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Do you think this is the beginning of a new type of market?
piecesofme
Posts: 6,669 ✭✭✭
I've been discussing this with some bullion friends and out of that discussion came a conclusion. This is the beginning of a new kind of market. Still Paper vs. Physical but different in the sense that Physical, and when I say physical I even mean your typical run of the mill bullion...your Merry Christmas bars and such, is not going to follow (or as I like to say, be a slave to) whatever Paper metals, otherwise referred to as Spot, is trading for at any given moment.
There is your paper market that will trade for whatever Wall St. and analysts (or as I call them, the devils) want to manipulate it for, and there will be a physical market.
This will require more of your attention to follow what physical is actually trading for. You wont be able to say...what's Spot and add X amount. No more Spot x .715 to figure out what 90% is valued at. You will have to follow it more closely to know what physical is really worth, for you to actually hold it in your hands.
This is going to require alot of people to think of it all in a different and very unfamiliar way. No more simple math equations to figure value. You'll actually have to pay attention to what I like to call the generic, less common and rare metal markets.
Think of it in the sense of coins. You have your common stuff...1921 Morgan, that's your generic metal. Then you have your semi-key date stuff...1882-84 CC Morgans, that's your old pour 3 & 5 oz Engelhards...and then you have your rare stuff...1893 CC Morgan in above XF grade, that's the 2, 4 or 7 oz Engelhard stuff. (These are just examples, use it in your own words for what you think is more valuable than other metal pieces).
Maybe this is just a phase in the grander scheme of it all. Maybe it's a temporary mindset because the scent of $40, or even $30 silver lingers and we desire for it to return like the elderly desire their youthful appearence to magically reappear. We want to think our metal is worth more than it is because some may have paid double what they could currently cash it in for. I think THAT is what is driving the wider gap in premiums currently, because it is the mindset shared by more than the folks who still may be cost averaged lower than what Spot is currently...and if that mindset lasts long enough, it will become the new normal.
Care to discuss these thoughts me and my fellow nerd metal friends have accepted as what is happening?
There is your paper market that will trade for whatever Wall St. and analysts (or as I call them, the devils) want to manipulate it for, and there will be a physical market.
This will require more of your attention to follow what physical is actually trading for. You wont be able to say...what's Spot and add X amount. No more Spot x .715 to figure out what 90% is valued at. You will have to follow it more closely to know what physical is really worth, for you to actually hold it in your hands.
This is going to require alot of people to think of it all in a different and very unfamiliar way. No more simple math equations to figure value. You'll actually have to pay attention to what I like to call the generic, less common and rare metal markets.
Think of it in the sense of coins. You have your common stuff...1921 Morgan, that's your generic metal. Then you have your semi-key date stuff...1882-84 CC Morgans, that's your old pour 3 & 5 oz Engelhards...and then you have your rare stuff...1893 CC Morgan in above XF grade, that's the 2, 4 or 7 oz Engelhard stuff. (These are just examples, use it in your own words for what you think is more valuable than other metal pieces).
Maybe this is just a phase in the grander scheme of it all. Maybe it's a temporary mindset because the scent of $40, or even $30 silver lingers and we desire for it to return like the elderly desire their youthful appearence to magically reappear. We want to think our metal is worth more than it is because some may have paid double what they could currently cash it in for. I think THAT is what is driving the wider gap in premiums currently, because it is the mindset shared by more than the folks who still may be cost averaged lower than what Spot is currently...and if that mindset lasts long enough, it will become the new normal.
Care to discuss these thoughts me and my fellow nerd metal friends have accepted as what is happening?
To forgive is to free a prisoner, and to discover that prisoner was you.
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Liberty: Parent of Science & Industry
For now, I'm still playing the strong dollar, strong treasuries, weak emerging markets, weak bullion trade. This might take a while so don't hold your breath. I still buy bullion if I can get it for low premiums but I'm trying to keep buying at a minimum while I build up my cash reserves.
Give Me Liberty or Give Me Debt
<< <i>Won't be a new type of market (a paradigm shift) until physical price breaks completely free from paper price. Separation by a market adjusting premium is nothing new for metal. A historical look at other commodity markets and the distance between futures and actual product price may offer insight. >>
Agreed. I believe a historical look at other commodity markets will shed much light. And reveal the fallacy that permeates so many manipulation conspiracy theories.
