Is Gold and Silver a good place to put your money at these levels?

BrianKuszmar

After being in the precious metals markets since 1977 and watching it closely I have come to the conclusion Imho that Sub $500 gold is for the history books- As is Sub $8 silver-

If platinum is indeed at its resting place of 1000-1200 range, look for Gold to be at least in the $750-$850 range and Silver to be trading at $16-$19 range.
within the next 2 years. I am pretty conservative on my times also as I never expected gold/silver to rise this fast this year.

I have been telling my customers to buy whatever they can at sub $700 levels, picking bottom is nearly impossible so dont try, if you nailed it great.
Gold Imo is at a no brainer levels to make money in a relatively short time, silver is same way but you have to have a stronger heart to live thru the wild swings.
Platinum is Imho at or near its peak, unless all metals explode again, I think platinum is at it's level...

Why? This market is driven by a pure and realistic supply and demand factors, particulary silver. The wild swings are a result of the paper traders in the market etc..the longer term trend is a legitiment effect of a rising global physical demand (particulary for silver) and a limited above ground supply.

All in all, I would say any Gold or Silver you buy at a fair mkt value at sub g$700 sil$13 with the intent of holding up to 2 years could provide a very nice profit and at the very least a secure way to preserve some wealth.

Hope everyone making money and having fun, at least having fun ;')

Regards to all
Brian Kuszmar
2nd Generation Coin & Currency Dealer
954-493-8811

itsnotjustme

I think your first line likely has two wrong conclusions.

BrianKuszmar

<< <i>I think your first line likely has two wrong conclusions. >>



Interesting, What do you base the opinion on?

Thanks for reply!

Regards to all
Brian Kuszmar
2nd Generation Coin & Cyurrency Dealer

DeepCoin

Metals are a minefield for the uninitiated. I would never recommend them to someone who did not understand the fundamentals of the market. As much as coins should be a hobby, and not an "investment", I would suggest for the masses that buying generic metal is fraught with danger. If you plan to spend substantial time and effort on research, including what is really driving some of these markets including derivatives ... etc, then I have a different answer, but to recommend metals to the average person would not be in their best interest IMHO.

itsnotjustme

My opinion is based on the magnitude of the price swings over the years. With both gold and silver being significantly higher than for most of the past 10 years, I think there is a down side risk. Regarding supply and demand, I have an actual question.... does supply include "reprocessed" metal? Something like 85% of the gold ever mined is still in circulation (or use...). The newly mined supply is straight addition to the existing gold.

BrianKuszmar

Interesting thought, though metals are no different than many other investments so would the prudent thing to do is have them stay in cash or a feeble maney mkt or CD acct?

I would easily say metals is probably one of the safer bets (at this time) in the investment field, unfortunately most investment folks havent a clue about anything when it comes to metals.
Also, based on the logic of studying a investment inside out is smart and sounds fine unfortunatly most people do not, they rely on the opinions of expetst and so called experts. Hopefuly they find someone that knows what there doing and that being the case Gold and Silver would be a fine investment at these levesl.

Regards
Brian Kuszmar

BrianKuszmar

<< <i>, I have an actual question.... does supply include "reprocessed" metal? Something like 85% of the gold ever mined is still in circulation (or use...). The newly mined supply is straight addition to the existing gold. >>



When above ground supply numbers are quoted,I beleive it does. Anyone want to confirm this..

Regards
Brian Kuszmar

Longacre

I don't do metals. A well diversified stock portfolio would probably do you better over the long run. If you wanted to put a little something in metals, that is fine. I think Saintguru might have some good comments to this thread.

BrianKuszmar

<< <i>I don't do metals. A well diversified stock portfolio would probably do you better over the long run. If you wanted to put a little something in metals, that is fine. I think Saintguru might have some good comments to this thread. >>


Well put-Diversified was what I did not include in my statements. Absolutley agree, Metals should be a part of the investment egg along with a nice mix of other investments.

