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Silver Keep It Simple! Part 2
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Thread: Silver Keep It Simple! Part 2

  1. #1
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    Post Silver Keep It Simple! Part 2

    Snippet:
    Begin the analysis in 1971 when Nixon dropped the link between the dollar and gold. A pack of Marlboros cost (depending on local taxes) about $0.39. We paid about $0.36 for a gallon of gasoline. The DOW Index was about 850. Silver was priced at about $1.39.





    Author(s):
    GE Christenson


    Begin the analysis in 1971 when Nixon dropped the link between the dollar and gold. A pack of Marlboros cost (depending on local taxes) about $0.39. We paid about $0.36 for a gallon of gasoline. The DOW Index was about 850. Silver was priced at about $1.39.
    Times have changed!
    Today we have more currency in circulation, far more debt, and much higher prices what does it mean?
    Monday, April 1st


    read more


    More...

  2. #2
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    Default

    What it means is, we're all morons for not buying as much silver as we could afford back then at $1.39

    Okay, that window of opportunity has passed. So what's keeping us from loading up on all the silver and gold that we can afford right now - today?
    "If you don't know where you're going, you might end up some place else."
    - Yogi Berra

  3. #3
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    Default Tangibles

    Quote Originally Posted by Xizang View Post
    What it means is, we're all morons for not buying as much silver as we could afford back then at $1.39

    Okay, that window of opportunity has passed. So what's keeping us from loading up on all the silver and gold that we can afford right now - today?
    You are right. Silver was cheap then, and is cheap now, but for a different reason. This time the monetary base has ballooned and cannot be contracted. The reversal of QE entails asset sales. But the end of QE will end the bull market in bonds. The flight from bonds will be epic. Take the long T Bond. It currently yields 3.3%. You buy it for $100 today and get your $100 back in 2043. So if the long T Bond goes to, say, 6% yield in 2023, there will still be 20 YEARS to go before it repays at par. Little help to the price from the redemption date; it will still be too far away. So what will the price go to? Probably about $60. So the prospect for a long bond holder is a possible 40% capital loss over 10 years. OK so it will go back to $100 in 2043, by which time you might be able to buy a burger with it! So all that is keeping the bonds at their current level is the Fed "put". And if QE ends, don't think that the Fed will be the only entity trying "exit" and sell bonds. Everybody will be unloading bonds; including the Chinese who by that time will be selling USD to buy Yuan, to revalue their currency and bring in imports to create the trade deficit they need as a requirement for the Yuan (probably gold backed) to be the World's reserve currency.

    This whole process will result in a flight to tangibles. Silver will be a beneficiary, as will gold. As will real estate and stocks. This process is clear, and inevitab

  4. #4
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    Default

    Quote Originally Posted by Xizang View Post
    What it means is, we're all morons for not buying as much silver as we could afford back then at $1.39

    Okay, that window of opportunity has passed. So what's keeping us from loading up on all the silver and gold that we can afford right now - today?

    Caution might be a good reason. Anyone can see Silver historical charts and that $50 moon shot back in 1979 and again in 2011. It's easy to see what happened after 1980 came around and the moon shot was not successful and seeing what has happened after the 2011 moonshot failed to make it also.

    It's one thing to speculate about buying Silver at $1.39 in hindsight forty years ago, but which way will Silver go from here? It's never breached the $50 ceiling and that is less than an 80% increase in the price of Silver from here. Not quite the same as a 3,300% gain back in the 70's. But what if it takes another 1980's style tumble from here and ends up down into the single digits again? Then your looking at a potential loss that might take years to recover from. No one knows which way Silver will be going in the future. We can only speculate it will be up from here, but there are other consideration than our wants and beliefs. Primarily a world wide financial crisis and depression that could bring the value of Silver and Gold to it's knees and us along with it.

    Just keep in mind what those advertising Gold on TV keep repeating, Gold has never been worth zero, but it has come very close and it can again.

    We can speculate that it's better to lose 75% of the value of our Silver than 100% of the value of our Dollars. Which makes sense, but I don't recall the Dollar collapsing in 1980 or in 2011. I know I was able to buy some of my Silver for $4 an ounce in the 1990's and that was a whole lot cheaper than I could have in 1979. While many of you have been buying Silver for under $30 for much of the last year, versus prices that were $20 higher two years ago. While the current price might very well be the lowest price one will ever be able to purchase Silver for, it might also be two, three or even four times higher than you might be able to buy it for in six month or a year from now. Silver is a commodity and nothing is guaranteed other than nonstop speculation.

