If you're a long term holder of PMs...
MrEureka
Posts: 24,270 ✭✭✭✭✭
Why not sell the physical and buy contracts? You can jump back into physical when the premiums come back down.
Yes, I understand there's some risk of default on the contracts. But isn't it so minimal that it's worth taking the risk?
Yes, I understand there's some risk of default on the contracts. But isn't it so minimal that it's worth taking the risk?
Andy Lustig
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
0
Comments
1) because paper contracts are simply instruments of manipulation.
2) the real thing can pass from generation to generation without big brother keeping track of it or getting a piece of it.
3) holding a slip of paper is nothing like holding the real thing.When the time to sell comes I can exchange the real thing much quicker as eaiser for cold hard cash than I can a piece of paper.
<< <i>Why not sell the physical and buy contracts? You can jump back into physical when the premiums come back down.
Yes, I understand there's some risk of default on the contracts. But isn't it so minimal that it's worth taking the risk? >>
I dunno. What's an Enron stock certificate worth these days?
Let's see, the nation, major banks, major corporations are essentially already bankrupted. There are still tens of Trillions of dollars in potential losses to be stacked up. The possibility of an immediate default situation around the world can happen at any time going forward. Sure......sign me up for some paper guarantees from more insolvent entities.
roadrunner
Real PM's on the counter, Please!!
********************
Silver is the mortar that binds the bricks of loyalty.
It is NOT a like for like transaction.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
Seriously, most of the posters on here think the dollar will default, much less ANY paper asset. Although If they have a comex contract for aluminum, count me in.....it is clear that demand will soon outstrip supply ;~)
<< <i>Mr Eureka, seems like a reasonable point, but, on this, the forum of PM bugs, that is just crazy talk. what could you be thinking?
Seriously, most of the posters on here think the dollar will default, much less ANY paper asset. Although If they have a comex contract for aluminum, count me in.....it is clear that demand will soon outstrip supply ;~) >>
And the 28% tax on both sides of such an equation means nothing to you?
Not to mention, I resent the "bug" label. I am an investor and I've done better over the last 7 years than anything else I could/would have gotten into. Not to mention better than 99% of all US investors.
Your negativity towards those on this forum has become apparent over time. It hasn't been lost on me.
This is not a place for trolls from the US Coin Forum to come and play. We don't do the same over there.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
Sorry folks but I just had to say it
Many members on this forum that now it cannot fit in my signature. Please ask for entire list.
<< <i>Bluelobster are you trying to beat a Deadhorse
Sorry folks but I just had to say it
It's been said before, but NOBODY beats a deadhorse.
OTOH, lobsters often go into a pot of boiling water.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
<< <i>lobster ? Looks like a frog to me
That's Garsmith.
Blue Lob uses a coin avatar.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
lol, GS
Ok, Dead horse I didn't realize bullion was a tax free investment, I clearly don't understand tax law....and just so you know, bugs are really a term of endearment for me, because that's what we call lobsters down here in FLA, which I try to chase around in the Keys every year, but from now on any reference previous or henceforth to PM "bugs" will be dissolved and the term PM "lobstah" will be substituted
However, changing over to paper metals stocks and back to the physical will incur 28% taxes on each transaction.
It is not a "like for like" transaction as far as the IRS sees it.
We call crawfish "mudbugs", they are in the lobster family.
I just don't like the bug term used in regards to PM holders.
Most of us have a real life and the PMs are just another investment.
Sorry for any misunderstanding.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
<< <i>
I just don't like the bug term used in regards to PM holders. >>
"Gold bug" does have a negative connotation to it, like we're some kind of flawed, crazed subset of the human race.
I prefer "Hard money advocate".
An individual who thinks that investors should keep all or part of their assets in the form of gold. The tendency to recommend gold nearly always stems from the gold bug's expectation of rapid or uncontrolled growth of the money supply accompanied by high rates of inflation. Some gold bugs also predict economic collapse with gold becoming the standard of payment.
<< <i>
<< <i>
I just don't like the bug term used in regards to PM holders. >>
"Gold bug" does have a negative connotation to it, like we're some kind of flawed, crazed subset of the human race.
I prefer "Hard money advocate". >>
This is off topic, but if you guys have never seen the movie 'Treasure of the Sierra Madre', with Humphrey Bogart you really need to watch it. He gets a serious case of 'gold fever' and its hilarious when he startes muttering to himself that the others are out to get him. Really good acting and a great movie.
<< <i>gold bug
An individual who thinks that investors should keep all or part of their assets in the form of gold. The tendency to recommend gold nearly always stems from the gold bug's expectation of rapid or uncontrolled growth of the money supply accompanied by high rates of inflation. Some gold bugs also predict economic collapse with gold becoming the standard of payment. >>
You just can't leave it alone can you?
Poke, probe, look for a way to act like a jerk.
