Downsides to precious metals?

[Alexx1401]

I don't know about that. Silver isn't gold. It's not tied to gold anymore. It's not really a currency metal anymore. It's kind of an industrial metal at this point it doesn't have the gleam that gold has.

Anyone remember what set off that "rush" on it a bit ago? At the time I did not have any and was not really paying any attention. When I started buying some it was just out of frustration of watching the money that was "saved" going down in value. So figured why not. Told Wife it will most likely never be worth nothing. Most likely will have what I have till I shuffle off and the kids can deal with it

 

[Burt Gummer]

Yep. Same. With me it is the way it always has been. Just prefer assets that can't be taken away with a keystroke. I always believe inflation will not be slowing and cash is probably the worst asset own could own in the next five years. Silver/Gold have their place.

A couple of rich friends bought a lot at $30 during that 'rush' and are still pouting. I told one the other day private parties are selling theirs for more. CL ads for Portland are pathetic. One Newberg area guy that sells overpriced one at a time coins.

My experience is most people buy when the price is significantly climbing and avoid it when the price is stale and low .... boring. Picked up more back in the $14-$16k range a few years back. For those with limited funds I've always said common ammo, especially 22lr generic bricks are hard to beat.

 

[Camelfilter]

Anyone remember what set off that "rush" on it a bit ago? At the time I did not have any and was not really paying any attention. When I started buying some it was just out of frustration of watching the money that was "saved" going down in value. So figured why not. Told Wife it will most likely never be worth nothing. Most likely will have what I have till I shuffle off and the kids can deal with it

Nelson brothers attempt at cornering the silver market in the 1980's. Failed.

Commodity market volatility lead to the spike in ?2011.

 

[wired]

Nelson brothers attempt at cornering the silver market in the 1980's. Failed.

Commodity market volatility lead to the spike in ?2011.

That was the Hunt Brothers

 

[Alexx1401]

That was the Hunt Brothers

That one I remember now, made a huge splash in the news.

 

[wired]

That one I remember now, made a huge splash in the news.

My dad was working as a non-destructive testing engineer for a big construction company that made nuke plants and dams. Big stuff. Ran the dept as a VP. Every Friday he'd stop by their fab shop and dig a few hundred pounds of Xray film out of the garbage and he'd take it home where he and my brother and I would run an EPA superfund site refining silver from that film which is extremely rich in silver nitrate. When the Hunt brothers ran up the price of silver, we had blocks of silver the size of semi tires. Dad made a ton of money on it before work wised up and fired him. That's how I bought my first car.
A couple of times a week I'd go down to the bank and buy every bag of half dollars they had to sort through and pick out the 90 % and clad 40% to sell for scrap value. Oh, to be 14 again.

 

[billdeserthills]

My dad was working as a non-destructive testing engineer for a big construction company that made nuke plants and dams. Big stuff. Ran the dept as a VP. Every Friday he'd stop by their fab shop and dig a few hundred pounds of Xray film out of the garbage and he'd take it home where he and my brother and I would run an EPA superfund site refining silver from that film which is extremely rich in silver nitrate. When the Hunt brothers ran up the price of silver, we had blocks of silver the size of semi tires. Dad made a ton of money on it before work wised up and fired him. That's how I bought my first car.
A couple of times a week I'd go down to the bank and buy every bag of half dollars they had to sort through and pick out the 90 % and clad 40% to sell for scrap value. Oh, to be 14 again.

So they fired your Dad for taking out the trash?

 

[wired]

So they fired your Dad for taking out the trash?

As God is my witness

 

[WEE]

The gold and silver sellers used to promote them as being the best inflation hedge. Since Biden took office, gold is up 20% and silver is down 4.5%, spot prices. The platinum, rhodium, and palladium from stolen catalytic converters has become more valuable to a certain element of the population.

 

[Burt Gummer]

Estimates are the ratio of paper silver certs to physical is 700:1

Like I said, yes, if in some future us minions were able or willing to demand anything from the true powers, silver would literally explode in value.

But as with silver, gold, CBDC, you name it the banksters control it all, run it all, and that occurrence happening is about as likely as a lotto ticket.

I do remember people buying whole homes in Zimbabwe when hyperinflation hit there with one gold coin or a fist full of silver. True history. Ahh, never know.

 

[wired]

Estimates are the ratio of paper silver certs to physical is 700:1

Like I said, yes, if in some future us minions were able or willing to demand anything from the true powers, silver would literally explode in value.