Which brings up how much. I believe 10-15% and maybe 20% if your real bullish is a good move right now.

What think gents?

Regards and Thanks for nice replys

Brian Kuszmar
2nd Generation Coin & Currency Dealer

CarlWohlforth

<<Interesting thought, though metals are no different than many other investments so would the prudent thing to do is have them stay in cash or a feeble maney mkt or CD acct?>>

Metals are very different from many other investments. They produce no income.

There is enough gold above ground to keep jewlers busy for many years. There is a lot of metal in the ground. If demand keeps the price high mining companies will invest in bring more metal above ground.

Once you have reached a certain level in your savings/investments it seems reasonable to put a small percentage of your money in commodities. One should certainly have enough cash or money markets funds to take care of expenses for many months in case of emergency. Most of my commodity money is currently in oil stocks. I recently sold my gold. I would buy some back if gold goes down substantially.

BrianKuszmar

<< <i><<Interesting thought, though metals are no different than many other investments so would the prudent thing to do is have them stay in cash or a feeble maney mkt or CD acct?>>

Metals are very different from many other investments. They produce no income.

There is enough gold above ground to keep jewlers busy for many years. There is a lot of metal in the ground. If demand keeps the price high mining companies will invest in bring more metal above ground.

Once you have reached a certain level in your savings/investments it seems reasonable to put a small percentage of your money in commodities. One should certainly have enough cash or money markets funds to take care of expenses for many months in case of emergency. Most of my commodity money is currently in oil stocks. I recently sold my gold. I would buy some back if gold goes down substantially. >>



True in some sense, really though, when you figure in cost of living, dollar flucuations etc. Do they really produce an income or is it a wash?

Unfortunately quoting the jewelry business as an important factor in the price of gold is a fallacy that is perpetuated by many folks that have never studied the gold market and is a source very prominently quoted bt stock anylist and the press folks that have no concept of the gold mkt. Gold is money- Jewlers have an insignificant impact on the Gold mkt, now in India and such where it is made into jewelry it is viewed more of an investment in ones wealth as opposed to ornamental.

Silver is a different story, after many years of not mining silver the Silver mines have at least a few years of production to even make an impact at these levels.

Appreciate the reply Karl-

Regards
Brian Kuszmar

RedTiger

My opinions: everyone with wealth should have some money in precious metals or similar hard assets. I suggest 3%. Anything over 10% in metals is excessive and not for an average person. Most amateurs do poorly when they try to time the markets. Most are far better off accumulating small amounts over time (dollar cost averaging). Anyone reading a coin board for investment advice is in over their heads.

Today is not a low risk entry point (again my opinion), there will be safer times to buy in coming days.

cladking

<< <i>My opinions: everyone with wealth should have some money in precious metals or similar hard assets. I suggest 3%. Anything over 10% in metals is excessive and not for an average person. Most amateurs do poorly when they try to time the markets. Most are far better off accumulating small amounts over time (dollar cost averaging). Anyone reading a coin board for investment advice is in over their heads.

Today is not a low risk entry point (again my opinion), there will be safer times to buy in coming days. >>



I strongly agree and this is the basis of my bullish stance.

Commodity prices are going higher because of real scarcities. Another way of saying
this is there is a disproportionately high amount of yens, rubles, and dollars in relat-
ionship to the amount of commodities in the world. This disproiportion itself is infla-
tionary and people are likely to start weighting portfolios far higher in metals and real
assets as inflation increases. This, too, is inflationary to some degree.

At the current time the conventional wisdom is that investors don't need metal so there
is little demand for it. As inflation continues and financial assets weaken there will be
more of a move into commodities and prices can well soar.

When the conventional wisdom is that you should have at least 20% gold in your port-
folio then you'll know it's time to start getting out.

techeff

Metals are very different from many other investments. They produce no income.

