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Guest Post: Lock And Load In Gold And Silver – Escaping From Plato’s Cave
Lock and load in Gold and Silver – escaping from Plato’s Cave, Submitted by Paul Mylchreest of the Thunder Road Report
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I worry for silver - these defaltionary explosions are a pure gold play - I believe silver will get taken down again.
Could be. Could be. I track an average premium vs. spot on one ounce rounds on Ebay and the spread is now about 20% on average. Six months ago it was less than 10%. It all suggests that there's a rush at the low end of the market to get in. We all know what that means.....
eco, why would anyone pay 20% premiums?.
When you can get Silvr for 6% over?.
eBay is the worst place to buy anything PM related I have seen.
People who buy PM's off eBay deserve to get screwed....LOL
eBay is a crock. Try 29 cents over spot for JM 100 ounce silver bars and free delivery at www.Tulving.com
Apmex and Gainesville Coin are also good for those who can not afford the Tulving 500 ounce silver minimums (or 20 ounce gold minimums).
Most folks can't afford a mint box of ASEs. Nearly every outlet that sells silver Eagles prices small lots at $2 or more over spot per coin -- plus shipping. (Gainsville @ $392/roll) That puts the price close to eBay sales. For the little guy it's a toss-up. With eBay you can get exactly what you want, no generic/bulk unidentified lots, if that's the way you want it. If you can quantify "crock" I might agree with you, or not. I've bought on eBay for years (since 1999) and have had one shaky experience, but then I am a dealer, so my experience is no indicator of future performance. If you have the bucks you can get better pricing, so where's the big surprise there?
ebay was good because 'bing' was giving you 8% cashback and 2% cashback from ebay bucks
Its over now. It ended last week.
In 2008 bing (live.com back then) was giving out 35% cashback. Thus, you could buy $700 worth of pms and get $245 back. Up to $250 per transaction and $2500 a year.
The sellers realized this and raised the prices. You could still get a good deal though. I bought like a drooling dog (under spot) and maxed out in under a week.
It may come back but it will only be 8-10% because microsoft figured out what people were buying.
The rush hasn't even started yet, thanks to the captured MSM. Ask the man on the street about silver and he'll say "huh?". Ask him to name a place where he can buy gold coins and he'll say "huh?".
When contestants on Cash Cab know precious metal prices, THEN the rush has started.
I worry about silver, too, but in a different way. At current prices, and with current supplies, existing stocks could be grabbed with a shockingly small amount of money.
You still have the buying gold virginity. Where people are afraid to do it because they've never done it before and aren't sure they will do it right. Then 2 months later they become precious metal sluts.
Actually, I think that is here. I was in a Cab last night and the cabby and I were taking deficits, audit the FED, paper money and hard assets... Did Rockefeller say, sell when the shoeshine boy is talking about stocks. Is it different this time?
Everyone knows though silver will break out of pandora's box first.
Agree. Silver has decoupled from gold. The gold/silver ratio is going the wrong way. Silver is moving with the commodity complex, not gold. Silver went from 20 to 9 in the crash of 2008.
I've polished way too much silver in my life to ever want to go out of my way to acquire it as a store of value. Gold doesn't tarnish and you don't need as much of it.
In that case you'll be pleased to discover that fine silver coinage demands a substantial premium for nice original toning like this: http://mbcoins.net/2643.JPG
No polishing needed! If you do polish this coin you will depreciate it by half or more.
Silver tracks oil (always has), so the real question is not 'what will gold do and how will silver fair', but 'what will oil do, and how will silver fair?'
Stronger dollar for the rest of the month, then the US faces State default or whatever, unless BS prints MAD CASH! HOT WET STICKY CASH! Besides, with peak oil coming off of its plataue (peak oil hit plataue in '05 if you didn't know) in no more than two years, what better way to prepare than to hold the REAL money that tracks its price? Silver snitches!
"Silver tracks oil (always has)"
It sure as heck didn't today! Nor did it do so through 1980.
It may track oil much of the time, but like gold supposedly being an inverse play on the US dollar, that relationship only holds until it doesn't.
Long term charts it tracks oil verbatim. Daily...well silver is a hybrid and it tracks oil first and then gold, as silver is the ultimate commodity/money.
time is growing short for JPM. they have NO fear whatsoever of any ridiculous justice department investigation.
the key is to keep a serious stash of cash ready to plough into silver when they stage their last and final bloodletting in the silver sector.
at that point, i'm buying everything i can get my hands on.......
I just hope my Euro cash devalues at a slower pace then silver......
Hold Hold Hold.
Spread it around. I'm holding some FXC and some FXF. I wish there was an easy way to buy NOK.
