Opinion Poll: What will happen to silver in 5 months?

Discussion in 'Financial Cents' started by USMCwife, May 17, 2010.


?
  1. Will it go up to the 1 to 16 ratio with gold?

    4 vote(s)
    30.8%
  2. Will it stay stable?

    3 vote(s)
    23.1%
  3. Will it go down due to market manipulation?

    1 vote(s)
    7.7%
  4. Other? Explain below

    5 vote(s)
    38.5%
  1. USMCwife

    USMCwife Monkey++

    I know that there's no way to really know, but I was just wondering what other well informed people think. I ask because I have a large purchase to make in October. I've been putting back cash each month for the purchase, but I thought with the way the economy is looking I should put that money back in silver instead. Then, I could cash in when October rolled around and come out better. Is it too risky? My gut says go for it, but...yeah, I dunno.
     
  2. fortunateson

    fortunateson I hate Illinois Nazis!

    I look at all precious metal purchases as an insurance policy. It may not "perform" as an investment, but it will save your backside if TSHTF.

    That said, we're in a tricky situation. The fed and indeed most governments are trying to print their way out of this mess. The amount they're printing makes for huge potential inflation. Keep in mind that governments WANT inflation because it reduces their debts.
    I say potential, because without an economic pickup recessional forces will cancel out inflation. That is what we're seeing now - deflation.
    If deflation continues, commodities will be worth less and the dollar more - we're seeing that right now with oil... But what about gold. It's still rising despite deflation because more people are buying that insurance.

    So, in short you have 2 situations on your hands -
    Deflation - dollar rises, commodities fall, gold & silver hold their own
    Inflation - dollar falls, commodities go through the roof.

    Given the above, I don't see a downside to buying your insurance.
    Even if deflation wins out, how long will it last?

    Now as far as Silver: It will follow gold, but a ways behind. It's typically viewed as the poor man's gold. When the speculators have run amok and the little guy follows their coattails, silver will start to move. IMO, in this economy, it will move FAST!

    Well, those are JMHO. Definitely diversify, but I wouldn't feel bad about adding a bit of metals as an insurance policy.

    BTW, you could always "dollar cost average" it. Buy some now, next month, and every month. In this way, the market ups and downs average out for you.
     
  3. UGRev

    UGRev Get on with it!

    I agree. I started off thinking about this part of SHTF as an investment more than an arse saving tool. That hindered the process for me in deciding whether or not to get involved. While I do try to buy on the dips, I don't sell at all so it has become, by default, both a long investment should we pull out of this mess and a SHTF currency.
     
  4. melbo

    melbo Hunter Gatherer Administrator Founding Member

    Added an official poll for you.

    Up and down with cycles of market fraud, manipulation and panic when looked at on a month to month basis with the overall spot price trending higher if viewed year by year.

    I don't really buy into the 15 or 16:1 personally.

    Buy TIL it hurts*


    *If you have the rest of your preps taken care of. Don't ever think of PMs as a lottery ticket and forgo the rest of your preps thinking you'll time a parabolic rise and then be able to buy the rest of your stuff and a 100 acre farm in the hills. While I believe that everyone should have a few pieces of Au and Ag to rub together as a reminder of what real money was, Heavy investment into PMs is for those who are afraid of the conventional investment vehicles and don't know where else to stick their money.
     
  5. VisuTrac

    VisuTrac Ваша мать носит военные ботинки Site Supporter+++

    market manipulation, news good and bad are going to cause pm's to fluctuate wildly. the more uncertain the times the more the spikes.

    i am taking some of my weekly over time money and buying 2 oz. each week. dollar cost averaging all the way. until .. well hopefully i won't need it and i can give it to my grandkids. (silver that is)

    food,water, shelter, warmth, trade goods (pm's,ammo,canned goods, fire wood) and skills that can be useful like welding,carpentry, solar/wind electricity knowledge it's all a great big pie. your most valuable weapon/tool is your mind.

    along with good friends of like mind can go a long way during times of stress.

    what's gonna happen? who knows. my biggest fear is the insane folk from the inner city panic. i really don't want to take a life, but come over the wall, all bets are off.[viking]
     