BrianKuszmar

<< <i>My opinions: everyone with wealth should have some money in precious metals or similar hard assets. I suggest 3%. Anything over 10% in metals is excessive and not for an average person. >>



I would say that is a very conservative number and probably most correct for a person that wants very limited risk/down side.
Imo %10-%15 is a smart move for someone that is more bullish in metals, is not using there under funded retirement fund, and understands with higher potential risks may come higher potential gains.

Metals at the sub$700/$12 imo have a very good upside and a fairly limited downside med/long term. I gues you could say I am bullish <grin>

Providing the above statements are followed let me add(edit) that as far as what percent to be in at 3%-20% the only right or wrong answer will be proven by time and how they performed.

I like the topic content and opinions, Thanks guys!

Regards
Brian Kuszmar
2nd generation Coin & Currency Dealer

CarlWohlforth

<<Metals are very different from many other investments. They produce no income>>

Metal just sits there. CDs produce income. When you "invest" in metal you own something heavy. When you invest in a CD you get paid for the use of your money. When you buy a stock you should get a share in the profits of the underlying company. When you buy rental property you collect rents.

If inflation happens while you own a CD you end up with the same amount of money you started with. You also collect interest. However the money you end up with will purchase less due to inflation. Inflation should increase the price of metal so it can be a good hedge against inflation.

I agree with RedTiger and cladking.

HonoluluDude

<< <i>
Metals are very different from many other investments. They produce no income.
>>



Yeah but they have intrinsic value, which paper investments don't have.

CarlWohlforth

<<Yeah but they have intrinsic value, which paper investments don't have.>>

The intrinsic value of metal is its value in industry. The value people assign to gold beyond that is much like the value people assign to paper assets.

Personally I'd rather own land than metal. At least I can grow food on it. I know it is unlikely more land will be produced. Now that is intrinsic value to me.

fishcooker

The answer depends on the individual circumstances, but I submit that 3% or 5% of a portfolio is a ridiculous amount for the average investor to invest. It isn't enough to make a difference - even a brilliant investor who gains 100% on his 3% investment still only made 3% at the portfolio level.... something I do every 7 months in my silly money market fund.

I think metals will have a tough time as interest rates and inflation rise. Too much opportunity cost owning metal vs earning income.

techeff

I know it is unlikely more land will be produced.


They've produced a lot of new land in Hong Kong over the past couple of decades....

EricSan

Looking at this in terms of supply and demand, China is a very large, up and coming sink of bullion of all flavors and colors as it becomes more "westernized." Both "utility" metals (zinc, copper, etc) and "bauble" metals (silver, gold, plat - which also have scientific utility) are likely to continue to increase in price (an interesting parallel is the price of gas). China now imports nearly twice as much zinc as it used to export just a few short years ago - its exports have nearly stopped. I see nearly all metals continuing to rise in price over the next several decades. Silver, Gold, and Platinum are likely to be the biggest winners. Sure, there will be bumps along the way, but overall I see large increases...

Just my humble opinion...

Eric

BrianKuszmar

<< <i>The answer depends on the individual circumstances, but I submit that 3% or 5% of a portfolio is a ridiculous amount for the average investor to invest. It isn't enough to make a difference - even a brilliant investor who gains 100% on his 3% investment still only made 3% at the portfolio level.... something I do every 7 months in my silly money market fund >>



Very interesting point regardless of what your investing in, 3% may be insignificant? At what level does it become profitable, 100% return of your 5%? more?

Hmm. Ok, what think gents?

Glad I have the time to chat, normaly never do, Store so quiet today the only guy in was a blind guy who came in the wrong door. For real....heh

Regards
Brian

relayer

Gold...

As a commodity $580

As a currency $640

As a measure of inflation $690

As a crisis metal $750

Take your pick.

Baley

Diversification. Bullion, as an asset class, I like at 5 or maybe 10% of net worth. Collectible coins for me are another 10-15%.
The remainder is pretty evenly divided among real estate, growth stocks (particularly health care companies), and cash/money market/bonds.

so Yes, gold and silver are a good place to put SOME money. Not none, and certainly not all of it.

