I agree with you. I have been searching for a reason why this wouldn't be true. Smart people like Raoul Pal never address the issue. The crypto community seem to believe that its decentralised nature protects it against the hand of the government and that the introduction of government backed versions wont affect price. Crypto is great but there will be problems for existing players as new versions emerge.
I still dont know what I think about cryptos but I bought a few anyway haha. I consider it part of my diversification. If it does nothing thats ok, if it goes to da moon I'll buy some new work boots and some silver.
lol, that's funny. When I said the world, I think I meant the government. And people in california and SJW's and most public servants.
Thing is, paper is only good when there is trust. We have not lived in a time with no trust. So it is hard to envisage a future where trust goes away. Trust is like musical chairs, it is like the game musical chairs, when the music is playing, it is the music. And silver is the chair. Hypnotised by the music, nobody wants to sit down, they want to keep dancing with the lovely ladies. There are trillions of dancers, but any second the music will stop. And usually there are just one more dancer than chair, so only one goes out. But thanks to money printing, that rule has been broken, and now there are thousands of times more dancers, everything is out of whack. Everyone should be very concerned because of the lack of chairs but their not, because they do not know they are in this game. What happens when china or indian government decides, lets print some money and buy all the silver or gold? Honestly it is astounding this has not already happened and that you can still buy any metal. And that is just 2 countries. Then you have all the wealthy people. If you had your big mansion, your shopping centres, apartment buildings, you were earning say 3 million a week net. And there would be thousands upon thousands of people like this. If there is 50 000 people like this and they decide to buy one million dollars of physical silver a week. That is 50 billion per week. What is there 3 to 4 billion ounces for sale? All gone wednesday next week. Anyway, probably never happen, can you store 1 million. 50 000 ounces, 1.5 ton?
Government digital currency is not the same as cryptocurrency. A government digital currency is a centralized, regulated network. It is regulated such that transactions and accounts can be frozen or canceled. It is nothing more than a debit card/account instead of physical currency. It can be devalued just like any other currency and often is because in the ease in which "money" can be created by a keystroke instead of printing paper or minting coins. Cryptocurrencies are founded on a decentralized network (typically blockchain) and while there is greater transparency of transactions no single individual or supervisory authority controls the actions in the network. It is the ultimate decentralized monetary system. Love it or hate it - up to you, but it is definitely not the same as a government digital currency. Also, as we know, there is no limit to the government's ability to print money. With BitCoin, for example, the algorithmic foundation makes increased production of BitCoins harder and ultimately caps the number of BitCoins that can exist.
To keep this thread tenuously anchored to the title I commit to posting a running price update each Tuesday morning 9am. 3 Tuesdays so far so there are 3 ask (offer) prices from my SAXO spot trading account: June 23 approx 11am 1786 June 30 approx 9am 1786 July 7 approx 9am 1830 I wont be using the Kitco prices which track the SAXO platform anyway because they are not live tradable prices, have a large Bid/Offer spread and are quoted New York time not Aussie time.
If you had the dates on them it would be better. I don't know which is first the top or bottom. But for clarity today: 07/07/2020 is $1786 on Kitco
Good point so I have amended the post. Can't see where you got the Kitco price from. Here is a chart of tradable prices from midnight and they are mirrored on kitco from what I see. We didn't get anywhere near 1786
Sorry mate, my bad. So funny, the gold price was exactly that price at the same time in full dollars.
