@derryb said:
Also APMEX no longer has ASEs in stock, pre-selling for future delivery. Look for supply issues now to join the farcas and push premiums at a higher rate:
The people have said they are tired of the "fake news". They have them for sale and they are on sale.
They do now, they did not at the time of the post. Did you purposely wait for them to re-stock before calling me a liar?
I didn't call you a liar. Stop twisting things.
So, with the recent spike in spot prices, did premiums increase or decrease?
And citi g industry sources? Lol. Whenever someone else cites an industry source that you don't agree with you claim they are part of a cartel (banking system?), or peddling fake news ("mainstream media"?) or misinformation (gov.com?). But not your sources. They are always correct...even when proven wrong?
You tell us that 2nd consecutive quarters of declining GDP isn't considered to be a recession - when it's been that way for at least 50 years, probably longer.
You tell us that JPM doesn't manipulate the silver market when they've been found guilty for doing that multiple times.
You tell us that high ASE premiums aren't due to high demand, when industry dealers are saying otherwise.
Say what you want. Believe what you want. It's hard to give you credence when you keep denying the obvious.
Q: Are You Printing Money? Bernanke: Not Literally
Door number one. A massive increase in production will only slow down the premium explosion. ASE premiums were climbing before there was a known reduction in production
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
@Higashiyama said:
For those who believe that high premiums are indicative of high demand, would you agree with one or both of the following assertions:
If annual mintage returns to the 40 - 50 million range, premiums will remain elevated well above historical norms, or
An increase in mintage to a range of 40 - 50 million will have very little impact on premiums
@Wingsrule asked "Aren’t those stating basically the same thing?"
My intent was that # 2 is a stronger statement, though I can see it's not clear. For #1, if production returns to that of 5 - 6 years ago, premiums decline but stay materially higher than they were. For # 2, demand is so strong that even in the case of a return to prior production levels, we see almost no change in premiums. Both are conceivable, though another possibility of course is that the premiums are primarily driven by the supply side, so a return to prior production levels causes a return to historical premium levels.
Yet another thought experiment -- if the mint were able to simply product enough to satisfy whatever the demand is at a given point, presumably this would cause premiums to drop to historical levels?
Supply & Demand aren't static. Perhaps it would be more relevant to say that demand exceeds supply to the extent that premiums for ASEs are at all-time highs.
I would contend that demand has increased for reasons having more to do with inflation and the economy, and supply is being constrained by the Mint's decision to cut back on production (which may be dependent on mining output etc.) If there's a perception in the marketplace that scarcity is developing because of the lower Mint output, it's reasonable that premiums are rising as hoarding takes place - but I don't think that a supply issue is what's causing the premiums to increase.
Consider that since 1986, how many ASEs have been produced? That's your supply figure - not just this year's production. Since a cutback in production this year amounts to a small fraction of the outstanding supplies, it seems to me that premiums are increasing due to demand, not supply shortages.
If major dealers are saying that there's high demand, then by golly the chances that demand is high are pretty good.
Q: Are You Printing Money? Bernanke: Not Literally
Ask the custodian to send you a pic of the physical silver backing it.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
@jmski52 said: And citi g industry sources? Lol. Whenever someone else cites an industry source that you don't agree with you claim they are part of a cartel (banking system?), or peddling fake news ("mainstream media"?) or misinformation (gov.com?). But not your sources. They are always correct...even when proven wrong?
You tell us that 2nd consecutive quarters of declining GDP isn't considered to be a recession - when it's been that way for at least 50 years, probably longer.
It is considered a "rule of thumb" by some, but that is not a definition. A recession is much more than 6 months of declining GDP. As an MBA you should know that.
You tell us that JPM doesn't manipulate the silver market when they've been found guilty for doing that multiple times.
You are manipulated.
You tell us that high ASE premiums aren't due to high demand, when industry dealers are saying otherwise.
Dealers are saying supply is scarce, and you have repeated their comments thusly.
Say what you want. Believe what you want. It's hard to give you credence when you keep denying the obvious.
@derryb said:
Door number one. A massive increase in production will only slow down the premium explosion. ASE premiums were climbing before there was a known reduction in production
Premiums dropped 20% in the last week, and will continue to drop if spot increases. Did you mean to say "premium implosion"?
