My plan to stack PMs

[Lowlow]

3 minutes ago, StackerNoob said:

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!

It's the difference between a precious metal investment and investing in collectibles.

[Iamdeadboy]

I feel this topic has gotten a bit off topic lol.

So i am about to have my first 100oz of silver and 1 oz of gold. I really enjoy the maples besides the queen and am thinking of another coin to go beside them...maybe kookaburra or queen beasts series? But maybe have missed boat on QB

[vanderPoot]

So you looking for a semi numismatic serie next to your foundation stack.

 

I just started too and I am looking into new series. You mentioned missing the boat, so maybe a new series would be good for you.

At the moment the Perth mint has bird of paradise (mint 50.000) and the emu (30.000) bit of a premium on that one.
The Rwanda coins are doing well, the Lunar series has its 3rd coin out (2019) I personally like the Rwanda Nautical series (second coin in).

Rwanda coins mintage numbers are as far as I know a secret, except older ones from the wildlife series.

Somalia has a new Leopard series, started selling this week. mintage is 30.000 I believe.

There are quite a few new series. 

The Australian kangeroo might be worth looking into for stacking, maybe compare buy back prices from different sites.

The Uk has some benefits for buying their own coin, don't know where you're from, but maybe your country has something similair

[Lowlow]

On 19/09/2018 at 18:31, Lowlow said:

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.

 

I found a video on Youtube of a guy who is essentially arguing the same strategy that I mention above, one that leverages the fluctuations in the gold / silver ratio to move back and forth between gold and silver without regard to the paper price of either.  This trade has moved against the author of the video because the GSR is now approx 84 and was in the 70's when he made his video, but I think that only strengthens the case for the trade.

 

[Lowlow]

21 hours ago, Lowlow said:

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.

Found a video made by someone who is reading my mind ...

This video lays out the same case I lay out above ... first deflation, then hyperinflation ...

DOOM n. fate or destiny, especially adverse fate; unavoidable ill fortune

 

[vand]

On the topic of the GSR, I would like to add a few points:

- GSR has been rising in the very long term

- Despite that, we are currently at what is statistically a very high GSR reading

So, there is nothing incompatible with the idea that Gold will continue to trend higher in the very long term, but in the shorter term silver is relatively undervalued. This also fits in nicely with the idea that "good money appreciates". This is why I think GSR 15:1 is fanciful.

With a 10 year horizon, my own modelling tells me:

< 50 silver expensive

50 - 70 fair value

> 70 silver cheap

 

[Lowlow]

40 minutes ago, vand said:

With a 10 year horizon, my own modelling tells me:

< 50 silver expensive

50 - 70 fair value

> 70 silver cheap

 

That's about what I think too, around 50-70 being fair value.

[HawkHybrid]

2 hours ago, vand said:

the idea that Gold will continue to trend higher in the very long term, but in the shorter term silver is relatively undervalued.

this is what I've been trying to say, trade silver but hold

onto gold.

trading the gsr is great if makes you a profit. there are 'facts'

that people misinterpret.

in recent history the gsr was never 15:1 on average for any

time period of a year or more. you need to go back more than

150 years, maybe even more than 500 years to get that ratio.

many quote the gsr during the gold standard to justify this

ratio(me included until recently). a sovereign during the early

1900's was being fixed by law to equal 4 crowns(~1 oz coins).

this made the gsr ~16:1. this is wrong. by price a sovereign

was worth 4 crowns, but by bullion weight it was worth a

pound sterling or ~12 oz for a gsr ~50:1.

when the gsr is over 70 then buy silver. I agree given a few

years on average the silver price usually rises faster to reduce

the gsr. when the gsr is 50 swap silver for gold. why would you

do this? on the charts every time you did this you would have

lost on the trade($). this is because when the gsr rises it's

usually when both metals are falling in $'s. (mike maloney

recommends doing this so that he can sell gold during the

down trends in both metals). would it not be better to hold $'s ?

silver in ground, resources, reserves and the scarcity of mining

silver are misleading as an argument for higher silver prices.

it sounds logical similar to how higher fed rates should logically

cause lower prices for all $ priced goods including gold but in

reality it doesn't work like that.

 

HH

[Lowlow]

Please provide any evidence that the GSR is in a long term uptrend.

