Silver a good Investment or not !!

steamer

MoneyLA

my feeling is silver is undervalued.

from my web site:

article why silver is undervalued

best, Alan Mendelson
www.bestdealstvshow.com

MoneyLA

duplicate removed

ChuckC

So $50 silver not far off?

Steve27

It seems to be undervalued, since gold is over $800/oz (if the 50:1 ratio were to hold, silver should be over $16/oz).

MoneyLA

fifty to one ratio? how about the 17 to 1 ratio we had back in 1980??

cheers, Alan Mendelson
www.BestDealsTVshow.com

steamer

mabe 15.00 by the end of the year if gold keeps going up

Steve27

" how about the 17 to 1 ratio we had back in 1980??"

Are you one of the Hunt brothers?

Steve27

" mabe 15.00 by the end of the year if gold keeps going up"

I can see it hitting $15 even if gold stays level.

fc

i think that gold has given a good run and will settle down quite
soon. I think that silver is priced in the right range and will also
trade at the current levels for the next year.

i would not go crazy and buy a ton at once.

get your feet wet slowly. buy 10 ounces here and there.
get some junk silver below melt.

allow your hoard to accumulate slowly and pay attention to any
large dips.

silver could be back at 12 bucks an ounce in a month...
gold could be back at 750 in a blink of an eye.

just buy what you can afford and set it aside for a long term play.
think in terms of years... not months.

i was just at a coin store today and an older gentleman walked
in and bought 10 ounces at friday's price. I guess he just could
not wait until monday when there will be a large sell off and see
it go below 800.. thus saving almost a 100 dollars if it drops 10
bucks. Keep in mind that is like a small percentage change...

slow and steady is the key. pay attention to the dips.

steamer

that would be nice

roadrunner

I would not necessarily bet the farm on a large sell-off Monday. In fact I would be surprised if it drops more than $6-$10 with a similar increase just as likely imo. Where's the resistance? And who is cashing out? Even a heavy weight like Goldman Sachs who has been the classic short seller over the past 5 years (and PPT favorite broker) now has their LOWEST total short position in years.

Silver is a good enough investment for the short term (several years). What it does from here is anyone's guess, but I think it's safe to say it will outperform the USDollar by leaps and bounds.

roadrunner

steamer

I think gold will see 850.00 by feb. 08

Bear

I would rather have a stash of silver

that a stash of borscht beets.

LindeDad

<< <i>that a stash of borscht beets. >>



Dang Bear anything would be better than them.

But honey would be best.

steamer

I think Silver in a long run will pay off not as much as gold but it will be there

jdimmick

I feel (and dont have the foggiest idea) that silver will stay porportionally lower this time around and not track gold quite as much as it did last year. ?

BAJJERFAN

The only problem is that since it moves so slowly and in small increments, you will have to buy lots of ounces to make any serious money. How much would you have to handle to make $1,000 after expenses [and taxes if you choose to declare your profits]? At a dollar or two an once profit you would need to handle a lot. Personally I wouldn't consider $50 or $100 profit anywheres close to serious money.

cladking

There's less silver in the world than gold and EVERY day there is more gold and less silver.

There's little chance that this can change even if their prices change dramatically. The rate
of depletion of the silver stock is increasing. The rate of increase in gold is slowing slightly.

None of these trends are likely to change in the foreseeable future.

roadrunner

But can't the silver mines ramp up production or drillers find new mines to meet the demand? Isn't that what always happens in economies?

roadrunner

steamer

If gold keeps riseing the economie will drop futher if silver rises the economie wil rise along with the dollar

cladking

<< <i>But can't the silver mines ramp up production or drillers find new mines to meet the demand? Isn't that what always happens in economies?

roadrunner >>



They could if there were any silver mines.

The lion's share of silver production is a by-product of copper
production or gold mining. Supply is a function primarily of the
strenght of the economy and the increase electrical production
in China. Higher gold prices affect silver production to a little
lesser extent.

Deadhorse

Silver has always followed gold in the chart rises. Once gold finds a solid floor, silver then follows with a rise that is nearly always greater in value percentage wise.

I still expect silver to hit $17 in December. That's been my position for over a year and I'll stick with it.

Hell yes it's a good investment. It's a great investment. I think it's a better investment than gold, and I have nothing against gold.

I happen to have a small batch of both of them.

If I told you where I thought silver would be in 2-3 years, well, let's not go there just yet. Let's just say the current ratio of 55-1 is way out of whack.

steamer

<< <i>Silver has always followed gold in the chart rises. Once gold finds a solid floor, silver then follows with a rise that is nearly always greater in value percentage wise.

I still expect silver to hit $17 in December. That's been my position for over a year and I'll stick with it.

Hell yes it's a good investment. It's a great investment. I think it's a better investment than gold, and I have nothing against gold.

