Thinking ahead...

mrpaseo

My last post got me thinking...

My reason for stacking is to hedge against the inflating dollar. As it stands, with todays spot of about $28.91, a one oz coin is worth about $31.50 or so, a quarter is worth about $5.20 and a dime is worth about $2.08.

At these prices, most anyone can afford dimes and quarters in bulk (Maybe 10 at a time without breaking bank) and most working class can afford an oz or two at a time.

Fast forward to the impending inflated dollar days and what will these prices look like?

As I understand it, if the 1oz Silver goes to $70 per share, they will be just out of reach from a lot of working class and the Quarters and dimes will be the viable purchase for most working class.

That said... does it not make sense to stack a considerable amount of 90% so that in the future, you will have some to sell that most people will be able to afford? Other wise we will be stuck selling to the dealers whom may or may not give us the best prices.

What do you think? Sound thinking or am I thinking to much into it?

Ray

guitarwes

90% is always in demand and is easily identifiable, divisible, and storable. I know some people who do nothing but stack 90%, and large amounts of it.


Edited to add: about like stacking 1/10 and 1/4 oz. Gold American Eagles. If gold were to shoot up to $2000-3000/oz, most average people who want to stack gold could still afford a $200-300 or $500-600 coin vs. plunking down $2000-3000 at a time.

bronco2078

The question is where are you going to sell?

If you don't mind selling on ebay for electronic money , in light of the present fee structure

40% halfs and war nickles might net you 80% of melt after fees

90% dimes and quarters might get you 90% of melt

and 90% halfs might net you melt.

peace dollars and 1921 will get you a profit of 5 or 10% of melt

older morgans regularly sell for $35 each on ebay in circulated condition .




In light of those numbers 90% halfs might be the best bet. If silver doubles they may become the new morgan dollar, if silver gets cut in half then they aren't going to hurt you any.

Don't pay melt for 40% halfs or war nickles unless you are going to sit on them. If silver doubles they will be ok but if it gets cut in half you will get killed.

ksammut

You wrote that you purchase PMs because of eventual inflation. Although that is a small part of why I invest in PMs, the main reason I do is that I fear an economic meltdown. Long term, inflation (especially hyper-inflation) may be a real concern but until there is a substantial and sustainable rebound in the economy, deflation or more of what we have been experiencing may be more of a concern. This no or slow growth economy makes it impossible for tax revenues to rise enough to help counter our ever growing debt burden. Somewhere along the line, the debt will break the world economy. If I am wrong and somehow the economy truly rebounds, then I fear inflation as all the locked up trillions that have been pumped into the economy will begin to circulate and people will buy more, companies will spend more, and our food, gas, and metal resources will be used and consumed more quickly than they can be produced. Inflation will be upon us.

Stacking 90% makes a lot of sense for daily transactions but there is no harm in adding rounds and bars (of all sizes). Whether it is an economic meltdown or big time inflation, there will be entire businesses built around pm/dollar exchange so I personally do not fear getting a fair price for my pms as the competition will be great and will force these businesses (dealers) to be competitive.

Darwin

If gold drops even lower, all the stackers have to sit on their metal, waiting for it to go up-or lose money! Now is not the best time to buy PMs in my opinion. I would purchase some stock options/indices to balance out PMs. Boy I wish I had bought CMG 4 years ago...I had the money to do it. My mother and I talked about it-and look at the price now! Hindsight is always 20/20...

ricko

In case of a major meltdown, I do not think you will be exchanging PM's for dollars....since the dollars will likely be worthless. Most likely they will be exchanged for goods and services. Cheers, RickO