Precious Metals: Buy Now, or Roll the Dice?
Precious Metals: Buy Now, or Roll the Dice?
Written by Jeff Nielson (CLICK FOR ORIGINAL)
Buy low. Sell high. Precious metals investors are rational investors. They understand that they are currently converting their wealth into gold and silver at extremely advantageous rates. However, like all rational people, they would prefer to engage in this wealth conversion at the most advantageous rates.
Many of these rational investors may already be judging themselves somewhat harshly in hindsight. With the absolute chokehold that the banking crime syndicate has exerted over these markets since the spring of 2011, prices have continued to drift sideways-to-lower, even after those prices endured the original ruthless take-down.
Such self-recrimination is unwarranted, however. In the spring of 2011, gold and silver were still undervalued as priced in the bankers’ worthless/near-worthless paper currencies. Until that point in time, there had still been some degree of legitimate price movement in our markets, and thus, we made the reasonable assumption that prices would continue to rise.
As the saying goes: that was then, and this is now. Now, many price-battered precious metals holders may be leery of further wealth conversion, even with present prices at multi-year lows. Why “buy low” if you can buy even lower?
This brings us to the central issue of this commentary. As individuals seeking to shelter our wealth in humanity’s oldest and surest “safe havens,” we cannot become fixated on price alone. We must also consider availability.
During the Crash of ’08, the price of gold was taken down by over 30%, and the price of silver was crushed by roughly 60%. It was the ultimate “buying opportunity” in precious metals, with one exception: for smaller investors, there was virtually no silver to be found at those “crash” prices. Only the largest silver bars remained readily available.
However, once again: that was then, and this is now. Now the Next Crash approaches. Now our government’s level of insolvency is multiples worse than it was in 2008. Now our economies have been stripped bare by seven more years of bankers' economic blood-sucking . Now we have “bail-ins,” and all of our paper wealth is at risk.
Now we must not only focus on price, but also pay (at least) as much attention to availability. Already there are warning signs of tight supply in the silver market. Once upon a time, the U.S. Mint obeyed U.S. law and kept the U.S. market “fully supplied,” as required by the law. Now this same mint announces that it has “run out of silver” at least once a year.
These (illegal) supply interruptions come after years of demand being near or at all-time highs for these silver bullion products. Certainly it is impossible for the U.S. Mint to claim it is “surprised” by this high level of demand. Thus, a shortage of silver is the only possible explanation for these increasingly frequent supply interruptions, and the U.S. isn’t the only country experiencing a shortage.
The Royal Canadian Mint recently announced a shortage of its own. Previously, it had engaged in what it called “carefully managing supply,” but what media commentators have simply called “rationing.” There’s no need to ration anything if supply is plentiful. While the flow of silver still seems abundant in the Eastern world, in the West, the “taps” are gradually slowing to a trickle.
Anecdotally, many readers who are still regularly converting their paper into bullion may have already encountered occasional supply interruptions in some of the products for which they are shopping. And this is the current state of the market with gold and silver. They are now more shunned (as an asset class) in the Western world than they have been at any time in at least the last decade.
What will these markets look like when panic and crisis hit in one form or another, and possibly several forms? What will these markets look like when, once again, the words “gold” and “silver” mean more to the masses than just the medals hung around the necks of athletes?
Almost certainly, the banking crime syndicate will take advantage of the chaos (which it will create) and slam gold and silver prices significantly lower than they are at present, despite the fact that prices are already at an extreme low. But will we be able to obtain any silver or gold at such prices?
The fantasy, paper prices that the banksters have imposed on these markets are only to our advantage as long as we are still able to exchange their corrupted paper for real metal at such prices. Once supply dries up, those prices will be significant only as a testament to the massive fraud perpetrated in these markets.
Then there is the additional variable that many readers fail to consider in their financial planning: the “premiums” that we pay when exchanging our paper for metal. With the price of silver at one-third of what it cost back in 2011, dealer “premiums” of 25% or higher for such exchanges are commonplace.
