Downsides to precious metals?

[Camelfilter]

I call it boomer Bitcoin. They are just shiny rocks. They have no real purpose, no real value. Just a market that is set by the market itself, along with big wig market movers and the idea that it is a "hedge against inflation".

If you want to invest in metals, lead and brass hold their value well.

PM's are simply another basket of wealth portability. Same as the example of lead & brass (or perhaps firearms).

Diversify if one can & one wishes.

Oversimplified example, in "normalcy", its easy to transport quite a bit of value of PM's. Even by plane (in carry-on) domestically without ANY TSA hassel. Not so much with ammunition &/or firearms. Just keep it under 50(ish) pounds-depending on the airlines weight restrictions.

Another point about PM's, being a "basket" of wealth. They are for after "whatever" economic / social calamity occurs. When some type of "normalcy" returns AND we THEN have a want/need.

Just as in folks mention lead/brass/loaded ammunition as stores of wealth! I won't be selling any of ours amidst some social/economic calamity. Perhaps after, however not during.

In short, PM's are just another basket. Folks should diversify. How they do so, and how much they do so, is pretty individual/family dependant.

 

[Soli]

Anything held as wealth is a bet on what will be valued by others in the future. Anything held as supplies is a bet on what you will value in the future. IMO keeping that distinction in mind makes planning more effective, and easier.

Diversification is simply acknowledging that you can't see the future.

 

[Camelfilter]

...Diversification is simply acknowledging that you can't see the future.

Yup!

Another plus with being diversified, folks can expand &/or contract baskets "easier". IMO.

As oversimplified examples:

lead&brass. I already know what I'm willing to pay, what to buy and where to look.

Same with PM's.

I have no clue insofar as crypto-currencies go, however also have zero interest them. Other folks do, hopefully such us not there only basket.

 

[ma96782]

Yeah yeah I get all that. What you haven't addressed is: What other choices are there for someone to transfer a gun here in Washington? Don't complain about rich people. If I was a millionaire I would still resent paying for this but regardless of how I feel about it, I gotta pay. If I want to buy a gun from a complete stranger, I am not taking a chance on that guy being a loony or cop looking for a bust, so the transfer goes through an FFL. He isn't going to eat the cost of the transfer so again, What option do I have? If I want the gun I pay the FFL, and the FFL pays the state. I already donate hundreds of dollars each year to the SAF, GOA and NRA to fight these laws, but until they beat these laws in court, rich or poor, we all have to pay. If you have a way around that fact. I'm all ears.

You're taking my comment way too personally.
Of course, there will be SOME RICH PEOPLE who will agree and some who will disagree that it's "Chump Change".

Also, it varies on how people define "RICH".

As for how someone could get around things.......
FOR THE RECORD........
I'm NOT even suggesting "breaking any law".
THAT........would be against the rules.

So then......
Consider for a moment.......
How do some people get around the F/A rules?
How do some people get "tax breaks" for their hobbies?
How does someone claim as a "business expense"......items which may, in fact, be used PERSONALLY (or maybe have a slight dual useage)?

At this point (it's my opinion that) you're trying to BAIT an argument.
Whatever......

Have a nice day.

Aloha, Mark

PS.....getting back to the subject of PM Investing.

UP TO YOU!

 

[GWS]

You're taking my comment way too personally.
Of course, there will be SOME RICH PEOPLE who will agree and some who will disagree that it's "Chump Change".

Also, it varies on how people define "RICH".

As for how someone could get around things.......
FOR THE RECORD........
I'm NOT even suggesting "breaking any law".
THAT........would be against the rules.

So then......
Consider for a moment.......
How do some people get around the F/A rules?
How do some people get "tax breaks" for their hobbies?
How does someone claim as a business expense......items which may, in fact, be used PERSONALLY (or maybe have dual useage)?

They get around it by breaking the law

Perhaps I misinterpreted your comment : "Oooops......OK, OK, ok........I forgot that some of you have "no problem" with paying the $50 for a transfer fees to exercise your RIGHT (say, when buying a $150 .22 caliber rifle). So be it." As your mocking people for obeying the admittedly onerous laws.
If I got that wrong, I apologize.
Have a great Holiday season

 

[gmerkt]

More people seem to be thinking about the precious metals choice of "investing." Including the People's Bank of China. Or preparation, if you want to use that term.

