Silver in hand vs paper vs premium

[daviscfad]

I would say that we all agree that paper silver is not the way to go.. everyone here wants physical.. that being said, why is it we are not more opt to pay the high premiums.. I would say silver buyers/ing over the last few years has remained constant.. The spot prices have dropped tremendously.. We all would like to buy physical silver at the paper spot price, but that doesnt happen much.. So if we have no faith in paper silver why are people not more willing to pay lets say 20/oz, when back in 2011 you would have bought everything you could at 20/oz.. I know we are not fools and want to pay as cheap as we can, thats not what i am getting at.. We let the paper stock, we dont believe in, control how we buy our silver.. why is this? Most who are buying are the ones who bought at 5,10,15,20,30,40/oz.. It looks like its coming but you would think physical silver would have its own trade rate way above the paper rate, yet it is constantly drug down by the paper we dont believe in.. THoughts?

[68Camaro]

As long as mines and recyclers are selling at paper prices paper will dominate. Paper is used to hedge and hedging has a purpose when done in a fair market, and some businesses rely on it to function. So things will truly have to blow up before we see a gross disconnect (in my view).

I have no faith in paper because nothing backs it. But normalcy bias rules the hearts of the masses so they don't see things the same way.

[neilgin1]

I would say that we all agree that paper silver is not the way to go.. everyone here wants physical.. that being said, why is it we are not more opt to pay the high premiums.. I would say silver buyers/ing over the last few years has remained constant.. The spot prices have dropped tremendously.. We all would like to buy physical silver at the paper spot price, but that doesnt happen much.. So if we have no faith in paper silver why are people not more willing to pay lets say 20/oz, when back in 2011 you would have bought everything you could at 20/oz.. I know we are not fools and want to pay as cheap as we can, thats not what i am getting at.. We let the paper stock, we dont believe in, control how we buy our silver.. why is this? Most who are buying are the ones who bought at 5,10,15,20,30,40/oz.. It looks like its coming but you would think physical silver would have its own trade rate way above the paper rate, yet it is constantly drug down by the paper we dont believe in.. THoughts?

I agree with you completely.....in a bull market, in this case the physical Ag, DONT THINK, hit the offers, as your purse will allow you to.

the run to 50, on the crimex board, to me was over, when I read the letters, that were given to mini "raptor" hedge funds, that were buying board silver and WERE going to stand for physical delivery, thy got letters from the sellers that basically said, "to settle this, we will offer you $50 CASH , and if you insist on the physical delivery of the silver, we will default, and you, as an unsecured creditor, will be last in line, said time frame 5 years using our lawyers....so how do you want to resolve this?..the hard way, or the easy way?

savvy pro traders know which hill to die, and this wasn't it, so they took the $50.

as I said a few times lately, imho, is that I believe the game is this regarding the "board", "they" want to drive down the board price as low as they can, so they can flip and take delievery of the Five 1000 toz loaves of wholesale Ag per contract, and when there is none, and when the whole sordid enterprise goes default, the "price" of silver will skyrocket in dollar terms. Now if WE think we just hit the lottery, we will very disappointed because I believe the gummit will slap a 50% windfall tax on all private "white market" Ag sales.

[beauanderos]

I don't believe in fiat. Either it will, at some point, (internally) undergo rapid (overnight?) revaluation with a reset - dropping its value 40 to 50% - or,
we will experience hyperinflation (externally) dramatically depreciating its purchasing power, or those who rule will use fools who use banks to fund the
too-big-to-fail banks after the next global (derivatives induced... could happen at ANY time) meltdown via bail-ins.

A measure of all three could occur, and I believe will suddenly occur, and perhaps that's what's in the wind for the Sept/Oct time frame
which subliminally has begun to ignite the anxiety levels amidst the sheeple. Certainly, the govt's know something evil this way comes, else why the need
for internment camps, massive govt purchasing of ammo, Jade Helm exercises, etc? They can use paper raids to lower the VIX, muting that canary in the
coal mine (and lulling into complacency the cadre of equities "investors", just as they strangle (deluding and disheartening the 1%) the same bird before
it can herald that the truth (the real worth of precious metals) is 180 degrees polar opposite the paper-suppressed pricing.

John Williams states the high of 1980, in inflation adjusted dollars, would be $601 dollars. Really? For years, it has been known by savvy students of monetary
lore, that the GDP has been falsely goosed, by suppressing real inflation with shenanigans such as hedonics, and replacing components of the consumer price
index, or mitigating their damaging influence by dramatically altering their effect on the end result of the falsely created, and reported, ostensible inflation
rate... misguiding the masses to temper their concern of rising inflation.