@jmski52 said: And citi g industry sources? Lol. Whenever someone else cites an industry source that you don't agree with you claim they are part of a cartel (banking system?), or peddling fake news ("mainstream media"?) or misinformation (gov.com?). But not your sources. They are always correct...even when proven wrong?
You tell us that 2nd consecutive quarters of declining GDP isn't considered to be a recession - when it's been that way for at least 50 years, probably longer.
It is considered a "rule of thumb" by some, but that is not a definition. A recession is much more than 6 months of declining GDP. As an MBA you should know that.
It is a definition no matter how much you want to pretend it isn't.
You tell us that JPM doesn't manipulate the silver market when they've been found guilty for doing that multiple times.
Blinders.
You tell us that high ASE premiums aren't due to high demand, when industry dealers are saying otherwise.
Double blinders.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
If you like this "definition" so much then the positive GDP print negates your contention. Recession over. Whew....that was doosy!! I hope you were prepared.
There is much more to a recession than 2 negative GDP prints. I wouldn't expect you to understand that though.
If you like this "definition" so much then the positive GDP print negates your contention. Recession over. Whew....that was doosy!! I hope you were prepared.
There is much more to a recession than 2 negative GDP prints. I wouldn't expect you to understand that though.
I understand what a dictionary tells me. Two more consecutive quarters and we will be in another recession. LOL
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
In the US the NBER gets to make the official call on recession. They aren't bound by some strict definition like 2 quarters of negative GDP. And, they aren't using different rules now than they used decades ago. The biggest reason they didn't declare a recession this year is because unemployment numbers are near historical lows. But also important to remember.... they are typically make an official declaration close to a year after they'll say the recession started.
@RobM said:
In the US the NBER gets to make the official call on recession. They aren't bound by some strict definition like 2 quarters of negative GDP. And, they aren't using different rules now than they used decades ago. The biggest reason they didn't declare a recession this year is because unemployment numbers are near historical lows. But also important to remember.... they are typically make an official declaration close to a year after they'll say the recession started.
No, RobM, Google makes the call. Don't go against the politically driven narrative. It makes you look smart.
Knowing in advance that my comment will be twisted, sniped and mocked by one non-contributor or another, I'm posting this for the benefit of the contributors here whom I do value.
I should mention that I've listened to some interesting recent interviews with Andy Schectman lately.......concerning the supply & demand picture with precious metals, premiums, LBMA, Comex, Opec, BRICS and the belt road initiative.
So, it seems that supply to the US is being diverted to Europe while demand is accelerating in both silver and gold in more than just one market segment. Supply is being diverted and apparently constricted intentionally (by the US Mint) where this generally hasn't happened before. Demand is coming from everywhere, including central banks and other sovereign players.
Interested parties should go to youtube and look up Andy Schectman in various recent interviews (since mid-September or so). It's worth your time. Don't bother with the videos that are PowerPoint with audio voice-overs, go to the actual video interviews.
Updated.
Q: Are You Printing Money? Bernanke: Not Literally
@cohodk said:
Why has the premium collapsed 25%in the last few weeks?
premium has not collapsed 25%. That single ASE at APMEX will cost you an 86% premium plus shipping. Premiums are down (not 25%) because half of the formula (spot) is up.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Ask the custodian to send you a pic of the physical silver backing it.
Who cares it trades back into the same $$$ your overpriced ASEs do and I don't need a doomsday bunker to store it. THKS!
SLV goes down in value over time, like a donkey.
Can you quantify the disparity in spot return vs SLV since SLV was cteated?
Every year, due to expenses and administrative fees, one share of SLV represents 0.5% less silver than it did the year before.
So whatever "spot" silver does (up or down), SLV is guaranteed to perform 0.5% worse than "spot" silver.
@cohodk SLV at inception followed the spot price within a few cents, I believe. If thats the case, its easy to see the holding costs over time. GLD was 1/10 spot.
Ask the custodian to send you a pic of the physical silver backing it.
Who cares it trades back into the same $$$ your overpriced ASEs do and I don't need a doomsday bunker to store it. THKS!
SLV goes down in value over time, like a donkey.
Can you quantify the disparity in spot return vs SLV since SLV was cteated?
Every year, due to expenses and administrative fees, one share of SLV represents 0.5% less silver than it did the year before.
