If silver shot up in value.......

[Sliopjbsail]

If silver were to increase in value to a price that was just too good to refuse, would we sell all our collections/stacks and be left with no silver? And who would we sell to? Because we would all be trying to get rid. 

[KevinFlynn]

A sell decision would be based on whether there would be anything else that I could sensibly reinvest into.

If the gold silver ratio became favourable (i.e. gold didn't skyrocket as well), I would sell next to everything and reinvest most of it into gold.

If the gold silber ratio remained unfavourable, I would just sell a part, enough to get the feeling that I got the rest for free (selling enough to get back the ammount that I paid). I would blow a part of those returns on something fun 

I would sell most of the 'speculative' part of my stack, which is bullion coins and bars. I would keep the more collector orientated pieces, like Queen's Beasts Lions and Griffins, unless the rise was insane.

I would sell to regular dealers, trying to optimize the return. If silver skyrocketed I would have no problems with selling to a refinery for melt (some of my bars will only be worth melt, I'm afraid).

[Oldun]

24 minutes ago, Sliopjbsail said:

If silver were to increase in value to a price that was just too good to refuse, would we sell....?

Yup.

[mr-dead]

If gold and silver are shooting up in price it would likely be due to the fact that the world economy is going tits up and things like a property price crash underway.

I would dump my pm's and transfer into property where it would generate a yield through rent.

[vand]

When to sell is a constant theme for any asset.

I very much like Sir John Templeton's take on the subject. Although he refers to stocks I believe it can be applied to anything:

“I spent many years on that problem myself,” [Templeton] replied. “Several years ago I came up with what I believe is the right answer of when to sell. The solution is never to ask when to sell a stock. Instead, you should sell a stock only when you have found a new stock that is a 50% better bargain than the one that you hold.” 

https://sirjohntempleton.org/2010/07/22/templeton-on-when-to-sell/

That is why I favour using ratios instead of £ or $ denominated prices when choosing where to put my money. 

 

[vand]

31 minutes ago, mr-dead said:

If gold and silver are shooting up in price it would likely be due to the fact that the world economy is going tits up and things like a property price crash underway.

I would dump my pm's and transfer into property where it would generate a yield through rent.

It doesn't work that well in a hyperinflating economy, though, where the earning power of the  asset falls because demand for housing has fallen through the floor when the wealth of the middle classes is destroyed. My wife has a flat in Argentina that she rented when she moved here and although the $USD value doubled 8 years, she had to pay the mortgage at 25% and the rent was never enough to cover the mortgage. all in all she probably just about broke even on it, and that was with rates at 25%, while today they are doubled that (imagine what that's doing to the purchasing power of the population).

I think the trick to really doing well in real estate is to find an economy with high nominal inflation rate but also increasing real wealth and where the population's purchasing power is growing, like eg Britain 1980-1995

[mr-dead]

Just now, vand said:

It doesn't work that well in a hyperinflating economy, though, where the earning power of the also asset falls through the floor because demand for housing has fallen through the floor when the wealth of the middle classes is destroyed. My wife has a flat in Argentina that she rented and although the $USD value doubled 8 years, she had to pay the mortgage at 25% and the rent was never enough to cover the mortgage. all in all she probably just about broke even on it, and that was with rates at 25%, while today they are doubled that (imagine what that's doing to the purchasing power of the population).

I would be buying outright in cash and not taking on debt for properties.

Everything goes in cycles.  Just buy during the crash and ride out the cycle until things recover and property prices/rent increases.

[vand]

4 minutes ago, mr-dead said:

I would be buying outright in cash and not taking on debt for properties.

Everything goes in cycles.  Just buy during the crash and ride out the cycle until things recover and property prices/rent increases.

I tend to agree on the whole.

I would consider actively investing in property it if I could find a 7-8% net yield, but that is wishful thinking at the moment with prices where they are. On a personal level we're going to be "forced" into investing in property in the next couple of years as we look to move to a bigger house, and will keep the current one and turn it into a rental, but this is more about what we want for our family than it is about earning a return.

[Thelonerangershorse]

1 hour ago, Sliopjbsail said:

And who would we sell to? Because we would all be trying to get rid

Increased price is because of increased demand, no problem selling.

[HawkHybrid]

1 hour ago, Sliopjbsail said:

If silver were to increase in value to a price that was just too good to refuse, would we sell all our collections/stacks and be left with no silver? And who would we sell to? Because we would all be trying to get rid. 

 

silver increasing in value means it can be exchanged for more

of other goods and services. silver increasing in price means

that it's nominal value increased(this might be due to inflation

across all goods and services, ie it won't actually buy more

stuff). there will always be buyers and sellers in a working

market.

 

HH

[Oldun]

It is so simple. Once I started to “trust” the government again, I would sell it all. 

All I am forced to read and think about is how untrustworthy politicians are.....when that starts to change, I sell....qed. I dont think I will be selling anytime very soon.

Remember Blair screaming Cool Britannia...what a friggin comedian and what was the price of pms ? Lol.