Jcarney

<< <i>even a brilliant investor who gains 100% on his 3% investment still only made 3% at the portfolio level.... something I do every 7 months in my silly money market fund. >>



I get your point, but you're sorta mixing apples with oranges there. You're comparing your total portfolio return with only a 3% slice of the "brilliant investor's" portfolio. His 97% slice is probably at work somewhere too.

BrianKuszmar

One other thing I figure I would throw into the mix.

What does everyone think of historic ratios on metals? They seem to be quite out of whack, particularly with Platinum vs. gold/silver.
And out of all the metals commodities, which have had the smallest percentage increases? Sorry, don’t have the answer but maybe somebody here does? .

Regards to all
Brian Kuszmar

RedTiger

<< <i>The answer depends on the individual circumstances, but I submit that 3% or 5% of a portfolio is a ridiculous amount for the average investor to invest. It isn't enough to make a difference - even a brilliant investor who gains 100% on his 3% investment still only made 3% at the portfolio level.... something I do every 7 months in my silly money market fund.

I think metals will have a tough time as interest rates and inflation rise. Too much opportunity cost owning metal vs earning income. >>



Feel free to post your own suggestions, there is no shortage of opinions. Opportunity costs must always be figured in. That is one reason to limit it to 3% and hope you never have to cash that in. 5% interest on 3% will cost a person 0.15% a year over time in opportunity costs--not even noticeable to the average person. As one of Warren Buffett's board members put it, his1.5% investment in silver is [was] like his playing bridge, almost like a hobby, that is not significant enough to make any difference to overall performance of the fund. [I was really surprised that Buffett sold his silver for basically a break even profit, factoring in opportunity costs.]

Keep in mind, that 3% is for an average person, who may have a few mutual funds and doesn't want to get into heavy duty research or technical trading. 3% is basically insurance against end of the world scenarios. I'm talking about things living Americans have never seen, such as a change in government. In times like those paper money might worthless due to a change to a new currency. Deeds to property may not be honored. The stock and bond markets no longer exist in any modern form. These scenarios are extremely unlikely. 3% is plenty to pay for insurance and will be enough to start over if the end of days come. Of course if someone's net worth is $10,000, $300 isn't going to make much difference one way or the other. That's why I prefaced my suggestion for "wealthy" individuals.

I am also an advocate of diversification. Again, for the average person, proper diversification usually lowers risk and raises returns. 5% in any single investment, unless it is primary residence real estate, is about the reasonable limit for diversified portfolios. So 5% in actual metals, plus 5% in metal funds or stocks would be the most I could see suggesting. Again, this is for average people. People who want to buy more are certainly free to do so, but they must do their due diligence and watch that basket very carefully. Even with that, it is not something I would suggest.

Elcontador

Markets for precious metals and oil are driven by speculation, not demand. That's all you need to know.

There is plenty of both of them around. Read in either the Economist or Barron's that for every ounce of precious metal in industrial use, 13 is owned by a speculator.

A well diversified portfolio should have a little of each. How much depends on your bullish or bearish outlook. I think your best bet is an ETF to cover each investment, versus owning the metal(s) or an option on petroleum, outright. This way, you will generate some income, in addition to having minimal holding costs of such investment(s).

Non-bullion coins are the worst way to hold precious metals, due to markups plus additional potential for market manipulation of said coins.

fishcooker

Very interesting point regardless of what your investing in, 3% may be insignificant? At what level does it become profitable, 100% return of your 5%? more?

10% of the portfolio, as a minimum. That way I only need 10 good ideas.

If someone has several million dollars, I could see playing with 3%, but I won't have to worry about that until later....

roadrunner

There is of course plenty of metals to go around, if the demand equation stays the same. Now if more than say 1% of the population
starts to hanker for gold (like they did for dotcoms), that 1% could go to 5%. There would not be enough metal to go around at anywhere
near current prices. There already is NOT enough silver to go around if everyone demanded physical rather than paper silver.

