@RobM said:
The table does not show how gold has performed vs. general price increases over time. This one does:
content://com.android.chrome.FileProvider/images/screenshot/1651150808884675173089.png
Over the entire period, gold performed somewhat better than the CPI. The data starts 3+ years after US dropped gold settlements in 1971 so it doesn't include some of the biggest gains in gold vs CPI during gold's adjustment coming off the standard. But the moral of the story is that gold has done a reasonably good job at preserving wealth OVER EXTENDED PERIODS. However, over shorter timeframes (look at 1981 to 2000) it is not always the case. A comparable chart for silver would look much worse, but only if you bought during the 1979-1980 cornering of the market. Otherwise, long time silver investors are beating CPI too.
I think the chart has the legend backwards. The blue line is the cumulative CPI and the red line is the gold price.
Yet the red line shows the spike in interest rates in 1980 while the blue line does not.
"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
Yet the red line shows the spike in interest rates in 1980 while the blue line does not.
Keep in mind the blue line (yes, it really is the CPI and not gold) is cumulative. It's like you had $1 and invested it from Jan 1975 until Oct 2017 in a fund that paid whatever the BLS calculates CPI to be. Your $1 became $4.75. Note the slope of the blue line is steeper in the 1978 to 1980 range - this is where the CPI was running hot. Also notice the 2009 time frame where the blue line dips briefly - that was the deflation encountered during the Great Recession. I ran the numbers through the BLS CPI calculator and they match up perfectly. The red line matches up perfectly with the price of gold starting at $185 or so and ending around $1170. At today's gold price and cumulative CPI as reported, gold has increased by almost exactly 2X the CPI from 1975 until today. So in that respect, gold is a winner. And simply based on CPI, one could make an argument that gold is currently overpriced in relation.
People tend to forget article 1of the Constitution. The value "is"that it's money and supposed to be the legal exchange for debt
No matter the shape , our constitution hasn't changed one word...on what silver and gold are to be coined for, and as. As a means to pay debt. Bend it, shape it , manipulate it. Wheel it , deal it, steal it.
@crazyhounddog said:
If anyone here still thinks silver and gold is a good hedge against Inflation I’d like to know why.
Inflation is gripping is pretty good right now. Looks like silver and gold is dropping pretty damn fast rather than holding its own or going up to hedge this rough inflation we are going through right now that will undoubtedly get worse.
The bitterness of "Poor Quality" is remembered long after the sweetness of low price is forgotten.
@crazyhounddog said:
Looks like silver and gold is dropping pretty damn fast rather than holding its own or going up to hedge this rough inflation we are going through right now that will undoubtedly get worse.
spot prices are dropping pretty damn fast. Price of the real stuff is not.
"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
@crazyhounddog said:
If anyone here still thinks silver and gold is a good hedge against Inflation I’d like to know why.
Inflation is gripping is pretty good right now. Looks like silver and gold is dropping pretty damn fast rather than holding its own or going up to hedge this rough inflation we are going through right now that will undoubtedly get worse.
PMs will get beat up early in a recession due to margin calls, rush to cash, etc. Will likely shine as QT, interest rate hikes are abandoned (IMO sometime this summer, way earlier than predicted). I am staying the course with metals.
@crazyhounddog said:
If anyone here still thinks silver and gold is a good hedge against Inflation I’d like to know why.
Inflation is gripping is pretty good right now. Looks like silver and gold is dropping pretty damn fast rather than holding its own or going up to hedge this rough inflation we are going through right now that will undoubtedly get worse.
PMs will get beat up early in a recession due to margin calls, rush to cash, etc. Will likely shine as QT, interest rate hikes are abandoned (IMO sometime this summer, way earlier than predicted). I am staying the course with metals.
I have my pile and not about to sell at these rates but many are. When it gets low enough I’ll be buying more silver as I think it might just do better than gold. Just my thoughts. Yes I’m holding strong.
The bitterness of "Poor Quality" is remembered long after the sweetness of low price is forgotten.
Yep, still holds true that supply is a major component of price discovery. 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
First ya gotta show me a PR70 junk bar to compare it to.
"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:
First ya gotta show me a PR70 junk bar to compare it to.
No i dont.
OK, keep comparing apples to oranges if it convinces you that your narrative is true. After all what you think is all that matters. . . . . to you. 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
@derryb said:
First ya gotta show me a PR70 junk bar to compare it to.
No i dont.
OK, keep comparing apples to oranges if it convinces you that your narrative is true. After all what you think is all that matters. . . . . to you. LOL
One's perception is not fact. The truth, free of misinformation and in context, matters to ALL OF US.
The truth, free of misinformation and in context, matters to ALL OF US.
Just what we need, a self appointed queen of the forum Disinformation Governance Board. Welcome.
"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
Reduced slab inventory 75 pct. Settled on 80 as a plan roster number. I could see it if silver going up in leaps and bounds.