Here the artificiality of these markets descends to the level of semantics. A “25% premium” to convert paper currencies into silver? Why? Such premiums should amount to nothing more than the transaction costs of the dealer (which are relatively minimal), along with the “mark-up” that represents the dealer’s profit. Again, this has traditionally been a small, single-digit figure.
This base premium can be modified by “market conditions” i.e., supply and demand fundamentals. When gold or silver is deemed especially plentiful, the premium shrinks to an even narrower margin for dealers. When supply tightens, that premium rises. However, the soaring “premium” to convert our paper to silver has remained consistently high, even when there have been no visible supply pressures in the market.
The term “premium” no longer applies to a price that has disconnected from supply and demand fundamentals, including the less visible fundamentals of the “physical” market. Regular readers will be familiar with the market terminology that has been applied to such a price disconnect - decoupling.
There are, in fact, two means by which we could once again see a legitimate price for gold and/or silver. One is already well known: a formal default in the fraudulent, paper “bullion” markets operated by the banking crime syndicate. A formal default would expose the bankers’ fraud and thus delegitimize the paper prices produced from that fraud.
However, readers have previously been told of a second avenue back toward legitimacy: decoupling. As the absurd paper prices generated by the Big Banks become more and more detached from reality, the legitimate element of this market – the “physical” market – simply ceases to function (at such fraudulent prices).
At that point, this dysfunctionality can only manifest itself in one of two ways:
1) Retailers refuse to sell their products at such extremely fraudulent prices.
2) Retailers begin to set their own prices for gold and/or silver.
Beginning at the retail end (or even the wholesale end), the physical market simply begins to ignore the fraudulent paper prices of the bankers. The real market decouples from the paper market (and all its frauds), and a real-world price for metal begins to evolve . This evolution is what we are already seeing in the silver market.
These are the circumstances that exist today. A market (the silver market), which is already in tight supply, is expected to get even tighter. A market (the silver market), which has already started to decouple from the paper-fraud market, can be expected to decouple much further as even more extreme price/supply conditions come to exist within it.
Will we benefit if the “official” price for silver is $10/oz (USD) or less, but there is no silver to be found at such prices? No. Will we benefit if that price goes to $10/oz (USD) or less, but the dealer price “plus premium” is $25/oz or higher? No.
Currently, we don’t see similar price pressure or supply pressure in the gold market. However, for a variety of fundamental factors, it is much easier (for the bankers) to hide such pressures in the gold market than in the silver market. What we see today in the silver market we could see tomorrow in the gold market, with no warning.
Many price-battered precious metals investors may currently be sitting on some quantity of capital that they plan to convert into gold and silver, but they are wondering when “the best time” is to do so. This is an easy question to answer.
Please email with any questions about this article or precious metals HERE
Precious Metals: Buy Now, or Roll the Dice?
Written by Jeff Nielson (CLICK FOR ORIGINAL)
(8 votes)
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no one knows how the future will turn out.. but i'd rather have a stack of bullion as none,,, re fiat cant go to zero... i refer you to mr bobby mugabae assertions of same
www.teamramgold.com/about-us
Hyperinflation is on its way. Notice how copper is half the price of 2011 but warehouses are also empty (kitco charts). Eventually there will be less oil reserve too (producers quit). Demand will rise again and prices will skyrocket.
Hey Sprott, how does one get one's value out of your fund in case of currency collapse since you don't redeem in metal?
I buy silver because I think it will be worth more fiat. I can't buy into the notion that fiat will become worthless. If you truly believe that fiat goes to 0, shouldn't you go all in on brass and lead?
oh wait, I'm distracted by the cheerleaders
ok, I believe in silver, brass, lead and food stuffs
Playing "Devil's Advocate"; what makes anyone think the new guard will not be the same as the old and possibly worse?
How will buying metals really be helpful; only in certain conditions and only for a window of time...think about it. Is the local grocery store going to all the sudden accept gold & silver or local clothing retailer? They would be prohibited by law or plain ignorant; the only way gold and silver become useful will be via black market. However; I say buy it if you can afford it and only sovereign bars and coins because as ignorant as our society is; only the sovereigns will have any recognition if at all.