Gotta love the colloidal solution analogy, I think it's well placed. For me, silver has such a strong upside potential regardless of investment demand or interest. I'll attempt to avoid writing a small novel in this post, but here are my main reasons for Silver's upside in the long-term: Industrial demand Mine supply Mine lifespan Known silver deposits Global mining ratio of silver to gold As most are aware, industrial demand makes up the largest portion of global silver demand, and the data suggests that demand from industry is increasing, whether it's increasing uses in medicine, electronics, photovoltaic systems or other areas. Mine supply has been increasing too, but most mines need to process more ore to increase production. This typically correlates to higher production costs. Mine supply alone has not been sufficient to meet global demand, in fact, the deficit is approx. 200Moz over the past few years. We have had deficits in mine supply vs demand for up to 15 years and are dependent on scrap metal refining to make up that shortfall. For me, this is crucial as the majority of above ground available silver is dwindling since silver was removed from our currency. The world simply doesn't have the silver stock available to feed the markets (long term) in times of deficits. Mine Lifespan - The lifespan of many of the major silver producing mines only have an estimated 4-7 years of production remaining. Cannington and Fresnillo allegedly fall within this category. Another important factor in this equation is annual production capacity. You can be sitting on a 500Moz deposit, yet have a production capacity limited to 20Moz per year for that deposit. Each mine will be limited in it's contributions to global supply annually. Known silver deposits - Here is a map of known silver deposits in Australia: It may look like a lot, but when you do the math, it's far from it. The largest of the circles indicate significant deposits, which all have an existing mine. The second largest deposits are estimated to be between 500-5000 tonnes. That's between 16Moz's and 160Mozs. That is not a lot of silver, I doubt it would be enough to warrant setting up a mine specifically to target silver at these prices. A large, open Pitt primary silver mine may produce up to 40Moz per year. It is also worth mentioning that silver deposits and ore grades do not equate to realised production. Real production is much lower than the amount of silver discovered or even extracted. The third largest (circle) deposits are only estimated between 1.6Mozs and 16Mozs. The smaller deposits aren't even worth mentioning. The deposit size is so small that it wouldn't be feasible to mine for the silver deposits until Silver was well into the 1000's of $$, and even then, the mine Lifespan would likely be shorter than the time it takes to set it up. The mines that are operating on those smaller deposits are clearly not targeting silver. Gold to silver mining ratio - The global mining ratio of silver to Gold is 9:1. With the majority of annual supply of silver being consumed by industry, it's only a matter of time before the price ratio begins its downward trajectory towards the mining ratio. I personally take a 10-40 year stance on my silver stack. My strategy for when to buy has mainly revolved around the All-In-Sustaining-Costs (AISC) of the primary silver miners. In an environment of year-on-year deficits between mine supply and global demand, the primary silver miners have never been more critical in establishing a bottom for the silver price. This bottom is $15-17USD for me. Many people tout the fact that byproduct mining making up the majority of silver production is the sole reason why silver can go much lower. This may be the case if we didn't have deficits in supply/demand and also had an abundance of above ground available stockpiles, but we don't. The bottoming of the silver price has directly correlated with the AISC of the primary silver miners over the past 15 or so years. Although primary silver producers only contribute to 30% of annual mine supply, they are a critical component in supplying the global market and many NEED the price to be at least $15USD to break even, let alone be profitable. There's a lot more to the AISC of primary silver miners though. Many primary silver miners rely on other metals like copper, lead, zinc and gold to sustain production, and silver doesn't even make up over 50% of their annual production. The price of these other metals is also important to consider as the lower they are in price, the higher the AISC for silver production and vice versa. Silver is well poised to increase in price if ore grades continue to decline, mines begin to close and demand from industry continues to increase. Then you factor in investment demand! Investment demand is an entirely different beast. You can have a massive increase in price of investment grade Bullion without an overall shortage in global silver supply. Considering investment grade Bullion only accounts for approx. 20% (200Mozs) of global demand, the capacity to meet significantly higher demand (say 40% or 400Mozs) is dependant on the production capacity of the mints, the refining capacity of refineries and the logistical capacity to move product relative to demand in that time. In my view, this is why we have seen such increases in premiums for silver and the lack of stock at most dealers, it's the bottleneck aspect of production and supply. For all those reasons above and much more, I have chosen silver over gold for my retirement vessel at this time. That's not to say I don't hold gold, I love gold, but I can see much greater potential in silver for my purposes of stacking. I believe we could very easily see $40USD silver over the next couple of years, and it could even make it there without the influence of significant investment demand...
QE was a scam. It insinuated new money spending. It was just new money creation. And later on, destruction of new and/or existing (depending on amount existing money owners misleaded by the scam)
Great post. The more detailed the better. My background is financial so I look at price through a financial markets and economic analysis which is entirely demand side. It is interesting to read what you have written because it approaches the question of price mainly from a supply side analysis. What are your information sources?
