My plan to stack PMs

[sixgun]

i am stacking silver - it is undervalued by all parameters i take notice of. At some point it will reset and at some point i probably will swap it out for something else - maybe land. Gold and silver are currencies - this is why there is so much mention of them by banks and the controlled propaganda channels. This is why the BIS has a gold desk. The spot market is a currency market XAU/USD is a currency cross.

It is the ultimate money - legally a gold sovereign is £1 - i bet i could go swap out 5 gold sovereigns around the world a lot easier than a plastic £5 BoE note.

[HawkHybrid]

I'm not changing my argument. money needs to be accepted

in the locality that it's traded and hold the value of the money

itself(ie it can't be a piece of paper that is a place holder for

something else) since gold and silver coins stopped being

accepted as payment in the locality of it's issue there have

been very few things that can be classified as money. £ is

currency. it's sole purpose to facilitate trade in the uk and

maybe those who trade regularly with the uk.

(I thought it would be given that issued money was locality

bound)

what's the difference in exchanging a local gold coin for

currency and selling your car?

gold does not have to be classified as money to make an

investment case? (those who say gold is money remember

when it was money)

 

HH

[Lowlow]

2 minutes ago, HawkHybrid said:

what's the difference in exchanging a local gold coin for currency and selling your car?

HH

The difference is that money satisfies the following basic criteria

1. Durable
2. Portable
3. Divisible
4. Uniform
5. Limited Supply
6. Acceptable

Automobiles are somewhat durable, not portable, not divisible (short of a chop shop), not uniform, are in somewhat limited supply, and are fairly acceptable i.e. they aren't money.

[Lowlow]

 

[HawkHybrid]

is a 1oz gold bar money the same way as a 1oz gold coin

is money? how about when 1oz gold coins were accepted

as payment without having to change it to local currency?

(I'm going to claim they are both assets)

 

HH

[Lowlow]

1 minute ago, HawkHybrid said:

is a 1oz gold bar money the same way as a 1oz gold coin

is money? how about when 1oz gold coins were accepted

as payment without having to change it to local currency?

(I'm claiming they are both assets)

 

HH

 

I'm not sure what your point is here, but yes, it's the same.  Your bullion dealer won't care if its a bar or a coin when paying spot.

[sixgun]

One might reply - yes but the dealer is buying gold - gold is a commodity, it is an asset. He happens to be someone who deals in gold and silver. If you turned up at the scrap yard with 5 tonnes of bailed radiators or copper pipe you will get the value of the metal.

What should be grasped is gold is money. The unit of gold money is ounces of pure gold and what you will swap the gold out for in ounces of pure silver. The units are not other currencies. My stack is measured in ounces of pure gold and kilos of pure silver. The girl at the checkout will not take your gold and silver like she won't take Chinese yuan. The thing is when all the paper currencies go to sh1t the king and queen will still be reigning. Gold and silver are still up there as money.

[sixgun]

@Lowlow

The issue i have with the video on the characteristics of money is the last one - inflation. That is incorrect. Money is a store of value - inflation erodes value. A feature of true money is it is a hedge against inflation, that there is no inflation in terms of true money.

[Lowlow]

1 minute ago, sixgun said:

@Lowlow

The issue i have with the video on the characteristics of money is the last one - inflation. That is incorrect. Money is a store of value - inflation erodes value. A feature of true money is it is a hedge against inflation, that there is no inflation in terms of true money.

The last two points in that video aren't "characteristics of money" that I've seen before, it's just random junk those kids threw in for some reason

I have seen a seventh "characteristic of money" before but at the moment I can't remember what it was, maybe it was intrinsic value.

[HawkHybrid]

15 minutes ago, Lowlow said:

 

I'm not sure what your point is here, but yes, it's the same.  Your bullion dealer won't care if its a bar or a coin when paying spot.

 

if they were the same when gold coins were used as money.

so when sovereigns circulated. £1 sovereign would be

exchanged for one pound of sterling silver or ~12 toz.

it can then be melted to form 12 toz bars. 1 crown = ~1toz

(I'm simplifying the maths) I get 12 crowns worth. 4 crowns

can be traded for a sovereign. how does this work?

 

HH

[sixgun]

@Lowlow

Yes, you are correct it is intrinsic value - as i put in my comment 'money is a store of value' this is why fiat paper is not a true money. Inflation exists as a hidden tax to steal our savings. That is why saving in real money in the long run is always better.

