Economics Questions

Re: Where/How to buy and sell silver

DanielMuff — Thu, 05 May 2011 18:27:44 GMT

I hope you didn't buy silver between April 24-27.

Re: Where/How to buy and sell silver

Bohemian — Thu, 28 Apr 2011 00:21:29 GMT

Daniel Muffinburg:
The only reason I'd buy silver and gold right now is if hyperinflation were imminent. As for the bull market, it started over 10 years ago, so I would look for whatever is depressed right now (i.e. rhodium). Although, I'm wating for a correction in silver.

My initial interest in silver years ago was primarily as an inflation hedge. As I studied more deeply, I saw that is was better for speculation at that time. Silver is always an inflation hedge of sorts, but I don't think it's the best option--particularly right now or in the last 12 months.

I don't believe one should look deeply for profit potential in their investments to protect & secure themselves. Any place where profits are of any acknowlegable amount is likely to be proportionately risky. Risk is antithesis to security. Silver has been incredibly profitable, and likely will continue to be. However, now, and for the next several months I feel that it is an unstable wager and should be avoided by new investors unless they are willing to risk losing a great deal.

Re: Where/How to buy and sell silver

Bearchu. — Wed, 27 Apr 2011 20:24:59 GMT

<quote>Do you think correction in silver could be triggered by an uptick in interest rates?

I doubt silver corrects untill the interest rate comes up.</quote>

I highly, highly doubt that the interest rate will be going up anytime soon. In fact, it might not even go up since Helicopter Ben is guiding the ship.

Yeah i just watched silver go up $1 in the 50 minutes bernake was speaking.

Re: Where/How to buy and sell silver

rosstaylor — Wed, 27 Apr 2011 20:06:16 GMT

<quote>Do you think correction in silver could be triggered by an uptick in interest rates?

I doubt silver corrects untill the interest rate comes up.</quote>

I highly, highly doubt that the interest rate will be going up anytime soon. In fact, it might not even go up since Helicopter Ben is guiding the ship.

Re: Where/How to buy and sell silver

Bearchu. — Wed, 27 Apr 2011 19:51:41 GMT

Bohemian:
If you're looking for inflation protection with the potential for earnings, you're too late to use Silver for that.

Muffin:
The only reason I'd buy silver and gold right now is if hyperinflation were imminent. As for the bull market, it started over 10 years ago, so I would look for whatever is depressed right now (i.e. rhodium). Although, I'm wating for a correction in silver.

Do you think correction in silver could be triggered by an uptick in interest rates?

I doubt silver corrects untill the interest rate comes up.

Re: Where/How to buy and sell silver

rosstaylor — Tue, 26 Apr 2011 12:35:22 GMT

I recommend buying both physical and have it stored outside of the country. For physical, you can probably get it at your local gold/silver store somewhere. That way, you can inspect the coins yourself, and most likely, there won't be much of a spread from the current value. Also, I highly, highly recommend goldmoney.com - it was founded by a very respectable figure (who is also a follower of the austrian school), and it is insured by 4 major insurance companies (some of most reputable in the world), and audit by third parties on a quarterly basis.

I'd own both physical and store some outside of the country.

Re: Where/How to buy and sell silver

Aristippus — Tue, 26 Apr 2011 08:49:53 GMT

That's true, Clayton. Even in Australia, which - despite the efforts of the current government - is one of the most free economies in the world, there is the looming threat of a new mining tax and carbon (sic) tax. These would cripple the most prosperous and fastest growing industries in Australia. It was essentially due to the fact that the resources industries were able to thrive relatively unimpeded by the government (compared to the rest of the world), that Australia got through the market crash relatively unscathed (of course the current Keynesians in power claim that they were responsible for this).

Too bad for the current government that their measures will likely fail to get through, and at the next election they will be destroyed, paving the way for the way for the restoration of the relative laissez-faire conditions of the late 90's/early 2000's. Or perhaps I'm too much an optimist.

Re: Where/How to buy and sell silver

Clayton — Tue, 26 Apr 2011 08:30:53 GMT

@Bohemian: You're spot on. The hardest part about investing right now is that the entire global economy has become almost 100% political. Think of trying to invest in Russia on the eve of the Bolshevik revolution... what right moves were there, in the end, except to flee the whole damn country??

Clayton -

Re: Where/How to buy and sell silver

DanielMuff — Tue, 26 Apr 2011 07:08:21 GMT

Bohemian:
If you're looking for inflation protection with the potential for earnings, you're too late to use Silver for that.

The only reason I'd buy silver and gold right now is if hyperinflation were imminent. As for the bull market, it started over 10 years ago, so I would look for whatever is depressed right now (i.e. rhodium). Although, I'm wating for a correction in silver.

Re: Where/How to buy and sell silver

Smiling Dave — Tue, 26 Apr 2011 06:57:53 GMT

Why is it that buying precious metals should be any different than investing in any other commodity?

