I know some stackers may secretly dream of a hyperinflation scenario where Silver is at $500oz or whatever. However I personally think it's a huge mistake trying to sell your stack during a crazy period like that. I think its a lot safer to sell most of your stack before then and quickly buy or trade for a hard asset or whatever your whole objective was in the 1st place of buying silver. If you try and sell it all once hyper inflation hits, you may find the money you make from selling is useless, days or weeks later and with all the other competition from other sellers you'd be competing with, it may not be easy to sell it in the first place. I'd like to sell 90% of my Silver just before the hyper inflation stage hits and buy a home . Not real estate, not an investment property, but a home If I can sell my silver and only need $100K loan for a house I think that would be excellent and not too much indebt for a house. So to my question... what price would you think would be a natural top for Silver before hyperinflation hits? Going by what I said, would $100 be a top when we start to get nervous and see true hyper inflation soon after? Or do you think $100 Silver would only occur DURING hyperinflation period? Perhaps $100 is way too early to sell? At $100oz I'd see a gain of nearly 400% which I cant complain about, but if I buy a lot more this year it will prob end up being a 300% gain... I'd prob still keep a 100oz or so after selling just to see what happens... I know nobody really knows the answer, but would love to hear your perspective and selling plans because selling is no doubt the hardest decision of all - buying is the fun easy part!
I will sell silver at a specific price, since I am already leveraged on a property. I expect to sell an amount that will pay off my primary property. Its as easy as depositing funds into the bank to wipe off the debt. I think this is the advantage of having some debt in an hyperinflation scenario as you won't need to go hunt for property and worry if there are any sellers accepting fiat. You might find that the ones selling are reprocessed property. Slam
Some considerations for this hyperinflationary scenario: * Are you confident that you will have a job when business start to get slaughtered * Are you confident the bank is going to give you a large loan while they are suffering from a plethora of defaults * Will your position protect you if your money becomes increasingly worthless (back to the first point if you want to continue eating). I would think the best time to get out would be towards the end of a hyperinflation, once a clear picture has developed regarding over valued and undervalued assets. And job security is not at risk
If I'm understanding you correctly, dont you think thats risky? We all saw how fast Silver plummeted in 1980....you could easily lose all your gains in a blink of an eye if you don't get out in time.
You're probably right....there are manor differences but still a bubble is a bubble is a bubble, you don't want to be one of the last ones to enter or leave the party
My Silver stash will transfer into Gold when the GSR seems right. I own my PPOR outright. I "work" for a state govenment. I cannot see my postion of empolyment going away without my "union" giving a good fight. I own Honey. There are MANY worse off. Enjoy the ride, because YOU have NO control of what the future holds. Yesterday is history. Tommorow is a mystery. Enjoy today as it is the PRESENT. Silver & Gold will give you a helping hand.
If and when the value of my stack equates my debt level, I will have to seriously consider selling lots of PAMP KG, PM 10&20oz, 1&10oz kooks and even some 1966's to you fine people. Until then, and it's a far way off from current spot, I'll just enjoy the ride. As for when in phase 3 or hyperinflation do I sell? When friends and work colleagues start talking PMs, I'll consider making that call. No one I know talks or knows ANYTHING about it.
Great questions. Hard to answer fully, but here are some quick thoughts: When the hyperinflationary stage starts (here) you will need to shun cash like the plague. Therefore sell ONLY the tiniest part of you stack (threepences are great!) for your immediate needs - or use barter. (Threepences will be worth about $20+ each eventually). Aim to have NO FIAT CASH on hand at all. Picture yourself on the beach on a very hot day and imagine your cash is an ice cream cone. You only buy one cone at a time - for use right now. You don't buy one for tomorrow afternoon - it would melt. (Most of you know this already, but some folk are still gaining knowledge.) Regarding House Prices: When the main crash wave strikes Australia our property prices will probably decline to around 20%-10% of their peak prices. This sounds a lot today, but this level of collapse is already occurring in Ireland right now, and some parts of the US have already gone further. (Note: More up-market 'established homes' will hold their values better than smaller properties and new unit developments. The collapse in prices will not be uniform.) Popping the property bubble will do most of this price damage - and will correct prices back to around 1995-1998 levels. This first collapse wave will trigger a severe leveraged credit squeeze (contraction) in the Australian banking sector, with one or more banking failures quite possible. (This would become VERY ugly. Aussie banks are highly interdependent - if one goes down another may soon follow. They are all highly exposed to mortgages more so than some US banks!!) At that point it will be *VERY* hard to get credit at any price regardless of interest rates which will eventually rise to VERY high levels. This credit squeeze will naturally further collapse housing prices to the levels I described above - some may go even lower. Don't be misled by agents who say that house prices 'only rise'. House prices are declining right NOW in most capital cities - at the rate of 1.7 to 1.9 percent per month. (Seasonally adjusted figures). Some new properties are already being advertised at a 40% discounts today. In summary, a silver-to-house swap will get easier as times goes on - but timing it exactly will be impossible. Just do your best! (Hotel 46's comments above are very astute.) It might help to think of it all in this way: Expect house prices to decline by 85% and stay there for some years - but silver will KEEP going up. $500 per ounce sounds high to new ears today, but this is a very conservative target. The real top in silver will be much higher.