A popular PM product here in the US is the American Eagle line. As in, American Silver Eagle (ASE), American Gold Eagle (AGE), there are also platinum and even palladium coins struck by the US Mint.

There has always been a spread between what dealers buy PM product for and what they sell it for. They can't sell it at quoted spot prices and make their cut. There is some economy in buying larger units, as the manufacturing and distribution costs of smaller units incur more expense. So, a one oz. bar is going to cost a bit more than each oz. in a, say, 100 oz. bar.

Some PM products command a premium beyond what might be considered "normal" spread between buy and sell. This is because some buyers perceive that certain PM products have higher recognition factor or some other reason of extrinsic value. The ASE and AGE have long been priced with some amount of premium above and beyond intrinsic value plus a reasonable margin of profit over spot.

Within the past few months, I've watched the premium on ASE and AGE soar. In part, this is due to the widespread recognition factor of the coins, but lately also due to high demand that results from high popularity and lower than usual mint output.

Right now, the American Silver Eagle is outrageously priced. Today, spot silver is at $22.97 per troy oz. I just looked, you can buy the ASE coin for $37.86. That is a premium over spot of $14.89, or 64.8%. My advice, DO NOT BUY AT THIS PREMIUM. The ASE has always carried a premium, but never this high. In contrast, you can buy a generic silver round or bar that carries a much lower premium of about 13% over spot. Which is more than I like to pay, but way, way lower than the popular ASE coins. When all is said and done, and it is time to sell your goods, that one ounce of silver is just an ounce of silver and most of the premium you've paid for the ASE vanishes. Unless of course silver should go way up in price, whereupon you may get the premium back, but at the same time, you've given up a big chunk of the gain in recouping it.

Another thing I don't quite understand is the premium on certain non-US Mint bullion silver products. Apparently, some people are willing to pay a significant premium for certain brands, markings or strikes. For example, silver bars poured by Engelhart bring a stiff premium. Who knows why, it's just silver. I've also noticed that bars marked Deak-Perera have hefty premiums attached to them. DP was a former seller of PM product; they didn't pour their own but had other refiners do it with their custom mark. The owner of DP was assassinated in his office, they went bankrupt decades ago. But I don't see these as reasons for paying more for a bar of silver.

The American Gold Eagle product has a premium on it above other, similar products. Not nearly as horrendous as that for the ASE. Right now, you can get it with a premium of about 5.6%, but within the past few months, it's been as high as 8% to my observation. In contrast, you can get a nice Valcambi one oz. bar that carries a premium of about 2.5%. Shop around for these gold products; some of the big online sellers have higher premiums than you might find in a local shop. Which is contrary to what most people might think.

One of the reasons given for the spread between silver spot and reasonably marked up bullion at present is a lack of physical metal. Which I can't verify or dispute. What I do know is that there is a lot of speculation in PM which has resulted in much "paper" silver that represents positions in a trading market, not necessarily actual, physical metal supplies in warehouses. But I only offer this as one possible explanation that others ascribe to. I'm not putting it forth as a conspiracy theory that dispositively explains a market dynamic.

 

[Stomper]

Like anything, something is only worth what someone is willing to pay. Remember the "Sooth Effrican" gold Krugerrand? Are those still even a thing? (I have no clue)

As for the disparity in prices from one mint "brand name" to the next; it's because everyone who has the same "cheap Chinese made purse" made in the SAME slave-labor Chinese factory wants THEIR "cheap Chinese made purse" to be exclusive and worth more than all the other "cheap Chinese made purses".

So they slap some snobby, homo-erotic sounding label on them like, "Balenciaga", "Nike", "Channell", "Mercedes" or "Dolce Gabana", and then slap an obscenely ridiculous high price-tag on them.


….and the shallow NPC drones swimming in the ocean of other shallow NPC drones who want to stand out from all the shallow NPC drones eat that psychological scheme right up. They then spend their entire shallow NPC drone lives pursuing "cheap Chinese made purses" with the "exclusive labels" at great personal and financial costs to themselves and everyone around them.

They think their "cheap Chinese made purse" makes them look hot and prestigious, but in reality they're still just a painfully less than average shallow NPC drone who's most likely cross-eyed, snaggletoothed, and/or "plus-sized" with a bad face-lift and obvious boob-job performed by Dr. Darm.