Fundamentally I don't see how you argue that the GSR "breaks out" and goes much higher, when you're talking about two metals that are so closely related.  It's akin to arguing that milk is going to crash while cream breaks out and goes to new highs, or that unleaded gasoline is going to tank while jet fuel reaches new highs, or that corn is going to fall in price while rice reaches new highs.  I just don't see how that happens.

[HawkHybrid]

I don't see the gsr breaking out and going up much higher at

this point. I'm saying gradual long term uptrend as in moving

from 50 to 55 in 40 years(average). there is not enough data

to verify if it's true or not(we need decades more of data) so

I can't prove it at this point in time. imo the recent 3 decades

shows the trend could be moving up. since the world went

off the gold standard(by volume), gold and silver should now

be treated as different metals. gold is hoarded and rarely

consumed, a large part of the silver demand comes from

industry. these are very different markets.

 

https://www.gold-eagle.com/article/why-next-market-crash-will-not-take-gold-price-down

this article talks about why we might not see a last minute

deflation spike similar to that of 2008 crisis. I believe it's

close to a turning point now where most of the deflation

that would have happened are already priced in. emerging

market economies defaulting on their $ denominated debt

means less demand for the $(some have defaulted before).

how much longer can venezuela stay in a state of

hyperinflation before they are forced to default?

 

HH

[Lowlow]

21 minutes ago, HawkHybrid said:

https://www.gold-eagle.com/article/why-next-market-crash-will-not-take-gold-price-down

this article talks about why we might not see a last minute deflation spike similar to that of 2008 crisis. I believe it's close to a turning point now where most of the deflation that would have happened are already priced in. emerging market economies defaulting on their $ denominated debt means less demand for the $(some have defaulted before). how much longer can venezuela stay in a state of hyperinflation before they are forced to default?

 

HH

 

You can't "price in" monetary deflation.  Deflation is the destruction of money.  Derivatives in all their various forms are built on trust, and lack of trust destroys them.  Once that destruction begins in earnest it can cascade out of control.  Think about it from an individual's perspective - an individual investor has a number in their stock portfolio that the essentially think of as money, but that price cannot sustain every investor selling at that price, so it's like a mass delusion where everyone believes they'll get the best price, but almost no one will actually get it.  That doesn't stop investors from pretending they have that money, borrowing as if they did, making purchases as if they did, counting it as part of their "net worth", etc, and the same is true of house prices, bonds, and everything else.  Once deflation begins when we are at such high levels of debt, paper burns and the fire spreads, jumping from asset to asset like a wildfire in the western United States, from party to counter-party, destroying everything that was over-leveraged and doesn't have enough cash on hand to cover obligations.  The net effect of this is that all of this "money" (including derivatives, debt, all paper assets, etc) "dries up" and is destroyed, leaving only harder forms of money such as paper cash, cash deposits, and hard assets to be used as money.  This drives up the price of cash as everyone scrambles for an ever decreasing amount of money to pay their obligations (the mortgage still has to be paid whether you have valuable stock certificates or not), and the price of everything falls.

We're talking about monetary deflation, not a fall in prices that can be "priced in".

This is exactly what happened in 2008/2009, and it's the reason that precious metals also fell in price - because people were willing to sell ANYTHING to cover their obligations, avoid losing their homes, etc, they sold the sports car in the garage, their precious metal holdings, stocks, bonds, vacation homes, everything they could get their hands on so that they wouldn't lose their house, could feed their kids, etc.

[HawkHybrid]

16 minutes ago, Lowlow said:

We're talking about monetary deflation, not a fall in prices that can be "priced in".

 

last time I needed x amount in dollars and sold x assets to get

there. I lost money selling assets cheaply. I try to learn from my

mistakes. this time round I hold x dollars before the collapse

so then no selling of undervalued assets at a loss is required.

I'm pricing in a need for x amount in dollars by holding the

dollars before the collapse. the last minute deflation spike is

a rush to dollars caused by errors in judgement. priced in

meaning people have already accumulated the needed

buffer in dollars to get them through the collapse. I use the

reference deflation spike to loosely mean a run to the dollar.

it's not a true deflation by my understanding of the word.

 

HH

[Lowlow]

24 minutes ago, HawkHybrid said:

 

last time I needed x amount in dollars and sold x assets to get there. I lost money selling assets cheaply. I try to learn from my mistakes. this time round I hold x dollars before the collapse so then no selling of undervalued assets at a loss is required. I'm pricing in a need for x amount in dollars by holding the dollars before the collapse. the last minute deflation spike is a rush to dollars caused by errors in judgement. priced in meaning people have already accumulated the needed buffer in dollars to get them through the collapse. I use the reference deflation spike to loosely mean a run to the dollar. it's not a true deflation by my understanding of the word.