In a hyperinflationary scenario, you'll be more worried about food on the table and a store of necessities. You can't sell your house to eat in that situation, except, most likely at a severe loss, unless you are swapping into hard assets, at which time, take a ticket and join the line. I'd keep an eye on the doubling time in the POG, POS, and in all major soft and hard commodities, to time it. You may feel differently about needing to own your own home in a hyperinflationary event. Otherwise, you'll be looking for a distressed seller. Should be plenty of them. As for timing, that would be when the price of housing is low and the purchasing power of your silver is high, as evinced by a POS to median house price ratio. Better still, you may wish to follow the mathematics of acceleration, especially if it is exponential. You'll want to pick your location very carefully, if we hyperinflate, as food and water security will be your concerns, and personal security (a backyard of fertile soil and a good water supply, as well as close contact with decent neighbours), as well as proximity to work, if not from home. There is also the question of proximity to transport. If you are a brave soul, you'll be close to mass transport, such as rail, and less so, bus. Best to be in cycling range, unless you have family, and cycling en masse is not an option. You could look at Argentina as a good example, as a Westernised country, with a history of multiple hyperinflationary events, on the timing issue.
I have a question. Actually, many questions. I'm often trying to imagine these hyperinflation scenarios from the realm of food politics and oil prices. If we talk about banks folding and the value of money becoming worthless all around the world at once then all things (required to live) will stop moving around the world. The devastation from that alone will be magnificent (in a very bad way, but historians will someday look back on this blunder in awe!). So, how bad is it going to be? When you live at the center of a major urban center and unemployment rates hit the point where a majority of people can't afford the hyperinflated food prices do you think the gov't will start rationing food and maintain order? Or do you think it will be a SHTF scenario where all that gov'ts can do is watch from the outside (even though gov't will likely be caught in the center of those devastaed hungry cities). How likely will it be that if you have silver and try to use it to purchase something that someone will pull a gun on you and take the rest of it. Are we going back to the days of the wild wild west where there is a repugnant smell of death in the air from a massive die off of starved people. I live in toronto and we are like 5% food secure. Which means that the pop'n can't survive very long on the stores that we have. The big question is, what does the value of silver represent about the failing of currencies. So, if we have $100 dollar silver doesn't that mean that the rest of the people using fiat currencies will be having an extremely hard time purchasing goods. And if so, doesn't the whole system collapse because the majority of that system is reliant on a consistent production and consumption of goods which are not necessities to living. Now, jobless and hungry people will riot and try to steal my canned beans. Thoughts and ramblings. You get my point, what are your thoughts?
A real person's experience with hyperinflation in Argentina: http://ferfal.blogspot.com/2008/10/q.html I honestly think that the point of silver is to speculate and in hyperinflation it could be very valuable, but so could a carton of eggs or a can of beans, and I don't think hyperinflation will hit Ausrralia. A massive deflation and collapse of currency replaced by a world currency, but we have none of the precursors for it to occur in the timeframes discussed here.
Guys, don't forget, during times of hyperinflation, debt is good. A $500,000 mortgage locked in at 10% PA interest rates when you're earning $100,000 a day is a nice situation to be in
So if the US goes into hyper inflation all countries pegged to the US dollar will experience hyper inflation too? So even the Aussie currency will need to be reprinted and we will have $1000, $10,000 bills? Kind of sounds hard to believe it'll happen here. Won't Australia, UK etc unpeg themselves from the USD into somewhere else like the chinese dollar or another currency once they notice things getting bad? Sorry for the noob questions....so much to learn, so many possible scenarios and what if's.
Well I'm going on record to say that you'll be wrong on both counts. House prices will drop, silver will go up. Apart from that, you're dreaming. C
We are looking at a different type of market with the internet news travels faster? ... I think the best idea is to use the stack as "trade" when the fiat has little or no value. Or trade for a different PM asset. For most stackers silver is long term, and slow to move out of it to other assets. The best question is... What will be the TOP of the market? There will be sellers at every new high... at $55, at $60,... You will see a lot of sellers at the $100. mark thinking that its at the high. No one really knows what the top will be. For me I can easly see $100 or more, and I will hold out for higher highs before I sell/trade. @ $1000 I will be looking for the next PM asset to trade for.