  6. USMCwife

    USMCwife Monkey++

    Thanks for all of the info and feedback! We're in a great place when it comes to survival if the economy collapses. We've got the land, water, food, etc. We could probably use more ammo--but hey, who couldn't. We just don't have what I consider "adequate" savings. I have to make this purchase in 5 months, no choice, but I was hoping I could squeeze a little savings in for myself at the end assuming silver would rise over the next few months. I think I'll go half and half, it can't hurt, and maybe I'll get lucky. Thanks again for the advice. I love this forum
     
  7. melbo

    melbo Hunter Gatherer Administrator Founding Member

    I would say that all things considered, the spot price of silver will rise -with ups and downs in between- over the next 12 months. Too many things on the verge of defaulting right now.

    If you've read some of my other stuff on Gold and Silver, you'll know that I am a proponent of PMs. My friends and family thought me crazy to buy silver at $6 and Gold at $350...

    If your set otherwise, jump right in and there is never a better time than any given 'today'!
     
  8. tacmotusn

    tacmotusn Mosquito Sailor

    Total novice here with regard to PM's. I have some silver that has doubled in value since I bought it. But where the heck do they get this 16 to 1 ratio. The gold $350 / silver $6 prices above is 58 to 1 aprox. And, at $1200 gold of today silver would have to rocket up to $75 an ounce.... Are they crazy? Where does the 16 to 1 figure come from? Somebody please school me. I voted other because I have no clue on this.
     
  9. USMCwife

    USMCwife Monkey++

  10. USMCwife

    USMCwife Monkey++

  11. melbo

    melbo Hunter Gatherer Administrator Founding Member

    I might even argue that silver is more rare than gold but that's another thread.

    16:1 was the 'historical' ratio of above ground supply. Problem is that silver is consumed where gold is not.
     
  12. overbore

    overbore Monkey++

    VERIFY THIS!

    The summer pricing of PM's tends downward over a significant period. That is when I would buy in normal times.

    Laus Deo
    overbore
     
  13. tacmotusn

    tacmotusn Mosquito Sailor

    A thanks to all for the answers given to my question.
     
  14. ozarkgoatman

    ozarkgoatman Resident goat herder

    I could not agree more. [applaud] Other things can be lost or stolden. Know how and adaptablity are going to be in high demand, if/when things go bump.

    BWM
     
  15. Pax Mentis

    Pax Mentis Philosopher King Site Supporter

    I realize it is now 2 months into the 5 months, but hey...I'm new here.

    I said "other" because I believe it will rise, but that the 16:1 ratio is not likely to be seen again for a long time (if ever) unless we hit SHTF.

    Personally I think that, for anyone buying PMs as a "safety net" for SHTF, silver is a better choice at this time because I think it will hold value closer to it's current selling price when the currency goes belly-up. It also has the advantage of being easier to use in smaller denominations.

    For non-SHTF investing I don't know that I would recommed either.
     
  16. overbore

    overbore Monkey++

    SON,

    SHOW ME A PAPER CURRENCY THAT HAS NOT BECOME DEBASED
    THEN SHOW ME A CURRENT PM THAT HAS.

    FIAT , PAPER MONEY, IS now "BACKED" BY A POLITICAL PROMISE AND WE ALL KNOW HOW LONG THAT LASTS. ;) WANT TO BUY PAN AM STOCK??? EASTERN, PACKARD, STUDEBAKER, ETC--ETC HOW ABOUT BLOCKBUSTER??? MAYBE BP??? I KNOW; FANNIE OR FREDDIE ; $62 down to 0.62 one helluva buy---[rofllmao][rofllmao][rofllmao]Au has only increased 8.2% this year and the upside is??????

    Laus Deo
    overbore
     
  17. Pax Mentis

    Pax Mentis Philosopher King Site Supporter

    As I said...I am new here...so I don't know you.

    Did you somehow get the idea I was pushing paper money or the stock market for long term investments?

    I am really not sure I am getting the point of your tirade.
     
  18. UGRev

    UGRev Get on with it!

    this is a tough one, and I haven't read any of the previous posts so pardon me if this was debated already; if so, just pass it over.

    With all the manipulation going on in the PM's and the "rumors" (which I happen to believe) about there not being enough physical.. I'd have to say that at some point, the dollar value of PM's is going to the moon. What's it going to do in the next 3? anyone's guess so long as the manipulation is in play.
     