[Oldun]

It was 1997 btw

https://www.theguardian.com/inequality/commentisfree/2017/jul/05/cool-britannia-inequality-tony-blair-arts-industry

[Oldun]

Loooool. It is so obvious, it is comical....fundamentals....pfffft...preening politicians claiming it with others’ money.....pfffft

[sixgun]

1 hour ago, Sliopjbsail said:

If silver were to increase in value to a price that was just too good to refuse, would we sell all our collections/stacks and be left with no silver? And who would we sell to? Because we would all be trying to get rid. 

The price of precious metals would be going to the Moon b/c there was sufficient buying pressure to drive up price and overcome the usual price suppression forces. This is likely big pressure on physical which starts to unravel the paper derivatives.

The handful of coins members of the stacking community might be selling in those circumstances would be neither here nor there. Who would you sell to? - You just described a situation where there is huge buying pressure for physical. When this happens you start seeing adverts on the telly inviting people to sell all their gold. You won't see a situation where prices are racing up but no-one is buying.

As Mr Dead points out, if metals are racing up then you will see problems in the fiat system. Metals move up b/c fiat is moving down. Metals are a safe haven and that means paper assets are getting dumped. When you sell real money you are buying fake money. Real money will be rising b/c people are falling off the Merry-go-round and paper assets crumble. Things go up for longer than you expect and down for longer than you expect. So i would not be cashing in my metal in a hurry when the bubble bursts. As mentioned here, there would need to be a better home for value than real money before moving.

When we have seen recessions in the property markets they have tended to last for years. Land and property have been good longer term investments but they must yield more income than they cost or they become a liability. What was good farming land might become unproductive, property with many willing tenants paying high rents might cease to be. i have seen thousands of Victoria mansions that have become slums, that have roofs falling in. Many companies disappear or linger shadows of their former selves.

When precious metals shoot up for real - i won't be rushing to sell. There will be a time to sell some of the precious metal but it is not a decision to be made on impulse.

[JinKesef]

I’d sell off all the extras I have but not my favorite ones 

[Sliopjbsail]

1 hour ago, KevinFlynn said:

A sell decision would be based on whether there would be anything else that I could sensibly reinvest into.

If the gold silver ratio became favourable (i.e. gold didn't skyrocket as well), I would sell next to everything and reinvest most of it into gold.

If the gold silber ratio remained unfavourable, I would just sell a part, enough to get the feeling that I got the rest for free (selling enough to get back the ammount that I paid). I would blow a part of those returns on something fun 

I would sell most of the 'speculative' part of my stack, which is bullion coins and bars. I would keep the more collector orientated pieces, like Queen's Beasts Lions and Griffins, unless the rise was insane.

I would sell to regular dealers, trying to optimize the return. If silver skyrocketed I would have no problems with selling to a refinery for melt (some of my bars will only be worth melt, I'm afraid).

Nice, I hate the idea of selling any collections I have going but odds and ends like multi year Britannia’s and things would be first to go and bars. Good to rebuy gold if poss

[Sliopjbsail]

2 hours ago, Oldun said:

It was 1997 btw

https://www.theguardian.com/inequality/commentisfree/2017/jul/05/cool-britannia-inequality-tony-blair-arts-industry

There he is “oh I used to play little guitar myself phaw phaw” 

[Au79]

We will sell silver going up and sell silver going down if silver shot up in price. Cos most of us are clueless how high it will go. And there will be others who will buy silver going up and buy more when coming down.

[Kookaburracollector]

4 hours ago, mr-dead said:

If gold and silver are shooting up in price it would likely be due to the fact that the world economy is going tits up and things like a property price crash underway.

I would dump my pm's and transfer into property where it would generate a yield through rent.

The above is pretty much what I would do, but not all in one go. I have experience of being a landlord, so am comfortable with owning rental properties..I think it is important for people to stick to things they know and understand. It is unwise to venture into pastures new in search of yield, if you do not know what you are doing.

First thing to go would be all the carp stuff i’ve bought...We all make mistakes and I am no exception. I have hundreds of 1oz silver coins all ready to go to newbies buying in at the top 🤑🤑🤑🤑🤑

As @KevinFlynn mentioned previously, I would keep the collector orientated pieces which have taken time to collate. All the bullion grade coins would be out the door..USE, Pandas, Buffalo rounds, Britannia’s, Maples etc.

Whatever you hold your wealth in, just beware...Governments prey on those that have wealth (Top 1% excluded of course) and will do all they can to remove it from you. Having money invested in numismatics that ‘do not exist’! May not be a bad idea.

Each to there own, but let’s always try and help each other on the forum..

@Sliopjbsail Hope that helps!

 

[Abyss]

I know a few paper traders have positions in the silver market established when silver trading $14 without a stop. The explanation why don’t have stop in Silver is that unlike any other asset class Silver has a cost of production and if prices fall below the cost production then miners will stop and the restriction of supply will force higher prices. Limited downside potential and a massive upside potential in silver. They happy hold these positions rolling the contracts over for over decade. I personally will not be selling my stack of PMs (unless dollar crisis and we have shifted into new currency debt free for the time being). I will only be selling on the paper markets when want to lock in price for my physical stack of PMs.