Fear, narcissism and greed drive all of it.

 

[Mark W.]

When the crap hits the fan a bucket of good weed or a barrel of alcohol will be almost as good of trade goods as Tampons and Tobacco and all will be in much more demand then some shiny piece of metal. IMHO

Heck after a while AA batteries will be worth more then the shiny metal

 

[Camelfilter]

When the crap hits the fan a bucket of good weed or a barrel of alcohol will be almost as good of trade goods as Tampons and Tobacco and all will be in much more demand then some shiny piece of metal. IMHO

Heck after a while AA batteries will be worth more then the shiny metal

Yes. However PM's are just another portable basket of wealth.

I don't know about others, however it's extremely unlikely we will be trading ANYTHING. Least ways not amidst some upheaval.

Just simply doesn't seem wise, nor safe. Perhaps simple things of excess & minimal to no value, between friends (as in family). More like gifts though, and the inverse would be true. If not in goods, then in time/work. However that's what friends (as in family) do.

Trading with acquaintances amidst times of upheaval? Not likely.

Trading with folks we don't even know amidst times of upheaval? No way!

The risks simply wouldn't warrant any rewards. For us.

-So, that circles back to PM's. Simply a basket of wealth to be used (if NEEDS be), whenever "normalcy" (safety/security) returns where trade with acquaintances & unknown folks can occur safely & securely.

Pretty simple really.

Far easier to accumulate, store & move, than about anything else of "future value" size & such taken into account. That I can think on anyways.

Now, if someone wishes to get into trade as a business in some future world of upheaval? Sure, absolutely, have at it!

Think such thru, and think such thru well. Your family depends on you to do so. Would seem an incredibly risky proposal for personal & family survival. Regardless if you / your family were to travel to some mystical safe trade zone, or attempt to set up some magical violence free general store.

So, circling back to PM's. Just another basket of wealth. A basket folks should ONLY CONSIDER once other financials are in order, ...or in best reasonable order.

Everyone's financials are different, so everyone's baskets of diversified wealth should be equally different.

It would be silly for US to invest in tampons, tobacco & AA batteries (to sell/trade & survive & thrive thru some future upheaval). Other folks? Sure, have at it. Y'all do you.

-a pack of 20 cigarettes costs ~$14, I believe in S Oregon ATM...and I smoke cigarettes. Easily over $100/carton.

I haven't bought a pack in Oregon in years. Do the math. If someone wishes to stock up on smokes for future possible trade in a world of upheaval? A world where conducting trade with unknowns could likely lead to injury/death??

Nope. Doesn't seem very wise to me. Either financially, nor personal/family safety.

 

[Longwalkhome]

PMs are a bet on the future, it's a gamble since nobody knows their future for sure.

 

[aksu747]

Yeah, Lead, Brass, and Copper.

 

[Longwalkhome]

Going to boar the crap out of you with simple math. Government decided decades ago that the rate of inflation will be 2% a year. Reality is that governments control varies and inflation jumps as high as they want it to.

My house built in 1978 sold for $28k and due to inflation its value in today's dollars is $350k. What was the rate of inflation over over 44 years and who really gained the most due to inflation?

What did an ounce of silver cost in 1978? $6

What does an ounce sell for today? $23.32

It doesn't look like silver even keeps up with inflation.

 

[03A3Sporter]

Going to boar the crap out of you with simple math. Government decided decades ago that the rate of inflation will be 2% a year. Reality is that governments control varies and inflation jumps as high as they want it to.

My house built in 1978 sold for $28k and due to inflation its value in today's dollars is $350k. What was the rate of inflation over over 44 years and who really gained the most due to inflation?

What did an ounce of silver cost in 1978? $6

What does an ounce sell for today? $23.32

It doesn't look like silver even keeps up with inflation.

It doesn't and and gold doesn't either . Precious metals are a hedge against inflation in the best of times and in the worst of times they are a money loser . I purchased silver and gold for years before I finally came to the above realization.

 

[Longwalkhome]

It doesn't and and gold doesn't either . Precious metals are a hedge against inflation in the best of times and in the worst of times they are a money loser . I purchased silver and gold for years before I finally came to the above realization.

PMs are more an insurance policy than a hedge, it's betting something is going to happen to the dollar. When the country goes digital I suspect PMs will be outlawed because digital is about control. Just a hunch.