Taking similar action. Just got down to 80 slabbed coins with the goal being keeping 60. Definitely will keep at least 1 of each coin type and maybe dupes where one may be the nicest but another a key date. I have others and commons to weed out that are just duplicates from upgrading when opportunities came about so the lower grade will just go.
Not exactly true, Dave. Selling more this year than the 12 previous years in a coin shop , with the exception of 2011-2012. Demand is way up. Just ordered more yesterday.
Not exactly true, Dave. Selling more this year than the 12 previous years in a coin shop , with the exception of 2011-2012. Demand is way up. Just ordered more yesterday.
"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
"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
Major institutions and hedge funds seeking inflation hedges are focused on oil, gold and copper. These 3 have proven to be the most liquid and reliable over time.
@Crusty said:
I stopped stacking gold and silver about a 8 years ago. Got heavily into numismatics… So I have been out of the loop on PMs for quite some time. I’m wondering what you guys think is the reason silver has not taken off? With gold recently hitting 2k why didn’t silver go back to 50? Is it to many paper silver contracts, low industrial demand, to much supply, bank manipulation? If you believe it’s any of these things or something else I’d love to hear more…
On another note why the hell are premiums so high for silver eagles? How long has it been like this and do you guys expect this to last?
Thanks in advance for any comments…
I haven't read any of the posts, so maybe this is repetition.
Silver isn't a monetary metal like gold in the current environment and hasn't been for years. The price history since the 1980 peak makes this self-evident.
It's held as a store of value in countries like India but in the US, no one except for metal bugs and coin collectors think of it like those on this forum do. It's another commodity and another speculative option to make a profit measured in fiat USD but others don't want to own the physical metal. It has no current role in the global financial or monetary system. It isn't a central bank reserve asset like gold.
On the premiums, the best explanation is a decrease in liquidity. Silver is less liquid than it used to be. The premiums are higher since March 2020 (when COVID hit), yet the spot price is (and has been) lower versus different times since the 2011 peak. If it really was about lack of supply or insatiable demand, then market makers should increase their bids in an attempt to make more profit on volume. That's how markets usually work. My inference for why they do not is that they either can't effectively hedge inventory or it's not economical.
Buy-sell spreads, unfavorable tax treatment, and limited market scale make it a better option for (affluent) middle class buyers but not the actual rich. I know Warren Buffet owned it once but someone like him can't buy or sell it at scale without the entirely self-defeating outcome of disproportionately impacting the price, both ways.
Outside the US where I presume more of the affluent own one or both, I'd guess a meaningful percentage of the more and most affluent own gold but virtually none own material amounts of silver. (Private banking clients at a firm like UBS probably representative.)
I haven't checked the premiums recently (in a few months). But to give you an idea of how awful the economics are on buying ASEs, it took about a 50% move in spot to achieve about a 14% return, net of taxes. (Somewhat better for other options.) That's abysmal.
I'm still interested in buying it but it's going to take noticeably lower prices, far lower spreads, or both.
On the premiums, the best explanation is a decrease in liquidity. Silver is less liquid than it used to be. The premiums are higher since March 2020 (when COVID hit), yet the spot price is (and has been) lower versus different times since the 2011 peak.
I would indeed expect the price to go lower if silver is less liquid than it used to be, but how are you gauging the liquidity of silver? Because of the disconnect between Comex pricing and physical silver, I think you have to include the premiums as part of the price. In that case, the market should be liquid enough at the higher price/higher premiums. Are you saying that it's not?
I haven't checked the premiums recently (in a few months). But to give you an idea of how awful the economics are on buying ASEs, it took about a 50% move in spot to achieve about a 14% return, net of taxes. (Somewhat better for other options.) That's abysmal.
Are you figuring the premiums as part of the cost when you buy, but not when you sell? Can you document where your 50% move and 14% return came from? Are you are relying on Comex quotes rather than real world physical sales data and ignoring the premium when you cite a 14% return?
Comex is trying to dis-incentivize retail silver stackers, for sure, but the retail market is saying "oh no, you don't." The real price includes the premiums, both when buying and when selling. The only way to really know what's going on is to take delivery from Comex and see what happens.
Q: Are You Printing Money? Bernanke: Not Literally
@jmski52 said: On the premiums, the best explanation is a decrease in liquidity. Silver is less liquid than it used to be. The premiums are higher since March 2020 (when COVID hit), yet the spot price is (and has been) lower versus different times since the 2011 peak.
I would indeed expect the price to go lower if silver is less liquid than it used to be, but how are you gauging the liquidity of silver? Because of the disconnect between Comex pricing and physical silver, I think you have to include the premiums as part of the price. In that case, the market should be liquid enough at the higher price/higher premiums. Are you saying that it's not?
I am referring to the spread between the buy and sell price, not the premium over spot. That's the conclusive evidence for liquidity. You are aware of spreads for other markets and assets, aren't you? Silver is (and always has been) among the worst for such a supposedly liquid asset. It's also a lot worse now since COVID.
