Any silver stackers on the board?

[vintagetoppsguy]

Originally Posted by barrysloate

David- I like the idea of having precious metals- I'm probably more of a gold bug than a silver one- but I'm surprised that they've been trading in such a very narrow range for so long. Remember when silver would shoot up to $40-50 an ounce? Now I can't recall when it has traded outside $13-15 an ounce. There doesn't seem a whole lot of interest in gold or silver these days.

I've thought about putting away some precious metals but I don't know if there is any money to be made. I recently started collecting currency, and I have some nice gold and silver certificates, but they are of course only symbolic. You can't get silver or gold on demand any more.

I'm certainly no one to give financial advice, but I believe everyone should own some metals. For me, it's silver because I look at the potential. However, the first metals I ever purchased was gold, but that was back in 2002 and I think I was paying like $380 an ounce at the time IIRC.

Right now, I just like to upside to silver. Both had highs in 2011 - gold $1917.90 per ounce, silver $49.82 and ounce (within like a dollar of its all time high). Today, gold is $1342.80 per ounce or 70% of its 2011 high, but silver is only $14.82 per ounce or 30% of its 2011 high. I would have to study the history of the gold to silver ratio In terms of price, but as of today it's a little over 90:1. I do know at one point in the late 1700s (I believe) it was like at a 15:1 ratio. But since it's being mined at a 9:1 ratio, then I just think it has tremendous potential. It stands to reason that either gold has to come down or silver has to go up. I'm betting on the silver side.

[Peter_Spaeth]

Now David may freak out because they're slabbed, but I think the two coins designed by St. Gaudens are true works of art.

[vintagetoppsguy]

Beautiful coins, Peter. I actually like slabbed coins. I don't collect them, but I do like them.

[barrysloate]

Teddy Roosevelt was very interested in making sure American coins were works of art, so he commissioned Augustus St. Gaudens, who at the time was one of the finest sculptors in the world, to redesign the gold coins.

David- I agree silver has the potential to increase in value, but we just haven't seen it happen in a very long time. But I can't predict the future, so who knows. I like bags of old silver coins over silver bars, since I am a coin collector.

[tonyo]

if paper money fails, how will the stackers go about using the metals to trade for goods and services?

[bnorth]

Originally Posted by tonyo

if paper money fails, how will the stackers go about using the metals to trade for goods and services?

That is the part I don't get at all. There is no way I would trade food or water for some worthless metal.

Thanks for the info everyone. I knew silver took a huge hit when they stopped using it in film. I didn't know if they had found a new use for it. Yes it has been a long time since I knew anything current on precious metals.

[58pinson]

As far as how would precious metals be used to acquire anything if a paper currency fails (and lets not restrict ourselves to the US $ here) the concept is that before central governments thought up the idea of paper currency precious metals (and other commodities) have been recognized as a "store of value" throughout history, and around the world. Look to Weimar Germany with it's astronomical inflation rate in the post WW1 era, when entire city blocks changed hands for a few pieces of gold. I would never try to cheerlead anyone into doing something with their resources that they are not inclined to do, but the idea that gold/silver/etc are "worthless" is belied by several thousand years of human history. They have always carried value.

[58pinson]

The gold/silver price ratio is an interesting phenomenon. Traditional metal people will point out the the long term ratio was 16 units of silver would roughly average 1 unit of gold. That has gone out the window for some time now. Again, a rough comparison: when I was a kid and borrowing dad's car for a cruise around town gasoline was about .35 cents a gallon. That's when the quarter was silver. Hence, a 1/4 ounce of silver got you the gallon of gas. Today, that same gallon of gas will cost "approximately" the equivalent of a 1/4 ounce of silver - not exactly of course. The other old story is that an ounce of gold should buy a good men's suit. Historically it does. What's changed? The key is that we are denominating these commodities (like all others) in US $'s, and, without getting in any way political, the bi-partisan crew of goofballs running the show cannot stop debasing the currency (this is a world wide problem).

David:
You asked why I "stack" gold. It is my opinion, based on my investigation and probably as much on my personality, that every paper currency in the history of the planet has failed, eventually. I do no see ours as being a candidate for exceptionalism. If the wheels come off this current state of living arrangements the bad stuff is going to go right through the biggest exhaust fan ever. We need fiat currency to conduct our day to day affairs, but saving in it reminds me of saddling up to a crooked three card monte game. Not for me.
We skated on very thin ice 10 years ago or so - next time, and it's coming, who knows. I mentioned the 321gold.com website in my original comment, and I think you would be interested in another site I take a look at sometimes:
coloradogold.com. They are metal sellers, but I would recommend you click on the "Don's Column" icon. He's the retired owner of the site and he writes a column once or twice a week. He's old school and a character, but having read some of your views on things through the years I'm pretty sure you're going to like where he's coming from.

[vintagetoppsguy]

Originally Posted by vintagetoppsguy

...silver is only $14.82 per ounce...

As I type, silver is at $19.50 an ounce, up nearly $5 an ounce from less than 3 months ago. I'm not selling right now. Just the opposite, I'm still buying. I think we'll see $25/oz silver by the end of the year...if not much sooner.

[Directly]

Why do we buy baseball cards, some buyers pay millions for say a T206 Wagner..Lets for discussion say the economy tanks, as 1929.

Question: What might be possibly best to trade for a piece of bread--a ounce of silver or a Mantle baseball card. So just in case why not have both!

Cash may be king, did the decline of the Roman empire begin when they removed the silver from their coins, ring a bell?

[vintagetoppsguy]

Originally Posted by Directly

did the decline of the Roman empire begin when they removed the silver from their coins, ring a bell?

Sure. The gradual removal of silver from their coins played a large part in their decline. Their own people didn't want their coins. Shows you how valuable and important silver really is, huh? Just like the removal of silver in US coins plays a large part in the decline of the United States.

In 1964, gas was $.30 a gallon. I could take a Kennedy half and a Roosevelt dime and buy two gallons. Today, a gallon of gas is about $2.20 here locally. However, that same Kennedy half and Roosevelt dime are worth $8.46 because of their silver content. I could sell them for that amount and buy nearly 4 gallons a of gas. Which was worth more / held their value in the long run? Fiat currency or silver? The fiat currency lost its purchasing power. The silver gained in value.

Here's my point. If I gave you the choice of a $20 bill or an ounce of silver and told you that you could do anything you want with them, which would you choose? You'd be a fool not to choose the $20 bill. But if I gave you the same choice and told you that whichever you choose that you had to hold on to for 10 years, then which would you choose? You'd be a fool not to choose the silver. It will be worth more than the $20 bill in 10 years.

Please forgive any spelling or grammatical errors. I'm typing this rather quickly from my cell phone.

[Peter_Spaeth]

This chart suggests silver is still at nearly an all time low on an inflation adjusted basis. I guess one way to look at it is it has plenty of upside.

[barrysloate]

Gold is having a pretty good run too, hitting $1550 an ounce. But on a percentage basis, silver is doing better.

Edited to add both silver and gold are way down today, but the Dow is up over 400 points. We are finally starting to see precious metals rise and fall in inverse proportion to the Dow.

[Peter_Spaeth]

If silver was a good buy yesterday it's an even better buy today, down $1 an ounce.