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 Replies: 25 / Views: 2,266 |
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Valued Member
Canada
309 Posts |
I'll try to keep it short, but in order to explain myself why I have opened another thread on this subject, I'll have to make a few statements before I put the question: We all know the price goes up, and it keeps doing so in the last few (?) years. I am very new at this coins and precious metals game and it could be said that I have only a slight idea of what I'm doing. I would like to know your personal opinion on WHY do YOU think the price is where it is, and WHY the general impression is that it can only go up from here. We all read and see pretty much the same information (all forms of media, newspapers, etc),but I still think that, depending on the region of the world where we live, we might also have personal opinions on this subject, and these opinions might be different. This is what I'm after, of course, only if you decide to enter the game. I don't believe that there are stupid opinions. Heck, I might be out to lunch on my beliefs related to this subject, and I will be more than happy if somebody will tell me so  ( I won't get mad, I know I'm ignorant). I think we are in a position here to get a very unique view, since our members reside all over the world. Maybe Europeans see it different than North Americans, then the Australians are a different bunch on their own [:p]. We might get something really interesting here. I for one don't know exactly why the price is where it is. Silver is not tied up with money (not even gold is anymore), it is scarce since quite sometime, but only later it picked up. The industry might require it, but I don't know if this would make it a good enough reason. I hope you'll not see this as another exercise in futility and you'll take the time to participate. Sorry for the long post |
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Pillar of the Community
Australia
3831 Posts |
The answer is quite simple: whenever USD falls against most major currencies, precious metal prices seem to go up. Don't forget that precious metal pricing is mostly done against the USD. It is a fact that USD has been slightly unstable this year. Perhaps that is a good reason why you are seeing a lot of overseas bidders, as they find this is a time when USD is finally reasonably cheap.
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Pillar of the Community
United States
4868 Posts |
I beleive the prices are factored from the economy and high energy prices. Gold & siver are like a universal currency.
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Pillar Of The Community
3147 Posts |
We also must consider some huge markets have just opened up for gold and silver. China has legalized foreign gold and silver inside their borders and, like most of the Asian nations, gold and silver are highly regarded. We have been hammered for years in the U.S., mostly by stock brokers and accountants who want you to pay for their services, how bad an investment precious metals are and they continue to do so today. While returns can be nominal in any investment I have found loosing in gold or silver is much harder than stocks! One must buy with long term intentions just as you would with any other investment option. If something good comes out of it very quickly then that is a plus.
Also it would be important to note that silver actually does get USED where most gold is reclaimed at one point or another. New investment opportunities are currently being instituted concerning silver and this is creating a shortage on the market as more and more investors are jumping on board to control huge amounts of silver. As I said there are a great number of factors involved in what we are seeing today and it has only just begun. Hang on for the ride!
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Pillar of the Community
United States
560 Posts |
There are many reasons why precious metals are moving up. However, I truly believe the main reason for this is the awakening of the slumbering giant CHINA, and to a lesser extent India. We Americans have arrogantly long ignored these countries. I've been to both nations and can tell you they are "worlds" unto themselves and they are growing beyond comprehension. China affects every single thing in your life as the prices for all raw materials has risen because of its insatiable appetite. I'm afraid, we've only seen the tip of the iceberg and we have nobody to blame but ourselves for giving all of our jobs and technology away.
