Quote:
Originally Posted by Lowdown3
I feel bad for the folks that bought gold at $1,000. an ounce and silver at $20. thinking they would make some money off of it. Silver closed $9.00 today.
Both will likely go back up, but as to them being "investments", I can think of better.
Lowdown3
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Yup, the SPOT price closed in these ranges for the last few weeks, but go out and buy some at that price. I don't mean paper, I mean the real, physical metal. Gold eagles are bring close to 1k, silver eagles are bring 20, even 100 oz bars, ones that could have been bought for as little as ten cents UNDER spot earlier this year are bringing 16 to 18 an oz.
Due to the wild swings in the stock market, many traders and funds are getting HUGH margin calls, and they have been dumping PAPER assets by the truck full to come up with cash. This has driven the SPOT price down to the basement. I have metals funds in my IRA, and the P to E is now down around 8 to 1, something unheard of in recent years. This has been caused by dumping of the paper stocks in these companies.
We are seeing how irrelevant the spot market is to the real world. People are VERY nervous about paper assets, banks, stocks etc, and the rush is and has been to 'have and to hold.' The US mint made twice as many gold, silver and platinum eagles this years over last year, and they are sold out. Flat out of gold and silver. I get calls and emails every day from all over the country from people looking to buy gold and silver coins. I have none. Neither does anyone else, at least in quantity or regularly. 90% coins that had been trading at melt price are now bringing 30 to 50% OVER melt value, due to supply and demand. Common silver dollars are rising as spot drops. One oz silver rounds bring fantastic premiums over spot. So tell me again just how the spot prices mean anything anymore?
Yes, I could sell out my holdings (which were bought far below the top of the SPOT market) and I can still realize prices equal to or close to what I would have gotten at the top of the market. Sorry, not for sale.
Precious metals have ALWAYS held value in troubled times, and as we sit here on the verge of record inflation, this is still holding. Inflation of course is the increase in the money supply without the corresponding increase in goods and services produced. It has nothing to do with rising prices - they are just a result of inflation. The US money supply has been about $15 trillion, up from $3 trillion in 2001. Are we producing five fold as much as we did then? Nope. Now the kicker is what has been going on the past few weeks. Add up all of the bank bailouts, bank cash infusions, purchasing of toxic loans etc etc, and it adds up into the $1 to $3 trillion range. Add in what the worlds banks are doing as well, and the trend continues. So, cash is watered down faster than it ever has been before. The fed lowers the interest rate to next to nothing and encourages banks to borrow as much as they can and come back for more when you need it. And they are. This is the scenario that happened in 1922-23 Germany and present day Zimbabwa (or however you spell what they did to Rhodesia) Take a look at the same things done recently in South America. The results are always the same - massive devaluation, troubled times.
You look at all of the spending programs urged by ALL of the politicans from both sides of the aisle and you have to realize there are only two ways to fund it all, aside from taking everything from your check - create it out of thin air and lower the value of the 'dollar' and make it worth less, borrow and pay it back with 'dollars' that cost less, or.... wait, that IS the only way they can do it.
Gold and silver isn't for everyone I guess. Not a problem. I never look at the day to day price to see if I feel good or bad about my choices. But if anyone asks, I think it is just as important as food, clothing, firearms, ammo and other survival gear.
Remember gold and silver AREN'T backed by 'full faith and CONfidence in the US Gov't' Just thousands of years of a track record. Paper money.....well it is just a few hundred years old and has never lasted very long before no one wants it.
G
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