Correct..it does NOT protect against inflation...when talking about an average investors, investing lifecycle..from between ages 25-60. Since nobody can predict the highs...as they are occurring (remember when silver was $40...people were buying...and predicted $100?), only AFTER they have occurred...and, since Silver was 95% less in 1980 then in 2002-2003, it seems to be more of a hedge against crisis. $100 in 1980 $58 in 1981 $34 in 1982/1983 $5 in 2002/03 $50 in 2011/2012 $13 in 2015/16 Yes...if your Great Great Grandfather purchased in 1918...and, YOU sold it today...it would be a net positive..but, for whom? Not your GG Grandfather. If an average investor...picks the wrong time to purchase (which, from the looks of it...you don't see Silver dropping below $20, based on a lot of factors that YOU see), then their foreseeable investing lifetime could result, and many times has resulted in, a net loss. In terms of the current state of affairs...we didn't see the QE having much of an effect, long term...on the prices of PMs, considering the TRILLIONS of dollars, and nearly 100% increase of the printing of money in the past 8-10 years, Silver was STILL around $13 a few months ago. Short term investing in Silver can be very good...and, short term investing in silver can be VERY bad. Bottom line...if it was merely a hedge against inflation, you'd be ok holding onto this stuff for 10-20-30 years..but, as recent history has shown, that's not the case. All of the data in the world doesn't win over pure luck and instinct.
Relax dude...you seem a bit argumentative. I can cherry-pick data all day long, and show you real people who bought at the wrong times, and have lost thousands and thousands of dollars when investing in Silver for 30 years. If I were you, I'd purchase a bunch of Silver at 20$ USD...because, that's what you clearly believe is a good choice. I'd even invite friends to do the same. Me, personally, will wait...and if I miss the boat...rest assured, it will come tumbling down...like it always does. I'd invite my friends...to do the same. ultimately, it comes down to personal investment goals, short term/long term/risk mitigation/assessments Thanks for the...comments.
I used 1918 because it was the closest date I found to the Breton Woods Agreement, (1913) which sent the dollar on it's 95% slide as of to this day. We can compare just about any good (commodity) you like, because your statement is FLAT OUT FALSE. Inflation is the INCREASE IN PRICE IN GOODS AND SERVICES.... Today, You can buy MORE commodities with the same amount of silver than you could have bought with thAT amount of silver or paper money in 1913, (AND MOST OF THE YEARS SINCE THEN!).... Silver has held it's value (OR GAINED) in in value relative to other commodities. That is why silver is a hedge against inflation. Do you contend that you can still get a gallon of gas for 20 cents? Only if you use SILVER DIMES, THEN YOU CAN GET 1.75 GALLONS!!!! get it yet?? What part of this don't you understand? Don't you understand what the terms hedge and inflation mean? You must not understand basic economic principles if you cannot grasp this. Silver and gold are one of the best hedges against inflation.
You seem pretty upset. Sorry to have made you so angry. I won't contend getting a gallon of gas for 20 cents...but, I will only contend that if you purchased silver at the wrong time, within the past 40 years...your investment could have been shockingly bad...depending on when you purchased/sold. In 1979, an ounce of silver would have purchased 25 gallons of milk. Today, it's 5. 10-12 years ago...it was 1 or 2. For me, it's just the basic economic principles of purchasing power...as it relates to periods of time, during highs and lows of an investment platform, of which silver is not immune. And, what is your infatuation with 1913? Did you invest then? My point about an investors life cycle (30-40 years), and the value of Silver as it pertains to the dollar and other commodities...and, how it COULD have been disastrous, and HAS been disastrous for many people...remains true. This is borderline trolling...so, that's all I have to say on this. But, I do appreciate your feedback on my lack of understanding on basic principles of economics, so for that, I thank you.
So, when I don't wait a "very, very, very long time," I have permission to come back and discount everything you've said, deal? And, if I do...wait a "very, very, very long time," you have permission to do the same. Now...to determine what each "very" equals...some analysis will have to be done, but in terms of years...a VERY long time is at least a few years...meaning, a VERY x 3 must be at the very least..a decade. I have a feeling i'll be responding to this prior to 2026. Much like, people said gasoline would NEVER be under $2.00 again.
For me personally, where the price of PMs goes in future isn't the point. I might make money, or lose money, but that doesn't matter. This is because my interest in PMs is simply a diversification/risk mitigation strategy as retirement approaches, along with (most people say) a likely recession/economic event. About the only thing we can be sure of going forwards, is that we can't be sure of anything, so spreading my hard-earned around is an attempt to minimise hardship if/when that happens. My 'diversified' portfolio isn't like many of the folks on here own though; it's pretty simple and unimaginative: I own my house, I have a half-decent super balance, some cash in the bank and a small hard PM collection (with plans to increase it over the next 2 years unless the price goes stratospheric). I guess I'm buying into the 'cycles' thing, in my own modest way.
Some would argue that the best strategy is to buy PM's on the dips whether the market is a bear or bull. .