So whatever "spot" silver does (up or down), SLV is guaranteed to perform 0.5% worse than "spot" silver.
That ain't bad. Especially when one considers the cost of holding physical.
The bid/ask spread is usually several dollars--that could be at least 10% or 20 years worth of SLV fees. The spread today seems to be closer to $7. That's 20%, or 40 years of fees. Thats killer!!
Or the time and cost of shipping to buy or sell. Fuel, insured shipping, waiting at PO, etc. A $1000 order with $25 shipping is 2.5% or 5 years worth of fees.
A safe to store could cost $2000. That $2000 could be earning 4% in the bank---8x more than the SLV fee.
A safe deposit box could cost $100/year.
Maybe your protection is FIDO. How much does he cost per year?
Add your physical to you homeowners insurance policy? How much is that?
You see, everything has a cost. 50 basis points really isn't very much and looks quite cheap in comparison.
Ask the custodian to send you a pic of the physical silver backing it.
Who cares it trades back into the same $$$ your overpriced ASEs do and I don't need a doomsday bunker to store it. THKS!
SLV goes down in value over time, like a donkey.
Can you quantify the disparity in spot return vs SLV since SLV was cteated?
Every year, due to expenses and administrative fees, one share of SLV represents 0.5% less silver than it did the year before.
So whatever "spot" silver does (up or down), SLV is guaranteed to perform 0.5% worse than "spot" silver.
That ain't bad. Especially when one considers the cost of holding physical.
The bid/ask spread is usually several dollars--that could be at least 10% or 20 years worth of SLV fees. The spread today seems to be closer to $7. That's 20%, or 40 years of fees. Thats killer!!
Or the time and cost of shipping to buy or sell. Fuel, insured shipping, waiting at PO, etc. A $1000 order with $25 shipping is 2.5% or 5 years worth of fees.
A safe to store could cost $2000. That $2000 could be earning 4% in the bank---8x more than the SLV fee.
A safe deposit box could cost $100/year.
Maybe your protection is FIDO. How much does he cost per year?
Add your physical to you homeowners insurance policy? How much is that?
You see, everything has a cost. 50 basis points really isn't very much and looks quite cheap in comparison.
Counter-party risk - something not mentioned enough in a precious metals forum.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
buyers set asking price. Markets set actual price. If a seller does not like market price, then he should not sell.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
There is a counter party in any transaction. The more "paper" involved the more the risk.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
@derryb said:
There is a counter party in any transaction. The more "paper" involved the more the risk.
Break even yet? lol
some of us know how to trade silver. And, apparently some don't.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
@derryb said:
buyers set asking price. Markets set actual price. If a seller does not like market price, then he should not sell.
Yup, both the seller and buyer need a counter-party. Risk.
Mother of Dog, not this again.
If you get a table at a coin show and you collect the cash before relinquishing control of the metal (selling), or you take possession of the metal just prior to paying out the cash for it (buying), then there is no risk of loss. The other party does not have to perform on anything further.
With something like SLV, you buy shares (send them money). They essentially purchase silver with your money and then hold the silver for you. You hope they perform on their promise to actually do that. And you hope that they do not abscond with anything and/or declare bankruptcy. If they don't perform on their obligations, you lose.
@cohodk said:
Why has the premium collapsed 25%in the last few weeks?
To afford guys like you an opportunity.
What are "guys like you"?
Well Dave, you asked why premiums collapsed. And people asking want to know. So people who are curious and don't know why, should capitalize on opportunity. Not a time to debate or argue or even analyze. Time is of the essence, like timing.
@derryb said:
buyers set asking price. Markets set actual price. If a seller does not like market price, then he should not sell.
Yup, both the seller and buyer need a counter-party. Risk.
Mother of Dog, not this again.
If you get a table at a coin show and you collect the cash before relinquishing control of the metal (selling), or you take possession of the metal just prior to paying out the cash for it (buying), then there is no risk of loss. The other party does not have to perform on anything further.
With something like SLV, you buy shares (send them money). They essentially purchase silver with your money and then hold the silver for you. You hope they perform on their promise to actually do that. And you hope that they do not abscond with anything and/or declare bankruptcy. If they don't perform on their obligations, you lose.