[Lowlow]

HH the reason I'm not responding further is I just don't understand what you're getting at, it's definitely moved from the point you were trying to make about gold/silver not being money, now it's on to Gresham's law.

[Martlet]

Gold and silver are assets that may have currency and may be used as money. 

All the preceding arguments for "gold is money" have counterarguments, contradictions and dont stand up to scrutiny, not because they are wrong per se but because they lead to counterfactual conclusions.   Replace gold or silver with copper and see if any case stands up, because other than its unit value being far lower, it offers all the same properties. 

[HawkHybrid]

I'm trying to show that gold is no longer money.

there is a difference between a 1 oz gold bar and a 1 oz

gold coin. the gold coin was once used as money. the

gold bar was never accepted as money. the reason why

gold coins are traded the same way as gold bars today is

that the gold coin has lost it's status as money. they are

traded as assets. this is a significant distinction. the

same thing has happened to silver. silver is no longer

money, it is traded as an asset. problem is unlike gold

silver is less desirable as an asset. if silver was still

money then stacking large amounts of silver would not

be a problem as it would always hold it's value. if silver

is no longer money and loses it's desirability as an asset

then it's value would go down as time goes on. this is

represented by the increasing gsr from the late 1900's

to the modern day. the gsr data is short so won't be

conclusive but the average gsr for the recent decades is

56 or higher. this is higher than it's early 1900's gsr by

volume of the low 50's. silver needs to race past gold

and keep the gsr at well below 50 in order to address

the imbalance. with silver's tendency to be very volatile,

I don't see it holding down the gsr for any extended

period of time. imo any allocation to silver is probably

betting against a longer term down trend in the silver

value(calculated by purchasing power) and you would

only use betting money and not investment money in the

hopes of selling at the relative highs. the risk in silver is

higher than it would be if silver was still money.

 

HH

[Lowlow]

HH I don't see how you make the argument that gold and silver isn't money on any level, but especially not by saying "if silver was still money then stacking large amounts of silver would not be a problem as it would always hold it's value".

What kind of argument is that ?

Paper money doesn't hold it's value as good as silver does, isn't it money ?

Even on a daily basis £uk fluctuates in price vs the $us, does that mean one of them isn't money ?

Stacking large amounts of silver ISN'T a problem.  Many people do it.

[HawkHybrid]

paper money eg £, $ are currencies(I like calling them debt tokens).

both are not money. their purpose is to facilitate trade in the

countries that issued them.

what I'm trying to say is that paper money doesn't hold it's value.

I believe silver also does not hold it's value but takes longer to

depreciate in value. gold holds it's value. this is why the gold to

silver ratio has risen over the decades. if your stacking strategy

consists of a buy and hold method. then on average gold would

have given you better returns over the previous decades. 

if silver was reinstated as money as it was then the silver price

would be higher than it is now. same with gold.

 

2 hours ago, Lowlow said:

Stacking large amounts of silver ISN'T a problem.  Many people do it.

doesn't mean it's the best method moving forward.

 

HH

[Lowlow]

1 hour ago, HawkHybrid said:

paper money eg £, $ are currencies(I like calling them debt tokens). both are not money. their purpose is to facilitate trade in the countries that issued them. what I'm trying to say is that paper money doesn't hold it's value I believe silver also does not hold it's value but takes longer to depreciate in value. gold holds it's value. this is why the gold to silver ratio has risen over the decades. if your stacking strategy consists of a buy and hold method. then on average gold would have given you better returns over the previous decades.  if silver was reinstated as money as it was then the silver price would be higher than it is now. same with gold.  doesn't mean it's the best method moving forward.

 

HH

Well if you're arguing that paper money isn't money, and silver and gold isn't money, then ... is there anything you DO consider to be money ?

You say that paper money doesn't hold its value (I agree) and you say silver doesn't hold its value, do you have any data to back that up ?  Graphs of oil, wheat, other commodities priced in silver ?  I don't think it would be fair to use anything that has a high likelihood of being in a bubble at the moment (i.e. home prices and/or the stock market).

 

Edit, here's oil and silver range bound through 2015.

[HawkHybrid]

30 minutes ago, Lowlow said:

you say silver doesn't hold its value, do you have any data to back that up ?

 

gold to silver ratio is averaging above 50 over the last few

decades, silver is losing value versus gold. the data is

limited.