But the dip from what? When it was $45 it dipped to $44 then continued climbing and dipping. It's hard to really determine what's best. If we did, everyone would be millionaires, zillionaires or whatever I bough silver in 2010 when it was around $20usd. Today we are at $20Usd... You don't want to buy PM's at that historical highs. I'm comfortable with my stack to not buy moving forward, but I would still be comfortable buying As long as the trend is up and is still below the historical high. To me, I'll be happy to around $27-29, at that point I would stop.
Date / total net futures position / end of day price / projected cash price based on a 10000 bottom position. Last calculated as ((position - 10000) * 5000) / 70000000 The 70 Moz is an estimation of supply/demand change of 70 Moz per price dollar. 16/08/2016 104893 $20.035 > $13.2 02/02/2016 45474 $14.26 > $11.80 26/01/2016 28799 $14.33 > $12.99 19/01/2016 36034 $14.03 > $12.17 12/01/2016 30562 $13.88 > $12.41 05/01/2016 28799 $14.01 > $12.67 22/12/2015 31162 $14.24 > $12.73 15/12/2015 23542 $13.74 > $12.77 08/12/2015 31027 $14.24 > $12.74 01/12/2015 29821 $14.21 > $12.89 24/11/2015 28725 $14.14 > $12.89 17/11/2015 35524 $14.25 > $12.43 10/11/2015 50129 $14.55 > $11.68 03/11/2015 67141 $15.38 > $11.30 27/10/2015 69373 $15.80 > $11.56 20/10/2015 66800 $15.86 > $11.80 13/10/2015 58626 $15.61 > $12.14 06/10/2015 49502 $15.67 > $12.85 29/09/2015 30106 $14.56 > $13.12 22/09/2015 31314 $14.94 > $13.42 15/09/2015 22255 $14.35 > $13.475 08/09/2015 25560 $14.63 > $13.52 01/09/2015 24566 $14.68 > $13.64 25/08/2015 23970 $14.87 > $13.87 18/08/2015 25437 $15.23 > $13.41 09/06/2015 35941 $16.13 > $14.28 02/06/2015 57569 $16.70 > $13.30 26/05/2015 61502 $16.79 > $13.82 19/05/2015 62485 $17.40 > $13.71 12/05/2015 38103 $16.46 > $14.45 05/05/2015 37250 $16.42 > $14.44 28/04/2015 33999 $16.32 > $14.6 21/04/2015 33836 $16.08 > $14.38 14/04/2015 41980 $16.08 > $13.8 07/04/2015 50438 $16.86 > $13.97 31/03/2015 49861 $16.60 > $13.75 24/03/2015 39242 $16.97 > $14.88 17/03/2015 30210 $15.56 > $14.1 10/03/2015 33263 $15.78 > $14.1 03/03/2015 39712 $16.42 > $14.3 10/02/2015 53457 $16.80 > $13.7 <- alot sales and/or demand drops on the cash market around $17 03/02/2015 56199 $17.59 > $14.29 27/01/2015 61593 $17.87 > $14.18 20/01/2015 55641 $17.80 > $14.54 13/01/2015 46804 $17.00 > $14.37 06/01/2015 36951 $16.47 > $14.54 30/12/2014 38636 $16.25 > $14.20 23/12/2014 33732 $15.71 > $14.01 16/12/2014 33997 $15.87 > $14.16 <- alot sales and/or demand drops on the cash market around $16 09/12/2014 35357 $17.12 > $15.31 02/12/2014 26576 $16.31 > $15.13 25/11/2014 22043 $16.56 > $15.69 18/11/2014 18367 $16.08 > $15.48 04/11/2014 12408 $15.77 (lowest position of the 3-4 months cyclus) One can conclude here that around start 2016 the 5 years downtrend reverted. It might have been the reason for the exceptionally big futures market hedge: instead of the common 50K sized frontrun on the 3-4 months term, it's now a 100K one. Of course, they're only a part of the story, if other markets would become more attractive, silver ETF shareholders may swap to those, which would be a price hammer as big as the futures hedge now. At least till the time they sold off. It's hard to foresee such more attractive other markets though. Typically, this is done by the central planning by increasing the intrest rate on bank deposits. But there is a big debt level, and a big bank deposited amount, and it wouldn't surprise me to see another decade of these low intrest rates with a 3 or 4 crises in it. All ment to make those bank deposito holders waste further savings on temp increased prices. Because those savings form the key problem for the legal thieves club, it's easy to give a 10% intrest rate (just create new fiat), but much harder to take it away without complaints.
Pirocco What's you thoughts on the paradigm shift we will have once interest goes up. The amount of money that will want to move to interest bearing bonds and treasury deposits will be staggering. (not as panic just the normal dynamics) What your thoughts on that.