BitCoiners will have to face the reality that PM's have the edge because it is based on something as opposed to a non-thing; meaning the Bitcoin is tied to a currency, the USD for now. So what happens to Bitcoin when its piggy-back-peg is broken to pieces...vaporized.
Dirt on Bitcoin: http://plata.com.mx/mplata/articulos/articlesFilt.asp?fiidarticulo=274
there is no basis for this comment, it is simply false: "Bitcoin is tied to a currency, the USD for now"
bitcoin is not tied to any other currency.
i have a great respect for mr hugo salinas price.
however, it's clear from what he says about bitcoin, that he does not really understand it, doesn't understand where its value comes from, and is trying to compare this new-fangled bitcoin thingy to silver and to fiat currency since that's something he can relate to.
mr price, as well as his readership, would be better served if he stuck to writing about things that he did understand, such as silver.
Went by the LCS this morning to check out the junk silver; bought it all because there was not much there! How about Au? "We might have some from the show this past weekend, but it won't be a lot of choice specimens."
Now, I also came home from the LCS and checked Provident and Apmex. Au is there, but the selection is getting a bit thin.
Anecdotal, but true.
Lake City; is that in the state that Peyton played football? Nice place.
The coin guys were in a big Florida show. They are back in Chucktown now.
Gold. Silver. In YOUR HANDS. Do it now!...while you still can.
Shiny-shit cult worshipers should exchange every bit of fiat that they can get their hands on, even sell all your assets, wife & children, and borrow as much as you can, to worship with full devotion at the altar of shiny shit -
BUY BUY BUY - NOW NOW NOW !!!
Price is irrelevant !
Reason is irrelevant !
Shiny-shit IS the only real money !
ONLY shiny-shit will preserve your savings and protect you from the total collapse and apocalypse that is IMMANENT !!!
Get as much shiny-shit while you still can and before the total collapse of the entire galactic monetary, financial, economic, magnetic, and gravitational systems !!!!
But you MUST act NOW, before the shiny-shit hucksters run out of the ginsu steak knives !!!!!!!!!!!
SHITHEAD! CHECK THIS THE FUCK OUT? I SUPPOSE LIQUIDITY SHOULDNT BE A PROBLEM? FUCKING DICKHEAD! http://www.zerohedge.com/news/2016-01-11/us-mint-slammed-unprecedented-demand-precious-metals
Do you fucking read? Or do the Big boys just spin you in a direction and YOU GO? The Article puts demand at more than 15 times last year, yet the price is dropping? YOU TELL ME EINSTEIN??? YOUR A FUCKING LOSER!
UNREAL CHARTS! JUST ADMIT your a USELESS PROPAGANDA SPREADING P.O.S! LAST THE US MINT RAN OUT of GOLD AND SILVER TOWARDS THE END OF THE YEAR? THINK THEY WILL LAST THAT LONG THIS YEAR? YOUR A FUCKING MORON!
Someone is telling ONE BIG LIE, Substantially increased demand with dropping price? Makes PERFECT SENSE?
2/3rds of a months demand in one day? Seems like the Vote is in and the people are saying the FED is a fucking bunch of useless Idiots!
From Article: "US Mint Sells Nearly As Much Gold On First Day Of 2016 As All Of January 2015"Got spellcheck? Feel better? Obama voter x 2?? Be honest :)
You are as wrong about that as you are about shiny-shit.
I despise the obomination more than any of you shiny-shit cult worshipers.
Folks around these parts simply aren't as sharp as they used to be.
Well, I was gonna be a dick, and reply in kind, but my upper brain functions are running at a better pace than normal for a Monday, so i decided to take the rational intellectual high road with a rebuttal to your aimless bellowing of stupid.
So, here we go, comments on metals.
Problems with gold versus silver start with the unit cost ratio versus silver.
Almost all gold mined is still in existence.
Paper gold has not been as mercilessly manipulated as silver paper because of the influence of institutional and governmental gold asset holders.