After I wrote my last post, I checked golddealer.com (California Numismatic Investments) which is where I always check. ASE buy-sell-spread is $9 or $9.50 Bid is $27+ and ask is $36+. I know prices vary by source somewhat but anyone who buys now is right off the bat in the hole by 33%.
That's horrible liquidity and there is no way to avoid the math.
I haven't checked the premiums recently (in a few months). But to give you an idea of how awful the economics are on buying ASEs, it took about a 50% move in spot to achieve about a 14% return, net of taxes. (Somewhat better for other options.) That's abysmal.
Are you figuring the premiums as part of the cost when you buy, but not when you sell? Can you document where your 50% move and 14% return came from? Are you are relying on Comex quotes rather than real world physical sales data and ignoring the premium when you cite a 14% return?
Look at my example above. You buy today at $36+. Spot is at $22+ and the premium in the bid price in my example is about $5 ($27-$22). Assuming spot increases to $33 and the bid also goes up by 50%, the new bid price is around $40.50. That's about a $4 gross profit or 11% pre-tax. My marginal tax rate in my state is about 30% (federal + state) which leaves $2.80.
Yes, that's a net after tax return of 8%, even less than my last example. It's somewhat better for other silver bullion options but you get the idea. The economics of buying physical silver in today's market are awful, except to the die hard believer who is holding it as a permanent hedge expecting $50, $100, $200 or more.
I think silver spot will outperform mainstream asset classes (stocks, bonds, real estate) longer term from current levels. But the difference is that, since these asset classes are in a full blown mania, I can attempt to wait for a much better entry point after a crash. I don't need to have my funds tied up indefinitely.
Analytically speaking, I would be buying from Scotsman in St. Louis @ $32.86 according to their online trade sheet.
Further, their buy price for Qty=10 is $29.56/ea., the actual spread (at least at Scotsman) is "only" $3.30/oz.
I'm not done with my response, but I'm slow on the draw tonight, and I haven't had time to ponder the rest of the equation you laid out. Maybe there's another justification for silver but how many more justifications do you need at this point?
There's a good interview by Dunnagan on "liberty and Finance" with Bill Holter from JSMineset. Bill reps for Miles Franklin who deal in bullion commercially. Has anyone here in the forum ever dealt with Miles Franklin?
Q: Are You Printing Money? Bernanke: Not Literally
The spread of $3.30 is a 10.6% spread ($32.86+$29.56/2) = $31.21 average price.
I haven't kept up with day to day silver prices other than as a portolio component, but I do seem to recall buying 90% silver coin at spreads of 3 to 4%. So, an increase in the premiums being charged reflect not only liquidity (and it does, I'm sure - but it also reflects big reluctance on the part of any sellers, in this market. No doubt supply is tightening while demand is waking up. The paper price doesn't hold much weight with me, so there's that.
Q: Are You Printing Money? Bernanke: Not Literally
If the premium increases by 50% linearly along with the spot price (and we don't know that without tracking it over time), then Scotsman's sell of $32.86 increases to $49.29 and their bid increases from $29.56 to $44.34, a new premium of $4,95.
We don't know that the spread increases linearly, in fact it depends on what the market is doing. It could increase or decrease, so I don't necessarily agree with an automatic linear 50% increase in the premium if spot increases by 50%. Maybe it does, maybe not but let's go with that anyway.
So, your gross profit increases linearly by 50% along with spot and premiums, from $29.56 to $44.34, a gross profit of $14.78 and an after tax net profit number of $10.36, a 35% profit. The tax numbers work the same as with any other speculation.
I guess that my position is that waiting for a better entry point doesn't depend on spreads or premiums because they change, and that if you perceive the spread and premiums on silver to be too high, you should wait - but there are no guarantees that the situation won't get worse before it gets better.
If you think that other asset classes are in full-blown mania right now, why would you put more money at risk in them unless it's money that you can afford to lose in a mania speculation? Silver is no different than any other speculation except that the spot price isn't indicative of what the retail market is doing. Spreads and premiums are simply part of the real pricing, and that's what is tripping you up, I think. Spreads and premiums continue to change, but you can be sure that they change directly in response to the real market.
I don't hold silver expecting big profits although that may happen. I hold silver because the mismanagement of our monetary system is crazy bad, and most other assets that are subject to paper financial vehicles are way too risky now.
Everything is a speculation. Silver is a physical asset that is manipulated by derivative paper positions, and those paper contracts aren't sustainable in my opinion. That's your justification, not a big potential upside - although that potential big upside is always a possibility. We've seen that with silver a couple of times before now. Just my opinion.
P.S. - Silver is taking another paper pounding this morning. In any sense, if you can still get your hands on physical silver, it is a little cheaper today.
Q: Are You Printing Money? Bernanke: Not Literally
i wish i had the foresight to stack sheets of plywood 2 years ago. I could have quadrupled my investment.