In the first example, you needed to find a counter-party in the first place. The risk is finding the other party. If you take a 10oz bar of silver and a 10 oz lump of coal and neither sells, then at that time, both are essentially worthless. You have failed to find a counter-party. That's a risk you assume.
In the second example, well, it doesn't quite work that way.
@derryb said:
buyers set asking price. Markets set actual price. If a seller does not like market price, then he should not sell.
Yup, both the seller and buyer need a counter-party. Risk.
Mother of Dog, not this again.
If you get a table at a coin show and you collect the cash before relinquishing control of the metal (selling), or you take possession of the metal just prior to paying out the cash for it (buying), then there is no risk of loss. The other party does not have to perform on anything further.
With something like SLV, you buy shares (send them money). They essentially purchase silver with your money and then hold the silver for you. You hope they perform on their promise to actually do that. And you hope that they do not abscond with anything and/or declare bankruptcy. If they don't perform on their obligations, you lose.
In the first example, you needed to find a counter-party in the first place. The risk is finding the other party. If you take a 10oz bar of silver and a 10 oz lump of coal and neither sells, then at that time, both are essentially worthless. You have failed to find a counter-party. That's a risk you assume.
In the second example, well, it doesn't quite work that way.
"Counter-party risk" means that you have established a contract with another party and the risk is that the other party does not fulfill their end of the contract.
In your example of not finding anyone to buy your asset, there is no counter-party at all. No counter-party means no counter-party risk. If you don't sell the silver or the coal, you still have it - you haven't lost it.
Your example above is an example of "market risk", not "counter-party risk". The two are very different.
Something like SLV has both Market Risk AND Counter-Party Risk.
Transacting physical precious metals only has Market Risk.
@dcarr said:
Transacting physical precious metals only has Market Risk.
Most comical thing you've ever written.
Anyone had their house broken into to take their paper silver?
Anyone ever been shot during a paper silver transaction?
Everything has counter-party risk.
What you are describing above is a common criminal, not a counter-party.
An armed robbery is a criminal act, and so the police would help (as best they can) to recover any stolen items.
If SLV (or similar) declared bankruptcy, as an unsecured creditor to them, you are on you own.
The police would not get involved. "It's a civil matter".
PS:
Yes, unfortunately, people have had their homes invaded to take their paper assets (stolen account passwords, forced signing of fraudulent documents, kidnapping for ransom, etc).
Comments
I didn't call you a liar. Stop twisting things.
So, with the recent spike in spot prices, did premiums increase or decrease?
Knowledge is the enemy of fear
And citi g industry sources? Lol. Whenever someone else cites an industry source that you don't agree with you claim they are part of a cartel (banking system?), or peddling fake news ("mainstream media"?) or misinformation (gov.com?). But not your sources. They are always correct...even when proven wrong?
You tell us that 2nd consecutive quarters of declining GDP isn't considered to be a recession - when it's been that way for at least 50 years, probably longer.
You tell us that JPM doesn't manipulate the silver market when they've been found guilty for doing that multiple times.
You tell us that high ASE premiums aren't due to high demand, when industry dealers are saying otherwise.
Say what you want. Believe what you want. It's hard to give you credence when you keep denying the obvious.
I knew it would happen.
For those who believe that high premiums are indicative of high demand, would you agree with one or both of the following assertions:
Door number one. A massive increase in production will only slow down the premium explosion. ASE premiums were climbing before there was a known reduction in production
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Aren’t those stating basically the same thing?
@Wingsrule asked "Aren’t those stating basically the same thing?"
My intent was that # 2 is a stronger statement, though I can see it's not clear. For #1, if production returns to that of 5 - 6 years ago, premiums decline but stay materially higher than they were. For # 2, demand is so strong that even in the case of a return to prior production levels, we see almost no change in premiums. Both are conceivable, though another possibility of course is that the premiums are primarily driven by the supply side, so a return to prior production levels causes a return to historical premium levels.
Yet another thought experiment -- if the mint were able to simply product enough to satisfy whatever the demand is at a given point, presumably this would cause premiums to drop to historical levels?
Supply & Demand aren't static. Perhaps it would be more relevant to say that demand exceeds supply to the extent that premiums for ASEs are at all-time highs.
