O.k. I am bored now....all this waiting around...time for hypothetical Manipulation, paper shorts, evil empire of bankers, blind regulators, government cover-ups, etc etc etc. What if gold back to $1150, silver back to roughly $15 and then bottoms out and rises in a few years to all time highs with no smoking gun ever uncovered, no global law suits and no banks going bust and no countries going on to the gold standard. What are we going to write about then? Will we just forget we ever considered these ideas once we are all sitting on tidy profits? or will the newcomers at higher prices adopt the same ideas as the ones talked about now when prices have a down leg while our own convictions will have been tempered as the doomsday scenarios that were expected never occured? No references to other opinions. Your own thoughts only. I am not after justification for thinking the worst because it is in every post already. I want to know if you are mentally prepared for an outcome that you are not considering... Good luck.
I treat my Gold and Silver holdings as my insurance policy for all of those things which have already been raised. I don't really care if it doesn't increase in value over the next 10 years as it gives me great sleep at night factor and allows me to focus on other investments. I would be stressed to the max if I didn't have any physical. I don't know how long the PTB can kick the can down the road but it's probably a lot longer than most of us expect but when the SHTF it will come out of left field and catch the majority of population with their pants down. I don't want to be in that crowd.
No reference to other opinions!!! That's no fun! How about listening to Mr. Gregory Mannarino. Greg has charts, he explains why, how and you can even buy his book. Seriously though, this chap has some good points, especially the S&P being in a bubble...when it corrects...imo it's going to smash a lot of people and...those on margin are going to suffer big time. Go to 2minutes 50 secs for his charts and comments...then go to..."The Bubble Machine" 10 minutes 18 secs, Job number 11 minutes 12 secs. You'll have to admit, Mr. Mannarino provides very passionate advice and is a silver bull. [youtube]http://www.youtube.com/watch?v=wqjjVVp5dVw[/youtube]
^^ This. I'm not buying physical in the hope of making a few bucks profit - if I wanted to do that, I'd trade paper. Physical is an insurance policy - a "nest egg" that is mine, with no counterparty risk, that I own and I can put my hands on when I want, and trade for things I will need when the time comes of wiping one's keester with paper based fiat currency (presumably, you have no toilet paper, or have run out of it, and the cotton rag the USD is printed on will serve as nice, soft toilet tissue. Our polymer notes will have even less value).
For me the insights I've gained from learning about gold's roll in this system has lifted a curtain to what's really going on behind the scenes. Once seen, you can not unsee this shit.
I'm a bull, always have been. Even before I was really aware of the whole 'situation'... But that doesn't mean I don't expect the price to rise and fall like the tide. As goldrush says, it's like insurance. It's also an investment, and all investment carries risk! There is a lot of hype on both sides of the equation. On one side is the positive recovery indications (if you believe them) and affect of qe whatevers... On our side we often say things like buying silver keeps your money out of 'the system'. But buying silver creates an exchange... That exchange to a dealer results in a transfer of cash. That dealer pays some expenses and wages in cash, and replenishes their stock with cash from a wholesaler, and the wholesaler pays it to the producer, and the producer pays it to their shareholders, banks, keeps some in the bank, and reinvests the rest in new mines... So at what point is your cash out of the system??? It's not... You have just purchased another product. What is your reality??? Mine is this. I will always have a core stack for Shtf event as yet unnamed. The rest, will go when i feel it is more beneficial to have my money elsewhere.... If indeed there is other types of money at that time!
I have invested years of worry, stress, heavy drinking and several failed marriages in the coming collapse of civilization and I find this wild conspiracy theory that there will not be an earth shattering collapse frankly preposterous. On the other hand, Waiting for something to happen is about as exciting as watching paint dry so it's good that I do have an alternative reason for stacking silver and gold. Like many others I see my stacking as a safe form of saving and a hedge against very high inflation should that ever occur. I don't see this as an investment or get rich quick scheme but should the apocalypse actually happen well I guess that's an unexpected bonus. I guess I am prepared for the remote possibility that the world is not going to end soon.
Recent years clearly show a 'sell on strength', as was indicated by price rebounds followed by big sales on strength. And that's to expect since the price increasings due to new dollars didnt happen. Next question then is, with the same lack of price increasings / inflation, when will those big sales on strength stop? The answer may be found in the current silver stocks in 'loose' hands. An ETF is an example. Some ETF's work with Comex futures contracts, so the COT reports total position gives us a clue about their price share. As of recently, those sit on a low. What remains then: the ETF's that work with silver in their vaults. Alike IShares. That one still holds 1/3 of a worlds annual supply. For a next silver purchase, I will wait until they dumped at least a third and maybe half. It's what happened in the gold ETF, so the same is to expect for silver.