(I have problems embedding pics, so I'm borrowing a youtube

video to show the graphs)

 

gold and silver coins was money, now I consider them not

money.

 

HH

[Lowlow]

You didn't answer my question, if gold/silver isn't money, and paper fiat isn't money, what IS money ?  Are you arguing that we should just get rid of the word money because it no longer applies to anything ?

On gold/silver ratio you're literally arguing the opposite side of the trade I'm in ... I'm BUYING silver because of that ratio, because it will inevitably (I believe) return to its norm.  I'd argue the trade is to buy silver in anticipation of trading into gold when the ratio returns to a historical norm.

[HawkHybrid]

12 minutes ago, Lowlow said:

what IS money

 

17 minutes ago, HawkHybrid said:

gold and silver coins was money

 

apart from maybe copper 1p or 2p coins I don't know anything

that is money. a bit like the dinosaurs. there is nothing alive

today that is a living dinosaur(to my knowledge). there were

dinosaurs. there may or may not be dinosaurs in the future.

the word dinosaur should not be removed just because there

exists no dinosaurs today. money did exist but have mostly

been replaced with currency.

 

go back further, what should the gsr be? how long has it

stayed above 50? how long will it take to get back to the norm?

imo trading silver with the help from the gsr could work out well.

does the gsr show that on average stacking silver over multiple

decades, it would be more profitable to stack gold?

(you might need a chart that goes further back and less biased

than the first majestic silver corp chart to get a better picture

on what's happening.)

 

HH

[Lowlow]

4 minutes ago, HawkHybrid said:

go back further, what should the gsr be? how long has it stayed above 50? how long will it take to get back to the norm? imo trading silver with the help from the gsr could work out well. does the gsr show that on average stacking silver over multiple decades, it would be more profitable to stack gold? (you might need a chart that goes further back and less biased than the first majestic silver corp chart to get a better picture on what's happening.)

 

HH

I think they would resent the implication that their data isn't accurate, I mean, they are literally graphing the gsr.

Here is a longer historical chart.  Note that it really does no good to talk about the gsr at any earlier period than this in the United States because we had fixed exchange rates for gold and silver when we were on the gold standard.

[HawkHybrid]

I didn't say their graph wasn't accurate. I said it was biased to

paint a better than reality picture for silver so that they can get

more sales.

my guess is gsr 1975-1985 average under 40.

also guessing gsr 2005-2015 is over 50.

it's taken maybe a decade(1975-1985) to go from under 40 to ~50.

since then it's it's taken three decades to not even come close to

averaging under 40 again(this includes the 2011 results where it

got into the 30's and didn't hold that for very long).

put another way, silver has taken three times as long to reclaim

a fraction of the value that it lost in the decade from 1975-1985.

I see this as silver is losing value versus gold(albeit at a slow

rate). it's obviously my interpretation of what is possible as there

needs to be many more decades of data to verify whether it's

not simply that silver is just slow to reclaim it's losses.

 

this claims that silver needs to be at $19.2 to have kept in line

with inflation.

whilst it might be a good time to take a punt on silver now.

for long term stackers I believe it's riskier than people think.

gold is much safer.

 

HH

[Lowlow]

HH I don't think you are arguing a reasonable point anymore so ... good luck with your trading strategy.

[Lowlow]

20 minutes ago, Lowlow said:

HH I don't think you are arguing a reasonable point anymore so ... good luck with your trading strategy.

Edit, I changed my mind and I do want to add to this.

Basic facts.

• The highest record GSR in the United States since the Great Depression is 99.76
• The most recent spike in the GSR is to approx 85
• The GSR has flirted with the all time high GSR on at least four occasions without breaking it
• The GSR has been trending down over the long term from the mid-80's until now
• The physical GSR (silver / gold above ground) does not support a GSR of 90
• The mined GSR (silver / gold mined per year) does not support a GSR of 90

All that leaves us in a position where I think one of three things can reasonably happen.

• GSR can increase and put in new highs above 100
• GSR can decrease
• GSR can stay the same

I personally believe what is going to happen with the GSR depends on one critical factor - what will happen with the world wide debt bubble.  My basic trading strategy does not involve resolving what will happen with the bubble at any specific time, it may go on expanding for a day, a week, a month, a year, another decade, or another century, I really have no way to know, but I do not believe it will be another decade, and that is my trading assumption, and the thing that will make or break my long term position.