I happen to have a small batch of both of them.

If I told you where I thought silver would be in 2-3 years, well, let's not go there just yet. Let's just say the current ratio of 55-1 is way out of whack. >>

steamer

<< <i>

<< <i>Silver has always followed gold in the chart rises. Once gold finds a solid floor, silver then follows with a rise that is nearly always greater in value percentage wise.

I still expect silver to hit $17 in December. That's been my position for over a year and I'll stick with it.

Hell yes it's a good investment. It's a great investment. I think it's a better investment than gold, and I have nothing against gold.

I happen to have a small batch of both of them.

If I told you where I thought silver would be in 2-3 years, well, let's not go there just yet. Let's just say the current ratio of 55-1 is way out of whack. >>

>>

57loaded

i don't feel the ratios apply at all in todays economy.

if it did wouldn't silver be up there in price??

i am becoming a cautious gold bull

DoubleEagle59

If I could only have my money in ONE area only, I'd pick silver bullion. That's how much I like it!!

Coxe

I think silver represents a wonderful opportunity. It appears to be undervalued by disparate measures. It is a veyr useful metal industrially and in dwindling supply (though some might argue that point). It might take up a lot more room than gold, but thta's just how it is. The best part is that it is approachable by both lower budget investors and folks with low risk tolerance. The unit price of 1oz rounds or 90% dollars is low. It can be accumulated over long periods of time and efficiently cost dollar averaged. It's hard to do the same with gold or platinum without an enormous, by many peoples' views, overall investment and exposure. Lastly, in the direst doomsday, backwoods militia fantasy, silver ounces are somewhat ideal as currency to replace that of a defaulted government's fiat. Works well for most types.

Hoodlatch

I think gold will be $880 by February 08.

RedTiger

<< <i>fifty to one ratio? how about the 17 to 1 ratio we had back in 1980??

cheers, Alan Mendelson
www.BestDealsTVshow.com >>



How about 70-to-1 or 90-to-1 when silver was at its lows? Right now the ratio is in the middle of its recent range. To my eye it doesn't show a tradeable trend.

Silver may go higher, may go lower. It has underperformed gold recently, and gold has underperformed oil. There is a lot of silver out there, I would guess billions upon billions of ounces. Just taking the surviving U.S. silver coins probably gets over a billion ounces. Start counting jewelry and silverware and it is many billions of ounces of silver above ground, ready for salvage, just counting the U. S. There are plenty of other countries whose populations have lots of silver tucked away in readily available form. 50 billion ounces of silver above ground, ready for easy use, might be a ballpark figure.

Right now precious metals are mostly tracking the U.S. dollar. As the dollar weakens, the metals go up, as does oil. The dollar is the dog that is wagging the tail. Currency markets are the biggest fish, and all other fish are lower in the food chain (bonds, equities, commodities). For now, where ever the currency markets want to go is where the precious metals will follow. This will change later, but for now it seems to me that the big currency dollar fish is in command.

/edit typos

cladking

<< <i>

<< <i>fifty to one ratio? how about the 17 to 1 ratio we had back in 1980??

cheers, Alan Mendelson
www.BestDealsTVshow.com >>



How about 70-to-1 or 90-to-1 when silver was at its lows? Right now the ratio is in the middle of its recent range. To my eye it doesn't show a tradeable trend.

Silver may go higher, may go lower. It has underperformed gold recently, and gold has underperformed oil. There is a lot of silver out there, I would guess billions upon billions of ounces. Just taking the surviving U.S. silver coins probably gets over a billion ounces. Start counting jewelry and silverware and it is many billions of ounces of silver above ground, ready for salvage, just counting the U. S. There are plenty of other countries whose populations have lots of silver tucked away in readily available form. 50 billion ounces of silver above ground, ready for easy use, might be a ballpark figure.

Right now precious metals are mostly tracking the U.S. dollar. As the dollar weakens, the metals go up, as does oil. The dollar is the dog that is wagging the tail. Currency markets are the biggest fish, and all other fish are lower in the food chain (bonds, equities, commodities). For now, where ever the currency markets want to go is where the precious metals will follow. This will change later, but for now it seems to me that the big currency dollar fish is in command.

/edit typos >>



Total world mining production of silver in recorded history is less
than 30 billion ounces. Huge amounts have been consumed and
every year there is a net 50,000,000 once deficiency between pro-
duction and consumption.

Much of the existing above ground silver is in artefacts that are not
readily available for use in consumer products.

RedTiger

<< <i>

<< <i>

<< <i>fifty to one ratio? how about the 17 to 1 ratio we had back in 1980??

cheers, Alan Mendelson
www.BestDealsTVshow.com >>



How about 70-to-1 or 90-to-1 when silver was at its lows? Right now the ratio is in the middle of its recent range. To my eye it doesn't show a tradeable trend.