[Kookaburracollector]

13 minutes ago, Abyss said:

I know a few paper traders have positions in the silver market established when silver trading $14 without a stop. The explanation why don’t have stop in Silver is that unlike any other asset class Silver has a cost of production and if prices fall below the cost production then miners will stop and the restriction of supply will force higher prices. Limited downside potential and a massive upside potential in silver. They happy hold these positions rolling the contracts over for over decade. I personally will not be selling my stack of PMs (unless dollar crisis and we have shifted into new currency debt free for the time being). I will only be selling on the paper markets when want to lock in price for my physical stack of PMs.

I read this the other day..HOC are closing a mine as it’s cost of production is  higher than silver price..the supply of silver may well start to fall if other companies follow suit.

13 February 2019 Hochschild Mining plc to place Arcata mine on Care and Maintenance Hochschild Mining plc today announces its intention to suspend operations at the Arcata precious metal mine, in south west Peru, and place it on care and maintenance. It is anticipated that full care and maintenance will be in effect by the second quarter of 2019.

[HawkHybrid]

57 minutes ago, Kookaburracollector said:

I read this the other day..HOC are closing a mine as it’s cost of production is  higher than silver price..the supply of silver may well start to fall if other companies follow suit.

 

you can't generalise like that. arcata is an old mine. the areas

with the best grades have already been mined there. it is not

representative of the sector as a whole.

 

 

HH

[Kookaburracollector]

9 minutes ago, HawkHybrid said:

 

you can't generalise like that. arcata is an old mine. the areas

with the best grades have already been mined there. it is not

representative of the sector as a whole.

 

 

HH

Hi, Not sure where you are coming from regards to a generalisation!,

All I am saying is, that if a mine has a cost of production above the spot price of silver, then it makes sense to close it. If others do the same then the physical supply of silver will decrease ..that is all. I am quite familiar with HOC, as I have traded their shares in the past.

Mines can, for a while elect to process higher grades of ore to prolong their viability, but this cannot go on for ever.

[HawkHybrid]

imo a better conclusion from the closure is that hochschild has

thought long and hard before deciding to close the mine. with

their experience they do not make that choice lightly. it takes time

to close a mine. and then time to re open the mine(mine closure

by q2) therefore hochschild is not expecting any serious rise in

the price of silver any time soon.

which other major mine has production cost close to that of arcata?

how much of world production do they currently account for?

(most silver is mined as a by product of other metals)

even if it turns out that hochschild is leading mine closure with the

closing of their arcata mine. it will take a long time for this process

to continue and finish.

the chances are that the closing of arcata has little to no effect on

the supply of physical silver globally. this is a single event. there is

no domino effect because there are no other domino pieces.

 

HH

[Kookaburracollector]

There will be lots of mines out there whose viability is marginal at current prices, and not just Arcata. Their management will at some point need to decide whether to keep them open or close them. This is quite clearly derived from the spot price of silver and of course, copper,lead and zinc.

I think the following article sums up pretty well the point I made from the start..it may not be a domino..but it could well be a small crack in the dam!

Hochschild Mining blames low silver price for mine closure

---

Liam Sheasby, News Editor 
 15 Feb 2019, 10:24 a.m.

 

---

 

Location of the Arcata mine in Peru. Image courtesy of Google Maps.

South American mining company Hochschild Mining PLC has announced that it is to shutdown its operations at the Arcata mine in Peru. The announcement came as part of the company’s 2019 forecast, with the Arcata site already removed from all forecast figures for the year.

The gold and silver mining firm, which is listed on the FTSE 250, operates in Peru, Argentina and Bolivia. The company’s share value slumped after the news was published, with prices down 1.7% to 187.10 pence. The company has since bounced back to 197.50 pence per share.

A statement from Chief Executive Officer Ignacio Bustamante said: “This decision has been expected but is still disappointing for the organisation. Arcata was the company's first mining operation and started producing in 1964. It has been an excellent operation with an outstanding workforce and supportive communities but the continuing low silver price over some years and current geological conditions leaves us no option.”

The low silver price has forced the company’s hand into putting the Arcata site into a “care and maintenance” mode for the foreseeable future, will full shutdown complete by the end of Q2 2019. Silver prices have been coming down consistently since the record levels of $49.50 in 2011. The low prices are good for those using the precious metal in industry, but not the mining firms harvesting it. The silver spot price today is $15.66 per ounce, but the average price was closer to $20 per ounce in 2016, $18 per ounce in 2017, and $17 per ounce in 2018. The hope for mining firms is that the growth in demand for gold will help improve demand for silver, and that the reduction in silver output will also help boost prices similar to the reduction tactics that oil firms use to stabilise prices.

 

The Arcata mine site in the Arequipa Region of Peru. Image courtesy of Google Maps.

The mine is in the Arequipa Region of Peru, to the south west, and the 47,000 hectare site is located within one of Peru’s largest silver reserves. The Arcata mine was the first that Hochschild developed, with work beginning in 1961 and the site being operational since 1964. Exploration work is set to continue in the area, with Hochschild confirming that they will be ready to reopen the mine as soon as prices improve.