This isn't anything earth shattering, I'm just new to the forum and felt like tossing in my 2 cents. On another thread someone was talking about "getting in" on silver at the right price, timing to sell at the high, etc, and I had a thought on it that I'm sure others here have had as well since people here are silver stackers, and that thought is ... does it really matter that much what the price is if you are stacking ? By way of example, the currency in my country is USD, and the currency of most of the people here (it seems) is AUD. For someone who is talking about buying and selling silver, they're probably talking about buying and selling it in AUD, but isn't that all just a matter of perspective ? What I mean is that most of the people where I am would feel very uneasy about having a pile of AUD, most have never even physically held an AUD note before, it would look like play money to them, just paper with pretty pictures on it and the colors are very unfamiliar, as is the little clear window in the note - I know because I do actually have a few AUD physical notes, but that's the only reason I know what they look like. Most people who deal in USD in their daily lives would not want to save money in AUD, they would worry about it all the time, what if Australia sinks into the ocean ? What if the economy changes and Australian dollars aren't worth as much when it is time to sell them ? What if the market breaks and you get stuck with AUD and can never get USD again ? Etc. But to someone in AUD, it's probably just the opposite, spending their precious AUD to get a pile of USD is probably going to make them worry, was it a good decision to buy USD, what if the USD goes down ? What if the U.S. economy goes horribly wrong and USD isn't worth anything tomorrow ? What if, what if, what if ? I think for new silver stackers holding silver is much the same, they aren't accustomed to thinking in terms of silver being an actual currency, it's like a foreign currency they want to trade to "make money" (meaning increase their AUD or USD holdings), but it isn't something they think in terms of it being a currency on its own. But out of AUD, USD, and silver ... isn't silver the more universal currency, with intrinsic value, the only one of the three that isn't just a piece of paper with some pretty pictures inked on it ? It seems like an objective person, one that was not thinking in terms of the currency they are most familiar with through an accident of birth might see silver as the better currency, and feel somewhat uneasy holding paper. Someone transported through time from a thousand years ago would probably have a much easier time choosing between silver, USD, and AUD, to the point of having a belly laugh at the prospect of holding a stack of paper notes, or worse, electronic digits, instead of silver. So back to the original thought ... does it really matter that much what the price is or where its going ? People imagine that their home currencies are stable, Australians probably think that about the AUD, and people in the U.S. certainly believe that about the USD, but AUD and USD change price dramatically against one another in relatively short periods of time in the forex markets, neither one is stable against the other. So does it really matter that much if you're holding AUD, or USD ? or silver ? It just seems like it really shouldn't be some kind of anxiety producing trade to make, because even if you don't "buy" anything, just holding your home currency IS A LONG POSITION. If you buy NOTHING, you are long your countries currency, for better or worse, you are fully invested in that currency and nothing else and at the mercy of the forex markets. Shouldn't THAT be the most frightening position to be in ? Is it rational to feel "safe" in paper, safe to the point that you don't even pay attention to how it trades against other currencies and commodities when you're holding it, and yet feel "anxious" in silver, and start paying close attention to every little price move ? Why do people who wouldn't pay the least bit of attention to forex markets when they are holding a stack of their home countries currency suddenly feel the need to day trade when their holding a foreign country's currency (or silver) ? Isn't the decision about which currency (or silver) to be long all in people's heads ?
I'm Australian, but don't restrict myself to only buying in one particular currency. I'll buy (whichever asset, not just gold/silver) in whatever currency I believe will give me more value for my purchase. I've been shorting the AUD using a US denominated trading forex account, buying USD ETFs using Australian dollars, buying gold ETFs in USD as I believe the AUD has further to fall. I'll buy physical/unallocated here in Australia using AUD and unallocated in Singapore using USD.
It's always good to frequently revisit the philosophical motivations for why you do things. In the last few days, I've started to drastically rethink what I'm doing. For instance, I spent ages looking at ways to flip my stack using the GSR only to find that it could take ages for a suitable ratio to come along and might never. Then I started looking at how to hedge against the falling AUD by buying USD whilst it is still on the rise. Then I started the process of listing my semi-numi silver on ebay to reduce my exposure to things like lunars. But here's the thing: even if I got a favourable GSR and even if I got a good handle on foreign currency exchange nothing makes as much economic sense as paying off my credit card debt with cash or putting money into my mortgage. So rather than wasting energy trying to make two bob on hobby investments, I decided to strike aggressively at the things that really matter. Once I have that sorted then I can justify increasing my stack. Then the whole idea of stacking started to make more sense. Why am I doing it at all? Certainly not to make money. So if not making money then what? A global market crash where fiat is worthless? Well for that strategy to make any sense at all you need to have a global market crash where fiat is worthless and you need that situation to be in place for a long time for your hoard to be valuable and if we are in a situation where gold and silver become common currency then you are going to need a whole lot more than just metals. Now, I like a good apocalypse as much as anyone but I'll just bet that in 5 years we are still talking about when the US debt bubble will burst. I just don't see it happening to an extent where I'm buying the last drum of diesel with a 10oz lunar. So if that scenario is most likely never going to happen then what is my pm strategy? More importantly, why? When I moved to Melbourne from the holy city of Newcastle, I met a lot of jews from the Eastern suburbs and almost universally they had silverware and jewellery in large amounts. I asked them why this was a characteristic of all the Jews I met and they all said the same thing. They had been kicked out of so many countries over the centuries it became a characteristic of their folk to always have a good quantity of portable wealth in case they are fleeing with a donkey-drawn wheelbarrow and have to start again somewhere else. Initially as an Australian, that seemed a bit over the top but to the Jewish community it was common sense and real. This left an impression on me and now I see my physical stack as a secret re-start package if the SHTF. I don't think it ever will but if I'm wrong I am prepped up solid. Sorry about a stream of consciousness rant but Bad Medicine made me do it. Comments? Am I wrong? Silver fever can get you bad if you're not careful.