It goes without saying i wouldnt have paid any tax on the proceeds
i still think its funny some of you are completely against everything the government is doing but rush out and pay tax on your bullion sales even though inflation stole the actual gain away before you could even book it
i still think its funny some of you are completely against everything the government is doing but rush out and pay tax on your bullion sales even though inflation stole the actual gain away before you could even book it
Unfortunately it depends how you sold your bullion. If payment was made on eBay or PayPal, there is a 1099 in your future. If sold to a local store, then your ID and sales info are conveniently store for the tax auditor to review (which is quite easy - you just ask for a export from their accounting software and sort by name then sub-total and see you is worth the effort of pursuing). Yes you can sell for cash - but if you stacked any volume, how are you going to spend the money?
@cohodk said:
.> @taxmad said:
how are you going to spend the money?
Barter for the barbarous.
Okay - then how are you going to spend your barbarous relics when the time comes. Eventually you will need to have dollars - and likely you will be dealing with a company that won't take thousands or tens of thousands in cash.
@cohodk said:
.> @taxmad said:
how are you going to spend the money?
Barter for the barbarous.
Okay - then how are you going to spend your barbarous relics when the time comes. Eventually you will need to have dollars - and likely you will be dealing with a company that won't take thousands or tens of thousands in cash.
I wont need to trade for dollars if i already have dollars.
And if the time comes, it wont be dollars that i need.
@jmski52 said:
The spread of $3.30 is a 10.6% spread ($32.86+$29.56/2) = $31.21 average price.
I haven't kept up with day to day silver prices other than as a portolio component, but I do seem to recall buying 90% silver coin at spreads of 3 to 4%. So, an increase in the premiums being charged reflect not only liquidity (and it does, I'm sure - but it also reflects big reluctance on the part of any sellers, in this market. No doubt supply is tightening while demand is waking up. The paper price doesn't hold much weight with me, so there's that.
I haven't bought silver in a long time. I have checked APMEX which was somewhat but not much better when I did.
I don't ever recall a spread of 3% to 4% for silver, not even close. That's been the spread on 1oz gold every time I have looked, except during COVID. CNI has a spread of 4.5% when I did my last search for silver on their website.
I agree that US based coin collectors and metal bugs are hesitant to sell their stash, especially since at least a large minority probably have noticeable "paper" losses by buying at higher prices since 2011. But it doesn't explain the spreads. If the spreads were lower by market makers raising their bids, then this should increase supply, somewhat.
We don't know that the spread increases linearly, in fact it depends on what the market is doing. It could increase or decrease, so I don't necessarily agree with an automatic linear 50% increase in the premium if spot increases by 50%. Maybe it does, maybe not but let's go with that anyway.
Agree. I was using it to simplify the example which I admit was imprecise. Since I still expect a deflationary asset crash, I'm expecting both the spot price and the spreads to decline.
I guess that my position is that waiting for a better entry point doesn't depend on spreads or premiums because they change, and that if you perceive the spread and premiums on silver to be too high, you should wait - but there are no guarantees that the situation won't get worse before it gets better.
The "all in" price is more important, but the spread and premium still matters. It still impacts the net result.
@jmski52 said:
If you think that other asset classes are in full-blown mania right now, why would you put more money at risk in them unless it's money that you can afford to lose in a mania speculation? Silver is no different than any other speculation except that the spot price isn't indicative of what the retail market is doing. Spreads and premiums are simply part of the real pricing, and that's what is tripping you up, I think. Spreads and premiums continue to change, but you can be sure that they change directly in response to the real market.
I don't own any of the asset classes I named. It's also not a matter of "if". There is no question these three asset classes are in a full-blown mania (the worst ever), except to someone who doesn't know financial market history or believes "it's different this time", such as a ridiculous "new normal". It's a combination of ignorance and denial. Denial because most people refuse to believe it because it's contrary to their personal preference.
I don't think I'm tripped up about anything. The OP asked about the factors "holding back" silver and IMO, it's one reason. It isn't the only one, but it is one.
I don't hold silver expecting big profits although that may happen. I hold silver because the mismanagement of our monetary system is crazy bad, and most other assets that are subject to paper financial vehicles are way too risky now.
My initial post was not singling anyone out. I agree with your reason but don't believe buying and holding anything is going to be successful in wealth preservation which I presume is your primary objective. Unfortunately, in the casino financial system where we all have to "play", the only way for most to win is through speculation.
Silver isn't overpriced historically, relative to everything else. That's the most logical way of evaluating it, not against fiat currencies but real stuff. The problem with both gold and silver is that it's a "dead asset" which doesn't produce any cash flow which means the only way to use it to preserve or increase your wealth is through good timing of your purchases. Anyone who bought it any time in the 90's up to early 2000's or soon after late 2008 has succeeded. Anyone who bought it at or near the 1980 or 2011 peaks has lost big. Many other entry points (like the 2008 peak of $21) make it "dead money".