See if you can stir up others.
You sem to get off on that sort of stuff. It gets old fast.
WTF is your problem?
Under "choose you title", have you considered A-Hole?
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
i have no idea why you take things so personally. i addressed no
one specifically and simply defined it for conversation's sake. No one
else was clear on what it meant.
<< <i>i just defined the term as commonly used so there is no confusion.
i have no idea why you take things so personally. i addressed no
one specifically and simply defined it for conversation's sake. No one
else was clear on what it meant. >>
1)Everyone knows what it means.
2) You are clueless on many things.
3)I simply defined you, for those who were not yet clear.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
Many members on this forum that now it cannot fit in my signature. Please ask for entire list.
<< <i>Mr Eureka, seems like a reasonable point, but, on this, the forum of PM bugs, that is just crazy talk. what could you be thinking?
Seriously, most of the posters on here think the dollar will default, much less ANY paper asset. Although If they have a comex contract for aluminum, count me in.....it is clear that demand will soon outstrip supply ;~) >>
Aluminum will never be scarce.
Bauxite is used to make aluminum. It's plentiful.
The earths surface is 7% alumina.
Ray
I like PMs but wouldn't describe myself as a "bug." I agree the term is somewhat (mildly) insulting. I would just say I'm "into them."
An individual who thinks that investors should keep all or part of their assets in the form of gold. The tendency to recommend gold nearly always stems from the gold bug's expectation of rapid or uncontrolled growth of the money supply accompanied by high rates of inflation. Some gold bugs also predict economic collapse with gold becoming the standard of payment.
It was meant as an insult. Go ahead and tell my friend's grandma that she's a goldbug because she owns a single circulated $5 Indian she was passed down. Stock bug is a far more apt term to describe the "get rich" mentality of the boomer generation. They want it all and now...and more later if they can swing that too. If anything, the gold holders are much more satisfied with steady and slow growth plus lots of safety in the longer term. Gold has done exactly what the doc ordered up since 2001. Gold holders such as grandma and grandpa predicting economic collapse?.....don't make me laugh.
Did you find that definition in Wiki or work hard making it up yourself?
Your definition probably encompasses <1% of all gold holders and probably no one on this forum. Anyone know if Harry Schultz or Howard Ruff are forum members? It might apply to one of them.
True on this part only:
The tendency to recommend gold nearly always stems from the gold bug's expectation of rapid or uncontrolled growth of the money supply accompanied by high rates of inflation.
This is what in fact happens when money supply is increased.....monetary inflation breeds price inflation. Always. But the time frame before it becomes apparent is variable. It's done that since paper money was created. An historical fact.
An individual who thinks that investors should keep all or part of their assets in the form of gold
This probably includes 75-99% of all CFP's today who recommend some gold in all portfolios. I guess they're all goldbugs now by inclusion.
roadrunner
<< <i>Why not just buy physical and then hedge by shorting contracts if you think it's going to go down? >>
I like this idea...or buy out of the money puts on the contracts.
<< <i> gold bug:
An individual who thinks that investors should keep all or part of their assets in the form of gold. The tendency to recommend gold nearly always stems from the gold bug's expectation of rapid or uncontrolled growth of the money supply accompanied by high rates of inflation. Some gold bugs also predict economic collapse with gold becoming the standard of payment.
It was meant as an insult as is most everything fc posts on the PM forum. >>
I said an insult? Correct me if I am wrong, but I see real insults in
this thread but not from me.
<< <i>Go ahead and tell my friend's grandma that she's a goldbug because she owns a single circulated $5 Indian she was passed down. Stock bug is a far more apt term to describe the "get rich" mentality of the boomer generation. They want it all and now...and some later if they can swing that too. If anything, the gold holders are much more satisfied with steady and slow growth plus lots of safety in the longer term. Gold has done exactly what the doc ordered up since 2001. Gold holders such as grandma and grandpa predicting economic collapse.....don't make me laugh.
Owning a single gold coin or even 3-5% of your assets in gold does
not make a gold bug.
<< <i>Did you find that definition in Wiki or work hard making it up yourself?
Your definition probably encompasses <1% of all gold holders and probably no one on this forum. Anyone know if Harry Schultz or Howard Ruff are forum members? >>
I just pulled a reasonable definition from the internet.
<< <i>True on this part only:
The tendency to recommend gold nearly always stems from the gold bug's expectation of rapid or uncontrolled growth of the money supply accompanied by high rates of inflation.
This is what in fact happens when money supply is increased.....monetary inflation breeds price inflation. It's done that since paper money was created. An historical fact.
