Silver - $27 going to Zero! Call your boss..beg for job back

[Recyclersteve]

Gosh it would be tempting to buy a 100 oz. bar if I could get it for about $1,000. Remarkably, that is not that far away the way things are going now.

Actually, I'm getting even closer to the point where I could trade a 1 oz. premium gold coin like a slabbed Double Eagle for a 100 oz. bar of silver. Amazing!

[Country]

Carpe Diem gentlemen !

[Treetop]

I started buying small amounts again lately. Replenishing what I had sold of for the down payment on our home a few years back. I wasnt exactly waiting for this low of a price although that is obviously nice. It just happened to be when I had limited funds left over after the various projects Im doing around the homestead.

[johnbrickner]

No evaluation needed on my part. I follow my protocol for buying. It's difficult to forget GovMint ASEs for $16.95 and Generics at around $15 as starting places: 1) price going down; 2) keep enough dry powder should the price fall further; 3) buy the best deal you can within your budget; 4) watch for the price to go down further; 5) repeat.

My first rounds cost $5 so I started out in favor at that level. Bricks (hey, that's my name) at $500 would get me to change my protocol.

[Recyclersteve]

Bricks (hey, that's my name) at $500 would get me to change my protocol.

One thing about super cheap silver is that we'd have to be on the lookout for is fakes. Why, you ask? Because there would be such a huge amount of silver bought and sold (quickly) that dealers would have no good way to check everything they bought before selling it. I believe counterfeiters would be aware of that and would put a few more fakes in the coins they are selling because they would realize the chances of being caught would be very slim.

There reminds me of a story in The Big Silver Melt about someone who knew the melting operations (ca. late 1960's) were quickly pouring bags in to be melted. Pages 14-15 talk about an extreme example. One large capacity burning operation would cut the lead seals off the bags and dump the entire bag (with the coins inside) into the melting pot. When the bags went in with coins, the burned cloth from the bag would float to the top as carbon deposits in the slag and didn't contaminate the molten metal.

In one case a bag that was supposed to contain dimes had pennies in it. The weights of the dimes and pennies were about the same. The bag didn't "feel" right to the worker, so he decided to open it up and check. There were 6 such bags filled with pennies instead of dimes. I am curious what the melting operation person said to the person who sold the coins to them. This isn't mentioned in the book, but I wish I had been a fly on the wall when those two got together after the passing of 6 bags of pennies designed to fool the buyer.

[InfleXion]

I haven't been watching the charts, wasn't expecting to see these prices. For all I know the GSR might go to 100, but the current GSR at 85 screams buy to me. Of course rounding into a position / DCA is never a bad idea. The higher the GSR goes the more fear there is in the market (gold demand), and what's good for gold is good for silver eventually.

[scyther]

Bricks (hey, that's my name) at $500 would get me to change my protocol.

One thing about super cheap silver is that we'd have to be on the lookout for is fakes. Why, you ask? Because there would be such a huge amount of silver bought and sold (quickly) that dealers would have no good way to check everything they bought before selling it. I believe counterfeiters would be aware of that and would put a few more fakes in the coins they are selling because they would realize the chances of being caught would be very slim.

There reminds me of a story in The Big Silver Melt about someone who knew the melting operations (ca. late 1960's) were quickly pouring bags in to be melted. Pages 14-15 talk about an extreme example. One large capacity burning operation would cut the lead seals off the bags and dump the entire bag (with the coins inside) into the melting pot. When the bags went in with coins, the burned cloth from the bag would float to the top as carbon deposits in the slag and didn't contaminate the molten metal.

In one case a bag that was supposed to contain dimes had pennies in it. The weights of the dimes and pennies were about the same. The bag didn't "feel" right to the worker, so he decided to open it up and check. There were 6 such bags filled with pennies instead of dimes. I am curious what the melting operation person said to the person who sold the coins to them. This isn't mentioned in the book, but I wish I had been a fly on the wall when those two got together after the passing of 6 bags of pennies designed to fool the buyer.

What an interesting and rightening story. I don't understand people who aren't concerned about counterfeits and simply assume they're rare and not an issue.

[aloneibreak]

kitco says it’s silvers best up day in nearly 2 years

[Recyclersteve]

There is an old saying "One day does not a trend make." Although today was a good day for silver (they're saying it was due to dollar weakness- we shall see), there are several things I'd be looking for before getting more excited about silver. Keep in mind that I am using the SLV exchange traded fund, which is considered to be a good proxy for silver (not spot silver per se). The reason I use SLV is because it has been trading well over a decade and it is easy to get all kinds of charts on it to spot developing trends, etc.

The things I'd be looking for are these:

1) SLV to go above the 50-day moving average (dma)
2) SLV to go above the 200-day moving average (dma)
3) The 50 dma to go above the 200 dma (this is a fancy way of saying that silver has done better in the past few months than it did over the last year or so)
4) The 200 dma to be sloping upward
5) There should also be a significant spike in volume as silver breaks out and runs higher

Current prices (and they change daily) are:
SLV itself: $13.83/oz.
50 dma: $15.05
200 dma: $15.63

Currently we have none of the 5 items above. For the SLV ETF to hit $15.63, silver would need to go up 13%. So we are a ways away from this becoming anywhere near exciting. All that said, when silver gets moving, it can move 13% in what seems like a heartbeat (like it did in 2010-2011).