  19. overbore

    overbore Monkey++

    AMAJOR EUROPEN BANK:

    was just forced to sell tons of gold to cover its debts; therefore the price of gold has decreased--on a short term basis.

    The news that a mystery bank has just pawned the family jewels gave traders a jolt – nervous about the sudden transfer of almost 20pc of the world's annual gold production and the possibility of a sell-off.

    In a tiny footnote in its annual report, the bank disclosed its unusually large holding of gold, compared with nothing the year before. The disclosure was a large factor in the correction of the gold price this week, which fell below $1,200 for the first time in more than a month.
    Concerns hinged on whether the BIS could potentially sell on this vast cache of bullion in the event of a default, flooding the market with liquidity. It appears to have raised $14bn for whoever's been doing the swapping – small fry on the currency markets, but serious liquidity in the gold market.
    Denominated in euros, gold has fallen 8pc since the beginning of the month and is now trading at a seven-week low of €937 per troy ounce.
    The big gold exchange traded funds (ETFs) – having peaked at record inflows in May – have also been showing net outflows over the past few days.
    Meanwhile, economists and gold market-watchers were determined to hunt down which bank is short of cash – curious about who is using their stash of precious metal for what looks suspiciously like a secret bailout.
    At first it looked like the BIS was swapping gold with a troubled central bank. After all, the institution is the central bankers' bank and its purpose to conduct transactions with national monetary authorities.
    Central banks in the troubled southern zone of Europe were considered the most likely perpetrators.
    According to the World Gold Council, central banks in Greece, Spain and Portugal held 112.2, 281.6 and 382.5 tons of gold respectively in June – leading analysts to point fingers at Portugal, or a combination of the three.
    But Edel Tully, an analyst from UBS, noted that eurozone central banks would be severely limited with what they could do with the influx of extra cash – unable to transfer it straight to governments or make use of the primary bond markets.
    She then listed the only other potential monetary authorities with enough gold as the US, China, Switzerland, Japan, Russia, India and Taiwan – and the International Monetary Fund.
    This led to musings that the counterparty was the IMF, making sense because the lender of last resort is historically prone to cash shortages and has been quietly selling off gold in the first half of the year.
    Renowned gold expert Jim Sinclair adopted this explanation. The panic came when people mistook a lease for a swap, he argues. Far from being a big release of gold into the market, it is simply a commercial arrangement between the IMF and BIS with a favourable rate of interest paid for the foreign currency.
    "Gold swaps are usually undertaken by monetary authorities," he writes on his industry blog, MineSet. "The gold is exchanged for foreign exchange deposits with an agreement that the transaction be unwound at a future time at an agreed price.
    "The IMF will pay interest on the foreign exchange received. Historically swaps occur when entities like the IMF have a need for foreign exchange, but do not wish to sell the gold. In this case, gold is a leveraging device for needed currency to meet requirements.
    "The many reports that characterise the large IMF gold swap as a sale of gold into the markets do not understand the difference between a swap and a lease."
    However, the day after original reports about the swaps, BIS emailed a statement saying that the swaps had not been conducted with monetary authorities but purely with commercial banks.
    This did nothing to quell the sense of mystery surrounding the deal or deals. It is almost inconceivable that a single commercial bank could have accumulated so much gold alone. And cynics have suggested that the whole affair still looks like a secretive European bailout that a single country wants to keep quiet.
    In this case, one or more of the so-called bullion banks – which act as wholesale market-makers and include Goldman Sachs, Deutsche Bank, JP Morgan, HSBC, Barclays, UBS, Societe Generale, Mitsui and the Bank of Nova Scotia – would have agreed to act on behalf of a monetary authority. This would add an extra layer of anonymity. "So the BIS swaps look like a tripartite transaction," writes Adrian Douglas of the Gold Anti-Trust Association. "The commercial bank or banks made a swap with a central bank or banks and then the commercial bank or banks made a swap with the BIS."
    <!-- / message --><!-- sig -->Yes, gold goes up and down in the short run but always up in the long term; paper always goes down. Facts not diatribe, Son.
    Laus Deo
    overbore
     
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