My guess is because other commodities are going to be consumed sooner or later, so the seller is afraid to sell the same barrel of oil, say, to twenty different people.

Re: Where/How to buy and sell silver

Bohemian — Tue, 26 Apr 2011 06:54:55 GMT

Clayton is very correct in that you should really take your time with this sort of thing. I would also agree that right now is a poor time to enter the silver market. It could hit $108 USD by December, it could go back to $30 two weeks from now--there is a great deal of confusion, misinformation, and worst of all, manipulation.

Right now I am only so jubilant because I was buying the shiny metal years before it took off, so I'm phenominally covered. For the past week I've been getting very itchy, with this Wednesday in mind particularly. I even made a thread regarding it. After a long day of being more or less aloof I see today that silver has dropped by $1.81 USD today--yikes.

You should ask yourself a series of questions:

What are your goals? Are you looking for a long term inflation hedge or a quick profit?
- If you're looking for profit, what is your desired return?
What level of risk are you willing to navigate?
- Is now a good time to enter the market?
What understand do you have the silver market?
What is your experience with precious metals in general?

By no means, is this list complete. The point is, understand your desires, reasons, and scope of knowledge.

I'll be curt and say that if you're looking to ride the silver train and are for most intesive purposes competely new to the silver trade--stay away unless you love extreme volatility and probability of sustaining overall loses. I have been obsessively watching the silver market for over three years now and only within the last year have I been able to get a good grasp on the reality of the market. I tend to be a bit early on my predictions, but have typically been able to call moves by the month about 5 months before they occur. Right now traditional influences are no longer the dominant force, and my crystal ball is very very murky.

If you're looking for inflation protection with the potential for earnings, you're too late to use Silver for that. I also deal with Palladium. I find it to be a wonderful investment. It has nearly all of the positives of both silver and gold with nearly none of the negatives.

However, if you're insistant on playing with silver (see: fire or matches), then predominantly buy 1oz coins (non-numismatic) or 10oz. bars if you plan to spend 6 figures or more. Private products are my preference, but Canadian Maple Leafs are my favorite soverign print. They aren't quite as marked up as US coins and have every bit as much confidence and reputation as the yankee coins. Whether the market is high or low, they tend to get respectable yet fair premiums. Also, read. I tend to read and analyze the most current details probably about....15-21 hours weekly. That is a conservative estimate.

Be careful.

Re: Where/How to buy and sell silver

Maggie Gilmore — Tue, 26 Apr 2011 06:43:08 GMT

Though I've only dabbled in it myself I've read quite a bit about buying what they call "junk silver", which is old coins that have no collectible value but have a high silver content (pre-1960s dimes, etc.). This is convenient because you can find them locally in coin shops and shows or you can buy them in bulk on eBay and still come out looking pretty good on cost.

Freshly minted silver coins or bullion are fine if you're just looking for a long-term investment (and I definitely agree on the need to hold them physically), but you pay for the minting in the price and it's kindof unnecessary. I personally prefer junk silver because all I'm concerned with is the silver content and the ease of divisibillity, I'm buying them as a safeguard for any future situations where the dollar is useless and I need to trade. I guess overall it's probably a good idea to diversify what kinds of silver you buy so that you'll be prepared for anything.

Re: Where/How to buy and sell silver

Ben H. — Tue, 26 Apr 2011 06:09:43 GMT

Some of the mining companies pay dividends, so it's not all speculative.

Re: Where/How to buy and sell silver

DanielMuff — Tue, 26 Apr 2011 02:49:37 GMT

Why the companies and not the commodities?

Re: Where/How to buy and sell silver

Ben H. — Tue, 26 Apr 2011 01:55:42 GMT

Economic analysts that I follow: Peter Schiff (Euro Pacific Capital), Jim Rogers (Rogers Holdings), Marc Faber (Gloom, Boom and Doom), James Grant (Interest Rate Observer), Gerald Celente (Trends Research), Doug Casey (Casey Research), Max Keiser. There are plenty of videos of these guys on YouTube.

A good book to read is Schiff's Crash Proof 2.0. The first half is about the economy, and the second half is how to invest. Schiff also has a free monthly precious metals report (email) that you can subscribe to here. It features articles from various experts, including Casey Research.

Since silver is both a precious metal and industrial metal, it has the best chance of going up in price. If the economy improves, more industries will be using silver. If the economy gets worse, governments will keep printing money, destroying the value of their currencies.

Other than a few silver coins, I don't own any silver. But I do own shares in precious and base metal mining companies, gas & oil companies, a couple of agriculture companies, and a few other companies in different sectors.

*I am a client of Schiff's brokerage firm, so I tend to favor his analysis over other analysts. I hope you guys don't think I'm spamming for him.