Educating a WSJ Reporter (hopefully)
CertifiedGoldCoins
Posts: 1,644 ✭✭✭
On May 6, the WSJ's Market Watch Web site ran an article titled,
Smart money left silver to tarnish retail buyers
Hedge funds, other large players cooled speculative bets before metal’s crash
It started off nonsensically enough, with "Retail buyers may have stayed invested in silver long after most hedge funds and other large investors had left, data from U.S. futures regulators suggest." and then went stupid.
So I e-mailed the writer, as follows:
Not a bad article, but.... Silver is not my entire holding (I own gold, bought for as little as $471/oz., and some platinum, also). As a past retail buyer of silver (at $9 to $13/oz.) I don't care what the paper buyers/sellers do. My 100oz. ingots still weigh the same, and the price will continue upwards, long after JPMorgan and that crowd get out with huge losses from their short selling.
Why will the price of the actual metal continue upwards? Simple. The US government can only survive by (eventually) destroying the dollar, because it has never lived within its income, and never will. The problem is that too much of the population is now non-productive and dependent on government to put food in their mouths. The government itself needs a bailout -- two trillion more, from what I've read.
When I was in college, I worked in a bank. A $1,000 bag of coins (all silver then) was worth $1,000. The same bag today costs $27,000.
Silver Coin Prices
As for The Almighty Dollar, my first new Mustang cost me $2,450.
Think about that.
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I'll be interested to read her reply (if any).
Smart money left silver to tarnish retail buyers
Hedge funds, other large players cooled speculative bets before metal’s crash
It started off nonsensically enough, with "Retail buyers may have stayed invested in silver long after most hedge funds and other large investors had left, data from U.S. futures regulators suggest." and then went stupid.
So I e-mailed the writer, as follows:
Not a bad article, but.... Silver is not my entire holding (I own gold, bought for as little as $471/oz., and some platinum, also). As a past retail buyer of silver (at $9 to $13/oz.) I don't care what the paper buyers/sellers do. My 100oz. ingots still weigh the same, and the price will continue upwards, long after JPMorgan and that crowd get out with huge losses from their short selling.
Why will the price of the actual metal continue upwards? Simple. The US government can only survive by (eventually) destroying the dollar, because it has never lived within its income, and never will. The problem is that too much of the population is now non-productive and dependent on government to put food in their mouths. The government itself needs a bailout -- two trillion more, from what I've read.
When I was in college, I worked in a bank. A $1,000 bag of coins (all silver then) was worth $1,000. The same bag today costs $27,000.
Silver Coin Prices
As for The Almighty Dollar, my first new Mustang cost me $2,450.
Think about that.
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I'll be interested to read her reply (if any).
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my early American coins & currency: -- http://yankeedoodlecoins.com/
my early American coins & currency: -- http://yankeedoodlecoins.com/
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Comments
reporters from WSJ are pretty level headed and pretty much reported what happened.
like you, i haven't sold any yet. there has been a lot of consensus that this big correction was upon us and nothing has really changed between two weeks ago and today. it is important to know that the paper markets are moved by making money in the short term. and upward movements can't go forever. i like the shakedown from last week in both major PM's. it is only laying a foundation/basement to go even higher.
i hope you still have your Mustang!
<< <i>"I don't understand your reply." >>
Let's hope the WSJ reporter understands it, then.
dbcoin also wrote
<< <i>" I think the WSJ made more sense." >>
For the speculator audience for whom she's writing, yes. Which is why I started with "Not a bad article." However, I suspect she does not have any idea why owning physical metal will win in the long run, regardless of the speculators and their paper profits/losses.
57loaded wrote
<< <i>"it is only laying a foundation/basement to go even higher." >>
As it has starting today.
57loaded also wrote
<< <i>"i hope you still have your Mustang!" >>
No, but if PMs go high enough, I'll be able to buy a Boss302.
my early American coins & currency: -- http://yankeedoodlecoins.com/
Hedge funds, other large players cooled speculative bets before metal’s crash
It's funny that CNBC this morning flashed the names of 3 hedge funds that got out of silver with large losses.
Maybe WSJ only reports on the "smart" hedge funds.
I knew it would happen.
some did make a lot some lost most of their shirts.
i'll be interested if you get a response. also you should be able to read comments.
as for the 'Stangs they rock!
what percentage of your annual salary did that sum represent that year?