But you don't need a canary to sing, or perish, to establish what we all know. Inflation IS rising, as much as ten percent per year, driven inevitably (despite
temporarily dormant monetary velocity) by QE, and is certifiable at the grocery aisle, the health premiums, the cost of tuition... if not at least, again temporarily,
at the gas pump. Four years of psychological warfare has worked to their advantage in that it has shaken some weak hands into abandoning their plans,
and thwarting the will of others to execute their strategy (by inducing the "I'll wait for lower prices" dynamic).

Lower prices may come... but if actual physical silver resources, which do seem to be be diminishing by the day (despite soliloquies of reassurance that it is
a retail product bottleneck, and not genuine resource scarcity) continue to suggest depletion or, more likely, accelerate as those late to the hunt begin shooting...
then your lower prices will only be accompanied by rising premiums, a de facto (if not de jure) acknowledgement of the inevitable long awaited paper vs physical price
bifurcation.

Secondary market pricing, let's use 90% junk for instance, is driven not by the impact of cratered spot prices induced in meteoric fashion by the machinations
of those who introduce massive amounts of short futures contracts to plunge prices. The buyers (those willing to pay the premiums) are setting the price, not the sellers.
True price discovery occurs when one peers behind the curtains, spies the wizard, and recognizes the ultimate futility (and thus the eventual rebound) of levers that can
be pulled to further his aims. The wizard (the Fed) is out of tricks. We can expect war, then the coming financial collapse can be handily blamed (misdirecting the wrath
of the masses) yet once again.

What part of this does anyone not understand? Fiat is worthless, and only continues in usage due to the misguided faith of the public in its worth. At any and all costs...
we ALL should be converting our bills to coins, premiums or not. Neil points out yet another ploy used to frighten into inaction those who would otherwise begin to convert
from faux to genuine money. Eventual taxes on windfall gains? You should be anticipating windfall LOSSES! (if you heedlessly remain true to their school). Another tactic
they employ is stoking the fear of confiscation (deja vu) in those who are students of history.

Is it any wonder that they have been mostly successful in forestalling the buying instinct of real money advocates?

Sorry for rambling, but this kinda thread pisses me off. It symbolizes that they are winning the war. Jeesh... I get up to take a leak, and now look at what
you've made me do!!! And people wonder why insomniacs can't sleep.

When those who would order various products (from Golden State Mint in this case) are told that they are only producing one ounce buffalo rounds - 100,000 per day - and still
unable to keep inventory in stock, it provides just one further harbinger of what is to come... if you train to become an adept bird watcher.

When Chris tells you he can no longer source junk silver inexpensively... the Fat Lady is done singing.

[beauanderos]

Spencer,

Secondary market physical silver does trade above the spot price. It's misnamed the premium.

[daviscfad]

Sorry to get you upset Ray, going back to premiums.. Yesterday I saw a guy wanting 17 face for quarters, 27'for engelhard.. I though man that's strong.. Then I see a guy wanting 14 for 90% and 21 for Eagles.. Then I see another guy who says I won't sell anything for cheap except some 10 oz opm's which if you bought 100 oz you could get for 16/oz.. Yet I shied away knowing these are the best deals I have seen in a few years.. I just couldn't bring my self to pay the premium on, in Reality this cheap silver, only because paper said its to high

[beauanderos]

Anyone who, by failing to buy into this market (despite premiums)... awaiting "lower prices"...

is buying into their game.

What I do is pretend (I won't have to do that for very much longer... self-fulfilling prophecy)... if I couldn't buy ANY silver
any longer, what would I like to be holding now... then watch the market and snag any relative bargains. Junk, for better
or worse, now seems to be trading at a base level of 14X face, while less than a month ago you could still find occasional
deals at 12.8X Plentiful stock abounds in strong hands, but awaits much higher pricing to entice holders to sell.

Normalcy bias works to your detriment in this scenario. While it's true that the second mouse gets the cheese, when a new
paradigm emerges it's back to the old adage of "the early bird gets the worm."

[daviscfad]

Absolutely,
You know everything has slowed and the real buyers are still buying.. notice the get rich crowd quick is gone.. heck most people i know say they are "sick" over these prices.. i just dont understand it.. in the situation we have going silver and gold are just waiting to bust out.. how many long time members do you know that bought to much at 30 plus an ounce and just dont wanna play anymore? As the wealthy has always said run when everyone is running to it, then run to it when everyone else is running away.. seems to be whats happening

[Cu Penny Hoarder]

Absolutely,
You know everything has slowed and the real buyers are still buying.. notice the get rich crowd quick is gone.. heck most people i know say they are "sick" over these prices.. i just dont understand it.. in the situation we have going silver and gold are just waiting to bust out.. how many long time members do you know that bought to much at 30 plus an ounce and just dont wanna play anymore? As the wealthy has always said run when everyone is running to it, then run to it when everyone else is running away.. seems to be whats happening

I suspect there are lots of them. I wonder how many sold for a loss?... how many are still hanging on?