    So what do you say to those that follow your advice and load up on Silver and Gold, if it takes another 1980's tumble and it takes ten years or longer to recover to the current price? You should have done your own due diligence, but hang in there it will be worth the investment some day!!! I stopped trying to convince my own relatives and friends back when the price was around $20 or so the first time and I haven't bought any since it was maybe $14 an ounce and that was just rolling into an IRA ROTH account for Silver. I did add some in the low teens down to around $9 an ounce when it dropped in 2008, but that was the only thing I had bought since 2002 or 2003, which was way above my average price.

    I do not own any Gold and haven't since I swapped 30 ounces for Silver a decade ago, but if I had to invest more money into the precious metals market today, I'm afraid it would be in Gold versus Silver and all I own is Silver.

    If I didn't own any Silver or Gold at all and was only investing small amounts of money into the precious metals market, I'd probably be tempted to bet on Silver. I just couldn't bet the farm on Silver with today's prices and I wouldn't be buying Gold or Silver if I didn't have a decent surplus of cash to keep us above water in times of potential trouble.

    The potential upside for Silver is always greater than Gold, but it's also subject to greater declines than Gold.
    I'm a proud member of Eggshellman's Liar, Shill, and bully club and a new member of the Super Jew Defense League!!!

  5. #5
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    Default

    Quote Originally Posted by Mike Phillips View Post
    You are right. Silver was cheap then, and is cheap now, but for a different reason. This time the monetary base has ballooned and cannot be contracted. The reversal of QE entails asset sales. But the end of QE will end the bull market in bonds. The flight from bonds will be epic. Take the long T Bond. It currently yields 3.3%. You buy it for $100 today and get your $100 back in 2043. So if the long T Bond goes to, say, 6% yield in 2023, there will still be 20 YEARS to go before it repays at par. Little help to the price from the redemption date; it will still be too far away. So what will the price go to? Probably about $60. So the prospect for a long bond holder is a possible 40% capital loss over 10 years. OK so it will go back to $100 in 2043, by which time you might be able to buy a burger with it! So all that is keeping the bonds at their current level is the Fed "put". And if QE ends, don't think that the Fed will be the only entity trying "exit" and sell bonds. Everybody will be unloading bonds; including the Chinese who by that time will be selling USD to buy Yuan, to revalue their currency and bring in imports to create the trade deficit they need as a requirement for the Yuan (probably gold backed) to be the World's reserve currency.

    This whole process will result in a flight to tangibles. Silver will be a beneficiary, as will gold. As will real estate and stocks. This process is clear, and inevitab



    Thank you, a realist and not a Gold and Silver is everything statement. Kind of rare on this forum.

    It sounds logical, but those people seem to have a never ending line of tricks up their sleeves, so nothing they do surprises me.


    However, rolling over and playing dead would!!


    I wouldn't be at all surprised it they would somehow get involved in WWIII, if that's what it would take to fix this mess. What the hell, wars have been used for far less and for thousands of years.
    Last edited by valerb; 4th April 2013 at 21:28.
    I'm a proud member of Eggshellman's Liar, Shill, and bully club and a new member of the Super Jew Defense League!!!

  6. #6
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    Default Silver is finite

    Quote Originally Posted by valerb View Post
    Thank you, a realist and not a Gold and Silver is everything statement. Kind of rare on this forum.

    It sounds logical, but those people seem to have a never ending line of tricks up their sleeves, so nothing they do surprises me.


    However, rolling over and playing dead would!!


    I wouldn't be at all surprised it they would somehow get involved in WWIII, if that's what it would take to fix this mess. What the hell, wars have been used for far less and for thousands of years.
    Thanks Val. It really comes down to this. Silver is a traditional monetary asset and is finite. Fiat cash is also a monetary asset and is not. Which do you chose as a store of value? Pretty simple. Fiat money is just electrons. (Don't dignify it by calling it "paper", it is not. At least you can use paper to light a fire of wipe you ass!). In fiat terms the difference between zero dollars and one trillion dollars is one digit. A trillion is 1 and 12 zeros. Zero is 0 and 12 zeros. Basically all the same to a central bank computer! A 15th century human would laugh at our money. "a piece of paper with the King's head on it, which the King can print at will!" Nobody in 1550 would use that type of money. They would barter and use silver and gold. We 21st century sophisticates believe the emperor has clothes on. The "fool on the hill" knows he is buck naked! Just a matter of time boys and girls. Hang on. Our metal is NOT FOR SALE!! Suck it up shorts!!