Liberty: Parent of Science & Industry
Since anyone could buy the same Mustang, how its price related to my salary would be as meaningless as how it s price related to a millionaire's salary, or to any other individual's. Comparing the average price of automobiles taken together with an average of incomes might be useful, but I'm not an economist.
The fact is, middle-class incomes have not kept up with prices across the board. Millions of people, on fixed incomes, or whose careers have tanked in recent years know that full well. That's why gold and silver coins have become popular among those who want to preserve some assets against defacto Dollar devaluation.
That's what I was trying to convey to the WSJ reporter, not car prices.
my early American coins & currency: -- http://yankeedoodlecoins.com/
I did,
it made me wonder if it's easier or harder now to earn a new car than it was in 1965. I think it's easier to earn a car now, and the car is a lot better, based on what I see on the road.
Sure, if you're trying to buy a 2011 car or the gas for it with dollars you earned 46 years ago and stuck under your mattress, inflation is going to be a big problem.
If that money had been in silver coins instead of paper dollars, it would have done very well in holding value or even growing in purchasing power. But nowhere near as good as a good stock or even simple compound interest.
Liberty: Parent of Science & Industry
<< <i>If that money had been in silver coins instead of paper dollars, it would have done very well in holding value or even growing in purchasing power. But nowhere near as good as a good stock or even simple compound interest. >>
The Dow was 1000 in 1966. It's under 13000 today. Silver is up something like 25 or 30X. The stock market has not performed as well as silver. Of course, had you done the same comparison 10 years ago, silver would have been the loser.
<< <i>
<< <i>If that money had been in silver coins instead of paper dollars, it would have done very well in holding value or even growing in purchasing power. But nowhere near as good as a good stock or even simple compound interest. >>
The Dow was 1000 in 1966. It's under 13000 today. Silver is up something like 25 or 30X. The stock market has not performed as well as silver. Of course, had you done the same comparison 10 years ago, silver would have been the loser. >>
Except the Dow pays out an average of 2% - 3% in dividends every year. Over 45 years, that puts the Dow up something like 40X. Then you have better tax advantages for the Dow as well.
Things go in cycles. There are times for stocks, bonds, commodities, real estate. We are in a commodity cycle now but it is nearing it's end. The next cycle will be stocks
Box of 20
<< <i>The question is when will physical metals be separated from paper and be traded in the markets as such. >>
Now there is the $64,000 question.
I have been wondering for more than a year when that would be asked.
From my view there is a definite disconnect between Physical and Paper.
the first part is a fact.
the second part, not so much. Do you know when and how much the generally accepted all tiime high price for silver is, in adjusted 1998 dollars?
(hint: it's hundreds of years ago, and hundreds of dollars per ounce. google it!)
Anyway, I'd even predict, over the long term (decades), the price of silver measured in current dollars will go up from here. Short term (today through the next 5 years) is an open question. Usually, assets that move so far so fast take a little rest.
especially ones that just sit there "storing value". the best assets produce something useful. metals only help produce something useful (value added when they're USED, not stored.
Liberty: Parent of Science & Industry
Win what?
How long is long term?
Why?
Many people believe as you. However, many, many more do not or do not care. So my question would be, "If very few are concerned about the "prize", how valuable is it?"
Also, the part about buying the mustang is only relevant if you compare its cost then and now--there are also quality/safety improvements to be considered-- to average incomes then and now. Or, if you are comparing the value of that same automobile in todays dollars--ie, has it maintained its value when compared to inflation or incomes.
Knowledge is the enemy of fear
Have they not been? In 2009 when spot silver was $10, .999 rounds were $15. Recently when spot was $35, those same rounds were $45.
Knowledge is the enemy of fear
astute observations
however, aparently, he's not an economist, doesn't care about logical flaws in certain beliefs, or reasons that bald metrics may need rational explanations in a larger context.