Also remember that a house (or stocks) that are decreasing in value earns no money either.

roadrunner

BrianKuszmar

The day this post was started gold and silver July 27, 2006 am 634.20 pm 639.00 am 11.2200

Today-current ny gold $653. ny silver $12.53

Anyone think we will see sub $10 silver and sub $600 gold soon or again?

Regards to all

Brian Kuszmar
2nd Generation Coin & Currency Dealer
Lbts, Fla. 33308
954-493-8811

cladking

<< <i>The day this post was started gold and silver July 27, 2006 am 634.20 pm 639.00 am 11.2200

Today-current ny gold $653. ny silver $12.53

Anyone think we will see sub $10 silver and sub $600 gold soon or again?

Regards to all

Brian Kuszmar
2nd Generation Coin & Currency Dealer
Lbts, Fla. 33308
954-493-8811 >>



Gold could drop to under $600 but I wouldn't hold my breath and it wouldn't stay there long.

I don't believe gold is ready to make its move yet because it will require more change in widely
held beliefs. This will occur as more money is pumped into the economy.

mrearlygold

As interest rates increase the cost to carry these metals increases and the preferred investment becomes CD's and the like.

HonoluluDude

<< <i>
Anyone think we will see sub $10 silver and sub $600 gold soon or again?
>>



Nope.

Fed has paused and the dollar is losing its lunch again.

coynclecter

<< <i> Metals are very different from many other investments. They produce no income

Metal just sits there. CDs produce income. When you "invest" in metal you own something heavy. When you invest in a CD you get paid for the use of your money. When you buy a stock you should get a share in the profits of the underlying company. When you buy rental property you collect rents.

If inflation happens while you own a CD you end up with the same amount of money you started with. You also collect interest. However the money you end up with will purchase less due to inflation. Inflation should increase the price of metal so it can be a good hedge against inflation. >>

<<

The real question here is "what is your faith in the future value of the US dollar? Not next week but in 5- 10 -15 years. Any less time is speculation. If the dollar falls (inflation) faster than your "investment income" then you would be better off with the gold ( look at history of the dollar and the current cost of the war and the deficits). In addition, gold won't go BK like Enron did. Silver is a different story and there is a real shortage that should make "speculation" a good bet.

Metals should be a part of every portfolio (10-25%), but just a part. A large percentage or holding for a short period (less than 5 years) is really gambling. However considering how this gov't loves to print and spend it may not be such a bad gamble.

BrianKuszmar

So far so good, many of us were right so far in this older thread..

Lets see where we go.

Regards

RedTiger

<< <i>you buy at a fair mkt value at sub g$700 sil$13 >>



So far folks that bought near last year's highs are still underwater. Those highs, especially for gold are going to be resistance levels.

Sentiment is mixed here. Some folks seem willing to sell bullion related coins for under melt (see recent Statue of Liberty set thread, and others). I take this as a sign that some folks are trying to "sell high." Folks seem reluctant to bid up to full melt at current price levels. I shade this as bullish. Longer term, I see metals much higher, however, the most likely scenario is a long base.

Again, I'll repeat that the average collector has no business trying to time these markets. Best to buy and sell in a steady manner. In my opinion, everyone with significant net worth needs to have a small percentage of that money in precious metals. My suggestion is 2% or 3%.

BigRed

<< <i>

<< <i>you buy at a fair mkt value at sub g$700 sil$13 >>



So far folks that bought near last year's highs are still underwater. Those highs, especially for gold are going to be resistance levels.

Sentiment is mixed here. Some folks seem willing to sell bullion related coins for under melt (see recent Statue of Liberty set thread, and others). I take this as a sign that some folks are trying to "sell high." Folks seem reluctant to bid up to full melt at current price levels. I shade this as bullish. Longer term, I see metals much higher, however, the most likely scenario is a long base.

