So, Why buy silver now?

[bsshog40]

I don't quite understand what the reasoning behind buying silver up when it's high. For example, I have a couple 4oz pieces of bullion silver that I purchased for a little over $60 ea. a few yrs ago. I've been watching similar items on ebay and the same pieces are going for over $190 now. Do people think that silver is just gonna get so much higher that they want to invest now? It makes me wanna sell mine and get a 200% profit now before the bucket drops back out. Do you have any peticular reasons for buying when it's high??

[TomB]

I would imagine there were quite a few folks wondering why you would buy silver when it was so high at $15 per ounce.

[bsshog40]

I would imagine there were quite a few folks wondering why you would buy silver when it was so high at $15 per ounce.

Well to be honest Tom, I bought the pieces for the design, not the silver. Now I'm starting to realize what I like better, the silver price.

[Chris1976]

Reason to buy silver now is because silver is finally geting back on track to its historical track of being 1/16th the value of gold. A few months back silver was at $27 an ounce, now its at or slightly over $40 an ounce, While it may dip down now and then, it wont see the $27 an ounce range again. Especially now that the purchase of silver has opened up in China and is gaining momentum again. Granted silver wont climb to where it should be in comparison to gold overnight, but it will over time.

 

For me I started buying silver bullion back when it was at the $27 an ounce price, since then I have been buying my monthly budgeted amount of up to $150 worth of one ounce bars each month. Its no different then the people now how are buying gold when it is far overly priced. The reasoning for this is that the more and more currency that is printed the more that the value of the current USD will fall. Due to this fall people are purchasing gold and silver that can later be traded at value for other currency in the event that either those people move to other countries or the USA adopts a new form of currency. In short, its a way for them to secure their financial future. Some of these people are even transfering their gold and silver to forgien banks where they gain much better interest while the bank uses the gold and silver that was deposited as a backer for the money they loan out. After all, why earn 0.15% interest here in the US when they can gain 3.75% interest overseas. I'm sure others will say this isnt true, but my aunt is a good example, her company based in michigan posts 20 to 50 million in profits at the end of the year, she takes half of that money and purchases physical gold and silver to transfer to her out of country accounts where it does nothing more than gain interest, then once a year she requests a check for just the total of all interest to which she uses to reinvest either into another banking system or into other companies that she feels shows a strong history of surviving in a time of hardship.

 

After watching her do all this for year and years while I was growing up, I know I wish I could invest much more so I can live the way that she does. Must be nice to own homes in 8 different countries and be able to travel to any one of them she wishes at any time and still be able to cover all business expenses and family financial issues as if she were handing someone nothing more than a 25 cent quarter.

 

-Chris#2

[bsshog40]

That's interesting Chris. I main intentions for collecting coins is coins themselves. I've never really thought about the bullion side of it.

[x2rider]

I suppose it gets to the stage , Does the bullion value outway the numismatic value and if it has , if you were offered that sort of return on any part of your collection would you take it .

 

Martin

[michael]

because many think silver will be 50 usd pre troy ounce within a year or less

 

so a 20% return in a year or less aint that bad

 

combined with a shrinking dollar and true inflation at 10% per annum and with printing more paper dollars along with dirivitives etc. i can see why many think it will hit 50 soon

 

i myself have no silver; none, nada, zero, zip, 000, nothing

 

 

 

 

[Chris1976]

not to get off topic, but in a greedy sort of way, I like the idea that people are turning in the older silver coins for their melt value that means in the end since I am against the idea of doing that, that my silver coins will become considered more rare and will drive their price up as well. So with that said, I say this to anyone who turns in US silver coins to smelters "keep up the good work, you turn my minimal investment into a heafty sum later due to rarity :)"

 

-Chris#2

[PerryHall]

combined with a shrinking dollar and true inflation at 10% per annum and with printing more paper dollars along with dirivitives etc.

 

Agree. As the dollar continues to lose value, it can only help increase the value of precious metals over the long haul. If the government ever has a balanced budget and starts paying down the national debt, precious metals may stop being a good place to park your money.

[jtryka]

Well, here are a couple points to ponder:

 

First, be careful about that 16-to-1 gold silver ratio, that is something that a lot of people throw around as being silver and gold's "natural" state, but it really is nothing of the kind. In history, because of the mining of the two metals and supply and demand, the ration back in the 18th century and earlier was about that. In fact the first US coins used a 15-1 ratio, which is why all our early gold coins were melted! In fact, there have been many cases where the ratio was very comparable to where we are today. From the 1840s through 1933, the ratio in terms of coinage was fixed at 16-1, so a double eagle had just under an ounce of gold and 20 silver dollars had just under 16 ounces of silver. Well, the problem with that is, in the late 1800s and early 1900s, the price of silver was much lower, so the mint was effectively buying silver for 30-cents an ounce and turning it into silver dollars! Those 20 Morgans that you traded only had about $5 worth of "metal" in them, sort of like 20 Presidential dollars have $1.40 in metal in them today. So if the 16-1 official ratio overstated the metal value by 4-1, then the true gold to silver ratio in the low points of the early 1900s would have been closer to 64-1! Not that different to where it was a year or two ago!