I would contend that demand has increased for reasons having more to do with inflation and the economy, and supply is being constrained by the Mint's decision to cut back on production (which may be dependent on mining output etc.) If there's a perception in the marketplace that scarcity is developing because of the lower Mint output, it's reasonable that premiums are rising as hoarding takes place - but I don't think that a supply issue is what's causing the premiums to increase.
Consider that since 1986, how many ASEs have been produced? That's your supply figure - not just this year's production. Since a cutback in production this year amounts to a small fraction of the outstanding supplies, it seems to me that premiums are increasing due to demand, not supply shortages.
If major dealers are saying that there's high demand, then by golly the chances that demand is high are pretty good.
I knew it would happen.
Not much new ASE supply, not much demand. Welcome to the gutter. Plenty of SLV.
RGDS!
All you can barf.
Ask the custodian to send you a pic of the physical silver backing it.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
It is considered a "rule of thumb" by some, but that is not a definition. A recession is much more than 6 months of declining GDP. As an MBA you should know that.
You are manipulated.
Dealers are saying supply is scarce, and you have repeated their comments thusly.
It is quite obvious, so why do you deny?
Knowledge is the enemy of fear
Premiums dropped 20% in the last week, and will continue to drop if spot increases. Did you mean to say "premium implosion"?
Knowledge is the enemy of fear
It is a definition no matter how much you want to pretend it isn't.
Blinders.
Double blinders.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Yup...generally identified.
If you like this "definition" so much then the positive GDP print negates your contention. Recession over. Whew....that was doosy!! I hope you were prepared.
There is much more to a recession than 2 negative GDP prints. I wouldn't expect you to understand that though.
Knowledge is the enemy of fear
I understand what a dictionary tells me. Two more consecutive quarters and we will be in another recession. LOL
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
In the US the NBER gets to make the official call on recession. They aren't bound by some strict definition like 2 quarters of negative GDP. And, they aren't using different rules now than they used decades ago. The biggest reason they didn't declare a recession this year is because unemployment numbers are near historical lows. But also important to remember.... they are typically make an official declaration close to a year after they'll say the recession started.
No, RobM, Google makes the call. Don't go against the politically driven narrative. It makes you look smart.
Knowledge is the enemy of fear
Who cares it trades back into the same $$$ your overpriced ASEs do and I don't need a doomsday bunker to store it. THKS!
Knowing in advance that my comment will be twisted, sniped and mocked by one non-contributor or another, I'm posting this for the benefit of the contributors here whom I do value.
I should mention that I've listened to some interesting recent interviews with Andy Schectman lately.......concerning the supply & demand picture with precious metals, premiums, LBMA, Comex, Opec, BRICS and the belt road initiative.
So, it seems that supply to the US is being diverted to Europe while demand is accelerating in both silver and gold in more than just one market segment. Supply is being diverted and apparently constricted intentionally (by the US Mint) where this generally hasn't happened before. Demand is coming from everywhere, including central banks and other sovereign players.
Interested parties should go to youtube and look up Andy Schectman in various recent interviews (since mid-September or so). It's worth your time. Don't bother with the videos that are PowerPoint with audio voice-overs, go to the actual video interviews.
Updated.
I knew it would happen.
SLV goes down in value over time, like a donkey.
Can you quantify the disparity in spot return vs SLV since SLV was cteated?
Knowledge is the enemy of fear
Why has the premium collapsed 25%in the last few weeks?
Knowledge is the enemy of fear
premium has not collapsed 25%. That single ASE at APMEX will cost you an 86% premium plus shipping. Premiums are down (not 25%) because half of the formula (spot) is up.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Every year, due to expenses and administrative fees, one share of SLV represents 0.5% less silver than it did the year before.
So whatever "spot" silver does (up or down), SLV is guaranteed to perform 0.5% worse than "spot" silver.
@cohodk SLV at inception followed the spot price within a few cents, I believe. If thats the case, its easy to see the holding costs over time. GLD was 1/10 spot.
That ain't bad. Especially when one considers the cost of holding physical.
The bid/ask spread is usually several dollars--that could be at least 10% or 20 years worth of SLV fees. The spread today seems to be closer to $7. That's 20%, or 40 years of fees. Thats killer!!
Or the time and cost of shipping to buy or sell. Fuel, insured shipping, waiting at PO, etc. A $1000 order with $25 shipping is 2.5% or 5 years worth of fees.
