Why Gold and Silver are dropping ...

reply to post by GirlGenius

Bravo, GirlGenius! What a find...S&F

Fantastic article that tells it like it is. I authored a thread on Jan 1, 2011 on ATS that gives a useful analysis of the silver market in detail:

www.abovetopsecret.com...

I have been buying and holding silver for a long time. I did not buy it to sell for a "profit". I look upon it as simply a store of value to be used when the currency collapses...and it WILL COLLAPSE.

I heard a wise man once say this, "The only difference between a $5 bill and a $50 bill is the arrangement of the ink on the paper." Think about that. Anyone who will exchange silver for a worthless piece of paper is a fool. Take advantage of the fools of the world and buy silver NOW.

reply to post by OBE1

...avoid the counterparty risks associated with some Ebay sellers

Great post OBE1, I hope others will continue to filter out the nay-sayers and tune in to people who know what they're talking about.

One small thing to mention, I buy a lot on eBay, there are some great deals out there, all the time, although it helps to know good sellers of course. While the counter-party "risk" you mention certainly applies to larger transactions, it's possible that the average ATS member looking to spend only a few thousand dollars doesn't have to worry about that, as long as they pay using PayPal.

Not sure if everyone knows this yet, but eBay has done a good job of reducing that risk to a minimum, and anything purchased using PayPal is pretty much covered. If you don't get the item, or it isn't "as described", etc., all you've got to do is tell the seller you're not happy, and then if they don't do something, you can complain to PayPal, and you get your money back! They then take it out of the seller's hide. Of course, sellers know this, which is why this kind of thing rarely happens anymore.

SO, for the smaller buyer, I want to share something very concrete: First, go to a big seller like APMEX, and "shop around". Decide what you want, and look at how much they're asking. Then, go to eBay and see if you can get the item cheaper. Sometimes, not always, you CAN find the particular item, and at least you will have a good idea of what it's really worth, instead of getting into a bidding war, and paying too much. This might even be "critical" for someone who has never bought gold or silver before.

Of course if you want more than one or two of whatever it is, then you can always go back to APMEX and confidently put in your order. They also run nice specials, and you can sign up for their free email notifications.

JR

reply to post by SaturnFX
While I am sour that I can't invest in anything. Gold is one of the best super conductors out there and regardless of what makes something valuable it has and probably will be so.I was watching a documentary on the De Beers and one part struck me as very interesting,the fact that they were storing vast quantities of diamonds in Russian silos.So many are in their vaults that if dumped on the market tomorrow anyone(but me)could afford a pocketful.The real value is in industrial uses.I use them every time I cut my ceramic tile,porcelain or natural stone.
Is the gold market being artificially maneuvered?I would think so.I remember paying 4.27$ for a gallon of gas so I decided to ask my wealthy tile customers what their take was.Two of them told me about their friends that owned oil wells were getting paid more to not pump than if they kept pumping.Just like turning off the garden hose for these people.I just wish I could get a decent paying job doing anything less physical. My body hurts all the time.

Thanks for this article, good info for me a gold and silver holder.

I bought my first silver when it was in the teens, now it's almost doubled in price. Gold hasn't held steady with silver but it's increased as well.

I just like gold and silver better than paper. It feels more valuable, looks more valuable, and has more practical uses. Go to a remote island and the natives will be more interested in a bar of silver than a 100$ bill.

Take my cash, give me your silver any day. Everyone just needs to ride through the storms (silver from 31 to 27 $/ounce in less 2 weeks) and stay in it for the long run.