If I was younger I would probably invest in coins with numeric collectors value.

 

[Longwalkhome]

Value of 1978 dollars today | Inflation Calculator

The 3.51% inflation rate means $100 in 1978 is equivalent to $456.61 today. This inflation calculator uses the official US consumer price index published by the Department of Labor.

www.in2013dollars.com

Just so you understand the simple math, $6 silver in 1978 yet the dollar has lost 78% of its value today.

 

[Capn Jack]

The only precious metal I save is lead.
You can't eat gold, or silver, but you can always, "Trade" lead for what you need.

 

[Camelfilter]

The only precious metal I save is lead.
You can't eat gold, or silver, but you can always, "Trade" lead for what you need.

That's fine, for you & yours. However for US, along with beans & bullets, PM's are simply another basket.

See my rather long post above. We won't be trading ANYTHING to unknown folks in times of upheaval. Which includes bullets & beans.

Once times return towards some sense of normalcy? As in it would be reasonably safe to trade anything with anyone? Perhaps we'd trade things.

Having PM's is just simply having another portable basket is all. Similar to your bullets example.

Someone would have to value whatever is for sale/trade so there is that. Wouldn't do any good to have only bullets to trade, if no one values them...

 

[gmerkt]

Remember the "Sooth Effrican" gold Krugerrand? Are those still even a thing? (I have no clue)

SA Krugerrands are still "a thing" and carry a lower premium than the AGE.

Government decided decades ago that the rate of inflation will be 2% a year. Reality is that governments control varies and inflation jumps as high as they want it to.

I think maybe not so much that they wanted to as they allowed it to happen. Because it's easier and causes less pain than belt tightening. The federal government used to run on a budget. They still pretend to the concept but now it's just a number that is under constant upward revision. There aren't many of us still alive who remember when the federal government had bond rallies to raise money to pay for the costs of wartime expenditures. This money was largely raised from within the US, i.e., from the citizens who would later cash in their mature bonds when the government was more able to pay the money back. During this period, money printing to raise money was not so much done.

As time went by, it became an addiction and now the government unofficially relies on inflation to decrease the value of debt incurred. Meaning, money previously borrowed is later repaid at the nominal borrowed amount but with dollars that are worth less. But since COLA became a factor in government entitlements, that works both ways. Because higher inflation causes the federal government to gag out more money to entitlees. And it has to pay out more money in interest on US debt instruments. So, when the Fed is raising interest rates, career bureaucrats at the Treasury may be gnashing their teeth.

It doesn't look like silver even keeps up with inflation

Using the insurance analogy, it retains most of its value, unlike most insurance policies. Car insurance, property insurance, and term life insurance, it's rare to get a premium rebate on those and when it exists, it's a small fraction of what has been paid. Whole life policies (marketed as "investments") are subject to inflation right along with everything else.

Using the example of $6 silver in 1978, that amount is now equivalent to $27.40. Which is only a dollar and a fraction higher than what you can buy a generic one oz. bar or round for today. Forget spot, you'll never buy silver at that price at retail.

In the past 50 years, silver has had a history of volatility. You don't want to be the guy who buys at a peak. If you're gonna participate, you want to be a hard-eyed buyer who looks at the charts. Never buy PM as a matter of emotion.

PMs are more an insurance policy than a hedge

Again, using the insurance analogy, silver retains most of its cost value, unlike typical insurance policies.

My house built in 1978 sold for $28k and due to inflation its value in today's dollars is $350k. What was the rate of inflation over over 44 years and who really gained the most due to inflation?

In my opinion, real estate does not conform to "normal" considerations having to do with inflation. Because real estate involves more than just routine inflationary influences.

 

[Longwalkhome]

The big winner in inflation is government, they tax you on the increase of property values even though you never sold the property.

In high-school I worked for $1.25 an hour minimum wage. Gas was 22 cents a gallon.

2023 Oregon minimum wage will be $14.75 an hour. Gas is $3.29 a gallon

In high-school my first Ruger 10 22 was $44

 

[Certaindeaf]

Anything held as wealth is a bet on what will be valued by others in the future. Anything held as supplies is a bet on what you will value in the future. IMO keeping that distinction in mind makes planning more effective, and easier.

Diversification is simply acknowledging that you can't see the future.

Oh now.