  7. #7
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    Quote Originally Posted by Mike Phillips View Post
    Thanks Val. It really comes down to this. Silver is a traditional monetary asset and is finite. Fiat cash is also a monetary asset and is not. Which do you chose as a store of value? Pretty simple. Fiat money is just electrons. (Don't dignify it by calling it "paper", it is not. At least you can use paper to light a fire of wipe you ass!). In fiat terms the difference between zero dollars and one trillion dollars is one digit. A trillion is 1 and 12 zeros. Zero is 0 and 12 zeros. Basically all the same to a central bank computer! A 15th century human would laugh at our money. "a piece of paper with the King's head on it, which the King can print at will!" Nobody in 1550 would use that type of money. They would barter and use silver and gold. We 21st century sophisticates believe the emperor has clothes on. The "fool on the hill" knows he is buck naked! Just a matter of time boys and girls. Hang on. Our metal is NOT FOR SALE!! Suck it up shorts!!


    So no one would use paper in 1550 for anything. Maybe the Tally Stick system is simply a myth, I agree it wasn't exactly paper, but is a hunk of wood all that different?


    THE TALLY STICKS (1100 - 1854)

    King Henry the First produced sticks of polished wood, with notches cut along one edge to signify the denominations. The stick was then split full length so each piece still had a record of the notches.
    The King kept one half for proof against counterfeiting, and then spent the other half into the market place where it would continue to circulate as money.
    Because only Tally Sticks were accepted by Henry for payment of taxes, there was a built in demand for them, which gave people confidence to accept these as money.
    He could have used anything really, so long as the people agreed it had value, and his willingness to accept these sticks as legal tender made it easy for the people to agree. Money is only as valuable as peoples faith in it, and without that faith even today's money is just paper.

    The tally stick system worked really well for 726 years. It was the most successful form of currency in recent history and the British Empire was actually built under the Tally Stick system, but how is it that most of us are not aware of its existence? Perhaps the fact that in 1694 the Bank of England at its formation attacked the Tally Stick System gives us a clue as to why most of us have never heard of them. They realized it was money outside the power of the money changers, (the very thing King Henry had intended).



    What about a bunch of those paper shares of Apple stock purchased ten years ago at $7.20 a share with paper currency versus one ounce of Silver for $4.48 with paper currency.

    Apple has increase 5700% in value, while Silver is up 500%.

    If you had invested only $20,000 in Apple stock ten years ago, it would be worth $1,160,000 today versus having bought Silver back then that is now worth $120,000.

    Now if the zombies take over, that Apple stock will be worth zip and the Silver will be worth something if your still alive and not one of them.

    You can trade that apple paper on Monday for more paper giving you the title to a couple brand new cars and a really nice home in most parts of the US and you can also take possession of $120,000 worth of Silver.

    The point is, there really is no such thing as bad paper, unless the world comes to an end for your currency and only if currency is the only paper you hold.

    In spite of all the bad press for the paper Dollar, it will currently buy an additional 3/4 of an ounce of Silver for every one you purchase today versus what that same paper Dollar would buy two years ago.

    The Dollar didn't increase in value, Silver decreased and there is no guarantee it will not tank like it did in 2008, while the Dollar "might" actually increase in value against other currencies, making it even more valuable.

    To make the mistake that all currencies will be toast sometime in the future and Silver will reign supreme, could be the same kind of mistake many others have made over and over again.

    A simple fact of life rather any PM investor wants to believe it or not, there simply isn't enough Gold and Silver to go around if the currencies of the world were to fail as everyone keeps predicting.

    No matter how high the value goes, there simple isn't enough available to sell. If the analyst are within a billion ounces of being correct to hitting the bottom, how far would that go in a mad scramble to buy up Silver to survive?

    The bulk would fly off the shelves in 1,000 ounce bars and leave nothing for the rest of society.

    Even if we took the US Dollar and collapsed it alone, it would still have a world wide ripple effect and probably cause the collapse of other major currencies at the same time.

    And how would anyone actually buy any Silver if they didn't have any currencies worth anything to buy Silver with? Who would sell their Silver in a nightmare scenario where the value of their Silver is running sky high and no one has anything of value to offer except some other tangible items for trade.

    If Silver can't be valued in any currency, then how would anyone even know what it's worth per ounce?

    Sixteen quarter pounder with cheese meals, a 24" LED TV, a new couch, a living room set, a new car, what?


    Now I don't want to have the value of my Silver drop like a rock, but what is stopping that from happening in a world wide financial crisis like we have never seen before or at least not in the past 100 years?

    There is nothing that says the Dollar would have to collapse and there is evidence that Gold and Silver can become worth far less than it is today, under the right or should I say wrong circumstances.

