If one has collected an amount of silver that you are considering doing a GSR swap for at some point then you can get a continuous exposure to swapping by simply buying gold instead of silver. What you are doing in effect is converting an amount of silver that you bought originally to gold, even though you are buying the gold with fresh fiat. The benefits are that you don't suffer the loss in premium / spread that occurs on buying and selling metals that can make swaps less favourable to you. The other benefit is that you can in effect swap all your silver for gold and still keep your original silver. If you do this, the amount of silver that you have "swapped" is effectively repriced higher at the silver price at the time of swapping. But the gold you have purchased is bought thereby at the lower prices implied by the swap (depending on what the ratio was when you bought the silver - mine was at 65-75). It's a bit hard to get your head around this at first but when you understand the principal, if you have substantial silver, then you can swap it all out for gold as we go along, just by buying fresh gold with fiat. Just another way of accounting.
Thanks intelligencer. Currently wondering about how to add gold and this has helped me clarify my thinking.
Hi Intelligencer, Does this mean you are now buying gold rather than silver? I've had this dilemma recently...but caved in today and bought some more silver (hurt a lot given that I haven't purchased anything for some months now). From now on, I'm going to buy gold. I think I can get my head around your alternative accounting...1 oz gold is about the same as 1 kg of silver...the deal gets better as the GSR lowers... Maybe you can explain a bit more for those of us whose brain hurts with this kind of analysis.
Let's say you have $1400 for purchases coming in a month and have accumulated 20kg of silver over the past year. To buy or sell 1kg of silver costs $30 in transaction costs. To buy or sell 1oz of gold costs $10. You now believe that it's time to start converting your stash to gold. To do this, rather than paying the $40 to swap gold and silver, you simply pay the $10 to buy gold. Over the course of the next year, you will end up with a slow weighting to gold, with a minimum of transaction cost. Downside is that you never actually do swap the original silver
yes. but if you think silver is overvalued it's remaining in your portfolio. so it's not a direct swap. also, as forge says, requires a fresh supply of cash..
This may change your mind on Gold in the short term http://www.martinarmstrong.org/files/how and when 03-01-2011.pdf
I enjoy reading Armstrong's historical writings, but I find his short term predictions to be of no value. You can read anything you want about gold into what he wrote in that article.
It will be a very good deal to spend some time after buying the gold. The price is really hitting the top and it has become the worth idea for the investors in this field. Read forum rules regarding spam links
