Question for metals investors

#26
#26
:hi:
red butler said:
Do you have a similar analysis for gold? I would guess it is much worse.
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Silver manipulation is the worst. For example, the historical silver to gold ratio is between 12 to 1 and 15 to 1. Even in The Coinage Act of 1792, they used a 16 to 1 silver to gold ratio. Today, the silver to gold ratio is floating around 65 to 70:1. This has to correct itself. Either the price of gold would have to drop to get us around 12-15 to 1 ratio, or the price of silver will have to rise. Again, I ask, how many commodities today priced in USD are cheaper today than in 1980? There has been an all out war on silver since the Crime of 1873 in the US and since the Opium Wars on a global scale.
 
#29
#29
Rasputin_Vol said:
:hi:

Silver manipulation is the worst. For example, the historical silver to gold ratio is between 12 to 1 and 15 to 1. Even in The Coinage Act of 1792, they used a 16 to 1 silver to gold ratio. Today, the silver to gold ratio is floating around 65 to 70:1. This has to correct itself. Either the price of gold would have to drop to get us around 12-15 to 1 ratio, or the price of silver will have to rise. Again, I ask, how many commodities today priced in USD are cheaper today than in 1980? There has been an all out war on silver since the Crime of 1873 in the US and since the Opium Wars on a global scale.
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I had to google the Crime of 1873. Thanks for the history lesson. :hi:

It's interesting that the government went from silver to the gold standard. I've read that one of the major reasons for the Revolution was King George's Currency Act that required the colonies to pay debts/taxes to England in gold. The problem was - unlike the Spanish colonies, the American colonies had no gold.
 
#30
#30
red butler said:
I had to google the Crime of 1873. Thanks for the history lesson. :hi:

It's interesting that the government went from silver to the gold standard. I've read that one of the major reasons for the Revolution was King George's Currency Act that required the colonies to pay debts/taxes to England in gold. The problem was - unlike the Spanish colonies, the American colonies had no gold.
Click to expand...

Opium Wars started because Britain was being drained of silver by China. There was a significant trade imbalance between the two countries. Britain had to pay China in silver because that is all they accepted to settle trade. Meanwhile, China took hardly any imports from Britain. The only import product that Britain was able to sell that the Chinese had a high demand for was opium. So basically, they flooded China with opium to levelize the two countries trade imbalance.

The Crime of 1873 impoverished more people and was the biggest transfer of wealth until the Great Depression, and many argue it even surpassed that. The banks traded in gold, while the common man traded in silver. Once commoners were forced to exchange their silver for gold at mafia exchange rates, you begin to see mass poverty. The powers that be also dryed up the money supply at the same time, so you had less money in circulation. They essentially created a monopoly on gold and made silver trash. Between 1873 and 1913, the price of silver crashed from like $1.50 to $.75. This was also the origins of the Free Silver Movements of the late 19th Century and the followers of William Jennings Bryant who wanted a bi-metallic standard (or a return to the Coinage Act of 1792), where silver is counterbalanced with gold and both are legal tender.
 
#32
#32
BTW, spot silver for the last week is down from $17.46 to $17.15 per troy oz. Spiked as high as $18.64 Friday through the weekend.
 
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#35
#35
lawgator1 said:
I've been thinking about buying some silver bars for long term investing. But I also see that trading in silver funds is available option.

Part of me wants to have the silver to trade. I think it adds to the interest level and will encourage me long term to keep it and collect as much as possible for something like a 15-20 year endeavor.

On the other hand, I can simply buy a share of silver ETF (symbol SLV) which tracks the actual cost of silver per ounce, or very close to it.

Thing is, when you buy physical silver there are all sorts of costs associated with that. For one thing, if you buy the bars directly from the mints, there's usually a premium associated with their striking something on it. For example even with silver down around $17.25 an ounce spot it sells from the mints at closer to $18.50-$19. Sometimes there's shipping, and of course storage and expenses when selling it, whereas the share of SLV is easily traded.

Why consider bullion for anything other than the attraction of physical possession?
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Buy it from a pawn shop. You want the tangible silver in hand in case you barter with it.
 
#42
#42
red butler said:
Here's my $.02 The precious metals market is one of the most rigged markets around, which is why I don't invest in them. I've read that the actual bars that back up each ETF have been rehypothecated so many times that there are 100 ETF claims per bar. If there is a massive demand for the physical, the belief is there will be a price point that will allow it to unwind. However, the paper price determines both the ETF and the physical price, so unless there is a major financial/currency crisis you should have no problem trading in the ETFs for dollars.


To me, the main reason to own precious metals is to protect against a crisis and in that case--if you don't physically have possession, you don't really own it IMO.
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This is why I physically own it, you can't trade it in crisis if you don't possess it.
 
#43
#43
It is better to own the physical silver. Remember it is a hedge against inflation. With the feds printing as much as they want every month, the dollar can only get weaker and the dollar is not backed by anything anymore. The dollar is only a government worthless check.
If you don't want to pay a premium over the spot price go to a gold and silver buyer and see how much under the spot price they will sell it to you for (offer them cash) , because they can't get the spot price when they sell it to be melted. If you are buying silver bars, make sure they are extruded bars (wavy lines on the edge of the bar) and not poured bars from a mold as these bars can be filled with lead or other materials.

Also remember that the price of metals are still inflated because the economy is in such a mess and I don't know if we will ever recover from it. We still owe 18 trillion dollars, which should bankrupt us as a country. If this country ever goes under you will have the physical silver to barter with.
 