 

Second point is that silver has some industrial use, but as a monetary metal, like gold it is an anti-currency, the opposite of a dollar. So you are really just betting on the dollar falling in purchasing power (a pretty safe bet right now). Since they are printing more dollars every day, why buy silver (or gold)? Well, answer this question, what is the current price of silver in Zimbabwe dollars? What is the current price in terms of Weimar Reichsmarks? No bid. Well we may not head to hyperinflation like those countries did, but over time paper currencies more or less continuously approach their intrinsic values. Sure I can point out that the dollar has lost 98% of it's value since the Fed was created in 1913, but that's so abstract it's hard for us humans to relate. But as we get older, it gets easier - for example, when I was growing up in the 1970s and early 1980s, our paper dollars looked very similar to those with Hank and Tim's signature today. In fact on me desk right now is a series 1981 A $1 bill, just like the one I used when I was coming home from grade school in 1983, and even then, I could stop at the corner store and buy the following:

 

a 16-ounce Coke for 25-cents plus a dime deposit

2 boxes of lemonheads for a dime each

20 Swedish fish for a penny each

 

And then I'd get a quarter back in change. What will that same dollar bill get me today? Just the Coke, so long as I live in a state with no sale tax or deposit! That's more than half the buying power gone in less than 30 years, and that my friends is why to buy silver now.

[bsshog40]

Well everyone has made some sense out of this for me anyway. The bullion I have doesn't really have any numismatic value for me but I think I'll just hang on to it. I have realized one thing tho', if it ever drops low again I may purchase more for times like this.

[truthteller]

So, Why buy silver now?

 

It makes a good capital loss writeoff when you lose money on the transaction.

 

Most people buy and forget. They do not sell when the opportunity is right and the profit is substantial but rather wait "until it goes higher". This would be a good time to sell silver into the market and transfer the profits into rare coins, which have been overall flat for several years yet have shown slow and steady gains over time.

 

 

 

TRUTH

[jom]

So, Why buy silver now?

 

It makes a good capital loss writeoff when you lose money on the transaction.

 

 

I think both metals are in a "bubble"...silver more so than gold, IMO. The signs are all there: everyone talking about it, coming up with reasons why it will go higher, dealers (gold and metals people no necessarily rare coin guys) hyping it up and saying how this time it's "different" than previous run ups. This just looks like what happened with Stocks, then Real Estate then Commodities here in the last 10/12 years. What looks like a duck and sounds like a duck....

 

I want to buy a few $5 gold modern commems and get one of those Buffalo 1 oz proofs (with the wooden box) but I just won't do it at these levels. Who knows though...we'll see.

 

jom

[WinstonWare]

I invest in precious metals like I do in my 401k - I don't guess where they are going - I just put some percentage of my income into them on a regular basis...

[jtryka]

No, this time it's definitely not different with the exception of the numbers. As for all the hype, not sure what papers you read or what crowd you hand out with, but nobody in my workplace has any metals investment. Total metals and mining stocks represent less than 1% of total assets invested on the planet, definitely not a bubble there.

 

Yes, we'll eventually get to bubble mania territory, but selling today is like selling in 1978, sure folks had a 10-bagger on silver and quadrupled their money on gold, but they missed the last blow-off peak.

[Old Pueblo]

If you have double, it makes sense to trim a bit recoup initial invested dollars and play with the houses money

 

 

OP

[bsshog40]

If you have double, it makes sense to trim a bit recoup initial invested dollars and play with the houses money

 

 

OP

I hear ya. Now would be a good time I feel to sell some silver, wait for the prices to go down again and then re-buy.

[RockMyAmadeus]

I sold 57.6 ounces, roughly 1/3 of what I have, in March at about $32 after fees and whatnot.

 

I said I would consider selling the rest if silver hit $50.

 

It's hit $45 today. $45!

 

But that's because of the plunging dollar.

 

So...

 

I'm torn.

[WoodenJefferson]

I sold today...I left smiling because most of the junk was purchased when silver was less than $7 per oz.

 

[Brian D]

I have 12 rolls of ASE when it hits $50.00 I am seriouly thinking of selling. I will post when the time comes.

 

[jtryka]

ASEs are already selling for more than $50...

[bsshog40]

Most silver I've been looking at is already selling around $50 an oz..

[Kurtdog]

I don't quite understand what the reasoning behind buying silver up when it's high.

Because it's going higher. All precious metals prices are. Throw out the book on the traditional analyses, and think, China and India. Those new markets are what are driving the demand, now, and they hadn't yet had their fill, not by a longshot.