Precious metals

Hmmmm this doesn't sound like rainbows and bunny kisses now does it?

“The next financial collapse will resemble nothing in history. . . . Deciding upon the best course to follow will require comprehending a minefield of risks, while poised at a crossroads, pondering the death of the dollar.”
If the dollar fails, the entire international monetary system will fail with it.
While Washington is gridlocked and unable to make progress on our long-term problems, our biggest economic competitors—China, Russia, and the oilproducing nations of the Middle East—are doing everything possible to end U.S. monetary hegemony. The potential results: Financial warfare. Deflation. Hyperinflation. Market collapse. Chaos.

 

You really believe the dollar is not in trouble? Not sure who said it here, but look at the richest people in the world. What are they doing? Getting out of the markets and obtaining hard assets. Also, major countries are going away from using the dollar already. Look at the recent energy contract between China and Russia, which was the largest in history. 0 dollars were used.

You have stated, as I have also, you buy silver to hedge against the dollar. I agree with you there. That will only work if you invest in bullion. ETFs will fail along with the stock market if the dollar crashes. Bullion will not crash. No, this thread is not just for coin investors. However, many believe that is the best way to invest in PM, through bullion, not ETF.

But you say you have bought 200 oz bars but don't currently own any? I really hope the world keeps the confidence in the dollar as you do. Curious why you sold the bars you previously had? We have not yet had a reason to sell. We have not yet experienced hyper-inflation.

 

Here's your golden boy Jim Rickards in an interview with CNBC....

Ealier today Jim Rickards of Omnis, formerly LTCM's GC, was on CNBC and was subjected to some "probing" questions by Joe Kernen in which the anchor asks Rickards if he is a "conspiracy theorist" for his recent insights into the potential investigation of JP Morgan's market rigging behavior by the DOJ. Rickards replies that he isn't, and follows it up with some gold price target observations based on "8th grade math": the former LTCM man sees gold going up by at least 10 times, and hitting $5,000 rather easily. We wonder if to CNBC there is any uglier word than "conspiracy theory" even when the "theory" is backed 100% by facts.

Joe Kernen, “Jim, some of the craziest viewers I know send me stuff that I think is from you. I’m just wondering if it’s the same Jim Rickards? Are you a conspiracy theorist on silver manipulation, that it’s being controlled by JP Morgan?”

Jim Rickards “I’m not a conspiracy theorist. I gave an interview I was asked to respond specifically, I’m a lawyer also and I was shown correspondance from the Justice Department, Anti-Trust Division of the Justice Department to someone who wrote in enquiring...my comment was that it was an unusual communication because the Justice Department specifically named JP Morgan. Instead of saying thanks for your letter, they said we’re looking into the JP Morgan alleged actions and they went on to say we are not going to refer to the CFTC, we’re going to look into it ourselves. I thought both of those things were unusual.”

Joe Kernen“So you’re not necessarily saying that gold and silver would be 1,000 times higher if free market forces...?”

Rickards “No I am saying 10 times, I am saying gold will get to $5,000. It’s 8th grade math. Just look at the amount of gold and the amount of paper money, do the division, that’s where gold has to get to.”

Oh by the way, that interview was in May of 2010!

 

I don’t think the US Dollar will fail....yet..,but on the verge of devaluation. I’m currently watching out for Germany(DAX) and US stock markets.

Keep an eye on Germany.

 

Yes I believe the dollar is not in trouble. So I've sold my silver bars and bought international investments hedged with the dollar. It's a bullish bet as the dollar appreciates against the Euro, I've also done the same with the Yen for my investments in Japan. So far I've made more money hedging currencies than I would've in silver bars. I will exit that strategy when the dollar falls against international currencies.

 

I think your international investments lean more toward hedging against other international currencies compared to the dollar, not whether the dollar itself is weak. I understand that take, and for what it's worth, I think in the short term you will, and are doing well as other currencies are inflating/devaluing as we speak. I agree that the dollar is still stronger than other currencies, but that doesn't mean the dollar will STAY in a deflationary period, or will remain as the world reserve currency.