Again, I'll repeat that the average collector has no business trying to time these markets. Best to buy and sell in a steady manner. In my opinion, everyone with significant net worth needs to have a small percentage of that money in precious metals. My suggestion is 2% or 3%. >>


WOW! 2 or 3% isn't much. What about people that don't have significant net worth? Should everyone have a little invested in silver and gold or other PMs?

basestealer

5-15% is a more appropriate figure. Doesn't matter what your net worth is, because everyone has to start somewhere. It's not where you are now, but where you wish to be that matters. Precious metals aren't really an investment as much as they are a storage of wealth and a hedge against inflation (the falling dollar, which occurs year after year regardless of the economy).

Goldeagle1981

The only precious metal (platinum, gold, silver) is affected by industry demand may be platinum. The prices of precious metals always go up and then come down. When silver reached $50 an ounce and gold reached $800 an ounce in the late 70s, everybody though they would keep going up. Wow, they came down pretty quick. There is no one single factor affects precious metal. Sometimes, when there are wars or inflation, precious metal priece will surge. However, recently precious metal prices seem to be immune to even wars and inflation. Very often, when oil price and interest rate go up, you will see precious metal prices rise. However, sometimes none of those rules hold true. The only reason the precious metal prices seem to be so high to us in the U.S. is because the U.S. dollar is so weak. In Canada, since the Canadian dollars are so strong, the prices of precious metals will seem to be a bargain to them. As long as we are depending on oil and keep spending money on the Iraq war and nobody starts save their money, the prices of precious metals will not come down any time soon. However, I believe we will see gold price drops back to $400 and silver drops back to $6 in a year or two and then the whole cycle will repeat itself. It is harder to predict on platinum.

RedTiger

<< <i>WOW! 2 or 3% isn't much. What about people that don't have significant net worth? Should everyone have a little invested in silver and gold or other PMs? >>



I see it as insurance. If folks have done their due diligence and want more, that is fine, but not for the average novice or average coin collector that knows little about these markets.

For folks without any net worth (under $10,000 USD or six months gross pay whichever is higher), I don't think it matters much. Better to pay off credit cards, put six months salary into a money market account and bank CDs, fully fund their 401k and IRAs and then worry about other investments. All the above steps will be more useful than spending any time thinking about the movements of gold and silver.

Goldeagle1981

The problem of buying bullion (coins) is that while they are liquid it is not easy to convert them into cash especially in an emergency. Even in some big cities, there are no readily available outlets for you to sell your bullion coins. Most of the time you have to sell them to your local coin ship, and unfortunately most of the time you will take a big hit, i.e., you will get below their bullion worth. However, saying that, I strongly urge an average person to have at least $100 face value of 90% silver coins. You can always purchase this either online or call a reputable dealer and should obtain them pretty close to their silver worth. Since there is about 0.72 troy ounce of silver in each $1 face of 90% silver coins, if silver is at $13 a troy oz., then each $1 face of 90% silver coins will be worth about $9.36 ($13 x 0.72). In short, each silver dime worth about 94 cents; the quarter is worth about $ 2.34 and the half about $ 4.68. Just about a year ago, when silver is around the $8-9 range, I have been buying 90% silver in our local coin club's auction, I will pay 6 times face for any 90% silver coins. Recently, when silver reachs the $12 and $13 range, I was still able to buy some at 7 times face. Ebay will also be a good source. If you have any bank contacts, you can ask them to keep an eye on any dimes, quarters or halves that are 1964 or older for you. I actually found 8 silver quarters in a local bank for face values a few years ago. When silver price reached $50 in the 70s, I went to the local bank (in a small town at that time) and searched for both 40% silver halves (1965-1969) and 90% silver halves (1964 and before), the bank teller told me I would be wasting my time, however I found a total of about 20 90% silver halves and almost 50+ 40% silver halves. I normally do not sell my silver coins unless silver reaches very high premium, I just steadily buying it. I know of a friend who keeps buying 1 oz. Kugerrands, one at a time, and ended up with over 200 pieces of them. She loaned it to her brother when gold hit $800 an ounce. His brother sold the coins and used the money to pay down payment for a house in San Francisco. Later, when gold price dropped, he returned the same number of gold coins to her. This is a true story.