 

HH

You are SMART to be holding $us to cover your obligations, but you have too much faith in your neighbors if you think they've learned anything.  See, they didn't see 2008 as a speed bump on the way to the actual crash, they see it as some weird anomaly that the United States has "recovered" from.

 

There are different kinds of deflation, and monetary deflation is a run on the $us (in the case of the United States of course).  The reason everything falls in price at once has nothing to do with the actual value of assets - a stock certificate is still equity in a corporation, a house still keeps the rain out, a car will still get you across town, and precious metal doesn't lose its luster ... the reason it "falls in price" is because what it's value is measured in becomes increasingly rare, the actual measuring stick of the assets value changes.  This is different than people not wanting to eat and forcing the price of food down, or not wanting a house and forcing the price of housing down, it's literally the destruction of money (in all its forms) and the scramble to purchase cash money which becomes an increasingly rare commodity in itself.  In such environments, cash is king.

Monetary deflation like this is only possible in certain environments were people are over-leveraged, there is a low personal savings rate, high debt, huge amounts of trust (too much trust) between people that prices will increase forever, etc ... it's really only in bubble economies that this kind of deflation is even possible.  It's a zen thing, winter contains within it the seeds of spring, and bubbles contain within them their own means of destruction.

Good for you on having cash.  When it all goes south you'll have plenty of cash to buy discount precious metals with, and your neighbors porsche if you want it.

[Abyss]

1 hour ago, Lowlow said:

Please provide any evidence that the GSR is in a long term uptrend.

Fundamentally I don't see how you argue that the GSR "breaks out" and goes much higher, when you're talking about two metals that are so closely related.  It's akin to arguing that milk is going to crash while cream breaks out and goes to new highs, or that unleaded gasoline is going to tank while jet fuel reaches new highs, or that corn is going to fall in price while rice reaches new highs.  I just don't see how that happens.

Gold to Silver ratio is in an uptrend

 

[Lowlow]

Just now, Abyss said:

Gold to Silver ratio is in an uptrend

Look in the graph directly above the one you posted (in my post) and find the period of time you have isolated in that graph.

[Abyss]

We cannot take a chart goes back to 1687 GRS to look for opportunities want to make in our lifetime. The most important question to me is the decisions of when to pull the trigger and convert lot of my fiat money into Gold. I believe that PMs have some significant downside potential over the next 6-24 months. I cannot make my decisions based on graphs go back hundreds of years. PM charts should only go back to 1971 when Nixon took the US off the gold standard (rest of the world at the same time) and the world adopted a fiat based currency system.

[Lowlow]

9 minutes ago, Abyss said:

We cannot take a chart goes back to 1687 GRS to look for opportunities want to make in our lifetime. The most important question to me is the decisions of when to pull the trigger and convert lot of my fiat money into Gold. I believe that PMs have some significant downside potential over the next 6-24 months. I cannot make my decisions based on graphs go back hundreds of years. PM charts should only go back to 1971 when Nixon took the US off the gold standard (rest of the world at the same time) and the world adopted a fiat based currency system.

You're putting words in my mouth if you think I'm making a case for using a chart from 1687 to make short term trading decisions, I never said that.  What I did say is above in .. well, what I wrote ... it's right there, it was about a generational long term trade.  I'm not even trading gold/silver on a short term basis, it doesn't have enough volatility right now to be useful in short term trading.

I'm with you, I think gold / silver has significant room to move further down, and I actually think that's what will "correct" the GSR, because I think gold has further to fall than silver.

Edit, all it would take to return to a GSR of 70 is for gold to fall back to 1000$us/oz.

[HawkHybrid]

42 minutes ago, Lowlow said:

but you have too much faith in your neighbors if you think they've learned anything.

 

I think the scramble for dollars has already happened with the

turkey problem. hitting headline news around the world the

turkish wake up call would have prompted those with the

means and need to already have stocked up on dollars. those

without the means now, are unlikely to have the means soon

and are not likely to have a lot of gold to sell(they simply

don't have that much savings and assets). I believe that this

time round those who has worked out to own gold will not

put themselves in a position to be forced to sell it cheaply.