Silver mining has dwindled to incidental recovery as a by product of copper, nickel, and lead mining - pure silver mines were played out for the most part over one hundred plus years ago.
Down turn of economy will not deter the most significant modern day usage of consumer electronics - the smart phone. Silver is the most efficient conductor of electricity on a unit cost basis.
Economic recovery of silver in consumer electronics is not feasible, even in China. Economic recovery of silver used in most other modern day applications of silver is not feasible either.
The ten percenters will never stop wanting new consumer electronics, and they survive down turns to the economy just fine it seems.
Add in the newer industrial uses of silver that also shrug off economic issues out of necessity - medical wound dressings, water purification filters, etc., and you have a continuing demand for a metal whose annual production has been falling for decades.
So, you have an indispensable metal being consumed by industrial use constantly, declining in mining production, and under supply pressure to serve both the industrial and monetary silver markets.
Take away the paper manipulation of hundreds of times the fake paper silver market versus the available physical silver in the marketplace, and there's a problem with price discovery for the real deal versus fantasy paper silver that never existed.
Lastly, the uncertainty of a major economic event always moves people to seek out safe haven for their hard earned money. Fiat currency has a history of failure for thousands of years, a near perfect track record of failure.
Silver and gold have a five thousand year history of recognized value in times of uncertainty, more so than any other commodity you can name that is portable, incorruptible, stable, and internationally recognized.
To summarize, with silver spot trading for substantially less than the industry overall average cost of production, I see no down side to investing in it as a safe haven.
Besides - when I was a kid, a paper or silver dollar bought about 4 gallons of gas. Today, a paper dollar buys a half gallon, and a silver dollar buys about six plus gallons. So, Silver wins as a hedge against inflation and fiat currency devaluation historically speaking.
If the whole world burns, silver will be a recognized form of currency far easier to trade with than anything else short of 22 LR ammo.
I would rather dance with the silver devil than take on Wall Street, Goldman Sacks Biters, JP Morgan Chase, banks, politicians, the Fed, the CIA, NSA, DHS, IRS, and all of the other thieves on the loose out there.
So, Mister Investwhore, shove that where the sun never shines.
You made some valid points, but left out the key points from the priests of the shiny-shit cult:
Every fiat regime will collapse, every fiat currency will be worthless, and all fiat debt will be worthless.
Human civilization will rise again based only upon shiny-shit, which will be worth an infinite amount of then worthless fiat, so even if you own only 1 atom of shiny-shit, you will be worth trillions in obsolete fiat.
And if you act NOW rather than wait decades for the armageddon that is forever prophesized but never comes, the shiny-shit hucksters have the following special offers:
1. FREE with every order of shiny shit a post-hole digger and buried-stash map-making kit to safely store your shiny-shit and of course be able to make maps to your stashes so you can find them when you want to - unless the squirrels get it first !
2. FREE with orders up to 5 kilos shiny shit a shiny-shit logo'd kevlar backpack so you can carry your wealth around without ripping out your pockets.
3. FREE with every order of 50 kilos or more of shiny shit a "Sister Sarah" logo'd mule so you can haul your wealth around without getting a hernia or ruining your spine.
4. FREE with orders of 100 kilos or more of shiny shit a "Create Your Own Central Bank and Fiat Currency Kit" so you too can create your own fiat currency regime and get wealthy like the banksters that you are escaping from.
BUT you MUST act NOW !!!
Total collapse of EVERY human system is IMMANENT - EVERY piece of bad news, EVERY market sell-off, is a warning and harbinger of the apocalypse to come - really, this time we really really really mean it - BUY NOW !!!
I'll go out on a limb and speculate that you are a small man with few friends, a shitty occupation and a lot of debt.
If I had the millions you claim to have I would not be here ranting against a philosophy I do not share. I'd be out fucking models and handing out 20's to everyone I see
Oh, yeah, I have zero debt. I am a lender, not a borrower.
You have a genius for failure. Wrong on all counts.
Models are terrible for sex, you would know if you had any.
I would not waste even 1 cent on humans, all my giving goes to the deserving, ie dogs.