BrianKuszmar

<< <i>The only reason the precious metal prices seem to be so high to us in the U.S. is because the U.S. dollar is so weak. It is harder to predict on platinum. >>



That statement assumes that the US is still the only800 lb gorilla in town and we control the gold mkts-Maybe once true-maybe. Industrial demand for metals is the underlying factor for silver and somewhat effects gold too, not as much though.

Platinum is controlled bu PGI group, the Debeers of the Platinum world..

Regards

basestealer

<< <i>The only precious metal (platinum, gold, silver) is affected by industry demand may be platinum. The prices of precious metals always go up and then come down. When silver reached $50 an ounce and gold reached $800 an ounce in the late 70s, everybody though they would keep going up. Wow, they came down pretty quick. There is no one single factor affects precious metal. Sometimes, when there are wars or inflation, precious metal priece will surge. However, recently precious metal prices seem to be immune to even wars and inflation. Very often, when oil price and interest rate go up, you will see precious metal prices rise. However, sometimes none of those rules hold true. The only reason the precious metal prices seem to be so high to us in the U.S. is because the U.S. dollar is so weak. In Canada, since the Canadian dollars are so strong, the prices of precious metals will seem to be a bargain to them. As long as we are depending on oil and keep spending money on the Iraq war and nobody starts save their money, the prices of precious metals will not come down any time soon. However, I believe we will see gold price drops back to $400 and silver drops back to $6 in a year or two and then the whole cycle will repeat itself. It is harder to predict on platinum. >>


I strongly disagree with that assessment. Silver is by far the world's most industry-used metal. And unlike platinum and gold, silver isn't recovered once the product has expired. I think industrial demand is driving the price of silver, rather than the other two metals. The amount of platinum used in any product is so insignificant that I don't think it would make a dent in the manufacturing costs if platinum were to double. But with silver, that's not the case.

BrianKuszmar

Metals have done well since this thread was started!

Big swings this week, silver held up nicely thus far.. Ps. my last post on this thread I mention 800lb gorillas, basedd on yesterdays global financial mktsLooks like the chinese are the 800lb gorillas! maybe even 850lb?

Regards!

ziggy29

<< <i>Big swings this week, silver held up nicely thus far.. Ps. my last post on this thread I mention 800lb gorillas, basedd on yesterdays global financial mktsLooks like the chinese are the 800lb gorillas! maybe even 850lb? >>

Clearly the financial markets are operating under the assumption that China will be a pre-eminent economic power in the 21st Century. Some have even taken to calling it "The Chinese Century" much as many called the 20th the American Century. Could be a bit premature, but market watchers know better than to fight the trend.

So more than ever, if China sneezes, global markets will get a case of the flu.

jmski52

Inflation is causing a perpetual and across-the-board rise in prices, which affects the precious metals in a general way, too. Over the years, the method that the government uses to report inflation has continued to change, and the inflation index doesn't reflect the true rate of inflation, compared to 1974, for instance.

The index was once a "basket" of goods & services, which was changed to a different "basket" after a few years. Then the index was changed to measure only the "core" rate of inflation, by excluding some key factors, such as heating oil and gasoline (I think it was these, anyhow).

Then, they began to tinker with the formula some more by first excluding the M-1 Money Supply, then M-2, and now, they don't even factor in the M-3 Money Supply. The official measure of inflation has become disconnected from the actual money supply and from the actual costs of living. The U.S. is now the only country which doesn't consider M-3 in determining inflation costs.

If inflation is understated in that way, government entitlement payouts are lower, because they are pegged to the new CPI instead of what it used to be. By the same token, if wages and salaries are higher, more people will be in higher tax brackets, so the government can raise more money without raising tax rates. Pretty diabolical, eh?

