Physical metals are obsolete.
Weiss
Posts: 9,941 ✭✭✭✭✭
This last year+ long bull market in metals has produced an odd but well-pronounced phenomenon: paper metals (pools, ETFs) are not just easier to trade, easier (& safer) to store, easier to manipulate and finance. They're also cheaper than physical metals. And not just a little cheaper. Significantly cheaper.
The current spread thread, the recent thread about palladium, and the ungodly difference between market "value" of platinum and the real world selling price of PT eagles (or any other form of physical PT) are really driving home the point.
As fc mentioned in the spread thread, you're tying up capital when you're paying a premium for a name brand bar. Especially since you're already paying X+spot for that bar.
If the premiums don't come down soon, if the spread doesn't narrow between "market price" of metals and the real world selling price that we all see every day at coin shops, people might start to realize the burden that owning physical metals represents--both for the obvious reasons (storage, transportation, theft, heft, etc), but also because of the opportunity cost of the physical metals' heavy premiums. If and when that happens, physical metals *might* actually start selling at a discount to the "market price".
Imagine that. Physical metals trading at a discount to paper metals. Voila. Physical metals will be obsolete.
The current spread thread, the recent thread about palladium, and the ungodly difference between market "value" of platinum and the real world selling price of PT eagles (or any other form of physical PT) are really driving home the point.
As fc mentioned in the spread thread, you're tying up capital when you're paying a premium for a name brand bar. Especially since you're already paying X+spot for that bar.
If the premiums don't come down soon, if the spread doesn't narrow between "market price" of metals and the real world selling price that we all see every day at coin shops, people might start to realize the burden that owning physical metals represents--both for the obvious reasons (storage, transportation, theft, heft, etc), but also because of the opportunity cost of the physical metals' heavy premiums. If and when that happens, physical metals *might* actually start selling at a discount to the "market price".
Imagine that. Physical metals trading at a discount to paper metals. Voila. Physical metals will be obsolete.
We are like children who look at print and see a serpent in the last letter but one, and a sword in the last.
--Severian the Lame
--Severian the Lame
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<< <i>I'm ready and willing to pay a premium for physical vs. paper. Call me crazy. >>
I guess that makes 2 of us.
<< <i>This last year+ long bull market in metals has produced an odd but well-pronounced phenomenon: paper metals (pools, ETFs) are not just easier to trade, easier (& safer) to store, easier to manipulate and finance. They're also cheaper than physical metals. And not just a little cheaper. Significantly cheaper.
The current spread thread, the recent thread about palladium, and the ungodly difference between market "value" of platinum and the real world selling price of PT eagles (or any other form of physical PT) are really driving home the point.
As fc mentioned in the spread thread, you're tying up capital when you're paying a premium for a name brand bar. Especially since you're already paying X+spot for that bar.
If the premiums don't come down soon, if the spread doesn't narrow between "market price" of metals and the real world selling price that we all see every day at coin shops, people might start to realize the burden that owning physical metals represents--both for the obvious reasons (storage, transportation, theft, heft, etc), but also because of the opportunity cost of the physical metals' heavy premiums. If and when that happens, physical metals *might* actually start selling at a discount to the "market price".
Imagine that. Physical metals trading at a discount to paper metals. Voila. Physical metals will be obsolete. >>
Best April Fool's Joke I've heard in a long time!!!!!!
I knew it would happen.
<< <i>I'm ready and willing to pay a premium for physical vs. paper. Call me crazy. >>
O.K. You're crazy........like a fox. Paper gold isn't the same as real gold and someday people holding it will have a rude awakening.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
Check out war nickels.
90% U.S. silver coins have often traded at a discount to the silver spot price. That's why so many of them were melted.
My Adolph A. Weinman signature
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<< <i>I'm ready and willing to pay a premium for physical vs. paper. Call me crazy. >>
Well, I'd rather own / caress a 1 Kilo Gold Bar than a piece of paper !
Really think so?
You can have your porno pictures.
I'll take real women.
Ray
The physical price premiums will become larger once the fraud is more widely known. Either that, or the price for paper ETF's and futures will sell at discounts to spot.
roadrunner
I would NEVER buy a PM I couldn't hold or store in my SDB.
With all that's gone on with the banks, why would you even think an ETF is better than physical?
I don't even like having an online only savings account, I print my statements all the time. One day
that website could go *poof* and what would I have to show for it?
To each his own.
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<< <i>>>Imagine that. Physical metals trading at a discount to paper metals.<<
Check out war nickels.
90% U.S. silver coins have often traded at a discount to the silver spot price. That's why so many of them were melted. >>
Are you saying war nickels are 90% silver here? They aren't.