#44
#44
Update: Reopened my old Sharebuilder account and bought a handful of SLV shares at $15.40. Just a few, mostly to get the funding linkages renewed. Will buy more later. There is a big advantage to buying online with larger transactions because the trade cost is $6.95, and you have to consider that two times, one for the buy, one for the sale, and so if you profit you want to spread that out over a larger number of shares, of course.

I did some research on this. SLV started as an ETF with each share a claim to an ounce of silver, which is physically held by brokerages. It has a .50 expense ratio every year, so over time the price of the shares has slowly fallen behind spot. For example i bought SLV at $15.40 whereas the spot price is just over $16.

The primary reason to own physical is that its a hedge against total economic collapse. As to inflation, the SLV price would would just steadily increase in lock step with the physical, but with the shares you can sell in minutes, from the computer, and no storage cost.

I have a feeling we will see some brinksmanship at the next debt ceiling debate, which should be in March. If that happens, I may cash out about a week ahead of when both sides back off as the price will surely goup, then reinvest once its settled.
 
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#45
#45
Hold physical. One of the cheapest and safest ways to buy is survival bags of U.S. 90% silver coinage. Don't buy silver dollars as there are a lot of counterfeits around. AND COUNT THE COINS BEFORE YOU BUY!
 
#46
#46
lawgator1 said:
I've been thinking about buying some silver bars for long term investing. But I also see that trading in silver funds is available option.

Part of me wants to have the silver to trade. I think it adds to the interest level and will encourage me long term to keep it and collect as much as possible for something like a 15-20 year endeavor.

On the other hand, I can simply buy a share of silver ETF (symbol SLV) which tracks the actual cost of silver per ounce, or very close to it.

Thing is, when you buy physical silver there are all sorts of costs associated with that. For one thing, if you buy the bars directly from the mints, there's usually a premium associated with their striking something on it. For example even with silver down around $17.25 an ounce spot it sells from the mints at closer to $18.50-$19. Sometimes there's shipping, and of course storage and expenses when selling it, whereas the share of SLV is easily traded.

Why consider bullion for anything other than the attraction of physical possession?
Click to expand...

If you get some bags of pre-1963 coin which are 90% silver you would be able to spend them if we got into a hyper inflationary environment. Wouldn't buy any metals now though.
 
#47
#47
Sandvol said:
If you get some bags of pre-1963 coin which are 90% silver you would be able to spend them if we got into a hyper inflationary environment. Wouldn't buy any metals now though.
Click to expand...

Why wouldn`t you buy now when they are at $16/Oz?
 
#48
#48
lawgator1 said:
Update: Reopened my old Sharebuilder account and bought a handful of SLV shares at $15.40. Just a few, mostly to get the funding linkages renewed. Will buy more later. There is a big advantage to buying online with larger transactions because the trade cost is $6.95, and you have to consider that two times, one for the buy, one for the sale, and so if you profit you want to spread that out over a larger number of shares, of course.

I did some research on this. SLV started as an ETF with each share a claim to an ounce of silver, which is physically held by brokerages. It has a .50 expense ratio every year, so over time the price of the shares has slowly fallen behind spot. For example i bought SLV at $15.40 whereas the spot price is just over $16.

The primary reason to own physical is that its a hedge against total economic collapse. As to inflation, the SLV price would would just steadily increase in lock step with the physical, but with the shares you can sell in minutes, from the computer, and no storage cost.

I have a feeling we will see some brinksmanship at the next debt ceiling debate, which should be in March. If that happens, I may cash out about a week ahead of when both sides back off as the price will surely goup, then reinvest once its settled.
Click to expand...

Sprott Physical Gold Trust - Sprott Physical Bullion Trusts
 
#49
#49
In retrospect, as I was pretty convinced the GOP would win back the Senate, I should have waited to buy on Wednesday morning. The price of silver(and I'm assuming gold), went down by about 4%. It has regained about half that in the last couple of days.

McConnell said there will be no default and no shut down.... If he means that, no brinksmanship, then my theory will be wrong. But if, as I suspect, when Obama does something on immigration he, Boehner, and the rest all go feigned ballistic, then all bets on trying to get anything done will be off, so that the GOP can blame Obama for the ensuing gridlock.

I really think its all fairly predictable. Put it this way, with the debt ceiling in March I don't expect in February for McConnell and Obama to show up at a Rose Garden presser to announce they've agreed on the 2015-16 budget.
 
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#50
#50
lawgator1 said:
In retrospect, as I was pretty convinced the GOP would win back the Senate, I should have waited to buy on Wednesday morning. The price of silver(and I'm assuming gold), went down by about 4%. It has regained about half that in the last couple of days.

McConnell said there will be no default and no shut down.... If he means that, no brinksmanship, then my theory will be wrong. But if, as I suspect, when Obama does something on immigration he, Boehner, and the rest all go feigned ballistic, then all bets on trying to get anything done will be off, so that the GOP can blame Obama for the ensuing gridlock.

I really think its all fairly predictable. Put it this way, with the debt ceiling in March I don't expect in February for McConnell and Obama to show up at a Rose Garden presser to announce they've agreed on the 2015-16 budget.
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I don't understand. Outside of regretting not buying Wednesday, I couldn't tell if you were bullish or bearish based on the trivial Beltway grandstanding from the GOP and Dems that you pointed out above.

What point were you trying to drive home?
 
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