But as with silver, gold, CBDC, you name it the banksters control it all, run it all, and that occurrence happening is about as likely as a lotto ticket.

I do remember people buying whole homes in Zimbabwe when hyperinflation hit there with one gold coin or a fist full of silver. True history. Ahh, never know.

OK, you're losing me. We haven't had redeemable silver certificates in this country since 64

 

[Alexx1401]

As God is my witness

Makes sense. The people higher up were embarrassed. Find out they were tossing out something worth a lot of cash. So often how this is handled is to fire someone and hope that no one will check into it further. In my younger days I a couple times got jobs when between jobs like this. Sent to some place to do "clean up". One was an electrical contractor who was closing up shop and moving to another state. Hired a handful of us to load trailers with stuff. Second day one of the "important people" asks me if I have a license. Waves his hand around a yard VERY large, full of old junk they had accumulated over decades. Points to a stake bed truck tells me load this "junk" and haul it to dump. So the who bunch gather around throwing stuff in truck. When full I was supposed to drive to landfill that was about a 15 mile drive. Told guy I needed help getting the crap back off the truck. So he tells me grab one of the guys. I picked a buddy, off we go. It was close to 100 that day. I tell him we are going to make money. He looks at me like the heat got me. I said this scrap is worth a few cents a pound. Less than a mile away here is scrap yard. Pull in on scale, drive to back, operator with electro mag crane makes one pass and drags whole load onto the ground. Back out to scale, into office, they hand me $20 some odd bucks. This was a lot more money back then. Not to mention I am getting paid by the hour and using someone else's truck. Buddy gets all excited to get back and get another load. I told him stop and think. We are supposed to be making a 30 mile round trip to a place we have to pull this stuff off by hand. Lets go to this bar around the corner and shoot a game of pool and have a beer. So we would kill an hour, head back. All the others would help load truck again and off we would go again. By the end of the day we both had close to a C note in our pocket. We did that for an entire week. The whole time the big man on site telling us what great workers we were. Now had they found out what we were up too? I have no doubt they would have fired us on the spot for making them out to be fools.

 

[Jay Walk]

Getting change back for a loaf of bread before the bread reaches $2,000 per loaf.

 

[Burt Gummer]

OK, you're losing me. We haven't had redeemable silver certificates in this country since 64

Yes. They are paper certs that say something like you have ownership or rights to XXX amount of silver.
Only there is far more certs than real silver so the certs are like saying you have a title to a vehicle that does not exist.
Same with Fiat US currency. I have a $10 note I kept for laughs that says redeemable in silver. Now of course, fiat is backed by nothing at all.
If even 25% of people with silver certs demanded their physical silver there would not be enough above-ground processed silver in coins or bars to give them. Period. It, like Fiat, is all smoke and mirrors.

 

[wired]

Yes. They are paper certs that say something like you have ownership or rights to XXX amount of silver.
Only there is far more certs than real silver so the certs are like saying you have a title to a vehicle that does not exist.
Same with Fiat US currency. I have a $10 note I kept for laughs that says redeemable in silver. Now of course, fiat is backed by nothing at all.
If even 25% of people with silver certs demanded their physical silver there would not be enough above-ground processed silver in coins or bars to give them. Period. It, like Fiat, is all smoke and mirrors.

No, those have not been redeemable for silver since 1968. They are still valid US currency but like Gold Certificates haven't been redeemable for gold since 1934 you aren't going to get any silver from the treasury by redeeming those silver certificates. 1968 was the cutoff date. After that the treasury divested itself of silver coins. Thats why you find craploads of as issued 1880 ish morgans in pristine shape. They sat in mint bags for 90 years until the treasury sold them off in the late 60's when silver ccertificates became non-redeemable. There is no silver in the treasury to redeem for bills because that program ended 60 years ago.

You missed that bus..

https://www.congress.gov/88/statute/STATUTE-77/STATUTE-77-Pg54.pdf

 

[Burt Gummer]

My apologies as I did get a little lazy in my wording. Not silver certs as in expired currencies, but assigned modern contracts where XXX company - often a bank - sells you paper for the supposed ownership of silver.
That is far more prevalent than people who own and hold physical silver.

"Silver Certificates"

People now use the term mostly to refer to titles of ownership to silver that is not actually in the owner's possession. These pieces of paper show that you own some silver stored in a vault elsewhere in the world, and although they are theoretically redeemable for the silver they describe, most of the time they are bought and sold by investors who never see or touch the silver they stand for.
The question naturally arises – is it better to actually hold your silver as physical metal bars, or in the abstract but convenient form of paper certificates, and leave the problems of storage and security to others.