As said, there are too much bank savings to allow interest up, in this environment of hanging general prices level. Just imagine, normally bank depositors are the milking cows of the central planning. If you increase their savings, without the prices of what they (gonna) buy increasing too, they gain instead of lose. The entire setup is to make those that borrow (State & Co) gain. So the central planners need to get rid of sufficient bank savings first. In order to achieve that, they try to make depositors waste their savings along temporary driven up prices of gold, silver, stock shares, ... By bringing crises, confiscation threats, cash withdrawal limits, cash transaction limits, lower limited bank deposit "guarantees", concern, etc. But not too much. Sudden shocks like confiscation or declare deposits as lost (legal bankruptcy of bank) or devaluations, may be too drastic, in that the trust in banks, currencies and State may suffer a big hit, causing a spending and speculation rates to drive the currencies into a hyperinflation spiral. So the central planning needs time. Hence my decade of low interest rates. They could also just fail (speculators learn too) to reduce the deposits enough, at which point drastic / draconic measures could be expected. Leading to serious recessions, depressions, conflict, you know, history has some of those. Another element worth to mention: the economical progress. In previous times, scientific / technological progresses allowed to produce more at a same cost. Usually, a central planner tries to throttle his inflation rate at a ratio to this progress. That is what happened during the 1980-2000 decades. The most influential probably be computers and automation. Compare old industrial plants with new. The big question now is, what will this progress be over the next decades. There are some promising technologies, 3D printing, nanotechnology. But it's hard to see such a large scale economical impact in these. More gimmick than economical. Over the 1980-2000 period process control computers replaced huge amounts of electromechanical/pneumatical devices in the plants and allowed to control much more from a single place. Big machines, one control console, one operator. It was a real world macro economical advance. Todays new / promising technologies don't suggest such a large scale application and impact as the move to computers. So I can't see much compensation for central planners' fiat production and along it, rate manipulation. So savings, the eternal problem of the government thief, sit in the way to continue his theft scheme. Trouble to get rid of the debt, obligation to pay back in real terms (ie not fiat measured) in the normal disguised way, is just its consequence. Government can "donate" all it wants along "interest bearing bonds and treasury deposits", that extra money still faces a same production. A speculator that instead buys / holds production, thus frontruns those "paradigm shifters".
Who thinks rates will rise?? Same experts as 3-4 years ago... Nearly impossible in this environment still...maybe negative first.
Hence thinking about strategy. No one in the right mind thinks it will be 5% next year but a year or two after that? Im considering has PM run its course.... What if what we are seeing in the world economic volatility/crisis now/currently is as bad as it gets. Do you think PM will stay at the same level or go back to $6US, considering that the only two increased silver usage sector/market by tonnage over the last twenty years are stacker, hobbyist, investors and the actual mines mining the stuff. All this talk about industrial uses.... pfffbt really hasn't changed, it's just shifted. The amount of silver or gold used by industry is the same. I am not saying it has run it course, they is still money to be made. but the way I look at my PM unallocated in my funds are very different to my hobby in silver coins.
I presume there are many here, who do distinguish between hobby and saving/investing be it as a prepper, Superfund, or as a smaller dealer/trader. I doubt many truly believe that silver/gold will shoot to the moon and we can go out and buy a house with 50oz of silver or such. It might happen, but to me it is of such a small chance it is not a factor in my outlook in my investing strategy. I dont day-trade as I don't know enough about PM market. But for me looking in to the horizon and thinking it will go higher $25 to $30 US an ounce. But like all metal it will come down. PM iis a mix of diversified investment, but small enough that if it doesn't happen, it not going to hurt much, but if it goes well, than a nice little earner. I say all of the above - looking at just few metrics no one seems to talk or discuss much. The huge increase in bullion sales as an overall silver use. http://www.silverinstitute.org/site/supply-demand/ Silver output 2006 917 moz -> 2015 - 1040moz Industrial use (inc industry jewellers, coins, solar, cpu etc etc) 2006 - 936 moz -> 2015 - 1070moz Bullion (coins and bars) of that production stripped out from above 2006 - 50 moz -> 2015 - 292moz (whopping 242moz increase) it has increased basically from smallest category to the single biggest. The ONLY significant overall increase. People talk about deficit of silver, but that small number is insigificant if hobbyist and investors start to move away as the economic volatility decreases. Just imagine if bars and coins sector slide back to 50moz, and dumb miners kept on producing creating a silver mountain of 250moz. Many will say lot of the miner will shut down.... true but only the smaller primary producers, as major silver production is a byproduct of other metals, the major producers/miners will keep producing it. If people think that it will not happen, have a look at coal and iron ore and BHP and RIO. They have expanded and have such economies of scale that even though the world prices have come down to less than half they are still profitable (barring one off mishaps) and they are mining the same amount or more. The smaller player are dropping out because they are high cost producers. just my 2cents
^^ Just like to clarify, to me preppers and doomsayers, are just like me in the PM investment sense. We are all saving for the future, but we just have very different outlooks. I look at PM => convert to dollars and the more fiat it is makes me happy Preppers => look at PM and they feel happy looking at their ever increasing hoard.
