Opposite View of Precious Metal Bugs.
- Thread starter barsenault
- Start date
I think this is the thread where Dan Norcini was attacked for saying that a cartel is not manipulating pms. Here is the evidence he gathered. Permabulls may not like it, but none have been able to refute the evidence.
http://traderdannorcini.blogspot.com/2014/03/gold-price-vs-hedge-fund-activity.html
http://traderdannorcini.blogspot.com/2014/03/gold-price-vs-hedge-fund-activity.html
wrcmad said:
Because it is POSSIBLE PMs will become worthless, doesn't mean it's PROBABLE,
In fact it highly unlikely.
Because we all have to prepare for the future all the time,
We work with what is the most probable future.
Because it's possible things might not work out as we forsee,
doesn't mean we give up trying to work with what is the most probable future situation.
Gold has been the mainstay in chaos for thousands of years.
It's possible it will become worthless in the near future, but highly unlikely. In fact its the best bet (thought not 100%) for
Ensuring the future if shtf.
mmissinglink
Active Member
The Crow said:
It's a very good question you posit and while some will argue that we just have to look back in time or in some other remote and different part of the world when some country then or there suffered hyperinflation and / or currency collapse to get the answer....I think this is dangerous, faith-based thinking. It ignores the incredibly important differences of time, location, and the arguably rapid rate of change that societies are going through in current times.
I'm not saying that we shouldn't look at other currency meltdowns of other eras or of very different regions of the world and examine them, I'm simply stating that it's a really bad idea for someone to argue, as they undoubtedly will, that all we have to do is look at the Weimar Republic or Zimbabwe (or whatever example will be used) to know exactly what will happen in this future hypothetical global currency catastrophe and what people will value then (what degree of valuation will they place on things like a blob of silver as just one example).
I'm of course hoping, being a stacker myself, that for the same crazy reasons
many people still value a blob of silver today, that there will still be this same level of 'love' for blobs of silver at a time of or surrounding a massive currency meltdown in the future.EDIT: I did not read all the new comments before responding with this one but now I see, as I totally predicted, that someone will use the Weimar Republic and someone may have already used Zimbabwe before I finish editing this.
EDIT 2:
Might you mean "revered"?
EDIT 3:
Now you are making sense in my view. It is about likelihoods and probabilities. It's because we can not know that blobs of metal will be seen to be worth less (but not entirely without value) in some hypothetical future (global) currency meltdown is why stating that blobs (perhaps especially silver) IS insurance is not really honest. Goldbugs tend to argue that gold will be valued far more than ever before and that things like diamonds will be virtually worthless during difficult financial times. Diamondbugs may have just the opposite opinion and will claim that diamonds is the best store of wealth. The point is, we are all more or less speculating about that hypothetical future whether we are silverbugs, realpropertybugs, diamondbugs, rarenumismaticsbugs, firearmsbugs, rhodiumbugs, or whatever it is we have attached our beliefs of future value to.
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I haven't got the space to stack instant coffee, toothpaste or toilet paper, which are apparently what people actually want in times of crisis (According to a website put up by a survivor of the serb/croat violence in the 90s.)
But if there is a currency crash or hyperinflation, people are still going to need to go shopping, they are still going to have to fill up their car with petrol. And shops are still going to need to sell their goods, and the last thing they are going to want to do is get hold of fiat which is going to halve in value before they can get it in the bank. Unless we can start trading in a foreign currency (Zimbabwe switched to the US dollar as their own currency went down the toilet) then we are going to need something.
Barter is not the answer for many reasons so people will be looking for something that is portable and divisible and all the other things that we look for in a currency. Hopefully digital transactions and credit cards will still be viable if we can use them but if not, gold is too expensive to be used for day to day purchases.
I have bet part of my stack on predecimal currency and round 50 cents. Not all of it, but they look like money, are recognisable to anyone who has been around a while and the price of silver is easy to find out at the time of transaction so for all intents and purposes they could be used. All you have to do is convince someone to accept them.
But if there is a currency crash or hyperinflation, people are still going to need to go shopping, they are still going to have to fill up their car with petrol. And shops are still going to need to sell their goods, and the last thing they are going to want to do is get hold of fiat which is going to halve in value before they can get it in the bank. Unless we can start trading in a foreign currency (Zimbabwe switched to the US dollar as their own currency went down the toilet) then we are going to need something.
Barter is not the answer for many reasons so people will be looking for something that is portable and divisible and all the other things that we look for in a currency. Hopefully digital transactions and credit cards will still be viable if we can use them but if not, gold is too expensive to be used for day to day purchases.
I have bet part of my stack on predecimal currency and round 50 cents. Not all of it, but they look like money, are recognisable to anyone who has been around a while and the price of silver is easy to find out at the time of transaction so for all intents and purposes they could be used. All you have to do is convince someone to accept them.
Fed officials cut monthly bond purchases by $US10 billion ($11bn), advancing the central bank's plans to conclude the stimulus effort at its next meeting, in October.
Gold prices have extended their losses as the US dollar strengthened and traders mulled the Federal Reserve's policy statement.