A couple of friends and I just bought silver american eagles on December 28, 2010. We received our physical silver after the new year and are pretty excited. We figured, the dollar is only going to get more and more worthless. Especially if our debt continues to increase as spending is what we do. We don't produce much anymore, so spend we will. And then you have some that WANT the dollar to fail, so really the decision to buy precious metals was made for us. And I watch the price of silver periodically throughout the day. The price of silver american eagles has dropped 10% in the last couple of weeks since we bought our stash at $30.36/oz. We kept wondering what was going on, as the drop didn't make sense to us. We knew it was being manipulated, and now we know exactly what game they are playing. Thanks for the link OP!

reply to post by JR MacBeth


Hi JR. Yeah, Tulving is a great family owned business. I think the appearance of their cost-saving website may give pause to some 1st-time investors, and I do wish the minimums were a bit lower, but as you know, they have a very successful business model. The last time I purchased from Tulving was during the pullback near the end of May. I happened to phone my order in during the evening and Hannes was working the night-shift....quite a character.

I didn't mean to totally rag on Ebay. Back in the day I won a few Silver auctions myself...smooth transactions...positive feedback to-and-fro. I also stayed up all night once to win a Gold auction...that ultimately went bad...for me. I guess some folks enjoy participating in the bidding process and are willing to pay a little extra in premiums for the opportunity...others may have the time to poke around for a good deal.

In November, we had a sharp morning pullback just before Fed-speak, so I rushed over to a local coin shop to take advantage...and relieved him of 100 SAE's. I returned home to watch PM's reverse upside immediately after the FOMC announcement. Difficult to duplicate that strategy with an auction. I still payed sub-Ebay prices, and had the opportunity to feel like "Genius for a Day" on the reversal. Got lucky.

I guess what I'm trying to say is that sometimes...time is of the essence, and no-one likes to make a purchase only to watch the value of their investment immediately deteriorate by whatever percentage...it can be demoralizing, especially to newer investors. I've been there, and I guess that's why I try to encourage 1st time buyers to nibble at first, and at least make an attempt to buy the dips. Which is why it's really encouraging to see this thread gain popularity with PM's in the woodshed. Typically, Gold/Silver discussions have a tendency to disappear from the board during beat-downs (precisely when folks should be focused on buying), only to reappear when the uptrend resumes with everyone and his uncle jumping on board the Gold train at higher prices.

With solid input from knowledgeable members like GirlGenius, and yourself JR...it's refreshing to see this subtle climate-shift.

Afterthought: I think it wise to develop a relationship with local coin shop proprietors. Drop in, buy a coin now and then. If he isn't busy, ask a few questions. Like any business, coin dealers appreciate return customers...and they've been known to extend a certain amount of latitude in terms of pricing

reply to post by OnTheFelt


The debt cannot be repaid? Ever heard of discharging debt? It's about the only thing sovereign creditors can do to keep the system going. The system by design will fail if we are all debtors, as you said we cannot pay debt with debt. But when we discharge it and balance the system with enough creditors to handle the debts... then gold is not so important as the monetary system is nearly perpetual in this usage. Checks and balances... 'ground zero'.. discharge..

Gold is really a bubble, like housing, derivatives etc, If it's not in your hands and tested for purity it's near worthless. There are so many fake tungsten cored gold bars around that the gold bubble will be barely better than a complete debt based economic crash.

I would love to see a post from 2005 telling people to buy silver at $5

Instead you have the trend followers on here now saying silver is an amazing buy at $30

Like the poster above me said, the system is not going to fail completely

So in a recovery, the price of gold and silver will come back around, considering theres about 4 billion oz of silver in jewlerry and silverware in the market from just this past decade

You can make a profit off of buying silver, but you need to make the exchange in order to recognize any true profit, otherwise you still have 1 0z of silver that has been 1 oz of silver forever

reply to post by ADUB77


Well, if my company and our investment broker would have done the same thing as I did back in 2007, pulling my retirement and putting it all in gold, I think they would have been happy.

You just have to listen to the right people. PM, especially silver is undervalued by about 300% yet, IMO. But hey, some of the investment pundits on the MSM were saying that munies and bonds were a good investment up to about 3 months ago.

Hmmm, wonder what the talk about states going bankrupt is going to do to that?