An individual who thinks that investors should keep all or part of their assets in the form of gold
This probably includes 75-99% of all CFP's today who recommend some gold in all portfolios. I guess they're all goldbugs by inclusion.
roadrunner >>
gold bug
Someone who either:
1. Wants to return the dollar to a gold standard,
2. Wants to use gold as money in addition to the dollar, or
3. Collects or invests in gold, silver, and/or other precious metals.
Gold bugs are sometimes associated with paranoia, conspiracy theories, 9/11 "truthers," survivalism, tax protesters, racism, anti-semitism, and the far right.
As a gold bug, I can tell you that gold is REAL money, and worthless fiat paper money is a fraud.
----
Gold bug
Gold bugs, in the traditional sense, believe in, fear, or even hope for another Great Depression or Armageddon, and believe that by holding gold they will survive and prosper.
--------
this one is quite flattering actually at the end----------
The "gold bug" works more by principle than by pragmatism. He believes that the stock market and most other financial "instruments", including fiat money, are nothing but a fraud, a game, a ponzi scheme. He sees PMs as one of the few ways to keep his wealth hidden away from the greedy hands of the bankers. The poster "Constantin" wrote something a while back that caught my eye, and it went like this: "To own gold and silver is a principled decision you make, to be outside the controlled system in terms of your investments".
----
I am just pulling this from the internet and any reasonable person
would agree with it in general terms. I see a lot of it in posts on the
main gold tracking thread. Diversifying your portfolio to include some
PMs is hardly a gold bug. It is the other amplified qualities that make
it so.
But I suppose this post too, is also an insult... sigh.
just for the record, i consider myself a speculator. not a hoarder or
a gold bug.
I knew it would happen.
with me and no others? go figure. at least roadrunner is civilized
while the other two cuss/swear.
ah. the old edit to the post to remove the cussing. nice move jmski.
good of you.
<< <i>
just for the record, i consider myself a speculator. not a hoarder or
a gold bug. >>
FC, I generally appreciate your comments and insights. You have some healthy skepticism which is important. Buying PMs needs to be a logical, scrutinized decision just like any other and it can't be based on an echo chamber of like-minded people just reinforcing their preexisting views. That to me is a "gold bug," someone who refuses to logically and fairly look at the issues and who ignores contradictory evidence. I don't think anyone here is a gold bug in that sense. What I see instead is a lot of people arguing and hashing out the issues. And you're a part of that process. Sometimes people's feathers get ruffled in that process but it's a whole lot healthier to have intelligent dissent rather than an echo chamber.
good of you.
Frankly, what was it I said in terms of cussing before the edit, fc. Something about your need to turn pm threads into a contest of sorts, I suppose. In the end, I decided that you weren't worth commenting on, so don't flatter yourself.
I knew it would happen.
Its off topic, but just keep buying PM. We are gonna keep buying in the $12-$13 range for maybe 2 years before this takes off. Over the next year or two, we are going to see deflation or dis inflation anyway. Silver, Gold, Plat, they arent going up anytime fast so dont think there is a rush to buy. Wait on good prices, because you dont have to be paying $17-420 an ounce. yes, that is what most people are asking, but there is plenty to be found for $12-$13 and there will be for a good year plus.
<< <i>fc sure spends a lot of time around this board for being such a non-PM bug! >>
because i find some posts interesting. one always has to separate the
wheat from the chafe.
<< <i>Who cares if a stranger on the internet calls you a bug ?
Its off topic, but just keep buying PM. We are gonna keep buying in the $12-$13 range for maybe 2 years before this takes off. Over the next year or two, we are going to see deflation or dis inflation anyway. Silver, Gold, Plat, they arent going up anytime fast so dont think there is a rush to buy. Wait on good prices, because you dont have to be paying $17-420 an ounce. yes, that is what most people are asking, but there is plenty to be found for $12-$13 and there will be for a good year plus. >>
there seems to be one missing equation from your words. why will
silver and gold go up? To have deflation for a few years only to see
rampant inflation in the next two? It does not seem to add up.
The time line for 40 dollar silver and 2000 dollar gold could be 10 years or more! In that time money could be invested differently to make more
money.
Of course one has to consider their age and what they wish to do
with said money. Right now I bet many seniors wish they had gold
instead of stocks and switched a year ago! But that time has passed.
The reason it will go up afterwards is the fact that the US govt is gonna have to spend 5 Trillion dollars before this is over. Right now, people are upset about the 850 Billion. LOL. Wait until the massive credit card default which is sure to come with a prolonged recession, wait until the banks need more money. AIG already got about 1/4 of the $700 B bailout package. The $700 B wont be near enough. There is gonna be $1 Trillion plus in student loan default which are guaranteed by the gov't. unemployment high = more govt programs. Obama already said he is gonna spend lots of cash on social programs. And the war on terror money still has to be spent, any cutback in spending there will come with a far higher price. Thats why, because we are already DEEP in debt and its gonna get OH so much worse in the next 5 years or so.