 

Correct. It's a way to gain alpha by adding the stronger currency to comparable equities. But I'm highly confident in the USD as the world around us struggles to compete. Call it turbo boosting my global equity strategy. It's paid off in the past and I expect it to continue.

 

Best price I found this morning at 1015 locally was $21.25 for 1oz eagles and $17 for 1oz buffalo. Nothing larger to compare online prices to. He did have some Mexican 99% and junk coins. Just to a little since people seem to have gotten their shorts pulled tight after I found this thread.

 

17 for buffalo coins is a good price right now........ I apmex is up 19 for generic coins....
and 21 for eagles are a good price also.....
I have bought coins every month for 24 months straight and physical price seams to have bottomed out unless something happens...
By time it comes to sell it won't matter what you paid.... If you hold out it will go up a lot.....
APMEX has 100 oz bars for 17.25 a oz, but what are you going to do with a 100 oz bar just not practical for resale.....

 

Just was thinking about the hedge philosophy, don't you guys think if we see hyper inflation in the US that commodities will out pace the price of silver, physical and otherwise. It's happened in the past that PM's lost value in those systems because PM's were bypassed by commodities as other currencies became more commonly traded. Could make your hedge nothing more than a slower fall.

 

It's not conspiracy to say the dollar will be replaced, it's just a matter of time.. The BRICS are calling for it right now and so is every country we mess over...
In fact replacing reserve currencies are a fact of history...... google it......

Next month the IMF will decide if they add China to the fund... Good for China bad for us.....

Some of us all ready lived through 1 devaluation of the dollar, the high inflation of the 70s is because of leaving the gold standard, the dollar was devalued, life went on....
Everyone on the planet is going to hard assets to prepare for it.............
Our own gov has thrown in the towel and just riding it out, they are making no effort to save the dollar, just trying to force it down every countries throat...
The dollar is the strongest it's been in years, that gives us the opportunity to get the most out of our dollars today........
Convert your dollars to good hard assets, pay down debt, buy things you need, get the most for your money now....

The dollar is the most important currency in the world used buy almost every nation....
If it fails it will be the first time this has happened at this magnitude in history....
So some vids may get worked up but it is serious business that can't be taken lightly....
The only difference between Greece and the US is we get to make our own rules and just print up more money....
I feel we will just experience high inflation and that's it, many smart money mangers are predicting much worse...

 

No history shows that in times of high inflation people run to things of value....
Gold and Silver are the real money and have been for 3000 years and will be long after we are gone....
A silver quarter buys more gas now than it did in the 60s and the price of silver is in the tank...
In Germany people were buying city blocks with a few gold coins......
In hyper inflation some assets will tank (deflation) because people can't afford it...
Plus other commodities aren't being depressed as bad as PMs...
The jump that PMs will take is going to be crazy.............

But some things like food and water could out pace PMs but if it's that bad you will need lots of the other PM,
lead, which I have plenty of.....

Most likely after everyone gets screwed over we will go to a gold standard and PMs will jump up crazy and than that's it, just hold after that...

Then just like from the 30s to the 70s no reason to have PMs, you will convert to the next trade or as you need to....

 

And if I'm wrong at least I saved some of the pain, but what else can you do????
Moneys going down, inflation is killing the market gains, digital assets could be taken....
The only thing left is an inflation proof business... working on it but for now part of my plan is PMs....

 

If we have hyper-inflation, a loaf of bread could be $50. A gallon of gas could be $100. A 1 bedroom condo could be $1 million. Some who believe we may experience hyper-inflation say every commodity now is on sale and is a good idea to stock up what isn't perishable. Need new tires? Get em now while they are only $75-200 per tire. After hyper-inflation, that same tire could be $1,000 per tire.

You are correct that commodities will have great value during hyper-inflation. They will have great value to be bartered to obtain other commodities, rather than pay absurd USD prices.

The point of using PM as a hedge is if in the case we experience hyper-inflation, a new currency will be brought to the table, one might be able to not loose as much due to their hedge when they buy into the new currency.