Edit: hedging Armageddon is a real bitch.
if this rush is like 2008, your hands will be gotten onto nothing.
There was very little silver available at the retail level during the last deflationary impulse. I mean as in unobtanium. Maybe 1000oz bars, nothing else. I witnessed a local dealer offering a repeat customer a significant premium over spot if he would bring in some of his substantial 1oz holdings to be resold.
Quite true, Trav. The earthlings will be shocked to find out just how little actual silver there is. It truly is a disappearing element since it gets used up (dispersed in applications that make it uneconomical to recover).
See here: http://tinyurl.com/28seevf
And here: http://www.silverinstitute.org/supply_demand.php#supply
@trav7777
Dealers had no bars or coins in '08 because most of them are smart enough to not stock up on a product that is falling in value. Would you commit to buying $200K worth of product if there was a good chance that you would lose money on every sale?
Similarly, the mints cut way back on their production when metal prices started falling. These metal markets illustrate why deflationary spirals are so destructive and why guys like Bernanke lose sleep over it.
Just a teeny tweak on your Mint comment: The U. S. Mint is required to produce to meet consumer demand. It is their mandate. Price of metal is no object as far as they are concerned. Availability is the only fly in the ointment. They also can only produce from metals mined in the U. S.. The slow down in production was due to a lack of availability of planchets. The U. S. Mint does not produce coins from scratch; they acquire planchets from commercial suppliers, and it was these suppliers who could not get silver/gold to produce the planchets. There was some talk of using Canadian suppliers but I think that was abandoned due to the sovereign mine problem. Same outcome, different problem.
It is my understanding that the large silver warehouses (like APMEX--I KNOW they do this) hedge their positions, such that they make money off of the spread. I would imagine that dealers would do this as well, or risk going bankrupt.
When you couldn't find silver at the retail level, APMEX had a severe shortage as well, with most products sold out. All they had left were numismatics and weird/rare coins, IIRC.
IMO, it depends where you buy, during the last dumping of silver to sub $10, my local coin shop had supply that I eagerly relieved them of.
the chinese citizens are buying up physical as are other populations around the world..its a matter of breaking the JP MORGAN manipulation through the short squeeze that is coming....then it will explode to the upside..only a matter of time..anyone holding paper will regret it ..you need physical or the mining stocks..
+1 China came out on there tv and told there people that they needed to buy Silver..
"Damn it China!" -Paul Krugman
What is the relevance of the information? With that Martin Armstrong guy picture in the side, I really wonder (guiltiness by association huh...)
Checking the French gold reserve in present days, it reads around 2,600 tons.
This guy claimed that the French won a war through an extension by 2,770.
Either they started from low(which they dont since they moved gold during WW2), sold a large amount or the guy is off in his numbers...
News from Germany (Munich in this case):
A friend of mine was at a local PM dealer and said she was shocked (she`s a longtime goldbug). People are rushing for the metal, no supply anymore.
She said it was as if a discounter offered computers for 2 Euros a piece. Krügerrand over 1.000...Euros, not FRNs.
I`ll check the situation with an online-dealer. The site of Germanys largest (www.proaurum.de) is temporarily down.
I think people may be realizing that all sovereigns are bankrupt.
In The US, not yet, the ( Network) media continues to make fun of all Gold PM metal sales.
Joe Six Pack hasn't started the run YET............when they do,look for $2k for a start point.(IF you can get it).
You got me wrong there, buddy. See my forum:
Gold-Silver.US/forum
Yep, the public only knows the cash4gold commercials and the media has exposed them as a scam.
I'm really beginning to feel that Silver is the 'poor eternal optimists (pessimists) gold' and nothing more. Don't get me wrong, i own much - have enjoyed selling and buying since $10 and made money over the last year and a half since the tank. It's just that as we watch the Euro confidence unwind over the past week, gold has more than held its own as flight to safety. Silver has once again succumbed to panic selling. I dunno - but i know i sleep better with gold than silver...maybe it will pop one day - $20 would be that pop for sure...but its a small market and is easily surpressed by massive selling. A longshot bet really IMHO.
At a 65-1 ratio, it's just crazy...............especially since there is NO Way, either Gold or Slvr, on the ETF's could ever be physically delivered, for the amounts available.
This is why I hate ETF's,before ETF's, PM's if you wanted to own them, you paid yo moneeee, and you got your stuff.
It was OFF the mkt............
We would be on the floor if people had to take delivery to buy it.....no one ( only a select few) could afford it...
I remember when it was at $2.50ish oz............
No one wanted it. Gld at $260, same way way.
Prices can't and don't go against fundamentals forever. This exact same pattern has happened numerous times in recent years. Gold forges ahead, stalls, and silver catches up.