If TPTB can maintain control, it could take many years for Ag to get back up to $50. Extreme patience is absolutely necessary.

[beauanderos]

Absolutely,
You know everything has slowed and the real buyers are still buying.. notice the get rich crowd quick is gone.. heck most people i know say they are "sick" over these prices.. i just dont understand it.. in the situation we have going silver and gold are just waiting to bust out.. how many long time members do you know that bought to much at 30 plus an ounce and just dont wanna play anymore? As the wealthy has always said run when everyone is running to it, then run to it when everyone else is running away.. seems to be whats happening

I suspect there are lots of them. I wonder how many sold for a loss?... how many are still hanging on?

If TPTB can maintain control, it could take many years for Ag to get back up to $50. Extreme patience is absolutely necessary.

I don't mind if they keep these prices sideways for another five years... but at some point I'm gonna want to retire and start spending part of
the stash.

[silverflake]

As usual, good info here all around. Here's my two cents. As a guy on a TIGHT budget (I always say my wife is able to squeeze 6 cents out of a nickel) the high premiums on silver has a noticeable effect on my purchases as I usually buy less than 20 ounces at a time. But that said, I no longer trust fiat. I just this minute bought some Austrian Phils from Provident for $18.54. thats about a $4 premium over spot. But you know what? I don't care. Given the choice between getting silver or getting a good deal, I'd rather have the silver. And frankly if God grants me my allotted 78 years on this planet, then 32 years from now as I approached death would I be happier handing my sons the silver I bought today at $4 premium or would i be sorry saying I tried to wait for a better deal and missed out....a little melodramatic, yes. Point is I am getting silver in hand and trading paper FRNs for it. I am happy. I don't feel ripped off.

OK, I am done. Keep up the great info folks.

Stack. Don't overanalize premiums.

[InfleXion]

In a downward market you would not normally expect supply to continue to be sold for a loss, but hedging throws that out the window because it doesn't matter what a dealer paid. They neutralize the metal they have in hand with the opposite in paper, and live on the markups. Since we can't generally buy for less than the dealers, they set the floor for us, and the only direction we can move the market as physical buyers is to either pay more out of pocket or else choose not to buy and let demand wane, neither of which is to be expected.

In an upward market you're likely to see a lot more deals as people take profits. That is where those of us who bought already get into a position to set the physical price a bit more, once whatever is being sold isn't widely available online. It takes some time for that to happen when dealers can undercut with new supply.

I am a fan of dollar cost averaging. I spend what I can afford to lose on a loosely regular basis and try to get the best deal I can at the given time somewhat regardless of spot price and premiums. I am currently waiting for indication of a move one way or the other before I buy more, because I've already bought what I'm comfortable with at these levels.

I do not trust the leveraged IOU system of debt as a reliable store of wealth, and am happy to acquire what I can afford for any price as long as it's what I deem as the best way to preserve my earnings. When it will run it's course I do not know, but I rest easy knowing that I am prepared in advance.

[daviscfad]

At a show today, I saw 90% for 13.5-16x face.. Cheapest one ounce I saw was 18/oz they were saying silvertowne is 14 weeks out on silver getting to you, couple dealers I heard saying it

[wheeler_dealer]

Shop I visited other day can't source US 90% except walk ins. Limited to in stock ASE's. Has Canadian maple leafs on order and a waiting list for them.

[Recyclersteve]

I would say that we all agree that paper silver is not the way to go.. everyone here wants physical.. that being said, why is it we are not more opt to pay the high premiums.. I would say silver buyers/ing over the last few years has remained constant.. The spot prices have dropped tremendously.. We all would like to buy physical silver at the paper spot price, but that doesnt happen much.. So if we have no faith in paper silver why are people not more willing to pay lets say 20/oz, when back in 2011 you would have bought everything you could at 20/oz.. I know we are not fools and want to pay as cheap as we can, thats not what i am getting at.. We let the paper stock, we dont believe in, control how we buy our silver.. why is this? Most who are buying are the ones who bought at 5,10,15,20,30,40/oz.. It looks like its coming but you would think physical silver would have its own trade rate way above the paper rate, yet it is constantly drug down by the paper we dont believe in.. THoughts?

If I take your logic to an extreme, you could argue that a single common date copper penny has more melt value than a $100 bill. And technically it does. But I wouldn't dare trade $100 bills (yeah I know it is just fiat) for pennies. At least not yet and likely not anytime in my lifetime.

So if that is a really obvious example, where do we draw the line? Everyone is different and that's what makes a market.