Silver may go higher, may go lower. It has underperformed gold recently, and gold has underperformed oil. There is a lot of silver out there, I would guess billions upon billions of ounces. Just taking the surviving U.S. silver coins probably gets over a billion ounces. Start counting jewelry and silverware and it is many billions of ounces of silver above ground, ready for salvage, just counting the U. S. There are plenty of other countries whose populations have lots of silver tucked away in readily available form. 50 billion ounces of silver above ground, ready for easy use, might be a ballpark figure.

Right now precious metals are mostly tracking the U.S. dollar. As the dollar weakens, the metals go up, as does oil. The dollar is the dog that is wagging the tail. Currency markets are the biggest fish, and all other fish are lower in the food chain (bonds, equities, commodities). For now, where ever the currency markets want to go is where the precious metals will follow. This will change later, but for now it seems to me that the big currency dollar fish is in command.

/edit typos >>



Total world mining production of silver in recorded history is less
than 30 billion ounces. Huge amounts have been consumed and
every year there is a net 50,000,000 once deficiency between pro-
duction and consumption.

Much of the existing above ground silver is in artefacts that are not
readily available for use in consumer products. >>



Current silver demand runs about a billion ounces a year. Current mining is about 600 million ounces.

source:
http://www.silverinstitute.org/supply/index.php

I implore the readers, especially the newbies, don't believe what you read just because it fits into your world view, or someone has a lot of posts, or writes in clear sentences. I implore the readers to use some common sense. How many ounces do you think there are in surviving U.S. 90% coin? How many ounces in sterling silverware? To my mind at a minimum that's several billions of ounces right there, and just in this country. How many hundreds of millions of ounces just in Eagles, Maples and Libertads since 1986? Much of that is easy to access, readily available silver.

RedTiger

I found a silver/gold ratio chart at

http://www.goldsheetlinks.com/



Doesn't look like a trend worth playing either way. If anything, from that chart, I would lean towards the ratio expanding.

Overdate

My rough, back-of-the-envelope calculation is that there the total mintage of Mercury and Roosevelt dimes, Washington quarters, halves from 1916 to 1970, and war nickels used about 2.2 billion ounces of silver.

If a 75% melt and loss rate since 1964 is assumed, that would leave about 550 million ounces in U.S. silver coin. It could be higher or lower.

Add about 110 million ounces in Morgan / Peace dollars (another guesstimate), and around 170 million 1986-2007 one-ounce Silver Eagles (uncirculated and proof), that adds up to 830 million ounces of silver in U.S. silver coins.

My opinion only.

cladking

<< <i>

Current silver demand runs about a billion ounces a year. Current mining is about 600 million ounces.

. >>



I suspect you're not including silver scrap. Much of the silver being used each year
is in the form of reclaimed silver from industrial processes or from consumer products.

There certainly is no 400,000,000 shortfall.

Animalkeeper

Why is it that everyone seems to be paying attention now that everything is "through the roof"?? For years silver was in the $3-$5/oz range!! There was the opportunity. I wouldn't wade in with big money now with the prices where they are. The trick is finding what will be hot 3-5 years from now!

oreville

<< <i>Why is it that everyone seems to be paying attention now that everything is "through the roof"?? For years silver was in the $3-$5/oz range!! There was the opportunity. I wouldn't wade in with big money now with the prices where they are. The trick is finding what will be hot 3-5 years from now! >>



So what do you have in mind? I am intrigued.

By the way, I believe in the gold to silver 35/1 ratio used after 1933. That held pretty well for the years 1934 to 1975.

Based on the 35/1 ratio silver should be in the $23 an ounce range which I predict will be reached by the end of 2009. Best way to buy into this? Buy walking liberty halves in circulated condition. Everyone loves walkers. Also mercury dimes is a good second choice at a slightly cheaper price. There is some downside protection in case silver prices go down since these walkers and mercury dimes have numismatic value as well.

MoneyLA

RedTiger thanks for the chart on the gold/silver ratio.

I am into "technical analysis" and this chart is very telling.

What intrigues me is the period of what appears to be a giant head and shoulders pattern.

The "head" was when the ratio was 100 to 1 in the middle of 1990. The last shoulder was in 2003.

Based on this chart, the trend is for a return of the ratio to around 42 to 1.

Based on a gold price of say 800, silver should then trade at about 19 dollars an ounce.

What I would love to see is a gold/silver ration chart going back to the early 1970s, before gold was allowed to trade freely. That would give a clearer picture about where the current trend is headed.

thanks, Alan Mendelson
www.BestDealsTVshow.com

Overdate

What I would love to see is a gold/silver ration chart going back to the early 1970s, before gold was allowed to trade freely.