There are so many. Much of the supply and demand data comes from silverinstitute.org - The known silver deposits in Australia were taken from Geoscience Australia: https://www.ga.gov.au/education/classroom-resources/minerals-energy/australian-mineral-facts/silver#:~:text=Australia has the largest share,lead-zinc-silver deposits. Things like All-in-sustaining-costs can be taken from mining companies, but that data is constantly manipulated to appease existing and prospective investors and it's my understanding the AISCs typically don't include Administration costs not directly associated with production and other important elements, like interest paid on loans. AISC data by itself from a single company is pretty much useless information. But aggregate data suggests an AISC average for the primary silver miners is around the $15USD range. The chart data has also shown that when silver dips below $15, it encounters enough resistance to make any time spent below $15 a relatively short-lived event, and a buying opportunity for me. my understanding has been obtained by 1000's of hours research and study into as many areas I could in an attempt to understand benefits and risks In holding PM as a financial asset. It's still just my personal opinion, formulated over years of analysing the benefits and risks associated with using PMS as a long-term saving and retirement strategy. I don't have singular sources, however, the silver institute does provide a comprehensive analysis of mine supply, global demand and a general breakdown of where the demand is coming from. Gold had my interest when its price was around the $1100USD range, as this was my assessment of when gold was undervalued relative to production costs globally. Of course, USD strength is also an important factor to consider. Here's an article which provides a bit of insight to mine lifespan, but most can be calculated by the annual production output vs estimated reserves. https://www.mining-technology.com/features/feature-the-10-biggest-silver-mines-in-the-world/#:~:text=Fresnillo is also considered to,estimated to be 12 years. You can compare the reserves to annual production and get a reasonable idea of how what volume of reserves = actual production over time and get an idea of a mines lifespan in the short to mid-term. There were more primary silver mines than I thought there'd be which have an estimated lifespan of 10 years or fewer. I intend to write an article, create a thread or even a video outlining everything I understand and providing all links and sources to back up my understanding, beliefs and position. I'll post it up here when that time comes. I'm not claiming my analysis is correct, it just makes sense to me and enabled me to feel confident in my decision to buy and hold PMs... specifically silver. I will add, I am subject to confirmation Bias since 2018, but the majority of my views on silver were formulated between 2014-2018, all whilst having little exposure to the metal, if any at all. 2018 presented an opportunity that I took advantage of. The same is true for March this year. It may be worth sharing that a sizeable portion of my stack is made up of 1oz coins. The rest is in 10oz and kilo bars, nothing larger. I did this to provide more options when the time comes to sell, with particular focus on having the flexibility of liquidating in small portions, rather than bulk. 100oz bars were the most appealing in relation to size and price over spot, but coins suited my needs when speculating on certain outcomes relating to price movements and options to sell outside of the 'dealer sphere' - a decision I am yet to regret. It goes without saying though; buying Bullion when the market is low @ and/or as close to spot will be most advantageous. If selling below or @ spot to a dealer, you will only need a marginal uptick in spot price to break even or be in the profit. The 1oz coins were a choice I made and don't think it's the best decision for most, yet it was a decision I was happy to live with whilst understanding the sacrifices I was making in regards to volume and the $$ cost average per Oz.
Apmex $100 bag of walkers just went up 50 bucks more. They want a little more than some dealers but they are the biggest here in the states. The days of waiting for spot to drop for purchasing is OVER.
You dont understand how comodities work lol. Because those shinny metals get used to make shit which is what gives them value. Eg those computers that store cryptos on. So your comparing apples to oranges, and your statement about metals value is the value some one assigns to them is wrong, simplified and silly. Those silvery and golden rocks you call it have real world uses, from medical, computers, electronics, nano tech, electrical, green energy to name a few. metal has and always will have its value at the very least as a comodity, unlike cryptos which can become outdated by new tech, likely will. Crypos Has no value as a comdity and is a few zeros and ones on a computer, utterly useless without those rocks that are used to help send electricity to the circuits that help store those crytos in the computers memory, also cryptos are utterly useless with out power and internet. Metals will always be needed for something thus always have value. Cryptos are no better than fiat. At least with fiat its plastic and paper and metals they are made from has more value as a comodity than those crytpos. Worse than fiat its actually easier to manipulate cryptos due to the limited number of them a few rich guys can do that. Any goverment could buy up a massive stake of a crypto and manipulate it. A crypto whale could crash it at any point they want to finally cash it all in. Plus crypto's are only usefull when it is converted back to fiat. lol Its just a trojen horse for fiat, and is not treated like a currency by any one really. And its wallstreeters getting together buying up a big lot, then driving the price up then dumping it, converting it to fiat, making the price go down heavily then buying it again and doing it over and over and over! Making their hoard of fiat bigger. And the small guy is trying to predict when these guys are doing a pump and dump lol. Eventually they will move onto the next trendy tulip fever type scam. Oh in wars of the past and even current where participating countries ecconomies go to shit because they run out of money. and their fiat is worth shit because they blew it all on guns and ammo, Those shinny rocks and other comodities tend to buy allot of bullets. The country thats selling the war machines may not take their fiat but they damn well have no problems accepting that broke ass countries gold, silver and other comodities they have. That never changes