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New Member
United States
13 Posts |
Hello, everyone! I've been pretty tuned in to the gold & silver situation since 2002. Take that with a grain of salt because I'm certainly no expert!!! That being said, I really believe the fun has just begun in the PM markets for many reasons. China and India are certainly a huge factor because they have such huge populations and are rapidly improving their standards of living & have more disposable income. That also partially explains the commodity boom that is currently underway. I've seen charts that show the cycles of commodities and paper assets which generally run in 18 year cycles. The US stock market peaked in 2000 and the commodity cycle began at about the same time. While the stock market may appear close to the old top, it's still way down when adjusted for inflation. Gold, silver, & base metals are way up, even when adjusted for inflation. Inflation is the gasoline being poured onto the fire. Here in the US, the FED (Central bank) is creating massive amounts of funny money and artificially cheap credit to keep our markets proped up. That is what inflation is - expanding the money supply in excess of the natural growth of goods & services. The dollars (or whatever) are worth less in relation to the goods & services they are chasing. So what you have is a two edged sword. Supply & demand driving prices up, all while you have to purchase things with money that is decreasing in value. I believe when this cycle is over, it's going to make $850 gold & $50 silver look dirt cheap. Gold & silver are the way to protect your savings & hopefully prosper during the times we are in, IMO. And of the two, silver is far more undervalued & has the greatest potential for profit. Just make sure you have the "gut" for days like the last few! One last thought. I beleive all markets on a global scale are manipulated, especially gold & silver because the bankers hate them. If you doubt that, do a websearch on Allan Greenspan & read his essay "Gold and Economic Freedom". While I beleive the markets are manipulated, I also beleive that manipulation will soon implode. It may still be a few years, or maybe tomorrow, but something will trigger it. My guess is that the collapse will be derivitive based then the game will be over. So buy all you can as often as you can, and if you live in the US, DON'T keep it in a bank safe deposit box. I read a few days ago that Homeland Security has initiated procedures to have the banks witness what you remove from safe deposit boxes. What for? To intercept guns, gold & silver. May not be true, but why take chances?
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Pillar of the Community
United States
1247 Posts |
Globalization is the reason that China has a 10.5% GDP. Globalization is also why, IMO, that neither China, nor India nor anyone else will become (or remain in the case of the U.S) an economic superpower. Living standards can only go up so much now *for anyone anywhere* and then someone else in the global cotton club will be able to do it cheaper. All strength rests on the shoulders of weakness. Globalization put China where it's at today and it will take them down too.
Under globalization, living standards in the United States, Europe, Japan, Down Under, Brazil and other developed countries are going to decline, and in developing countries, especially Asian countries, they will increase. The party has only just begun. If it can be digitalized it can be done somewhere else cheaper. That includes: accounting, architecture, software development and engineering. That rubbish about letting third world countries do the grunt work while we do "the thinking" was just another one of our 5th wave hallucinations. Although it is true to some extent--alot people will be thinking about how they got hornswaggled by globalization while they're standing in line "A" with their forms.
The bigger picture in all this is that globalization is going to cause Luddite reactions in developed countries--the Paris riots seem to be a good example of what's ahead. It will even cause Luddite reactions in developing countries, such as China, once their standard of living gets too high and their economy is outsourced to another country. Or to a dozen other countries which may be what's needed to replace China's capacity. World-wide civil unrest ,IMO, is all that will be needed for metals to have a good time.
Inflation would just be icing on the cake.
For these reasons, I do not believe that precious metals are a "fleeing" opportunity as they were in the late 70's with $50 silver and $800 gold. The world was transiting from instability to stability. Financial assets--stocks and bonds--are the things to buy in stable times. I believe today it's the exact opposite, we've been transiting for awhile now from relatively stable times towards what would appear to be a Ned Ludd/Captain Swing ZOO! And silver and gold are good ZOO in progress metals. The long term trend, IMO, is going to be upwards for hard assets, numismatics included!
But I believe there will be drops along the way, some of which may feel like the potholes of Queens that sink into hell. But if the price of silver drops enough I'll buy more. If it goes high enough I might sell some and buy numismatic coins that others are selling to raise money so they can hop on the "me too" band wagon.
It was necessary for people to jump in and get out fast in the late 70's with gold and silver. People didn't know that though at the time. In fact there were people that were shocked to see silver dropping from $50 to $25 in a matter of weeks. I may be wrong, and time will tell, but I don't believe this is the case today. I believe there's plenty of time to make money in metals if one sells strength and buys weakness.
BTW, does anyone really believe the Ferengi Reserve's ( or whoever it is that's doing the "cooking") inflation figures? Do you really believe them when you go food shopping, clothes shopping, stop for gas or pay your utility bills? The higher the inflation rate the more money the gubmint has to dole out for federal, military and social security pension cost of living increases. Isn't that incentive enough for them lie through their teeth?