Balance: balance gold and silver purchases over time so short term set backs dont hurt you (if you bought a core position of silver under $5 and gold under $400 then these little swings would not be of concern and one could lighten up on strength with the intent to rebuy on a major dip). Balance precious metals with other necessities like stored food (but dont forget to check those expiration dates as it doesnt last forever like gold and silver). Balance further with seeds, land and tools to be able to grow your own food in the future. Balance that with "tools of self defense" to protect your life and property. But dont go overboard with these "tools" or you will wind up on a list and that could prove counter productive should gun confiscation materialize. Back to PMs....dont forget to secure your PMs with a secure, "safe" hiding place.

Speaking of "balance" (this is probably better off in a different thread) but after the collapse of fiat currencies and the future explosion of precious metals before tbtb fix prices and dial the currency back 10:1 the concept of money will eventually evolve to be digital (MOTB) altho presumably resource (ie PM) based. However, when TPTB "balance" the world's (over)population then demand for such resources will decline sharply as will the money supply after the great debt "rebalancing" (write-off). Just my "$2 (2 cents adjusted for inflation) worth."

reply to post by SaturnFX


Let me know how all that works out out for ya in two years..........

reply to post by OBE1

...time is of the essence, and no-one likes to make a purchase only to watch the value of their investment immediately deteriorate by whatever percentage...it can be demoralizing, especially to newer investors. I've been there, and I guess that's why I try to encourage 1st time buyers to nibble at first, and at least make an attempt to buy the dips.

Afterthought: I think it wise to develop a relationship with local coin shop proprietors. Drop in, buy a coin now and then. If he isn't busy, ask a few questions. Like any business, coin dealers appreciate return customers...and they've been known to extend a certain amount of latitude in terms of pricing

More excellent advice, I hope people take heed.

The person who is new to any investment does indeed run the risk of becoming prematurely disillusioned because of very normal timing issues. I often make recommendations exactly as you are saying, begin with a nibble perhaps. Buy the dips. Obviously, if a person blows their entire investment wad at what looks like a "high" price (in the short-term), they can be tempted to do the worst possible thing, which might be to give up on a very sound longer-term investment.

People should always accept that there is a learning curve, they do need to do some due diligence, learn not to panic, and by all means, carry on if they can see that the long run trend is going to help them.

Regarding local coin dealers, I totally agree with you. Yes, visit several of them, decide which seems to work for you. A big caveat though is that coin dealers do not have the best of reputations by-and-large, and that is for good reason. Most operate pawn operations that are part of the standard business model (not all). Most are very likely to take advantage of the green noob. It can be very intimidating!

But persevere. You may find one who is an honest, decent individual, and they can be a great asset, if you can identify that one gem among so many that are questionable. Ask around, you might be surprised to find that your friends may already know someone who has been quite helpful to them. That can trim your list some.

I know probably thirty coin dealers fairly well across the nation, so I can tell you, they are a dangerous breed. But, I absolutely do not want to discourage anyone in saying that. Again, there are some gems out there, and they can help you, and they can give you wonderful deals that you won't find anywhere else. Remember, they buy direct from the public, they get great bargains, that leaves a lot for others.

There is not a week that goes by where I do not pick up fantastic deals from the dealers I know. But it helps of course to know what a deal is. This bull market in metals in going to last a long time, by all appearances, now is the time to figure it out.

Your advice is spot on, and as long as people go slow, they are sure to do just fine.

JR

reply to post by GirlGenius


The price of gold isn't going down because if that were true then the value of the USD is going up wich it is not, it is going down thus raising the price of gold and other precious metals AKA inflation. Last I heard the USD was devalued some during it's valuation the IMF does every 5 years. Gold never really changes in value it always holds they same value it only fluctuates withen pennies not dollars. If it is raised thats only because the value of the USD id going down if you want further proof compare it to the Euro or other currencies. Compare the USD to gold and other currencies and see what is really goin on.

reply to post by ADUB77

Instead you have the trend followers on here now saying silver is an amazing buy at $30

You owe it to yourself to learn about these things. Silver is indeed a bargain at $30!

If you go to the Tulving website, they actually have a small box to the right that shows the "inflation adjusted" prices of metals, and you will see they have $128.00 per ounce for silver, based on the 1980 high.