A safe to store could cost $2000. That $2000 could be earning 4% in the bank---8x more than the SLV fee.
A safe deposit box could cost $100/year.
Maybe your protection is FIDO. How much does he cost per year?
Add your physical to you homeowners insurance policy? How much is that?
You see, everything has a cost. 50 basis points really isn't very much and looks quite cheap in comparison.
Knowledge is the enemy of fear
To afford guys like you an opportunity.
A shovel can be bought cheap.
How much does counter-party risk cost ?
Sometimes nothing.
Sometimes everything.
Counter-party risk - something not mentioned enough in a precious metals forum.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Successful transactions with : MICHAELDIXON, Manorcourtman, Bochiman, bolivarshagnasty, AUandAG, onlyroosies, chumley, Weiss, jdimmick, BAJJERFAN, gene1978, TJM965, Smittys, GRANDAM, JTHawaii, mainejoe, softparade, derryb
Bad transactions with : nobody to date
Finding a buyer at your price?
Knowledge is the enemy of fear
What are "guys like you"?
Knowledge is the enemy of fear
buyers set asking price. Markets set actual price. If a seller does not like market price, then he should not sell.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Yup, both the seller and buyer need a counter-party. Risk.
Knowledge is the enemy of fear
There is a counter party in any transaction. The more "paper" involved the more the risk.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Break even yet? lol
some of us know how to trade silver. And, apparently some don't.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Mother of Dog, not this again.
If you get a table at a coin show and you collect the cash before relinquishing control of the metal (selling), or you take possession of the metal just prior to paying out the cash for it (buying), then there is no risk of loss. The other party does not have to perform on anything further.
With something like SLV, you buy shares (send them money). They essentially purchase silver with your money and then hold the silver for you. You hope they perform on their promise to actually do that. And you hope that they do not abscond with anything and/or declare bankruptcy. If they don't perform on their obligations, you lose.
Well Dave, you asked why premiums collapsed. And people asking want to know. So people who are curious and don't know why, should capitalize on opportunity. Not a time to debate or argue or even analyze. Time is of the essence, like timing.
In the first example, you needed to find a counter-party in the first place. The risk is finding the other party. If you take a 10oz bar of silver and a 10 oz lump of coal and neither sells, then at that time, both are essentially worthless. You have failed to find a counter-party. That's a risk you assume.
In the second example, well, it doesn't quite work that way.
Knowledge is the enemy of fear
Wrong thread.
Knowledge is the enemy of fear
"Counter-party risk" means that you have established a contract with another party and the risk is that the other party does not fulfill their end of the contract.
In your example of not finding anyone to buy your asset, there is no counter-party at all. No counter-party means no counter-party risk. If you don't sell the silver or the coal, you still have it - you haven't lost it.
Your example above is an example of "market risk", not "counter-party risk". The two are very different.
Something like SLV has both Market Risk AND Counter-Party Risk.
Transacting physical precious metals only has Market Risk.
Most comical thing you've ever written.
Anyone had their house broken into to take their paper silver?
Anyone ever been shot during a paper silver transaction?
Everything has counter-party risk.
Knowledge is the enemy of fear
What you are describing above is a common criminal, not a counter-party.
An armed robbery is a criminal act, and so the police would help (as best they can) to recover any stolen items.
If SLV (or similar) declared bankruptcy, as an unsecured creditor to them, you are on you own.
The police would not get involved. "It's a civil matter".
PS:
Yes, unfortunately, people have had their homes invaded to take their paper assets (stolen account passwords, forced signing of fraudulent documents, kidnapping for ransom, etc).
I never claimed that was a counter-party. I was replying to your comment that physical metals ONLY have market risk.
Passwords are not paper assets.
Knowledge is the enemy of fear
It goes without saying that ANY asset can be the target of criminal activity.
Everything has counter-party risk.
No, it doesn't. There is no counterparty risk in a physical face to face metal for dollars transaction. It's a transaction, and done.
I knew it would happen.
You'll never understand it, jmski. Good.luck.
Knowledge is the enemy of fear
You'll never understand it, jmski. Good.luck
You should buy more bonds.
I knew it would happen.
Verily!!!
But, you still won't get it.
Knowledge is the enemy of fear