He bought gold at the 2011 peak
I never bought even one atom of shiny shit.
Last year I received 2 silver dollar commemorative coins as rewards, very beautiful to look at, but useless dead money, so I immediately sold them for USD.
I own zero shiny-shit.
PM envy. it's like penis envy, only worse.
Hey, Investwhore - were you that Ronco Vegematic Slicer TV guy ?
Same M.O. Just sayin'.
Tell you what - you wear your paper investment suit, and I'll keep my silver suit on - lets see who comes out ahead in the days to come.
Actually, I just hope you hedge a bit with some metals.
Plus, you forgot the best part - you can have 72 experienced virgins staff your household if you have a bunch of sunken boats filled with silver stashed away in local rivers and lakes, no religious affiliation required.
The dude with the nut chopper?
"Wait'll you see it chop my nuts!"
It was the Sham-Wow guy, Bath House Barry's public speaking instructor.
Thank you for the compliment, No, I cannot take credit for the Ronco stuff, but I can take proud credit for having earned millions on my own marketing of real products, some of which I actually developed :-)
Thank you for the advice regarding hedging. I am hedging, with US treasuries (in USD). You may have noticed how in spite of China selling more than $500BILLION worth of US treasuries that the price of US treasuries has varied very little. I trade them and have been earning very good returns, plus I hold a lot of them for interest and possible future capital gains. US treasuries provide INTEREST INCOME, have very low transaction cost, zero storage and handling cost, and trade in just minutes.
KEY TAKE-AWAY = HUGE global demand for the safety of USD and US treasuries, ie NO collapse of the USD and NO US default on US treasuries. Sorry shiny-shit cult worshipers, you will have to develop a new fantasy and self-delusion to prophesize and justify burying money in shiny-shit.
but of course you made millions princess...and now you just go around preforming oral services for us fools who have lost faith in the fiat of a country thats how many trillions indebt? get back in your moms basement and game on fool!
You have much more to loose than most, assuming you are telling the truth. If you are, then you wouldn't mind giving up $60k (plus or minus $10K USD) to a disabled person who needs that much to change ones life for the better. Additional benefits are the following: it helps the entire family and you get to feel good about helping another less able than yourself.
I'll wait for your kind reply.
I keep only enough profits to pay my annual living expenses, all the rest goes to animal rescue especially dogs, the most deserving of all.
I have very little empathy for "poor" humans unless I know every detail about why they are poor. I started out at the very low end of poor, without even parents, so takes a lot to get my empathy, much less support.
Why don`t you spend some time on some doggy chat room instead of wasting your time here with humans? I don`t care what you do with the money you purport to have, who cares? Who do you think you are? Your shit smells just like the rest of us!
...............Or, stud muffins, if that's the way you swing.
Personally, I would like to go back to the fifties, and start all over again knowing what I know today about gold at $35.00 an ounce, and silver dollars for a buck each.
Then, I could afford the beaver ranch I have always dreamed of owning.
If you find a way to go back in time, I will gladly pay to join you, plenty of things that I would do differently, eg buy Amazon, Apple, Microsoft, Google, Netflix, Facebook, etc all on IPO. The profits from any of these would make the corresponding time-period profit on gold look like round-off error.
But what happens when the fifties come around again and you are holding the above? Time will tell.
Logged in just to uptick and say thanks for posting. That was funny, keep it up.
I believe that, in the case of precious metals, it is best to look for long-term wealth preservation rather than short-term currency gain. This is just to say that the real but often ignored issue is the future buying-power of the dollar, not the future 'value' of PMs in general and gold in particular.
I think it is also useful to avoid viewing gold as a commodity, because it is not used that way. Commodities typically get consumed, or at least converted into a useful forms. Think oil into energy and lubricants; copper into electrical and thermal conductors; platinum into catalysts; silver into photovoltaic sensors; and pork bellies into BLTs. (yum - is it lunchtime yet?)