It's great, if you're a politician who is worried about how to buy votes with porkbarrel projects for your district - more money to throw around, without having to justify a tax rate increase. More money to reward the special interests who are making your own life easier! And no need to legislate a tax increase (out in the open, such a tricky proposition!)

A silver dime will still buy about what it would buy when I was a kid. A paper dollar will not. Gold or Silver pay no interest, it's true - but there is a certain amount of risk in holding any depreciating asset - just ask any Bondholder when inflation is on the rise.

My point is that it's all relative. Stocks rise and fall. Precious metals rise and fall. Interest rates rise and fall. Paper can be manipulated, and so can the prices of precious metals. The salient difference is that if you are physically holding gold, silver or platinum, the relative value of your holdings remains in place, even if your paper assets disappear one day. Derivatives and computers are a potent mix.

I would rather trust my own judgement, than that of politicians who are not looking out for me. I can think of hundreds of examples why I won't put much faith in the politicians. And THAT's the best reason I can imagine to own precious metals.

MrEureka

Is Gold and Silver a good place to put your money at these levels?

No. We're talking about meaningless lumps of metal. In the long run, it's a moronic investment. Why should a lump of metal appreciate in real terms? If you're going to invest, use your head and be creative. And don't come here looking for investment advice. We're coin weenies, not financial gurus.

TwoSides2aCoin

I've been in metal for a while and my friends who recycle have enjoyed an incredible return in the last few years with base metals. Metal continues to climb as will the mining equipment and mine safety products that are necessary to extract and process it.
As an investment, metal is a prudent choice. After all, it's Y-EYE-WORK


Oh, that reminds me.... The WORLD SERIES OF TRADING starts in just a few hours

Got Coins ?

DeepCoin

ALL metals have been increasing over the past few years. Will this trend continue, will nickel as well as copper and gold and silver and platinum....etc. continue to rise in value? While there has been a rise, I would not put any signficant amount of my funds in these "investments".

I am in the camp that lumps of metal in your safety deposit box produce no output. It is pure speculation, sometime you win, sometimes you lose, but either way for someone who does not trade it on a daily basis it is DANGER. If you need a hedge, buy Treasuries.

roadrunner

No. We're talking about meaningless lumps of metal. In the long run, it's a moronic investment. Why should a lump of metal appreciate in real terms? If you're going to invest, use your head and be creative. And don't come here looking for investment advice. We're coin weenies, not financial gurus.

Consider the truly meaningless lumps of metal (rare coins selling for absurd premiums) and meaningless lumps of paper (FRN's) or how about meaningless lumps of wood (antiques, decoys, vintage guitars for example). Why should these useless lumps increase in value? Use your head and think outside the box. Commodity bulls have occurred during periods of great unrest (wars). What's occuring now? To those doubting Thomases please post charts showing a decline in the multi-year gold market trends to support your positions. "In the long run.......everything is a poor investment." Wait long enough, 10...20...50...100 years, etc. and eventually EVERYTHING basically tanks for long periods or vanishes entirely (ie most companies in the 1928 stock indicies). Gold will tank for extended periods, it will not however vanish in our lifetimes.
Stocks will tank for long periods......and most will eventually vanish.
With few exceptions.....hold them long enough...and they will become worthless....just like an FRN or US savings bond.

Read my lips: there are no true investments, just places to either make money or lose money based on certain driving economic factors and speculations. Between scamming hedge funds, Govt manipulation and brokerages/corporations that cook their books, who gets a fair shake? Little guy holding stocks?

The forum has pooh-pooed gold and silver since the days of Dollardude. Gold and silver have outperformed the stock market by far since 2001. This economic cycle will continue until the commodity boom is over (when Asian growth slows considerably).
Commodity cycles have typically lasted 10-17 years (we're in year 6 or 7 depending on how you count it). Good luck with your decisions.

P.S. those that have $20 MS65 Saints in their PCGS Trading accounts will do very well in 2007.

roadrunner