Looking for a little Gold & Silver Expertise

[Nyrik]

Hi everyone!  Looking for a little help here…

 

I just finished writing a guide on investing in silver and gold and I am looking for opinions and feedback from a few experts in the field.

 

Your feedback is important to help deliver the best advice to people.  In return, assuming you will like the final version, I can offer you an opportunity to make a few bucks from it with an affiliate link.  I am not selling anything here, and I want to be respectful of this forum.  I ask only for your feedback and opinions so I can ensure great content, and you can then choose to promote it any appropriate place where you are comfortable.  The official release will be in January.

 

Thank you for your help.  You can click on this link to download it:  https://gum.co/goldandsilver/silverforum

 

Nyrik

[silversky]

Hi Nyrik

In the spirit of giving a little hopefully positive feedback I thought I'd be the first to reply to your request.

I've read about the first 25 pages of your pdf so I'm not sure whether you cover some of my points later in the presentation or not.

The first thing I would say is that there are obviously a few spelling mistakes that I'm certain you'll pick up for the final draft.

Secondly, In your summation of the financial history of Brettonwoods, my first impression of the chapter is that it jumps around between certain dates.  You mention the 1944 agreement first and then go back to the thirties and FDR and the confiscation.  It almost sounds as if it was afterwards.  Perhaps it would be best to reword that chapter in chronological order for simplicity for people that have not studied that history of gold.  A side point is that silver was not confiscated and throughout you regularily refer to "gold and silver" and that could also potentially create some confusion.  I personally believe the two metals are really quite different and that they don't share the same future price trajectories although they do share certain monetary properties.

Thirdly, regarding the chapter on Naked Short selling.  Some of it is quite informative but it strikes me as a little difficult to understand.  I personally was able to explain short selling to my ten year old by showing how I could firstly borrow a real physical thing that was identical to every other one of it's kind and then sell it.  Later I would need to buy it back to give to the person I borrowed it from.  That aside, I think what is missing from that chapter(but admittedly may be later on in your presentation that I have not got to yet) is the fact that many mines if not all mines are actively naked short selling supply that really does not yet exist!  The definition of naked short selling.  The ability to do so allows them to fund mining activity at a fixed sale price and not only know how much it will be worth to them but actually have a fixed price paid to dig it out of the ground for.  Naked shorting of a listed companies stock is obviously totally different because they are supposed to have a finite number of shares in issue and having unlimited non deliverable shorts is clearly a form of manipulation.  Perhaps you discuss the comex and it's reserves that are leveraged against I'm not sure.  It's a cloudy business and the truth is far from obvious.

Finally, regarding the futures markets.  The Japanese invented them as far as I know.  Their rice markets were made to provide price stability for farmers. It gave them the ability to strike a price to grow rice before the season even began.  This futures market stretches back a couple of hundred years if my memory serves me right but they obviously weren't experiencing unlimited derivative shorts manipulating it.

Anyway, when I have the time I will read through the rest of your presentation.

Hope you are not offended by my comments so far. They are intended in the spirit requested.  Merry xmas

Cheers 

[Nyrik]

Thank you VERY much for you feedback! It is quite valuable and I, very much, look forward to the balance of your review after you finish reading it!

 

Marry Christmas!

[Bumble]

I think you overstate it when saying that it is certain that we will see hyperinflation and will need wheelbarrows of cash to buy bread. A sustained but more modest level of inflation is possible. Another possibility is a debt default and a sudden revaluation. All are good for gold, so it doesn't hurt to hedge your predictions a little.

Under investment demand, you might like to note that several countries, especially China and Russia are accumulating gold. Also, wealthy individuals are stockpiling it. On the supply side, gold and silver production is peaking and may decline unless the price picks up quickly.

Under testing methods, you should mention ultrasound scanners. These can detect internal defects within bars, such as holes or tungsten inserts. Also, it might be worth mentioning that there are smartphone apps, such as Bullion Test, that you can use to perform a ping test and will tell you very reliably if a coin is fake.

Your discussion of pricing doesn't mention the London Fix.

You say: "Gold bars are typically pure (.9999 fineness)" - this is typically true of smaller bars of 1 kg or less. London Good Delivery bars are usually between 99.5 and 99.9%. Admittedly, most people will not be buying large bars like that.

Under the strategy and plan section, it is worth pointing out that because gold and silver prices are highly volatile, they are not suitable for savings that you might need in an emergency, because you might be forced to sell them at a poor price.

When mentioning naked shorting you might like to include a chart similar to the one attached, from Zero Hedge. It shows the huge increase in recent years in the ratio of open contracts for gold against the amount of registered gold available for delivery. You may need to put in some explanatory text to say what that means, but the chart speaks volumes.

The book as a whole is very US-centric. You might like to adjust the wording in various places to make it more inclusive.
 

[Nyrik]

Thank you VERY much for your input!!!!

[oliversw5]

Hi, 

I read it very briefly form start to finish, I think you cover all the main parts, it is probably an entry level guide to anyone wanting to buy silver to gold. I would like to touch on a few things that hasn't been mentioned prior. you talk about ETFs and short selling being bad this is not always the case. Ill give an example. What if you have amassed a large pile of metal and you foresee a big to medium drop coming in the price. If you are one of these people that wants to remain anonymous why not use a reverse ETF? 

 

[sixgun]

i have just taken a look at the area Shaun mentioned.

i agree buying ETF's is not as secure as holding physical. There are no ETF share trading as 1 ounce of gold - GLD is 1/10 oz.

There are advantages to ETF's for trading as you can get in and out fast with little slippage due to tight spreads.

Especially if you want exposure to silver a position in SLV is a much less expensive route b/c of the premiums we see in parts of the world where VAT is charged. Dealer premiums also tend to be high.

There is only one bear gold ETF (DGZ) - all the others are leveraged and then you are getting into riskier territory. 

You can hedge your physical position buying a PUT option in GLD. You risk the premium you pay.

More sophisticated traders might sell a bear CALL vertical credit spread - and still make money as long as price does not rise beyond the short CALL strike + premium collected.

This goes well beyond this book.

The basic message is invest in physical and not virtual gold.

[Nyrik]

My main reason for telling people to avoid ETF's is because when you buy an ETF, you are not buying the physical gold and silver. 

You are only buying a piece of paper that says that you own "x" number of ounces. Since most of the funds don't have all of the physical to back up every ounce that they are selling, you run the risk of requesting delivery and them telling you that they need to settle your transaction for the cash equivalent of the gold or silver in your account. 

Although ETF's can potentially be a great way to make money trading them, ETF's are not a good way to buy gold if you want to actually have the peace of mind that comes from having "Hold in you hand" Silver and Gold in anticipation of economic challenges.

 

Thank you oliversw5 and sixgun for your feedback!