurt Bellman

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

    I know it sounds a bit Kum Bay Yah, but in the larger sense, doesn't the land own us? From dust were we made, and dust we shall be...

    Even the lives of centenarians are but the blink of an eye to the land.
     
  21. DUNK 2

    DUNK 2 Well-Known Member

    @Brett_in_Sacto You nailed it.

    I decided a couple weeks ago to just ignore him because it's really not worth it. The endless knowing-it-all and self promotion gets very old very quick.

    By the way, how's your Peace Dollars? Anything new? And when's your next show?
     
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