(I was posting a theoretical example, I personally don't

currently have any dollar denominated debts)

 

HH

[Abyss]

https://thesilverforum.com/topic/14844-mike-maloney-uk-style/?tab=comments#comment-183722

Link in the silver forum and Mike Melony latest work available on a link that I have posted. I do like Mike Melony work but I would classify him in the pumper category. The work he has carried out on generational wealth hard to argue with though.

ITM Lynette Zang numerous videos mention cup formation  https://www.youtube.com/channel/UCom1i7_NVeSUNyJyuR_NbMQ

Cup Formation https://www.investopedia.com/terms/c/cupandhandle.asp

I have been trying to figure out when to pull the trigger and develop my PM stacking strategy. I am fortunate that I have no debt (loans/credit cards/mortgage free residential home) and have rental properties mortgage free as well. My strategy not to sell any property (even though I believe housing market overvalued) as central banks can prop up the system for a very long time take Japan Widow Maker trade as an example (https://www.wallstreetdaily.com/2016/04/25/japans-widowmaker-trade/).

My strategy stack 1,000 oz silver up to a maximum of 2,000 as insurance policy (SHTF) buy Gold (complete the Queens Beast series in 1 oz Gold  3 or 4 times over provided I can back date the coins at a reasonable premium) and put the rest into 1 oz gold Britannia (orientals) coins when right time to pull the trigger and have small stack of sovereigns.

Studying the charts to find repeatable patterns in Gold to execute the strategy.

The last cup formation I can see on the charts

I am looking for a Cup formation to take place as previous resistance that should act as support coincides fibonacci retracement level 78.6 from previous run higher. The current downtrend in Gold prices can stop and we could be range bound another couple of years before another downtrend establishes itself. I know level I want to pull the trigger but I have no idea how long (if at all) price reach that area and it is just an educated guess. I know next 5-15 years middle class of Asia will continue to increase to level that will match and then outgrow the western world. Asians view gold as money and more importantly they want the physical. At this point in time no market manipulation will be able to hold back the price of PM. Even if no financial crisis and we continue as normal PM will increase in price significantly.

[Lowlow]

2 minutes ago, HawkHybrid said:

 

I believe that this time round those who has worked out to own gold will not put themselves in a position to be forced to sell it cheaply.

 

HH

We shall see. 🐿️

Me, I don't even think it matters what people holding physical do when the time comes.  The "paper" gold ratio is 180.63 to 1, so it'll be the people playing in the paper markets who drive the price, and I'm betting they do exactly what they did in 2008/2009 when the stock market goes south ... sell, sell, sell, and move into U.S. Treasuries.  That won't force people to sell physical for spot price, at least it didn't in 2008/2009, it took a while for the physical markets and spot price to realign, but align they did, and it was a great buying opportunity.

[Lowlow]

Abyss, I really appreciate your analysis there, and I guess all i can say is that is what makes a market ... two people looking at exactly the same thing and coming to different conclusions about it.  Where you see an uptrending GSR, I see a GSR that is about to bounce off the highs of a long term trend line.  That's where I'm at buying silver in limited quantities, wanting to convert that silver into gold at a lower GSR down the line, and also wanting to accumulate more silver and gold over a longer period of time.

All that said, I still think the most important trade on the horizon is a move to cash for a cash bull.

[Abyss]

Silver to me insurance policy and a hobby. I have about 500oz silver only started stacking two months ago but I have bought STAR WARS Darth Vader / Stormtrooper the Marvel series / Landmarks of Britain / Silver Rwanda / Queen's Beasts 10oz and 2ozs. Some of series collecting has higher premiums to backdate the coins. Next six months I will have finished stacking but continue purchasing silver in the collections that I am interested in. I have no intentions of selling silver as I view it as an insurance policy against SHTF. Trade wars could lead to escalation in the south china sea or one of these zombie to big to fail banks fails or another unforeseen black swan events. I use the Gold to Silver ratio as another indicator to gauge price of gold and has little influence on my purchasing silver decisions.

Gold is the ultimate wealth preservation tool (ever a reset than gold used for the purposes of a reset) . I am studying the price of Gold Miners ETF in relation to movement of gold price in the past and see if their is any trading opportunities that could lead larger purchase of physical gold. I do believe status quo continues then stock markets (US) continue to climb unimaginable heights. Emerging market crisis starts to have any contagion to the western economies central banks stop unwinding their balance sheet and start fresh round of QE.