    A derivatives melt down would surely sink the major markets if that wasn't put to rest in a hurry and Gold and Silver is definitely tied into those markets.

    People say the Dollar and no other currency will ever become king of the hill as in the past, maybe, maybe not.

    You could cut the value of the Dollar in half, but if the value of Silver was to drop back to $7 an once, which would be better to survive on at that moment in time? Especially if everything was going to hell in a hand basket.

    There is no doubt that if the Dollar goes to ZERO, then Silver will be a better thing to have in your possession, no matter what it's valued at, but the Dollar has to collapse first and you have to be caught with it in your possession to lose any of it's value.

    For people to invest in Silver because they want to invest in the metal is one thing, but to invest in Silver because they fear the end of time is near, that's another thing altogether.

    If you truly fear the end of times, then buy Gold not silver. If you want to gamble in the precious metals market, then Silver is your best bet for a huge payoff.

    Nothing is guaranteed, nothing. Not Gold, Silver or heaven, not even the Dollars destruction!!! No one knows what is going to take place tomorrow that will change everything in the world as we know it today.

    For the record, I only own Silver and I do consider my investment a gamble at this level. It was only an investment when I bought it, but has become much greater in value and is also much more susceptible to market changes and if dropping from $48 to $27 isn't one hell of a market change, I don't know what is. Ok, dropping from $48 to $4 was even worse.

    As everyone loves to repeat, Gold and Silver has always been money, but that doesn't mean it will always have the same purchasing power.

    If you really want to protect your wealth, spread it around and be diversified. Don't get caught with your pants down and have everything in one basket, it might turn out to be the wrong one.
    Last edited by valerb; 7th April 2013 at 03:48.
    I'm a proud member of Eggshellman's Liar, Shill, and bully club and a new member of the Super Jew Defense League!!!

  8. #8
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    Default

    You might have invested in General Motors or K-Mart stock. Or Rock Island Railroad, Circuit City, CompUSA, or MGM Pictures.
    "If you don't know where you're going, you might end up some place else."
    - Yogi Berra

  9. #9
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    Quote Originally Posted by Xizang View Post
    You might have invested in General Motors or K-Mart stock. Or Rock Island Railroad, Circuit City, CompUSA, or MGM Pictures.


    Or Google and a bunch of other companies that went up instead of down.

    The point is, the paper market is not some open pit where everyone is just throwing their money away. If it was a consistent loser, then everyone would be invested in Gold and Silver if they were sure winners and that's where all the real money was to be made. But it isn't and that's why most investors are in the general stock market. Even the paper market for Silver and Gold can be far more profitable than holding physical metal, if you happen to be a lucky winner at the casino and not lose your ass.

    And these same people that predict a collapse of the Dollar, so you better buy their precious metals, don't mention that many of those stock items would still be viable, just in a different currency. So they can also be a safe investment for your Dollars, assuming you pick a survivor to outlast a Zombie attack and any other storm coming their way.

    Real Estate is another safe investment for the long haul, as long as it's paid for in full.

    Real estate, stocks and precious metals can all take a serious beating in a down market and yet they all have the ability to come back over time, even if the Dollar goes to Zero!!

    The Dollar is the real unknown factor, as it just keeps on ticking and no one knows what will happen or when. Just remember that when the other markets took a dive back in 2008, the Dollar didn't and could be used to purchase even more of almost anything in those other markets. I believe that might be an example of what some would call, "the Dollar is king" market, at least for awhile in some markets and for a longer period in others.

    The historical concepts of what should happen to the Dollar isn't a reliable guideline as it should have happened some time ago, at least if we go by what the so called experts tell us from their perspective. They made strong and convincing arguments, but when the Dollar didn't go into high inflation or hyper-inflation as they predicted, all bets were off. To make matters worse, they have managed to pile on several trillion in additional debt to that pile that was suppose to have already collapsed.

    Which brings us back to the point that the people running the show, have far more tricks up their sleeves than anyone has been capable of predicting to date.

    The Dollar is not dead and it "might" not be for many years to come, if then.
    I'm a proud member of Eggshellman's Liar, Shill, and bully club and a new member of the Super Jew Defense League!!!

  10. #10
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    Default

    Two points, the first addresses the topic at hand.

    1) Eliminate all unnecessary derivatives. (Necessary for JPM or GS does not count, they can and should fail.)

    The second addresses a point made earlier by Vale.

    2) Dude we are already in WW III. (Just because you are not the one suffering a loss, and the war is illegal, does not mean that we are not at war.)
    "I foresee little future in 'the price of silver', I see a huge future for 'the price in silver'." - heartbone
    "The truth is called hate by those who hate the truth." - K

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