And where are these other areas where you can make 350% ( silver now 12ish, you say 40 in 10 years), on your money in 10 years. I would love to know.
<< <i>
The time line for 40 dollar silver and 2000 dollar gold could be 10 years or more! In that time money could be invested differently to make more
money.
>>
I dont think it will take 10 years to see $40 silver. But if it does, and you are buying today at $13 ( not hard with a little effort), Then that is a 200% return in 10 years or 20% per year using simple math, using compound which is the true rate of return is gotta be like 15%. I dont have time to figure it out exactly, but its still a good return. And you have a little insurance. If the doomsday scenaro happens ( Not saying I think it will), but if it does you are gonna be damn glad you have PM and not Cash or stocks.
The reason it will go up afterwards is the fact that the US govt is gonna have to spend 5 Trillion dollars before this is over. Right now, people are upset about the 850 Billion. LOL. Wait until the massive credit card default which is sure to come with a prolonged recession, wait until the banks need more money. AIG already got about 1/4 of the $700 B bailout package. The $700 B wont be near enough. There is gonna be $1 Trillion plus in student loan default which are guaranteed by the gov't. unemployment high = more govt programs. Obama already said he is gonna spend lots of cash on social programs. And the war on terror money still has to be spent, any cutback in spending there will come with a far higher price. Thats why, because we are already DEEP in debt and its gonna get OH so much worse in the next 5 years or so.
And where are these other areas where you can make 350% ( silver now 12ish, you say 40 in 10 years), on your money in 10 years. I would love to know.
What some people seem to discount so easily is that a total monetary system default has lots of implications and that having hard money available is better than not having it available. Added - cash is essential in the deflationary scenario as well, but only to help protect a pm position.
Aside from that, all things are relative - especially money/currencies. So what if the dollar remains strong relative to the Euro and other currencies? If they are all crashing, then it would seem to me that gold is better by at least one or two orders of magnitude.
The dollar's lost what? 50% since 2002? I don't see that trend turning around anytime soon, deflation notwithstanding.
I knew it would happen.
<< <i>
<< <i>
The time line for 40 dollar silver and 2000 dollar gold could be 10 years or more! In that time money could be invested differently to make more
money.
>>
I dont think it will take 10 years to see $40 silver. But if it does, and you are buying today at $13 ( not hard with a little effort), Then that is a 200% return in 10 years or 20% per year using simple math, using compound which is the true rate of return is gotta be like 15%. I dont have time to figure it out exactly, but its still a good return. And you have a little insurance. If the doomsday scenaro happens ( Not saying I think it will), but if it does you are gonna be damn glad you have PM and not Cash or stocks. >>
but i am setting up ebay auctions right now for rolls of silver that usually net me an easy 10% with little effort. More like 15%... in
two weeks. Rinse and repeat and I can easily beat that return you
are talking about. If i really put my mind to it I could net the profit
you are talking about in a year or two. So a creative person could
probably get a better return on their money with very little downside
involved when discussing PMs as a flipper in the right environment
when so many newbs want it no matter the price (premium).
edited to add: i was a bit off with my estimate on net return per roll.
make it an easy 15% to possible 25%. Buy a roll of 25 Oz at 307 and
sell for 400-425 (minus ebay/paypal fees). The live.com discount makes 25% very possible right now. Without it the net return drops.
I am talking about a business plan that does not rely on faith for the
metals to go up. That is a bet you can take to the bank.
So i guess my point is while i do not disagree with your major points
i feel the way you are thinking in investing in PMs might not be the
best way to go about it. Other opportunities are out there and there
is the chance in the next 10 years we might only see silver at 20
and gold at 1200. Not exactly huge returns but nothing to scoff at
either.
<< <i>why is it that it is always the same 3 people who have a problem
with me and no others? go figure. at least roadrunner is civilized
while the other two cuss/swear.
ah. the old edit to the post to remove the cussing. nice move jmski.
good of you. >>
You edited yours as well.
Maybe it's because there are three people with years of experience that dwarf yours, probably many more posters(I know from PMs), but we know BS when we see it.
Maybe it's because a young punk comes along and decides he's the "new" expert on all things precious and has no problem bragging about his exploits.
Maybe because we can see through your crap and finally we are all fed up with it.
I believe far more agree with us than you think.
Plus we see you kiss up seeking favor from certain others. Another sign of your lack of experience.
You came in here acting like a jerk, you reap what you sow.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
I knew it would happen.
<< <i>I didn't edit to remove cussing. I edited to remove fc.
Ya think we could all do that as a group?
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
<< <i>lobster ? Looks like a frog to me
What frog, I don't see a frog, I see an orange peel
I have posted a few times here saying that I have been doing the same thing. Buying Maples for 13 and selling on CL for $16. Bought 200 eagles for $14 and sold for $16. Quick $400 profit. But the money is going right back to buy more PM.