This thread isn't about gold but objectively, it is relatively historically overpriced, measured by its relative value to other physical goods and some (or many) services. This doesn't mean it cannot increase anyway but longer term, I expect it to lose noticeable relative value.
Everything is a speculation. Silver is a physical asset that is manipulated by derivative paper positions, and those paper contracts aren't sustainable in my opinion. That's your justification, not a big potential upside - although that potential big upside is always a possibility. We've seen that with silver a couple of times before now. Just my opinion.
I agree all supposed "investment" is speculation.
I disagree there is any manipulation through paper substitutes, not where it differs from manipulation of any other commodity. I disagree because I don't believe anyone other than metal bugs and coin collectors see it as a money substitute as it evident with gold. In India, they do or may care but these people don't have other options. No one else gives a hoot about the price.
Gold's price since 1971 also contradicts this belief. Gold is a lot more important than silver, other than as an industrial commodity. No one can deny it, yet its price has increased a lot more. Those who are supposedly suppressing the price cannot keep anyone from buying the physical metal. This is a belief in a form of price control. If this actually existed and it's really as underpriced as it's advocates claim, there should not be now or in the past (since the 80's when I first heard this claim at minimum) a single ounce to be bought. That nothing of the sort has happened (except during temporary shortages of the fabricated blanks) better illustrates that the metal advocate is irrelevant as a buyer of last resort.
I disagree there is any manipulation through paper substitutes, not where it differs from manipulation of any other commodity. I disagree because I don't believe anyone other than metal bugs and coin collectors see it as a money substitute as it evident with gold. In India, they do or may care but these people don't have other options. No one else gives a hoot about the price.
Gold's price since 1971 also contradicts this belief. Gold is a lot more important than silver, other than as an industrial commodity. No one can deny it, yet its price has increased a lot more. Those who are supposedly suppressing the price cannot keep anyone from buying the physical metal. This is a belief in a form of price control. If this actually existed and it's really as underpriced as it's advocates claim, there should not be now or in the past (since the 80's when I first heard this claim at minimum) a single ounce to be bought. That nothing of the sort has happened (except during temporary shortages of the fabricated blanks) better illustrates that the metal advocate is irrelevant as a buyer of last resort.
This completely ignores the brainwashing most people are under and have been under their entire lives due to media and other fake realities being portrayed. Programming 101. If you have time, study how manipulated our thoughts and ideas truly are. It was extremely obvious during the last 2 years of the plandemic...
How does it work with Gold and Silver? Shoot the price down during HYPERINFLATION. The worst inflation of our lives is currently happening and commodities are being suppressed. It causes panic, FEAR, and running from the truth. The truth is right in front of you. PHYSICAL SILVER AND GOLD.
Comments
@dcarr, good catch.... The labels are indeed reveresed on that chart.
Kinda makes you wonder whether that company is good at helping manage your pension, eh?
I knew it would happen.
Yet the red line shows the spike in interest rates in 1980 while the blue line does not.
"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
Paper trades, paper trading @ ratio 353 to 1. Source it.
Keep in mind the blue line (yes, it really is the CPI and not gold) is cumulative. It's like you had $1 and invested it from Jan 1975 until Oct 2017 in a fund that paid whatever the BLS calculates CPI to be. Your $1 became $4.75. Note the slope of the blue line is steeper in the 1978 to 1980 range - this is where the CPI was running hot. Also notice the 2009 time frame where the blue line dips briefly - that was the deflation encountered during the Great Recession. I ran the numbers through the BLS CPI calculator and they match up perfectly. The red line matches up perfectly with the price of gold starting at $185 or so and ending around $1170. At today's gold price and cumulative CPI as reported, gold has increased by almost exactly 2X the CPI from 1975 until today. So in that respect, gold is a winner. And simply based on CPI, one could make an argument that gold is currently overpriced in relation.
People tend to forget article 1of the Constitution. The value "is"that it's money and supposed to be the legal exchange for debt
No matter the shape , our constitution hasn't changed one word...on what silver and gold are to be coined for, and as. As a means to pay debt. Bend it, shape it , manipulate it. Wheel it , deal it, steal it.
Bankers get it. I mean, got it.
Inflation is gripping is pretty good right now. Looks like silver and gold is dropping pretty damn fast rather than holding its own or going up to hedge this rough inflation we are going through right now that will undoubtedly get worse.
spot prices are dropping pretty damn fast. Price of the real stuff is not.
"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
PMs will get beat up early in a recession due to margin calls, rush to cash, etc. Will likely shine as QT, interest rate hikes are abandoned (IMO sometime this summer, way earlier than predicted). I am staying the course with metals.
I have my pile and not about to sell at these rates but many are. When it gets low enough I’ll be buying more silver as I think it might just do better than gold. Just my thoughts. Yes I’m holding strong.
You seem to forget that supply is a major component of price discovery.
>
>
>
Price discovered.