But gold is different. It has been and still is treated as a store of wealth for several reasons which include the difficulty (read expense) of mining, smelting, and refining; its durability including resistance to corrosion; and the curious fact that very early societies which had no contact with each other independently extracted gold from the earth and assigned it the status of money.
As for our moment in time, I think that for anyone concerned with wealth preservation for themselves or their heirs who perceives that the dollar is headed for serious trouble, as in an international loss of confidence, now would be an astonishingly good time to convert dollars into gold. I don't (can't) know how long this window will be open, but I don't think it will be for much longer.
...more BULLSHIT from fearmongering people who HAVE A VESTED INTEREST (i.e. CONFLICT OF INTEREST) in you buying precious metals NOW.
Gold MAY be bottoming.
It's still NOT time to buy gold and silver.
And don't worry... there will still be plenty of it at good prices when it does bottom.
I try to get the best price when I buy and to stay disciplined to accumulate now while the market is looking elsewhere. I do NOT require the validation of talking heads, or investment advisors, or the guy at the office water cooler. The whole idea of gold dealers 'scamming' clients is flawed. Everyone in business must earn a profit on their transactions or they will not be in busy very long. If I order physical bullion, and it shows up on time, with the purity and product that I ordered then I am happy. Whether or not the price of gold itself increases or declines thereafter, the dealer has fulfilled his obligation to me.
What I see too often from the gold haters is some attack because the price of gold has gone down. I do not and will never own facebook, or any of these other tech trend stocks. I do not care a big rats ass if they go up or down, and do not feel any need to post or discuss their behavior because I think they are a stupid fad that will end badly. So my question is to the gold haters, why on earth must the disgruntled fucks show up to opine on what gold is doing, or conflicts of interest with the dealers? Get a life! FFS, I have never regretted one ounce of bullion I have bought, and in fact the only regrets I have are because I didnt buy more of them when I had more money and the prices were way lower. There have always been people who were in a rush to tell me why I should not buy bullion. Get a life. Worry about your own money.
In time this gift of lower metals prices will be gone forever. In the years ahead I will wonder why I did not just roll out of stocks and buy even more bullion right now, today. And you will not be able to find one of these gold bears. The whole idea of 'over priced gold' will seem so ridiculous that no one will ever admit to thinking that way.
Car dealers want you to buy a car now too.. does that mean cars are a scam? why do you care so much if people over pay for physical metals
Everybody on this site with any sense has a program where they just buy gold and silver at regular intervals, whatever the current price. Averaging in like gets you more gold and silver over time.
Damn! The premium is getting huge. Apmex is buying silver above spot price. WTF!
BTW, exartizo, thanks for the advice. I've finally found someone who knows exactly what's going on with precious metals. Give me a call when I should buy.
I am willing to wait more if as a reward I get to see some WS'ers splate on the pavement.
Jump Scumbags.
Are you guys finding platinum anywhere near spot?
Nope, what is the lowest mark up that you have found?
https://compareplatinumprices.com/
4.39% GM
Got a link to 'GM'?
I found
1 oz Platinum American Eagle
USD $ 1,143.00
Around $400.00 for Eagles.
$50.00 for bars at APMEX.
Gold is a sell. At some point it will be a buy but the trend and strength of that trend is down. Sellers are dwarfing buyers. Hopium will not make you any more money than taking the opinion of somebody whose whole business is to sell you gold.
Gold is a sell if you buy into the mental manipulation of the bankers (that convince some weak minds) that the trend is down. And it may be down for awhile longer, but the end game comes when the opposing force is met by a stronger opposing force (physical shortage) and the system normalizes. They can manipulate gold/silver because they aren't consumed very fast, only change hands, but the wise are accumulating and the petrol dollar is being undermined. When Saudi Arabia falls this summer that's when things will change. Russia and China will swoop in and take over the middle east, then America will start paying $8 per gallon.
"Russia and China will swoop in and take over the middle east, then America will start paying $8 per gallon."
In the long run that may be a bargain for us! Rather than being endlessly mired in hopeless wars, we could spend less on defense and more at the pump. Heck, maybe even build roads and shit with that money!
Capitulate now, bitchez!