Not all the currencies are equal. USD is the de-facto reserve currency of the world, and you can go in any country and spend your USD without having too much trouble. Try do do the same with, say, Jordanian Dinars or Saudi Ryials and let's see what happens. So, yes, I would be worried to hold a currency that I cannot easily spend or that I can use only in particular places. Not worried about holding USD at all (compared to other currencies of course), or local currency where I live. I'm not sure silver can be considered now a currency, but I'll leave someone more knowledgeable than me to debate on this point. The whole point of buying and holding precious metals should be to swap them for something that you need or want in the future, or to pass it down to the next generation, and not just to hold it because it has a nice weight and shines. So, yes, I care very much about their price in any specific currency that I might have to use in order to acquire something that I want/need, and I hope that PMs can maintain their purchasing power better than currencies.
Liquidity of AUD? I was in Turkey, on Aegean coast go karting and did not have any Turkish Lira to pay. I told the guy I had no local currency and need to do exchange, he said not a worry, he looked up on internet did calculation and I did pay him in AUD. This was at least 10 years ago. AUD is very well recognised currency. Also a few years back it did worth more than USD as well Timing is very important in almost everything and economics is not an exception. When Reserve Bank of Australia had talks about AUD needs to drop to 75 cents and lower against USD I had about 140K in AUD which I did convert to USD. It was risky but down trend already started and RBA's direction of AUD was kind of enough signal for me to exchange it all to USD. AUD is about USD 0.71 now from $0.88 when I did change it all. Precious metals priced in USD and now is a very good time to buy as much as you can afford in my opinion. Considering; You have no debt at all which attracts interest so you are losing money every day, You have no business idea so you can make more profit vs precious metals You dont need all your cash for something else, ... For me I have about AUD50.000 I can invest in Precious Metals and have no debt, I dont need to access that 50K in near future and have a medium to high tolerance even if the value of my stack stays same or drops (at least 1 year I dont mind making profit on it) even considering I get in when silver was cheap AUD20 per oz. Everyone is different and some have plans some dont, some have good plans some think they do have a logical plan where speculation of precious metal prices making them illogical instantly. You need to know where you exactly stand on this market time-frame Need to know your limits as how much you can buy and afford to keep Where you will keep it? Home or vault? Will you be buying and selling mostly to make few dollars each day or week or keep stack and wait? Will you ever touch higher premium bars coins or not? Gold or silver or both? Etc etc... I am still learning and had 2nd thoughts many times about my choices on bars and coins I did buy. But I am very happy up until now and will be happier I hope All the best and keep stacking
Recently silver's gone up in USD and the AUD has dropped so it's a good time to buy silver [provided that (as others have already pointed out) you don't have any other calls on the money you use to purchase the silver.] Point being that the actual price is not part of the "buy" justification in this example. Mind you, the fact that the price is at the low end of the scale is not insignificant, and then there's the fact that silver is a lot cheaper to trade than gold, so for me "Yes the price does matter". As far as I know the idea that rationality drives decision making in people's economic decisions is not part of reality - apparently many economic models are based on this assumption and it simply doesn't hold true, which is why the models aren't entirely helpful. Yes, it seems to be largely all in people's heads! Interesting, isn't it ?
I would like to be as sophisticated as this in taking positions. I think that an advantage that Australians have over people from the United States is that your tax authorities treat your foreign income differently. For U.S. citizens this is a real nightmare with NBAR, FATCA, etc, all driven by the way the U.S. taxes its citizens' foreign income.
And you are one of the most established stackers on this forum Alf. Very strong tolerance levels right there
I got in motivated by the promise of a quick and massive profit. Most call that greed. The mantra in 2012 / 2013 was: "Fiat will collapse and bullion will go to the moon (to da mooooooon)". Check various youtube bullion gurus 2012 / 2013. One night alone I (and anyone else that noticed) saw spot fall 8% :lol: I'll leave you to work out the rest.
I'm sort of the opposite Swoydaz, I was interested in silver back in the 90's until it really started taking off above about 15$us and then I felt like it was too expensive and stopped buying it. The last time I purchased PM was in the 2008 downturn. Now that it's back down near 14$us I'm interested again.
But then again ... as a little old lady said to me waaaaaay back in the late 70's, "wishing is good time wasted" :lol:
Wish you were wrong, are you thinking PM will keep falling ? It would be great if silver went to 3$us and everyone would swore it would never go up again, that's what it was like in the 1990's during the Internet stock boom, you couldn't find anyone who thought gold and silver would ever go up in price. People would call a bottom, buy, and it would go even lower, time after time, it was not a happy time for bugs unless they were stacking for the long term.
Sure ... the silver people bought at $32 will look waaaaaaay better when it's at $3.20 When I and millions of others bought IN at AUD $32.00 the price heralded as LOW
Daddy would say ... "Wish in one hand, and ... in the other ...." (I won't finish the saying, but I assume it's probably a colorful saying in Australia too lol) :lol:
I don't feel stable in either usd or pm's.... yet at the same time both are worth about the same as when i got into pm's a year ago.... I say about as being within 2 U.S.D. I split my savings and although I might lose or gain a bit when I cash in silver, nothing has changed enough to make me not sell or buy again
I can buy a burger at Old McDonalds for three ASEs, so I guess silver can be currency, or is it that currency can be silver. The latter I believe. Like you, there are others more knowledge than myself on this issue.