Knowledge is the enemy of fear
Yep, still holds true that supply is a major component of price discovery. 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
Come on derby, you can do better.
https://coinweek.com/modern-coins/important-1995-w-1-silver-eagle-realizes-17000-at-greatcollections/
Knowledge is the enemy of fear
First ya gotta show me a PR70 junk bar to compare it to.
"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
No i dont.
Knowledge is the enemy of fear
OK, keep comparing apples to oranges if it convinces you that your narrative is true. After all what you think is all that matters. . . . . to you. 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
One's perception is not fact. The truth, free of misinformation and in context, matters to ALL OF US.
Knowledge is the enemy of fear
Just what we need, a self appointed queen of the forum Disinformation Governance Board. Welcome.
"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
Reduced slab inventory 75 pct. Settled on 80 as a plan roster number. I could see it if silver going up in leaps and bounds.
Taking similar action. Just got down to 80 slabbed coins with the goal being keeping 60. Definitely will keep at least 1 of each coin type and maybe dupes where one may be the nicest but another a key date. I have others and commons to weed out that are just duplicates from upgrading when opportunities came about so the lower grade will just go.
Pocket Change Inspector
The truth matters to Patriots.
You're intimidated by the truth. It scares you.
Knowledge is the enemy of fear
Join the Convention of States
U.S. Mint sees gold demand drop 43% in April, silver demand drops 23% ( For the year, silver demand is down nearly 92%.)
Now we have 2 out of 3 not meeting criteria for growth....
Lack of speculators
A) Demand
https://www.kitco.com/news/2022-05-03/U-S-Mint-sees-gold-demand-drop-43-in-April-silver-demand-drops-23.html
Demand down 92%!! Dang!!
Knowledge is the enemy of fear
Prices up 92%!! Dang!!
Direct correlation to paper money. See the value of the dollar drop. It buys half as much $hit than it did a year ago.
Not exactly true, Dave. Selling more this year than the 12 previous years in a coin shop , with the exception of 2011-2012. Demand is way up. Just ordered more yesterday.
Demand down 92%… That doesn’t seem right.
Yeah, i was wondering what the context was.
Knowledge is the enemy of fear
More like dollar down 92%
"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
At around $22 per oz, now may be the time to "test the waters"
Who is selling for $22… I’m in!
COMEX 🤓
"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
22x maybe
Good deal.
Knowledge is the enemy of fear
Major institutions and hedge funds seeking inflation hedges are focused on oil, gold and copper. These 3 have proven to be the most liquid and reliable over time.
I haven't read any of the posts, so maybe this is repetition.
Silver isn't a monetary metal like gold in the current environment and hasn't been for years. The price history since the 1980 peak makes this self-evident.
It's held as a store of value in countries like India but in the US, no one except for metal bugs and coin collectors think of it like those on this forum do. It's another commodity and another speculative option to make a profit measured in fiat USD but others don't want to own the physical metal. It has no current role in the global financial or monetary system. It isn't a central bank reserve asset like gold.
On the premiums, the best explanation is a decrease in liquidity. Silver is less liquid than it used to be. The premiums are higher since March 2020 (when COVID hit), yet the spot price is (and has been) lower versus different times since the 2011 peak. If it really was about lack of supply or insatiable demand, then market makers should increase their bids in an attempt to make more profit on volume. That's how markets usually work. My inference for why they do not is that they either can't effectively hedge inventory or it's not economical.
Buy-sell spreads, unfavorable tax treatment, and limited market scale make it a better option for (affluent) middle class buyers but not the actual rich. I know Warren Buffet owned it once but someone like him can't buy or sell it at scale without the entirely self-defeating outcome of disproportionately impacting the price, both ways.
Outside the US where I presume more of the affluent own one or both, I'd guess a meaningful percentage of the more and most affluent own gold but virtually none own material amounts of silver. (Private banking clients at a firm like UBS probably representative.)
I haven't checked the premiums recently (in a few months). But to give you an idea of how awful the economics are on buying ASEs, it took about a 50% move in spot to achieve about a 14% return, net of taxes. (Somewhat better for other options.) That's abysmal.
I'm still interested in buying it but it's going to take noticeably lower prices, far lower spreads, or both.
On the premiums, the best explanation is a decrease in liquidity. Silver is less liquid than it used to be. The premiums are higher since March 2020 (when COVID hit), yet the spot price is (and has been) lower versus different times since the 2011 peak.
I would indeed expect the price to go lower if silver is less liquid than it used to be, but how are you gauging the liquidity of silver? Because of the disconnect between Comex pricing and physical silver, I think you have to include the premiums as part of the price. In that case, the market should be liquid enough at the higher price/higher premiums. Are you saying that it's not?
I haven't checked the premiums recently (in a few months). But to give you an idea of how awful the economics are on buying ASEs, it took about a 50% move in spot to achieve about a 14% return, net of taxes. (Somewhat better for other options.) That's abysmal.