The December contract had settled at $US1,235.90 an ounce when gold trading on the Comex floor ended roughly half an hour before the Fed's policy statement was released.
The US dollar rallied against other currencies while gold prices fell to $US1,222.80 in electronic trading, a fresh eight-month low, extending earlier losses.
http://www.businessspectator.com.au/news/2014/9/18/commodities/gold-prices-touch-eight-month-low
Gold prices have extended their losses as the US dollar strengthened and traders mulled the Federal Reserve's policy statement.
The December contract had settled at $US1,235.90 an ounce when gold trading on the Comex floor ended roughly half an hour before the Fed's policy statement was released.
The US dollar rallied against other currencies while gold prices fell to $US1,222.80 in electronic trading, a fresh eight-month low, extending earlier losses.
http://www.businessspectator.com.au/news/2014/9/18/commodities/gold-prices-touch-eight-month-low
Another ignorant snipe at science? Save such stupidity for the climate change thread.mmissinglink said:
mmissinglink said:
Yes genius, you "totally predicted" this in hindsight. Then resorted to a strawman. After your previous demonstration of financial illiteracy the only firm prediction going forward is that you will again say something childishly stupid in an attempt to defend a naive and indefensible position.
The fundamentals of past events are educational and can serve as input for modelling future scenarios. You'd do well to learn something of the scientific process.
mmissinglink
Active Member
Jislizard said:
Good points and fair argument. As I've stated previously in this thread or forum (and you are actually supporting my argument with what you've stated, in part) we are all differently suited to stacking different commodities or assets or other tangibles that are arguably better stores of wealth than some things and almost certainly better than fiat money (unless a scheme is concocted by central planning which would convert the old fiat to the new (digital) fiat by percentage - but that may be a whole other discussion). For some people, certain types of energy sources are the best store of wealth because these people have the resources or storage tanks (or whatever is needed for a particular source of energy) to facilitate transactions of those energy sources. For others, owning real property is suited to their philosophy and capabilities while of course for most metal stackers, arguably, blobs are the store of wealth that is most suitable to us.
My biggest concern is that, at least here in the U.S. today in 2014, very, very, very few people see blobs of metal as important to own....even when I have confronted a number of these people with the reality of the possibility of a dollar collapse in their or their kids' lifetime, they can not be convinced that blobs of metal might be very valuable to own. This can not be overlooked by blob stackers I feel. Now maybe sentiment is different in your country but the point is, vast majorities tend to get their ways with elected officials and the elected officials post currency collapse will (my belief) cater to the masses more than to the tiny few and so therefore, a system will be set up where people will not need to posses blobs of metal to make the transition from instability to stability. So what role exactly will blobs of metal have in such a hypothetical time? How will that affect their value?
EDIT:
Fair enough...I do think it's important to a degree to look at history but do you understand my point about relying blindly, solely on history from some past time and from some past place whose conditions may no longer be very applicable to some future hypothetical time?
.
Exactly.Peter said:
As noted earlier, precious metals are part of a small set of consistently proven stores of value:
...currency can sometimes come under attack as a store of value (such as in hyperinflation). In those instances, other stores of value have proved their consistency over time, such as gold, silver, real estate and art. The price of gold, in particular, will often skyrocket during times of national peril or when a financial shock hits the broad markets, as demand grows for other widely recognized stores of value.
While the relative value of these items will fluctuate over time, they can be counted on to retain some value in almost any scenario, especially in those cases where the store of value has a finite supply (like gold).
To ignore all of past history and to fail to insure against future risk are the actions of those who have come to expect to be bailed out and to never bear responsibility for the consequences of their actions or beliefs.
mmissinglink
Active Member
Peter said:
Yes, but that doesn't mean that silver IS "insurance" or that I can be ensured that blobs of silver will have similar value in some future SHTF time. That's been my point all along.
We are speculating, we believe, we hope, but we can not be assured...we certainly can be wrong. That's what my point is.
.
mmissinglink
Active Member
SilverPete said:
No, not at all, I am speculating; storing blobs of silver doesn't insure me against loss of value. I am gambling that my blobs will retain their value (or increased in value) so that in a potential time of need to sell in the future, those blobs will have significant purchasing power.
There's no assurance they will but there's always reasonable hope.
Silver blobs are not insurance.
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mmissinglink said:
* Gambling: introduces risk where none exists.
* Speculation: taking on existing risk (in expectation of substantial gain)
* Insurance: mitigates risk where risk exists.
According to your rationale for holding silver, you are anticipating a "potential time of need" and you are hoping silver will at least retain its value. At least according to your description above, you are mitigating risk, not primarily looking for financial gain.
So while some stackers may be validly speculating, hoping for substantial gain, you are using silver as insurance.
So you have (a) Risk of ccy meltdown + (b) holding silver for mitigation against risk of ccy meltdown = (c) insurance against such an eventualitymmissinglink said:
Awesome response Peter.Peter said:
Much appreciated.
This is the same risk management philosophy that technical analysts use to trade!
And since T/A is often referred to as gambling (on this forum), then I guess logic would follow that stacking is neither insurance, nor speculation!?