Link

Deadhorse

<< <i>Why is it that everyone seems to be paying attention now that everything is "through the roof"?? For years silver was in the $3-$5/oz range!! There was the opportunity. I wouldn't wade in with big money now with the prices where they are. The trick is finding what will be hot 3-5 years from now! >>



Many of us did invest heavily back in those price ranges, though I don't know about $3 silver. That was back in the early 70's. We've been paying attention for years now.

There is a generally agreed on total of about 150,000 metric tons of refined gold on the planet.

At over 300 million ounces, the largest 8 traders on the COMEX are short more silver bullion than exists in total known world inventories, including total SLV holdings and total COMEX inventories.

Hmmm... 150,000 metric tons of refined gold versus a bit over 11,000 metric tons(the 300 million ounces mentioned above) of silver. It's difficult to find exact numbers even through extensive internet searches. I suspect that's not an accident. Yes, you can add in silver coinage and various other types of silver out there, though after 1980, there's probably only about 10% of what there was previously. The notion that there is 50 Billion ounces out there is just pure nonsense. I seriously doubt there is even 15% of that.

It just might be that there is actually more gold on the planet than silver and we all know silver usage has exceeded production for over 15 years now.

Regardless, the actual physical ratio is much smaller than any of has been led to believe.

I'd say silver is a great investment!

HonoluluDude

<< <i> At over 300 million ounces, the largest 8 traders on the COMEX are short more silver bullion than exists in total known world inventories, including total SLV holdings and total COMEX inventories. >>

Watch what happens when they eventually get squeezed...

Overdate

Does "production" in that chart include scrap recovery or just new production?

There's no scrap recovery for cocoa, coffee, cotton etc., and different rates of scrap recovery for metals, so it's important to know this in order to properly interpret the chart.

Deadhorse

<< <i>Does "production" in that chart include scrap recovery or just new production?

There's no scrap recovery for cocoa, coffee, cotton etc., and different rates of scrap recovery for metals, so it's important to know this in order to properly interpret the chart. >>



I'd imagine it refers to new production only. At least that's my understanding.

Still, there's nowhere near the scrap out there that some people seem to think exists. About 95% of it available at the time went to the smelting pots in 1980.

All that tells us is that the price is going to have shoot to the moon when the piper makes his call.

Overdate

Silver scrap recovery accounted for over 20 percent of supply in 2005.

Link

That would materially affect interpretation of the chart above if the chart refers only to new production.

Deadhorse

<< <i>Silver scrap recovery accounted for over 20 percent of supply in 2005.

Link

That would materially affect interpretation of the chart above if the chart refers only to new production. >>



An interesting and LONG read. Perhaps once scrap is smelted and refined it is considered as production.

A quick search on google seemed to indicate that recovered and refined scrap was indeed included in world production numbers.

It does seem odd, as there is no such thing in nearly all other commodities.

It also indicates that the available scrap out there is dwindling quickly.

oreville

I believe that new silver coins being produced/minted is being treated as "consumption?"

If so, isn't the new inventory of modern silver coins/medals replacing the supply of scrap silver metal causing no net loss of available scrap silver metal for the future?

tincup

<< <i>I believe that new silver coins being produced/minted is being treated as "consumption?"

If so, isn't the new inventory of modern silver coins/medals replacing the supply of scrap silver metal causing no net loss of available scrap silver metal for the future? >>




That very well may be the case. I wonder how much this yearly coinage consumes of the yearly total? Any ideas?

jdimmick

Thats one of my points is that if the minting of coin/Bullion products each year is being treated as consumption, than its not a true reflection of the metal being used up as there are tons of earlier silver eagles alone being bought up as bullion and being traded/melted , etc. If you spend any time in shops or shows, the current demand for silver eagles always revolves around the most current year, most of the others rarely get sold as numismatic items to the public. (or at least at a very low percentage to current year sales).

I get silver eagles in everyweek from the public, and its always 02, 87, 88, o5, etc.(not the current year) also lots of complete sets come in. I e-bay the 96 and ship the rest to regional bullion dealers.

cladking

<< <i>I believe that new silver coins being produced/minted is being treated as "consumption?"

If so, isn't the new inventory of modern silver coins/medals replacing the supply of scrap silver metal causing no net loss of available scrap silver metal for the future? >>



This silver isn't being destroyed in large quantities but it is going
to meet a very real demand. Many of the buyers will hold the metal
until it has met some price or a certain amount of time has elapsed.
They also tend to buy more each year. If it weren't available as new
eagles or maple leafs they'd buy it in some other form.

In any case the metal is consumed for practical purposes at the cur-
rent time.

Overdate

I wonder how much this yearly coinage consumes of the yearly total? Any ideas?


From the link above, it appears that coins and medals accounted for over 40 million ounces in 2005. That would be about 4.5 percent of total demand.

Kareemofwheat

So silver is a bad investment?