Assumptions in my position

• GSR is high because silver has fallen in price, and gold HAS NOT FALLEN YET (see below)
• Silver and gold could fall much further when the debt bubble pops, like it did in 2008/2009
• The debt bubble will pop, but I don't know when

So that leaves me in a position where I have to make choices about what to do.  So here is where I'm at.

The ultimate trade is to be in gold and silver when the currency is destroyed, which I believe will happen after the debt bubble implodes, but AFTER a period of deflation.  That's where I think we end up, essentially a world in financial turmoil where people are struggling to survive from day to day, basically like Venezuela except everywhere in the world, complete financial ruin.  I think this will result from a push by the populace to put socialist governments in place to "save them" from the debt implosion, and that this government will essentially destroy the capitalist economy.  Essentially this is the result of socialists finally getting everything they ever wanted, it's socialists finally "winning" the war instead of just winning battles.  Basically this is what happened during the Great Depression leading into WW2, and I think it will happen again.

BEFORE that, I believe we will experience a serious deflation where the value of currencies rise to very high levels and everything is on sale - houses, cars, precious metals, everything, and I think there will be a crash in commodity prices during that time, and that this will be the last time anyone can ever purchase precious metals for best price, a kind of generational trade for the future when the smartest thing you can do is get out of the paper currency when it is at its maximum level BEFORE the aforementioned hyperinflation.  Essentially this is where capitalism gets blamed for everything, everyone is scrambling for cash, and you give them that cash at the right time to get out before the inevitable hyperinflation.

BEFORE / during that, I think the stock market crashes.  I don't know when, or what will be the catalyst, but I believe it will.

BEFORE that, I think we're where we are now ... the debt bubble continues to expand to levels that are impossible to predict or maintain, governments around the world continue to over-spend and pile of unsustainable levels of debt, governments continue to hand out freebies to citizens for votes, continue to increase pension obligations for political support, continue to engage in crony capitalism, and power continues to move towards centralization and the cities / urban areas that benefit the most from the debt expansion.  House prices continue to rise, and precious metals, commodities, etc, continue to trade sideways or lower, while experiencing moments of spectacular "bubble action" when all this debt sloshes around in the markets from sector to sector.

So ... my strategy is to only trade stocks and bonds on a very short term basis, to trade into cash as a medium term trade, and to trade into precious metals for the long term.  The dangers at this point are this

• Stocks and bonds are where the action is, but dangerous to stay in
• Cash is where you want to be when the markets crash, but you're losing money in cash in the near term vs. everything
• Silver and gold is where you want to be long term, but when the markets crash there will be a better buying opportunity

So that's where I'm at.  I'm buying silver because it's cheap, with the intention of trading into gold when it drops in price and the GSR becomes more favorable for purchasing gold, yet that is all overlaid on the backdrop of my assumption that I'm actually getting into the gold / silver trade TOO EARLY because I think they're both going to become EVEN BETTER DEALS when the stock market finally crashes and everything goes on sale.  The rotation, in my opinion, is stocks / bonds short term, into cash for the crash (cash will be king), and then into gold and silver when the deflation is at its worst and everyone is scrambling to cover their mortgage payments, etc, BEFORE what I believe is the inevitable hyperinflation to follow.

None of that is investment advice, it's just my own thinking.

So .. in summary, I think silver is a good buy vs gold, but I am reluctant to move into it completely.  Related, I also think that the GSR will "correct" and that any silver you have purchased will then buy more gold, but I do NOT believe this will be because the price of silver rises, but rather because the price of gold is going to fall.  I think we see gold drop from 1200 back down to the 700 - 800 $us/oz range.

[StackerNoob]

On 12/09/2018 at 13:36, Martlet said:

I think the advise to not diversify applies best to those that are interested in pure stacking, or have large stacks they may need to move in bulk to dealers.  Its not wrong, just limits one from enjoying the many designs and interest there is in silver.  So mix it up a little, not to the other extreme of 1 of 20 different coins, focus on a few and look out for those coins others collect so you can gain from appreciation of both value and aesthetics.

This is far better advice that “don’t diversify”. No one in their right mind would stack just one type of silver. Stacking silver is supposed to be a diversification of your assets, so why stop applying the very sensible rule of diversification to your stack? I agree with the general idea of buying what you like. So pick a few candidates and go with those. You are allowed to enjoy your stack you know, it’s not supposed to feel like a chore!