Converting cash into bullion takes your wealth out of the system once you hold physical. The reasoning for this argument is 'control'. You have a choice between fiat money in a bank and hard physical asset where the state and bankers can't touch it. I keep a minimal amount of liquidity in the bank, to pay the bills and call on in an emergency to pay any unexpected cost, so if it was confiscated in a bank crisis (despite the current arbitrary thresholds, which can be changed at will thanks to clauses in various seemingly innocuous banking acts passed around the world) I won't lose too much. That fiat money is not mine. When it is in the bank it is in the system and it is their property. As a depositor I am only a creditor who has loaned wealth to the bank to use it as they see fit. They have control of that wealth. If they default I lose my money or get something worthless in return. Having physical gold and silver stored at home or in a private vault outside the banking system (and where possible secured offshore) - where my kleptomaniac government can't touch it and the bankers can't give it a haircut when they screw up and decide to use our hard earned to mitigate their losses - means I have control of my wealth. It is therefore outside of the system and not merely another product within it. Sure, they can cause my asset to lose some of its value, they can even legislate to make it illegal for me to hold it and try to take it from me if they can find it. But I have control of it and that proportion of my wealth remains mine.
Oh I totally agree, 'your' wealth is protected. But your cash has transferred to someone else in exchange for the metals you purchased. That cash will be spent or hoarded, and park in bank accounts across the country/world thereby continuing to contribute to 'the banking system' as a whole (being used for fractional reserve lending, etc.). And that is the point I was trying to make. Buying precious metals may protect us individually to some extent. But it does not damage 'the banking system' as some spruikers imply.
Lets say at the end of each month of hard work you have saved up enough of your hard earned fiat to buy either 60 oz of Silver of 1 oz of gold, and each month you do so. And while in possession of this metal you get that warm feeling of security knowing your wealth has been securely stored in a readily tradeable, ever increasing in price asset class you physically possess or control (if you ignore the last year). Are you not in effect as an induvidual leaving the field of play in the great game of fiat. Sure, the component of your earnings committed to settle accounts incurred through out the month are still actively circulating 'normally' in the financial system (your liabilities). But the component of your fiat earnings being spent on physical metals (your savings) is in effect eventually bogging down the entire field of play for fiat currencies. Ultimately the fiat your metal holdings represent is being spent further down the line, so on, & so forth, that it eventually becomes apart of the ever increasing pool of circulating fiat (due to normal increases in the currency supply), constantly deflating the purchasing power it once held. Add to this fractional reserve lending practices by the banks. At the same time new money is injected into the system by the central banks as they attempt to print away the debt at a rate necessary to cover the interest requirements on the pre existing debt laden currency base. Eventually a tipping point is reached when this rate of deflating value for fiat currencies makes the prospect of individuals saving in fiat a preposterous notion.
Hi Emanance, Not sure whether you are agreeing or disagreeing there. shall address in point format... 1. You as an individual are taking your fiat and putting it into a commodity of fluctuating value, as measured in that same unit of fiat currency. Until that fiat currency becomes obsolite, this will probably continue to be the case... (i.e. it is unlikely we will start measuring the value of silver in chicken eggs before the currency collapses.) 2. Yes, your liabilities are still settled in fiat money typically, since that is how most of us get paid from our day jobs.... But we are just one overthrown government away from a change of currency at all times. Hence the 'security' factor we all talk about. 3. No, the physical metals you purchased with your fiat have not bogged down the fiat currency system. You now have metal, but your fiat is now in someone elses hands. That person/business will probably spend it, pay tax on it, or hoard it in a bank account and thust perpetuate the fiat currency system. In that way, buying your metal is good for you if it satisfies your personal need for security, etc. But it does not remove fiat currency from the currency supply, it is in fact just another exchange. The money supply will continue to grow resulting from that exchange regardless whether we had spent the money on metals or a new TV. .... On a side note, if you did want to 'bog down' the currency supply then you would just burn your fiat money as soon as you earn it, thus removing it from circulation entirely.... But that will not help you protect your wealth! haha
Hi Grimnar, Source: Henrikb http://forums.silverstackers.com/topic-14783-i-need-more-motivation-page-1.html I'm not really agreeing or disagreeing with your original statements. I guess what I'm trying to say is that in this low trust, low return economy, I am removing myself from the risk of the fiat financial system as much as I can. That said I can't see how the thousands of individuals who invest all their spare fiat into long term PM holdings would not have an effect on both the 'velocity of money' moving around the system. And perhaps moreover to further devalue the worth of fiat. Fewer players competing for a greater pool of fiat paper would only exasperate inflation & deflation, making the job of central bankers that little bit harder.
Sorry, I had missed your point. I tend to agree with you that putting our wealth into metal doesn't damage the banking system per se. But they do find it harder to profit from us if we don't play their games, and if we hold metal instead of depositing fiat in their accounts they cannot so easily confiscate our wealth to make up for their mistakes and failed gambles. The greater the number of people who use the banks for essential fiat transactions only and store their wealth in other ways where the banks can't profit from it, the more harm it will do them financially.