The Disadvantages of Owning Silver Certificates vs. Physical Possession

Although there are obviously some advantages to owning silver certificates, keeping your silver in your possession rather than stored in a remote vault has numerous benefits, as well. One is the simple durability of the metal. In the case of a house fire, silver may melt, but it will not be destroyed, whereas a silver certificate is eminently perishable. Proving your ownership in the absence of the actual certificate could be very difficult

Using a silver certificate also means that you are prepared to place an immense amount of trust in people you have never met. There are alleged (but fairly well evidenced) historical examples of banks refusing to honor precious metal certificates in order to claim the metal for themselves, denouncing their own certificates as fraudulent and even threatening the actual owners with arrest.

There is a high chance that your silver certificates will be honored – but your ownership ultimately depends on the honor of people who could profit considerably through refusal to honor a piece of paper whose validity will ultimately be decided on the basis of how well your word stands up against theirs.

Furthermore, without actually seeing, touching, or possessing the silver, you have no direct proof that the silver your certificate represents actually exists. Although this might sound like a paranoid concern, there is also a high incentive for banks and other storage institutions to sell the same weight of silver multiple times, earning an immense profit in a way that would unlikely to ever be discovered – except in an emergency when a large number of people all wanted to redeem their certificates for physical metal, and suddenly discovered that ten, fifteen, or twenty people all held title to the same stack of silver bars. Since bank vaults are closed to the public for security reasons, there is no proof other than the bank's word that the silver bars you have a certificate for belong only to you.

In the case of a true economic emergency, physical silver would retain its value, while a piece of paper showing ownership of silver in a vault halfway around the world might well prove useless. A bird in the hand is worth two in the bush, as the old phrase declares, and silver is much more useful to you in a tight situation than a promise to be able provide silver at some unspecified point in the future.

Finally, there is the issue of cost. Vaults do not operate out of the goodness of their heart or the milk of human kindness, but only store your silver in exchange for regular fees. After years go by, it is quite likely that these fees – which are not trivial – will erode any profit that you might have earned from appreciation of the metal. It matters little if the spot price doubles if you have already paid three times the worth of the silver in fees. Fees are generally not that high, but they still cut down on your profits sharply, and can easily be avoided by storing your silver yourself.

Risk and Silver Certificates

In the last analysis, silver certificates are privately issued fiat money. They are very risky because they are not even backed by the might and ruthless determination of a government like standard fiat money is, but only by the word of a banker – quite possibly a foreign banker. If you are comfortable with that risk, then silver certificates are probably for you. But, if you prefer solid certainties even at the cost of some inconvenience, then physical possession of the silver is superior.

 

[Alexx1401]

OK, you're losing me. We haven't had redeemable silver certificates in this country since 64

Several places allow you to "own" Gold and Silver and not actually have it. You have an account and the Co "claims" they are holding that amount for you but its all on their books. Idea is supposed to be you don't have to store and secure it. I have long wondered about this too. As in do they really have a vault somewhere with this metal in it or do they just take your money and promise they have it? When I decided to buy some metal I was not interested in them just telling me they were holding metal for me and all I would have is an account #.

 

[Cavedweller]

I don't know about that. Silver isn't gold. It's not tied to gold anymore. It's not really a currency metal anymore. It's kind of an industrial metal at this point it doesn't have the gleam that gold has.

Some would argue that it is that quality that makes silver attractive. There is both industrial and investment demand, and new industrial uses are continually found. The silver market is much smaller than the gold market, so it doesn't take much of an imbalance between supply and demand to cause a run up in price. OTOH, when the price increases significantly a lot of silver tends to come out of the woodwork (grandma's silver place setting gets melted down, etc.) so the price can be very volatile.

https://www.macrotrends.net/1470/historical-silver-prices-100-year-chart

And, as @Burt Gummer has pointed out, a lot of market manipulation takes place in the form of futures contracts. But, the same can be said of gold.

 

[GWS]

Anyone remember what set off that "rush" on it a bit ago? At the time I did not have any and was not really paying any attention. When I started buying some it was just out of frustration of watching the money that was "saved" going down in value. So figured why not. Told Wife it will most likely never be worth nothing. Most likely will have what I have till I shuffle off and the kids can deal with it

Hunt Brothers from Texas tried to corner the market on silver in 1978 or 79. Silver hit $49/oz in 1979 dollars About $200/oz in 2023 dollars

 

[gimpwheelz]