Are you figuring the premiums as part of the cost when you buy, but not when you sell? Can you document where your 50% move and 14% return came from? Are you are relying on Comex quotes rather than real world physical sales data and ignoring the premium when you cite a 14% return?
Comex is trying to dis-incentivize retail silver stackers, for sure, but the retail market is saying "oh no, you don't." The real price includes the premiums, both when buying and when selling. The only way to really know what's going on is to take delivery from Comex and see what happens.
I knew it would happen.
I am referring to the spread between the buy and sell price, not the premium over spot. That's the conclusive evidence for liquidity. You are aware of spreads for other markets and assets, aren't you? Silver is (and always has been) among the worst for such a supposedly liquid asset. It's also a lot worse now since COVID.
After I wrote my last post, I checked golddealer.com (California Numismatic Investments) which is where I always check. ASE buy-sell-spread is $9 or $9.50 Bid is $27+ and ask is $36+. I know prices vary by source somewhat but anyone who buys now is right off the bat in the hole by 33%.
That's horrible liquidity and there is no way to avoid the math.
Look at my example above. You buy today at $36+. Spot is at $22+ and the premium in the bid price in my example is about $5 ($27-$22). Assuming spot increases to $33 and the bid also goes up by 50%, the new bid price is around $40.50. That's about a $4 gross profit or 11% pre-tax. My marginal tax rate in my state is about 30% (federal + state) which leaves $2.80.
Yes, that's a net after tax return of 8%, even less than my last example. It's somewhat better for other silver bullion options but you get the idea. The economics of buying physical silver in today's market are awful, except to the die hard believer who is holding it as a permanent hedge expecting $50, $100, $200 or more.
I think silver spot will outperform mainstream asset classes (stocks, bonds, real estate) longer term from current levels. But the difference is that, since these asset classes are in a full blown mania, I can attempt to wait for a much better entry point after a crash. I don't need to have my funds tied up indefinitely.
You buy today at $36+
Analytically speaking, I would be buying from Scotsman in St. Louis @ $32.86 according to their online trade sheet.
Further, their buy price for Qty=10 is $29.56/ea., the actual spread (at least at Scotsman) is "only" $3.30/oz.
I'm not done with my response, but I'm slow on the draw tonight, and I haven't had time to ponder the rest of the equation you laid out. Maybe there's another justification for silver but how many more justifications do you need at this point?
There's a good interview by Dunnagan on "liberty and Finance" with Bill Holter from JSMineset. Bill reps for Miles Franklin who deal in bullion commercially. Has anyone here in the forum ever dealt with Miles Franklin?
I knew it would happen.
The spread of $3.30 is a 10.6% spread ($32.86+$29.56/2) = $31.21 average price.
I haven't kept up with day to day silver prices other than as a portolio component, but I do seem to recall buying 90% silver coin at spreads of 3 to 4%. So, an increase in the premiums being charged reflect not only liquidity (and it does, I'm sure - but it also reflects big reluctance on the part of any sellers, in this market. No doubt supply is tightening while demand is waking up. The paper price doesn't hold much weight with me, so there's that.
I knew it would happen.
If the premium increases by 50% linearly along with the spot price (and we don't know that without tracking it over time), then Scotsman's sell of $32.86 increases to $49.29 and their bid increases from $29.56 to $44.34, a new premium of $4,95.
We don't know that the spread increases linearly, in fact it depends on what the market is doing. It could increase or decrease, so I don't necessarily agree with an automatic linear 50% increase in the premium if spot increases by 50%. Maybe it does, maybe not but let's go with that anyway.
So, your gross profit increases linearly by 50% along with spot and premiums, from $29.56 to $44.34, a gross profit of $14.78 and an after tax net profit number of $10.36, a 35% profit. The tax numbers work the same as with any other speculation.
I guess that my position is that waiting for a better entry point doesn't depend on spreads or premiums because they change, and that if you perceive the spread and premiums on silver to be too high, you should wait - but there are no guarantees that the situation won't get worse before it gets better.
If you think that other asset classes are in full-blown mania right now, why would you put more money at risk in them unless it's money that you can afford to lose in a mania speculation? Silver is no different than any other speculation except that the spot price isn't indicative of what the retail market is doing. Spreads and premiums are simply part of the real pricing, and that's what is tripping you up, I think. Spreads and premiums continue to change, but you can be sure that they change directly in response to the real market.
I don't hold silver expecting big profits although that may happen. I hold silver because the mismanagement of our monetary system is crazy bad, and most other assets that are subject to paper financial vehicles are way too risky now.
Everything is a speculation. Silver is a physical asset that is manipulated by derivative paper positions, and those paper contracts aren't sustainable in my opinion. That's your justification, not a big potential upside - although that potential big upside is always a possibility. We've seen that with silver a couple of times before now. Just my opinion.