Knowledge is the enemy of fear
<< <i>
<< <i>Won't be a new type of market (a paradigm shift) until physical price breaks completely free from paper price. Separation by a market adjusting premium is nothing new for metal. A historical look at other commodity markets and the distance between futures and actual product price may offer insight. >>
Agreed. I believe a historical look at other commodity markets will shed much light. And reveal the fallacy that permeates so many manipulation conspiracy theories. >>
Unless of course, other commodity prices are manipulated. If someone can benefit then chances are the prices can be manipulated.
Give Me Liberty or Give Me Debt
Give Me Liberty or Give Me Debt
I knew it would happen.
Currently 90% silver sells at a huge premium while 80% Canadian, 40% halves and 35% war nickels sell at less than spot for war nickels, 3% over for 40% and 5-6% over for 80% Canadian. The online bullion dealers at times offer .999 silver for 5-6% over for Monarch, OPM and NTR products including 1 and 10 oz. rounds and bars so as of right now 90% is grossly overpriced especially if you are still buying silver dollars. Panda's are grossly overpriced as the new issues are being mass produced as are the newer Brittania's.
There could be a time in the future when there is a complete disconnect between paper and physical prices but in the end it will always come down to the price someone is willing to pay for what you have to sell.
Comparing bullion to rare coins I will not do.
<< <i>Gold is gold and silver is silver. Spot is the current buy/sell price for each. Bullion is a way to hold & own each. Bullion is not intended to be rare and collectible but rather a standard way of selling gold & silver in measured weights. A 1 oz Christmas bar & 1 oz Engelhard all weight & contain same amount silver.
Comparing bullion to rare coins I will not do. >>
If you don't think that certain gold/silver bars carry a premium above their bullion value you haven't been paying attention. An extreme example would be some of the small gold and silver bars recovered from the Attocha and the Central America ship wrecks.
Worry is the interest you pay on a debt you may not owe.
<< <i>
<< <i>Gold is gold and silver is silver. Spot is the current buy/sell price for each. Bullion is a way to hold & own each. Bullion is not intended to be rare and collectible but rather a standard way of selling gold & silver in measured weights. A 1 oz Christmas bar & 1 oz Engelhard all weight & contain same amount silver.
Comparing bullion to rare coins I will not do. >>
If you don't think that certain gold/silver bars carry a premium above their bullion value you haven't been paying attention. An extreme example would be some of the small gold and silver bars recovered from the Attocha and the Central America ship wrecks. >>
Never said some did not carry a premium. I'm just saying that gold is gold & silver is silver. You can pay what ever you wish for your gold & silver. I will pay what spot says the metal is worth.
<< <i>
<< <i>
<< <i>Gold is gold and silver is silver. Spot is the current buy/sell price for each. Bullion is a way to hold & own each. Bullion is not intended to be rare and collectible but rather a standard way of selling gold & silver in measured weights. A 1 oz Christmas bar & 1 oz Engelhard all weight & contain same amount silver.
Comparing bullion to rare coins I will not do. >>
If you don't think that certain gold/silver bars carry a premium above their bullion value you haven't been paying attention. An extreme example would be some of the small gold and silver bars recovered from the Attocha and the Central America ship wrecks. >>
Never said some did not carry a premium. I'm just saying that gold is gold & silver is silver. You can pay what ever you wish for your gold & silver. I will pay what spot says the metal is worth. >>
I feel the same way. When I buy silver I want to get it as close to melt as possible. I will pay a small premium for a name brand bar such as Engelhard or Johnson-Matthey because I know it will be easier to sell and I should get that small premium back. I have no interest in collectible bars that sell for multiples of melt value. Also, I avoid those generic rounds and bars that don't have the manufacturer identified on them.
Worry is the interest you pay on a debt you may not owe.
Regarding interest rates--- they ARE NORMAL now. When they revert to HISTORICAL averages, the global economies will be doing quite well.
Knowledge is the enemy of fear
With this I agree the most to this point. I am also starting the lean my approach to it all the way gsa & PerryHall speak of. I am "this close" to giving up on all my "collectible" silver and reinvesting it all in merry xmas bars that can be had for Spot at times. That way I could get a true value of what my pile is worth...assuming physical remains being a slave to whatever Spot is doing at any given moment. Never thought I'd say that, but this crash in value has me at a tipping point. But here's the thing...as Spot has crashed, the value of my collectible stuff has risen oddly enough, and that is why I am thinking it may be time to cash out and start over with generic stuff.