And 90% junk silver should trade at a discount to the spot price. The spot price is for .999 bullion. 90% coins need to be
refined, and that costs money.
Maybe I understood you wrong, can you clarify?
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<< <i>This last year+ long bull market in metals has produced an odd but well-pronounced phenomenon: paper metals (pools, ETFs) are not just easier to trade, easier (& safer) to store, easier to manipulate and finance. They're also cheaper than physical metals. And not just a little cheaper. Significantly cheaper.
The current spread thread, the recent thread about palladium, and the ungodly difference between market "value" of platinum and the real world selling price of PT eagles (or any other form of physical PT) are really driving home the point.
As fc mentioned in the spread thread, you're tying up capital when you're paying a premium for a name brand bar. Especially since you're already paying X+spot for that bar.
If the premiums don't come down soon, if the spread doesn't narrow between "market price" of metals and the real world selling price that we all see every day at coin shops, people might start to realize the burden that owning physical metals represents--both for the obvious reasons (storage, transportation, theft, heft, etc), but also because of the opportunity cost of the physical metals' heavy premiums. If and when that happens, physical metals *might* actually start selling at a discount to the "market price".
Imagine that. Physical metals trading at a discount to paper metals. Voila. Physical metals will be obsolete. >>
HAHAHAHAHA!!
Great April fool's joke.
I can't imagine someone taking this seriously.
No, war nickels are about 35% silver. I'm saying that they are currently trading at a discount to their spot silver value.
And 90% junk silver should trade at a discount to the spot price. The spot price is for .999 bullion. 90% coins need to be refined, and that costs money. Maybe I understood you wrong, can you clarify?
The price for 90% silver coins can be legitimately above or below the spot bullion price at any given time.
For the small investor, 90% silver coins are more widely known, accepted and trusted than silver bars. They are therefore easier to buy and sell, especially in small increments. The vast majority have likely been melted during the past 40 years, and they are no longer being produced. Bullion silver coin production is currently not keeping up with demand, leading to high premiums over spot. 90% silver coins are a legitimate alternative to these bullion coins. This combination of factors can help explain why 90% silver coins are currently trading above their melt value.
Demand for .999 silver bullion can sometimes increase for a variety of reasons, from industrial users, speculators, and exchange traded funds, among others. In the past, demand for silver bullion has sometimes overtaken demand for 90% silver coins, raising prices to the point where junk silver trades at a discount to spot, and coin melting occurs. Eventually enough junk silver is melted that coin demand comes back into balance with bullion demand. This is a one-way street, however, since silver bullion is not turned back into junk silver coins.
So over time and with sufficient melting, 90% junk silver coins may eventually achieve a stable premium over the spot price of the silver they contain.
All IMO, of course.
My Adolph A. Weinman signature
I always prefer the real thing . If you can't hold it in your hand, you do not have possesion of it.
Most silver on paper does not even exist anyway , (the physical is not there to back up the paper.)
I guess some people don't mind however. These are the same dorks that are happy looking
at pictures of naked women on the internet, with their pants down around their ankles.
Others prefer to actually go out on a date with a real live (physical) woman.
Lewis
<< <i>Are you saying war nickels are 90% silver here? They aren't.
No, war nickels are about 35% silver. I'm saying that they are currently trading at a discount to their spot silver value.
And 90% junk silver should trade at a discount to the spot price. The spot price is for .999 bullion. 90% coins need to be refined, and that costs money. Maybe I understood you wrong, can you clarify?
The price for 90% silver coins can be legitimately above or below the spot bullion price at any given time.
For the small investor, 90% silver coins are more widely known, accepted and trusted than silver bars. They are therefore easier to buy and sell, especially in small increments. The vast majority have likely been melted during the past 40 years, and they are no longer being produced. Bullion silver coin production is currently not keeping up with demand, leading to high premiums over spot. 90% silver coins are a legitimate alternative to these bullion coins. This combination of factors can help explain why 90% silver coins are currently trading above their melt value.
Demand for .999 silver bullion can sometimes increase for a variety of reasons, from industrial users, speculators, and exchange traded funds, among others. In the past, demand for silver bullion has sometimes overtaken demand for 90% silver coins, raising prices to the point where junk silver trades at a discount to spot, and coin melting occurs. Eventually enough junk silver is melted that coin demand comes back into balance with bullion demand. This is a one-way street, however, since silver bullion is not turned back into junk silver coins.
So over time and with sufficient melting, 90% junk silver coins may eventually achieve a stable premium over the spot price of the silver they contain.
All IMO, of course. >>
Thanks for clarifying your position. Makes much more sense now.
This is a one-way street, however, since silver bullion is not turned back into junk silver coins.
Maybe Gecko could try??
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