Also, there is lots of gold, but not much silver. I'll take the rare stuff over the abundant stuff any day, especially at such a high price ratio.
Short to Medium term I think the ratio will hold steady. When we have a major currency completely crash and burn the masses will come in and silver will gain on gold. High net people can only store so much silver at this price. 10 to 20 year range I'm looking for 10:1 ratio
Question for all the gold- and silver-bugs out there.....
It's time I get into building a stash of metal. I'm thinking of going mostly silver at first, for 2 reasons -- more affordable per unit at the moment, and I believe it'll be easier to break into manageable chunks if TSHTF. I'll get some silver every month and then get some gold every few months.
Regardless of gold or silver, do you recommend getting coins or bullion? If coins, does it really matter which nation's currency (i.e., Silver Eagle/Kookaburra/Year of the Tiger or Gold Eagle/Krugerrand/French Angel, etc)? My thought is that you're buying the gold itself and the collector's aspects are secondary. I'm leaning towards bullion for manageability of storage, but the coins would be already broken into spendable units without melting/weighing, etc....
Any advice would be greatly appreciated -- I've come around to the shiny side and could use a few not-too-snarky pointers!
Mike Maloney has a nice vid on exactly that question.
http://goldsilver.com/formtobuy/
Coins are bullion and fungible.
The 22kt (crown gold) pieces like the Eagle and Krug will be more durable. Krugs typically trade at the lowest premium, due to ubiquity.
Among the 24kt articles, can't really see much difference between the philharmonic, kangaroo, or the leaf. I'd buy whatever was available at the lowest premium. The Buffalo is mildly collectable because they do shorter runs of those each year.
There are a few others out there now, the liberdad, the panda, etc...these don't have the face recognition of the 5 major coins.
The Krug has the lowest premium because it's an ugly coin and was originally intended to be merely a bullion coin, i.e. not numismatic.
The Kangaroo and Maple Leaf are .9999 fine = more bang for the buck. Krugs are alloyed with copper and and American Eagles are alloyed with silver and copper for durability. You still have 1ozt of gold in each. The additional metals make the coins net out at more than an ounce. This is also why there is a high premium for the American Eagle (besides the fact that coin collectors find it to be a pretty coin).
At this point I'd be going for the most gold your money can buy. In that regard, Maple Leafs are probably the best choice (high content of gold vs. low[er] premiums).
I am Chumbawamba.
Come on over to Gold-Silver.US/forum, and ask that on one of the precious metal boards. You will get a lot of good pointers. My 2 cents:
Gold: Buy coins- Eagles, Philarmonics, Maples, Krugs are all equally good. There may be tax advantages for Eagles (especially in IRAs), but if the SHTF, then it may not matter much to be frank. Don't get suckered into buying slabbed eagles, etc. Just get the bullion coins.
Silver: Coins (Eagles, Maples, Phils, Onzas, etc.), rounds (known makers preferred, 0.999 fine stated on round), 10 oz. bullion (known makers and marked 0.999 fine), 90% (junk) silver.
Go over and take a look at these items on Apmex. You will get a good idea what is available, and reasonable estimate of costs. For larger qtys check out Tulvig and Monex (physical only, stay away from funds).
I started out buying generic silver rounds thinking silver is silver...and it is, but I've noticed coins/name brand rounds such as Engelhard and the like seem to be easier to sell and get a better premium.
I bought a lot off of APMEX and BullionDirect...I like BullionDirect because I can buy from them, have them "store" it, buy some more and more, and then when I'm ready for them to ship, they ship everything I want shipped so you save on shipping/insurance.
Check them out. Also, when they are holding it for you, you have the option to sell it back through their NucleoExchange deal without ever having to possess the metal in your hands.
Just had them ship me several gold coins I had accumulated over the past 2 months or so.
Either or. Coins are probably more liquid (at these price levels) but there is nothing like holding a big fuck off bar in your hand. Junk silver is also a very good option too.
At the end of the day, this is just to get you from one regime to the next. So as long as it's pure and real, I wouldn't worry too much.
Gotta love it: but there is nothing like holding a big fuck off bar in your hand.
I went to my local dealer in 2008 to get Krugs; he had none. But he did tork me into something closer to spot: A Big-Ass Dog-Choking 1 Kilo gold bar. I dunno how I'll unload it when the time comes (barter for a big shit-load of guns & ammo?) but "It's got Friends" (Jack Palance, Curly's Gold) that are much smaller, to keep the big guy company, and for smaller purchases. Coins are a hassle ("Duhhh, How much are those worth?) but plainly marked .9999, assayed, and serial-numbered 1 oz bars should be easy to establish price.
Mmmmm. Kilo bar. Drool.
A dollar of silver is 65 times heavier than a dollar of gold. If you need mobile money then go for gold.