 

Just to point out, hyper inflation is rarely equal between all things. While the value of the dollar during hyperinflation can be calculated the value of each commodity tends to be dictated by it's demand in the market. Look into what happened in the Weimar Republic. A loaf of bread didn't fly to insane prices compared to building materials that were in higher demand. Silver won't cover all of your bases but I agree it can give you some buffer.

The biggest problem I see with silver is that, in order to cover hyperinflation at 1:1000 ratio new currency to old value, you'd need the same ratio in your holdings. At that point, in my case anyways, I'd need a large amount of storage to keep all of that silver. Not to mention the risk that someone will find out I have that silver and take it away, whether it's by private or public means. I just don't see it as being the miracle hedge that a few are making it out here to be.

Plus, consider the conditions in each country during the last few examples of hyperinflation. Zimbabwe was shut off from the rest of the world by embargo and the Weimar Republic had it's most profitable/lucrative industrial area and resource base stripped away by France while the equivalent of trillions of dollars was being demanded by the government for war reparations. I doubt forces that sever will occur against the USA.

I know some keep suggesting that the energy deal between Russia and China was to get away from the dollar. It wasn't. It was to get around a potential future embargo should Europe ever build the port capacity to supply it's own natural gas needs from North America. Without the natural gas market, Russia would basically decay to nothing. China needs energy, and Russia needs security, so the deal was made and not in dollars because there was no need for dollars to be involved. China gets a steal of a deal on the natural gas, paying literally pennies on the gas compared to what they would pay in USD and even less long term with the collapse of it's currency.

You also all keep talking about the dollar losing it's value once it loses reserve currency status and claiming it will because of a cycle that has been going for "x" amount of years. I'd challenge that before the British Pound Sterling and the concept of national debt which evolved in the Napoleonic era that gold and silver were the reserve currencies. Once the Napoleonic wars were over England controlled so much of the world economy it was able to force the concept of a reserve currency on the world and back it with silver and gold. Then, as the British Empire crumbled for reasons totally unrelated to any conspiracy or meddling by the USA the dollar took over the same role as the USA economy became economically dominant. Anyways, where I am going is that until another power becomes economically dominant on it's own, without relying on trade partners, the odds of a move to another currency are low. It's just the way history has presented itself. Not to mention not currency is now backed by silver and gold, so all bets are off on what the revaluation will do to PM's because no one has any idea exactly how their value will be perceived in a market that does not place intrinsic currency value on them.

BTW I live in Canada. Our dollar is basically tied to the price of oil. If hyperinflation occurs in the USA it will hurt, but odds are our dollar would recover rather than hyper inflate due to the high demand for our raw resources that back our economy.

 

BTW this is all why I was thinking about investing in Palladium. Unlike silver, it's use in industry is protected because the only substitute for it's uses is worth even more than it is. It's also worth enough that the amount of storage necessary to keep a few thousand dollars worth is extremely small. If PM's are ever recalled, or the economy falls off enough that robbery is just a daily thing, then odds are I can keep that value of Palladium under wraps until I can sell it. I just don't see silver, or gold for that matter, having that same safety factor. It's also devalued compared to Platinum right now mostly because of the relative popularity of that metal due to cosmetic and perceived value, even though the two share most of their industrial uses. Anyways, either way I think that PM hedging is sort of like buying car insurance. You know your odds are okay that at some point you'll need it. However, if you car ain't worth much (I'm young and my holdings are small compared to someone who is 60), you are a safe driver, and the price of insurance is a relatively large percentage of your income it's never going to be more than a break even plan.

 

Where is the fear/concern for hyperinflation coming from? M0 or M1? The US Govt is only a contingent currency issuer, seigniorage accounts for a small portion of US Revenues and Note yields are still low. Or is this a cost-push inflation? Could occur but I'm not aware of an environment where exchange rates resulted in hyper-inflation.

 

This is a tin foil hat thread. The end is nigh, hence hyperinflation, loss of the dollar as a reserve currency, and any metal you can bite is worth more than any currency are the themes here.

Oh, and I forgot about home grown youtube videos from basement dwelling economic "experts"

 

The nice thing about palladium is it is already negative just from industrial use. If investment demand hits it can go crazy...
The bad is it's not used as money like gold and silver...
But a very good hedge against the dollar....