Liberty: Parent of Science & Industry
as for, "The Dow was 1000 in 1966. It's under 13000 today. Silver is up something like 25 or 30X. The stock market has not performed as well as silver. Of course, had you done the same comparison 10 years ago, silver would have been the loser. "
you'll notice that I didn't say "the stock market" or the Dow, or any other "average". I said, "a good stock", one that does, over 20 years, something like this:
while the company makes something for improving and/or saving someone's life in the process.
edited to add: this particular stock is now $100
Liberty: Parent of Science & Industry
<< <i>
<< <i>If that money had been in silver coins instead of paper dollars, it would have done very well in holding value or even growing in purchasing power. But nowhere near as good as a good stock or even simple compound interest. >>
The Dow was 1000 in 1966. It's under 13000 today. Silver is up something like 25 or 30X. The stock market has not performed as well as silver. Of course, had you done the same comparison 10 years ago, silver would have been the loser. >>
Too bad we'll never know the real statistics. Those numbers are meaningless to me since they de-list bad stock and add the next high fliers to the average. Pullman used to be part of those stats but as they go broke they just remove them and add ones that help the average. Your basis for any average is using the same companies throughout time to get the real results.
for many stocks of that period, chiefly represent a 1 time shot in monetary debasement that we may never see again in our lifetimes. From 1995-2000 the
money/credit supply was taken parabolic. That's also about the same time frame that all the games with the gold suppression (gold carry trade), dollar boosting,
bank deregulation, and derivatives expansion began. No typical stock (ie a good stock) should ever behave like that. Just like no "good" PM (ie silver) should
behave the way it has the past 9 months. But there are certainly good startup companies that after 5-15 years really have something to offer. But for the majority
of run ups during the 1990's I don't think that was the case. Singling out the Microsofts, Googles, FaceBooks, of the world doesn't really say much about the other
99% of stocks. The performance of the stock in question since 2001 has been unremarkable. It certainly was a good stock from 1990-2001. But is it still a "good" stock
from a returns point of view considering the dollar's 40% decline is probably primarily responsible for any gains seen since 2001? I think "good" stocks are just fortunate
to be in the right place and right time when money becomes very loose.
The price of a mint original Mustang has much more to do with the options it came with than anything else. A 1964 6-banger hardtop in low mileage original condition might
fetch $10K to $15K these days (my best guess). But step that up to a stick shifted muscular V-8 and the price probably doubles again. If you have one of the rarer high
performance versions of that era (Cobrajet, KKR, GT350, Boss 302, etc.) then the sky is the limit.
Below is a long article but offering some interesting views. Something I hadn't thought of before was that in getting the underfunded/weak-handed longs out of the market
has probably only exacerbated the issue of finding silver for the bankster's shorts. Those long contracts were then picked up by better funded longs, many of which went in
with 100% cash. The PTB's have only pushed their problems out another month. The end-game doesn't change.
Avery Goodman on silver gamesmanship
roadrunner
and you're right, it's not that great a stock anymore, only a decent one. I've been scaling out and into another one which I hope is about in the same stage of development as other one was back in 1995.
And yes, there have been quite a few losers along the way. Not all diamonds in the rough cut into a nice stone. Those that do can often more than make up for the duds, though
PS, my dad used to drive a white/red 1964 1/2 Mustang 289, I learned to drive in it, but he sold it because A: I wanted to change the tires, rims, radio, paint it, etc, and B: he was sure I was going to crash it (I did crash the '82 Camaro, more than once )
Liberty: Parent of Science & Industry
<< <i>
<< <i>
<< <i>If that money had been in silver coins instead of paper dollars, it would have done very well in holding value or even growing in purchasing power. But nowhere near as good as a good stock or even simple compound interest. >>
The Dow was 1000 in 1966. It's under 13000 today. Silver is up something like 25 or 30X. The stock market has not performed as well as silver. Of course, had you done the same comparison 10 years ago, silver would have been the loser. >>
Too bad we'll never know the real statistics. Those numbers are meaningless to me since they de-list bad stock and add the next high fliers to the average. Pullman used to be part of those stats but as they go broke they just remove them and add ones that help the average. Your basis for any average is using the same companies throughout time to get the real results. >>
The stock market is a synopsis of the economy. Economies change over time. Demographics change over time. You can not compare the economy of 1910 to that of 2010, no more than you can compare life expectancy in 1910 to 2010. While gold has not changed its composition over time, the economy has, and to not represent that change in an average is foolhardy, at best.
Most people do not own the stock market, but rather individual stocks. Every year there are 1000's of individual stocks that outperform the stock market. To isolate gold or silver from a basket of commdities, is no different than isolating MSFT or PCLN from the stock market.
Stocks outperformed gold for 2 decades. Gold has outperformed stocks for the last decade. So what? Every asset class has its day in the sun. In the end all assets will have similar returns.
Knowledge is the enemy of fear