It's kinda like the lb. of feathers or lb. of rock thing. $1000 worth of metal is $1000 worth of metal. The price appreciation play is what is really being discussed.
Buy what is easily identified and quantified by an ordinary person:
http://www.onlygold.com/TutorialPages/Coin_specsFulScreenVersion.htm
http://www.fisch.co.za/operation.htm
And keep in mind that American Silver Eagles are legal tender, as are the Gold Eagles. Junk silver is legal tender as well. You can "buy" something with a Silver Eagle and say that you paid "$1" for it. With a 1/10th ounce Gold Eagle you just paid "$5" for your item. I'm just sayin'....
Good point on junk silver -- it is hedged on the downside. A silver quarter is always worth 25 cents, even if the value of the silver in it drops to ten cents.
A U. S. coin has never been demonetized. (Yeah, I know about Continental Currency.) If the whisper of demonetization of old coinage is raised you can be sure that TSHTF has occurred!
On the same theme: U. S. postage has not been demonetized and bulk mint stamps can be bought at 80% or less of face value. I use a lot of it for shipping!
List of American Eagle and American Buffalo Gold Coin Program retailers (lookup by State):
http://www.usmint.gov/mint_programs/american_eagles/index.cfm?action=lookup
Actually, that is not true. All pre-1933 US gold coins were officially demonetized in 1934, and silver US trade dollars were demonetized in the late 19th century.
.
This is THE PLAN TM! Silver bullion coins are great! I like holding coins from several mints. Between you and me; gold will be used for large purchase items, like arable land. Silver will be what you give your butcher for a tab for a month of meat. He will love you over the rest of his customers. "What am I going to do with a credit?"
Thanks all! Great responses; I especially like the fuckoff bar and the land/butcher concept. I'll check these sources out and follow your sage advice.
(sorry for the threadjack, Tyler -- please don't blow up my corporate art before I can melt it down :-)
Here's a plan for you:http://the-moneychanger.com/commandments.phtml
I hold silver and gold in, roughly, a 10:1 ratio by weight. In physical possession I keep pre-65 quarters, dimes, half dollars and gold bullion coins such as Krugs and Eagles (all purchased from Tulving.com at the lowest premium I could find)
For the bulk of my holdings, however, I use Bullionvault.com with silver stored in London and gold stored in Zurich at the same 10:1 ratio. These are good delivery bars in good delivery vaults and audited daily by a certified good delivery custodian (ViaMat). Bullionvault uses the same vaults as Goldmoney but the cost is much lower. Check them out & compare!
The above from Ed Steer's latest report.
Well, all I can say is:
http://gordongekkosblog.blogspot.com/2010/03/its-going-to-implode-buy-ph...
Submitted by cpowell on Wed, 2010-05-05 21:50.
5:48p ET Wednesday, May 5, 2010
CNBC's "Squawk Box" program this morning reacted incredulously to the interest of its guest, James Rickards, senior managing director of market intelligence for Virginia-based consultant Omnis Inc., in suppression of precious metals prices. Rickards was asked to explain what he had said on the subject in a recent interview, that interview having been given to Eric King of King World News and broadcast at the KWN Internet site on May 1:
http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2010/5/1_Ji...
The CNBC segment with Rickards is 6 minutes long and the exchange about precious metals price suppression begins at 3:30. You can find it at the CNBC Internet site here:
http://www.cnbc.com/id/15840232?video=1485831315&play=1
Congratulations to King World News for beginning to set the agenda for the broadcast media that consider themselves respectable but are, as always, actually clueless.
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
http://www.gata.org/node/8605
The "broadcast media", more commonly known as the MSM, have lost all credibility for everyone with a functioning brain.
That leaves about 5% of the population, Gordon. The rest are CEOs of the sofa. We are outnumbered!
Gold and equities are moving inversely. Massive buying today.....
http://www.kitco.com/charts/livegold.html
Kudlow is absolutely apoplectic! Grasping at any wisp of green-shootery.
It's a hoot to watch.
Jesse has a good post on the current dynamic:
http://jessescrossroadscafe.blogspot.com/2010/05/ullion-denominated-in-e...
Any advice on how to buy physical gold with 401k or Roth IRA funds?? Do I have to have to withdraw funds with the penalty and associated taxes to make it happen?
With mine I either had to loose my job or be in a (documented) hardship to take my money out. I realized i could take out a loan against it,(Tax free, penalty free) I took out a big of a loan as I could from it. This way if things turn up like Harry says :P, I'll still have it for retirment. Its like borrowing from yourself and it will still be there.
Thats what I was figgerin. Thx. Lovely set of Gubmint rules, there.
Joseph P. Kennedy
cue the vitriol