P.S. - Silver is taking another paper pounding this morning. In any sense, if you can still get your hands on physical silver, it is a little cheaper today.
I knew it would happen.
i wish i had the foresight to stack sheets of plywood 2 years ago.
I could have quadrupled my investment.
It goes without saying i wouldnt have paid any tax on the proceeds
i still think its funny some of you are completely against everything the government is doing but rush out and pay tax on your bullion sales even though inflation stole the actual gain away before you could even book it
Unfortunately it depends how you sold your bullion. If payment was made on eBay or PayPal, there is a 1099 in your future. If sold to a local store, then your ID and sales info are conveniently store for the tax auditor to review (which is quite easy - you just ask for a export from their accounting software and sort by name then sub-total and see you is worth the effort of pursuing). Yes you can sell for cash - but if you stacked any volume, how are you going to spend the money?
Drop your britches.
.> @taxmad said:
how are you going to spend the money?
Barter for the barbarous.
Knowledge is the enemy of fear
Okay - then how are you going to spend your barbarous relics when the time comes. Eventually you will need to have dollars - and likely you will be dealing with a company that won't take thousands or tens of thousands in cash.
I wont need to trade for dollars if i already have dollars.
And if the time comes, it wont be dollars that i need.
Knowledge is the enemy of fear
I think I'll order 4 more of these for $100 less today
House of pain.
I haven't bought silver in a long time. I have checked APMEX which was somewhat but not much better when I did.
I don't ever recall a spread of 3% to 4% for silver, not even close. That's been the spread on 1oz gold every time I have looked, except during COVID. CNI has a spread of 4.5% when I did my last search for silver on their website.
I agree that US based coin collectors and metal bugs are hesitant to sell their stash, especially since at least a large minority probably have noticeable "paper" losses by buying at higher prices since 2011. But it doesn't explain the spreads. If the spreads were lower by market makers raising their bids, then this should increase supply, somewhat.
Agree. I was using it to simplify the example which I admit was imprecise. Since I still expect a deflationary asset crash, I'm expecting both the spot price and the spreads to decline.
The "all in" price is more important, but the spread and premium still matters. It still impacts the net result.
I don't own any of the asset classes I named. It's also not a matter of "if". There is no question these three asset classes are in a full-blown mania (the worst ever), except to someone who doesn't know financial market history or believes "it's different this time", such as a ridiculous "new normal". It's a combination of ignorance and denial. Denial because most people refuse to believe it because it's contrary to their personal preference.
I don't think I'm tripped up about anything. The OP asked about the factors "holding back" silver and IMO, it's one reason. It isn't the only one, but it is one.
My initial post was not singling anyone out. I agree with your reason but don't believe buying and holding anything is going to be successful in wealth preservation which I presume is your primary objective. Unfortunately, in the casino financial system where we all have to "play", the only way for most to win is through speculation.
Silver isn't overpriced historically, relative to everything else. That's the most logical way of evaluating it, not against fiat currencies but real stuff. The problem with both gold and silver is that it's a "dead asset" which doesn't produce any cash flow which means the only way to use it to preserve or increase your wealth is through good timing of your purchases. Anyone who bought it any time in the 90's up to early 2000's or soon after late 2008 has succeeded. Anyone who bought it at or near the 1980 or 2011 peaks has lost big. Many other entry points (like the 2008 peak of $21) make it "dead money".
This thread isn't about gold but objectively, it is relatively historically overpriced, measured by its relative value to other physical goods and some (or many) services. This doesn't mean it cannot increase anyway but longer term, I expect it to lose noticeable relative value.
I agree all supposed "investment" is speculation.
I disagree there is any manipulation through paper substitutes, not where it differs from manipulation of any other commodity. I disagree because I don't believe anyone other than metal bugs and coin collectors see it as a money substitute as it evident with gold. In India, they do or may care but these people don't have other options. No one else gives a hoot about the price.
Gold's price since 1971 also contradicts this belief. Gold is a lot more important than silver, other than as an industrial commodity. No one can deny it, yet its price has increased a lot more. Those who are supposedly suppressing the price cannot keep anyone from buying the physical metal. This is a belief in a form of price control. If this actually existed and it's really as underpriced as it's advocates claim, there should not be now or in the past (since the 80's when I first heard this claim at minimum) a single ounce to be bought. That nothing of the sort has happened (except during temporary shortages of the fabricated blanks) better illustrates that the metal advocate is irrelevant as a buyer of last resort.
This completely ignores the brainwashing most people are under and have been under their entire lives due to media and other fake realities being portrayed. Programming 101. If you have time, study how manipulated our thoughts and ideas truly are. It was extremely obvious during the last 2 years of the plandemic...
How does it work with Gold and Silver? Shoot the price down during HYPERINFLATION. The worst inflation of our lives is currently happening and commodities are being suppressed. It causes panic, FEAR, and running from the truth. The truth is right in front of you. PHYSICAL SILVER AND GOLD.
PleaseWakeUp