Is silver worth $128 per ounce? Does that sound "high"?

It is in fact possibly quite LOW!

Silver is an incredible bargain, but few know about it. It has been manipulated for so many decades that people can't see the truth of the matter, by simply consulting historical charts. There is far more going on.

A few years ago, at the annual Silver Summit held in our area every year, a noted silver expert, Jason Hommel got up in front of the crowd and gave his speech. Heroically, he gave his reasons why he expected silver to reach an astounding $8,000.00 PER OUNCE!! I say "heroically" because such a huge "leap" would sound like insanity, and most so-called "experts" would never want to go out so far on a limb. But to his credit, he called it like he saw it. Perhaps even he was surprised, but the more he studied the matter, the more things looked "crazy good".

OK, to my thinking, if it was only HALF that good, we should be on board to some extent, wouldn't you think?

Silver may not be just the investment of a lifetime. It could be the investment of all human history! Look into it! If you don't care, then maybe your grandkids will. Can it hurt to spend a few minutes on Google investigating this phenomenal opportunity?

Take note, this is info you will seldom ever encounter. Don't miss this chance to really make a difference, and the magnitude is such that even the smallest of investors can realize gains they would have literally no where else.

JR

I was thinking about going and panning for some gold. It seems to me that enough time has passed that there oughta be some gold available in places where gold used to be pannned for. Hmm.

Originally posted by Gradius Maximus
Silver and gold wont feed you.

Buy food, guns and take workshops, prepare for the worst with skills and tools instead of buying into another form of the monetary trap.
-G

The next time you are buying food, take a nice, heavy, silver dollar out and offer it to the cashier. Watch their eyes get big and their hand reach out in a way that never happens with fiat currency. This works best with a non-American who actually knows what real money is. Then be sure to tell them you are joking and take your real money back before they pocket it. You may really need it one day.

I did this to my pizza man and he sure looked disappointed when I pocketed my 1922 silver dollar again.

After a person has bought food, etc., they may still need a place to store their wealth without worrying about devaluation.

I made 1200 today in the market

And on a 4500 investment to boot

and it wasn't on silver

Zimbabwe super hyper inflation. If these people, scratching around in the dirt, can use gold to buy food, I'll bet it will buy me some during any hyperinflation we may experience due to our government trying to print its way out of debt.

Originally posted by ADUB77
I made 1200 today in the market

And on a 4500 investment to boot

and it wasn't on silver

Flip some not so legal substances?

Originally posted by Dr Love

Originally posted by SaturnFX
Gold is just a rock.......

its a ploy..its a scam..

Then it's been a ploy and a scam since the beginning of human civilization.

Way to deal the Glenn Beck card BTW.

Sure you don't want to throw Alex Jones in for good measure?

Peace

Dr love,

I do not care if you are a forum moderator. Just because gold was a way to barter in the past does not mean it will be in the future. The thought is, in fact, complete nonsense. Returning to a gold standard would create an even wider gap between rich and poor.

We assign arbitrary values to both the dollar and gold. They are the same. They do nothing but sit there.

I would rather own something that produces VALUE in the long run, as opposed to just shining. Gold is like a trophy wife: she just sits there. Stocks, when not outrageously valued as they are now, are like a billionaire wife: the gift that keeps on giving.

On the other hand, there are arguments to be made that are pro silver. However, their industrial uses (mainly as a catalyst see Hydrogenation reactions with a Paladium or Platinum catalyst) do not justify their high price. Silver and gold suffer from the same inherent problems of the dollar: we are currently assigning an arbitrary value due to idiots buying it like crack.

Oh, btw, just for all you gold bugs. Who owns most of the gold in the world? The same exact people who own the most t-bills in the world: THE FED. So, if you are anti fed, you inherently should be anti-gold. Seriously, I hate it when people are trying to hedge their exposure to the Fed through gold when the Fed owns more gold than anyone in the world. Get a grip on reality people.