<< <i>Of course the most reasonable explanation for something you dont understand is that its manipulated. It is logical human behavior to do so. >>
And if you believe markets are not being manipulated you really have no understanding of markets or the motivation, power and ability of the manipulators.
<< <i>Regarding interest rates--- they ARE NORMAL now. When they revert to HISTORICAL averages, the global economies will be doing quite well. >>
We agree on something, Zero Interest Rate Policy by the FED is the new norm.
But interest rates aren't being manipulated.
Give Me Liberty or Give Me Debt
<< <i>There could be a time in the future when there is a complete disconnect between paper and physical prices but in the end it will always come down to the price someone is willing to pay for what you have to sell.
With this I agree the most to this point. I am also starting the lean my approach to it all the way gsa & PerryHall speak of. I am "this close" to giving up on all my "collectible" silver and reinvesting it all in merry xmas bars that can be had for Spot at times. That way I could get a true value of what my pile is worth...assuming physical remains being a slave to whatever Spot is doing at any given moment. Never thought I'd say that, but this crash in value has me at a tipping point. But here's the thing...as Spot has crashed, the value of my collectible stuff has risen oddly enough, and that is why I am thinking it may be time to cash out and start over with generic stuff. >>
The problem with collectible bars where the premium over melt value is significantly high is that the market is very thin. When you take these bars to most B&M coin shops, they usually only want to pay melt for them. In order to get full value you would have to sell them on eBay or a similar venue.
Worry is the interest you pay on a debt you may not owe.
<< <i>
<< <i>There could be a time in the future when there is a complete disconnect between paper and physical prices but in the end it will always come down to the price someone is willing to pay for what you have to sell.
With this I agree the most to this point. I am also starting the lean my approach to it all the way gsa & PerryHall speak of. I am "this close" to giving up on all my "collectible" silver and reinvesting it all in merry xmas bars that can be had for Spot at times. That way I could get a true value of what my pile is worth...assuming physical remains being a slave to whatever Spot is doing at any given moment. Never thought I'd say that, but this crash in value has me at a tipping point. But here's the thing...as Spot has crashed, the value of my collectible stuff has risen oddly enough, and that is why I am thinking it may be time to cash out and start over with generic stuff. >>
The problem with collectible bars where the premium over melt value is significantly high is that the market is very thin. When you take these bars to most B&M coin shops, they usually only want to pay melt for them. In order to get full value you would have to sell them on eBay or a similar venue. >>
You hit the nail on the head, e-bay has helped fuel a thriving though thin market of esoteric bullion items priced at a completely different level. I still have some neat bullion items that I should perhaps liquidate for more generic bullion but like some coins in my collection I enjoy pulling them out and looking at them every once in awhile.
There is a segment of investors that wants to believe every ounce is the same as every other. With physical metal its not correct to do that. I have felt for a long time that by moving to more and more abstracted forms of investment we are just enabling those that set up these investments to steal from us. The servicers view the investors as cattle . They will fire a gun at some point , stampede the herd over a cliff , pick the carcasses clean and Corizine off into the sunset.
<< <i>There is a segment of investors that wants to believe every ounce is the same as every other. With physical metal its not correct to do that. I have felt for a long time that by moving to more and more abstracted forms of investment we are just enabling those that set up these investments to steal from us. The servicers view the investors as cattle . They will fire a gun at some point , stampede the herd over a cliff , pick the carcasses clean and Corizine off into the sunset. >>
Yes ~ gold is gold & silver is silver. Only the finenss is different. What you choose to buy and pay is the only difference.
<< <i>
Yes ~ gold is gold & silver is silver. Only the finenss is different. What you choose to buy and pay is the only difference. >>
I meant to say that some think an ounce of paper is the same as an ounce of physical. If you have money you can always purchase paper. Given an equal amount to spend you might not get any physical at all. It may be unavailable or sellers may refuse to sell at all or at a premium. Sellers of paper metals don't hold out for premiums because they don't actually exist .
Liberty: Parent of Science & Industry