"Even in the worst of times, someone turns a profit." Ferengi Rules of Acquisition #162
Edited by longnine009
04/22/2006 03:15 am
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Pillar of the Community
Belgium
2078 Posts |
Because of oil and energy prices
To mine one ounce of gold costs about 500-600 devaluated dollars for marginal miners
These miners will go bankrupt and close below that figure
At 800 billion deficit per year the dollar is not cheap
in fact it is hugely overevaluated at present against all other currencies
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Pillar of the Community
Belgium
2078 Posts |
Moreover gold is trying desperately to keep up with oil and not realy making it sofar Download Attachment:  Vgl London_Brent_Oil.gif25.36 KB |
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Pillar of the Community
United States
1247 Posts |
quote:
Originally posted by ageka
At 800 billion deficit per year the dollar is not cheap
in fact it is hugely overevaluated at present against all other currencies
That's just the yearly additions to the federal debt. That's nothing! As I understand it the total debt of the United States: federal, states, cities, corporate, and personal debt is 51 trillion dollars. Now, I'm not a very optimistic person, but really, are they kidding? How are McJobs going to pay for this? Got wallpaper? |
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Pillar of the Community
Belgium
2078 Posts |
quote:
Originally posted by longnine009
quote:
Originally posted by ageka
At 800 billion deficit per year the dollar is not cheap
in fact it is hugely overevaluated at present against all other currencies
That's just the yearly additions to the federal debt. That's nothing! As I understand it the total debt of the United States: federal, states, cities, corporate, and personal debt is 51 trillion dollars. Now, I'm not a very optimistic person, but really, are they kidding? How are McJobs going to pay for this?
Got wallpaper?
In principle the economic theory presumes that the debt of an autonomous country will never be paid off But talking Trillions going up every year is not sustainable Sooner or later some sort of solution will have to be found or the solution will find the debtor I think in principle there are two ways out One is 20 years of austerity The other is Weimar type runaway inflation were a loaf of bread costs a cool million I do not want to consider a third possibility  |
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Pillar Of The Community
3147 Posts |
You can rest assured our government will probably pick the later, or the third, of your options. Ride a dying horse right into the ground. My predictions is when it is all said and done Australia will be the only remaining super power in the world! Guess they were just far enough from the rest of the world to protect themselves!
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Valued Member
United States
123 Posts |
Although there may be reasons for the recent run-up in the metals market, it is beginning to smell like a speculative bubble. Whenever "the mob" gets excited, they are usually wrong. That said, I cannot even hope to predict when the bubble will burst or how far prices will drop when it does.
However, if the world continues to trend towards instability and/or the economy degrades considerably from where it is now, prices could continue to grow. Precious metals tend to do well during hard times.
I'm glad I bought a lot of precious metal when it was cheap and nobody would touch it. Times like that are when we should snap up as much as we can. At the moment, I'm playing a waiting game.
Heather
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Pillar of the Community
Belgium
2078 Posts |
quote:
Originally posted by crystalk64
You can rest assured our government will probably pick the later, or the third, of your options. Ride a dying horse right into the ground. My predictions is when it is all said and done Australia will be the only remaining super power in the world! Guess they were just far enough from the rest of the world to protect themselves!
I am a child of the cold wars and science fiction afficionado I remember that film but (not the name) were the last surviviors were Australians on a submarine and the song I had never heard before but like very much Walzing Mathilda  Like I said before if inflation comensated gold wants to equal the 850 $ top of 1980 it has to go somewhere between 2250 and 3200 dollars only to equal that high Mostly values do not match equal highs but surpass them My plan is very simple At a predetermined value I will start selling 10 % for every 20% rise What I do with the Euro I get still remains to be decided because I think 2009-2010 will reach my predetermined value |
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Pillar of the Community
Belgium
2078 Posts |
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Pillar Of The Community
3147 Posts |
Ageka I will take that offer on both my gold and silver! Just send cash!!!
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Replies: 25 / Views: 2,266 |
Posted 04/21/2006 7:33 pm
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