[Recyclersteve]

I would say that we all agree that paper silver is not the way to go.. everyone here wants physical.. that being said, why is it we are not more opt to pay the high premiums.. I would say silver buyers/ing over the last few years has remained constant.. The spot prices have dropped tremendously.. We all would like to buy physical silver at the paper spot price, but that doesnt happen much.. So if we have no faith in paper silver why are people not more willing to pay lets say 20/oz, when back in 2011 you would have bought everything you could at 20/oz.. I know we are not fools and want to pay as cheap as we can, thats not what i am getting at.. We let the paper stock, we dont believe in, control how we buy our silver.. why is this? Most who are buying are the ones who bought at 5,10,15,20,30,40/oz.. It looks like its coming but you would think physical silver would have its own trade rate way above the paper rate, yet it is constantly drug down by the paper we dont believe in.. THoughts?

the run to 50, on the crimex board, to me was over, when I read the letters, that were given to mini "raptor" hedge funds, that were buying board silver and WERE going to stand for physical delivery, thy got letters from the sellers that basically said, "to settle this, we will offer you $50 CASH , and if you insist on the physical delivery of the silver, we will default, and you, as an unsecured creditor, will be last in line, said time frame 5 years using our lawyers....so how do you want to resolve this?..the hard way, or the easy way?

savvy pro traders know which hill to die, and this wasn't it, so they took the $50.

Another way to look at it is this. Let's say someone with deep pockets demanded delivery of a bunch of 1,000 oz. bars. Yes, they know that if they play hardball the COMEX could default. But if they have 10 times as much in physical stored elsewhere they might not mind a default and could potentially profit from it.

The potential for a govt. windfall tax is an issue that could be problematic for many indeed.

[InfleXion]

I would say that we all agree that paper silver is not the way to go.. everyone here wants physical.. that being said, why is it we are not more opt to pay the high premiums.. I would say silver buyers/ing over the last few years has remained constant.. The spot prices have dropped tremendously.. We all would like to buy physical silver at the paper spot price, but that doesnt happen much.. So if we have no faith in paper silver why are people not more willing to pay lets say 20/oz, when back in 2011 you would have bought everything you could at 20/oz.. I know we are not fools and want to pay as cheap as we can, thats not what i am getting at.. We let the paper stock, we dont believe in, control how we buy our silver.. why is this? Most who are buying are the ones who bought at 5,10,15,20,30,40/oz.. It looks like its coming but you would think physical silver would have its own trade rate way above the paper rate, yet it is constantly drug down by the paper we dont believe in.. THoughts?

the run to 50, on the crimex board, to me was over, when I read the letters, that were given to mini "raptor" hedge funds, that were buying board silver and WERE going to stand for physical delivery, thy got letters from the sellers that basically said, "to settle this, we will offer you $50 CASH , and if you insist on the physical delivery of the silver, we will default, and you, as an unsecured creditor, will be last in line, said time frame 5 years using our lawyers....so how do you want to resolve this?..the hard way, or the easy way?

savvy pro traders know which hill to die, and this wasn't it, so they took the $50.

Another way to look at it is this. Let's say someone with deep pockets demanded delivery of a bunch of 1,000 oz. bars. Yes, they know that if they play hardball the COMEX could default. But if they have 10 times as much in physical stored elsewhere they might not mind a default and could potentially profit from it.

The potential for a govt. windfall tax is an issue that could be problematic for many indeed.

If the goal is to profit in debt based currency then it could be problematic temporarily, but a substantial price rise in precious metals would undermine faith in fiat currency as that is what the gold price is a bellwhether of. So I'm not personally concerned with any tax, because I won't be trying to sell for a profit until the profit I'm getting is in a currency backed by metal (what I consider to be an eventuality), in which case I would have no need to sell and could simply take advantage of the buying power of the metal if I wanted to acquire something else. Even if metals do not return to the standard currency, I do not believe that fiat currency will last in its current form, and I would still rather accept a windfall tax on my metal if the only other alternative was not having metal and being left with an empty bag in a default situation.

[68Camaro]

To paraphrase you asked "we let paper that we don't believe in drive the price of physical - why?"

The simple answer is that I'm not a market maker. If I answered to no one and had maybe 10 billion extra cash I could probably blow the lid off this fiasco. But I don't have that (obviously) and neither do any of the metal believers we can name. Even the rich ones like Sprott or Salinas aren't quite at that level. A billion or two isn't enough because Sprott tried and it wasn't enough - at least 4 years ago. (It would buy more ounces now so would come closer.)

In the meantime I buy at the best available price.

[Rosco]

Also buying a best price an its .999 on the net. Not buying much but I'm 78 an coasting along

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