Believe me, I'd love for today to be the beginning of a huge move higher as I would personally stand to benefit nicely if that were the case. To me it is like getting excited that the drought is over when you just got 1/10 of an inch of rain.

[Rktect]

Well, I see that a lot of people are feeling the pain of these lower prices. When I saw silver in the $40’s there was no way I would buy. It dropped to the 30’s. Still no way. Dropped into the 20’s and I didn’t want to touch it. When silver crossed below $20 I started buying. Which was about a year plus ago. Today I am at about 175 ounces with average being roughly $18. As it drops more I buy more. But when the price reaches below $10 I may start to feel like some here except I am really buying it now because I like it and plan on leaving it to my kids when I leave this world hopefully no sooner than 30 years. If silver hits $40 again I will be a seller at that point. It’s all win win for me. Silver at $9 for me is any easy 500 ounce buying opportunity. So I guess what I am saying is, bring on the $9 price.

[68Camaro]

Well, I see that a lot of people are feeling the pain of these lower prices. When I saw silver in the $40’s there was no way I would buy. It dropped to the 30’s. Still no way. Dropped into the 20’s and I didn’t want to touch it. When silver crossed below $20 I started buying. Which was about a year plus ago. Today I am at about 175 ounces with average being roughly $18. As it drops more I buy more. But when the price reaches below $10 I may start to feel like some here except I am really buying it now because I like it and plan on leaving it to my kids when I leave this world hopefully no sooner than 30 years. If silver hits $40 again I will be a seller at that point. It’s all win win for me. Silver at $9 for me is any easy 500 ounce buying opportunity. So I guess what I am saying is, bring on the $9 price.

Depending on the round/coin 18 isn't far off the retail price especially for a BU ASE.

Welcome to RC! Please introduce yourself on the intro thread.

[Rktect]

Well, I see that a lot of people are feeling the pain of these lower prices. When I saw silver in the $40’s there was no way I would buy. It dropped to the 30’s. Still no way. Dropped into the 20’s and I didn’t want to touch it. When silver crossed below $20 I started buying. Which was about a year plus ago. Today I am at about 175 ounces with average being roughly $18. As it drops more I buy more. But when the price reaches below $10 I may start to feel like some here except I am really buying it now because I like it and plan on leaving it to my kids when I leave this world hopefully no sooner than 30 years. If silver hits $40 again I will be a seller at that point. It’s all win win for me. Silver at $9 for me is any easy 500 ounce buying opportunity. So I guess what I am saying is, bring on the $9 price.

Depending on the round/coin 18 isn't far off the retail price especially for a BU ASE.

Welcome to RC! Please introduce yourself on the intro thread.

That just means they stop melting each other’s silver down and remaking with their own design on it.

[Cu Penny Hoarder]

Well, I see that a lot of people are feeling the pain of these lower prices. When I saw silver in the $40’s there was no way I would buy. It dropped to the 30’s. Still no way. Dropped into the 20’s and I didn’t want to touch it. When silver crossed below $20 I started buying. Which was about a year plus ago. Today I am at about 175 ounces with average being roughly $18. As it drops more I buy more. But when the price reaches below $10 I may start to feel like some here except I am really buying it now because I like it and plan on leaving it to my kids when I leave this world hopefully no sooner than 30 years. If silver hits $40 again I will be a seller at that point. It’s all win win for me. Silver at $9 for me is any easy 500 ounce buying opportunity. So I guess what I am saying is, bring on the $9 price.

I started buying when I was a kid about 1976, really as a coin collecting hobby. Then after learning about inflation and the banking system, I started buying in size around 1985. I still have several $500 FV junk bags I bought from back then.

If silver slowly trickles down to $9, you should have a nice buying opportunity, but keep in mind the premiums will be higher. If silver drops to $9 quickly, you won't find any to buy at that price except maybe very large bars.

Welcome to the forum.

[johnbrickner]

<snip> If silver drops to $9 quickly, you won't find any to buy at that price except maybe very large bars. <snip>

Could you detail your thoughts on this? I'd be very interested in knowing how you come to see this. Are you thinking sources would dry up?

[Recyclersteve]

<snip> If silver drops to $9 quickly, you won't find any to buy at that price except maybe very large bars. <snip>

Could you detail your thoughts on this? I'd be very interested in knowing how you come to see this. Are you thinking sources would dry up?

I know Cu Penny Hoarder will have an opinion on this, but I wanted to add something as well. When silver fell to $9ish in Fall (they don't call it fall for nothing!), 2008, it did so very quickly and only for a very short time. At that time, the premiums were very high and a dealer I've known for a long time said he would only sell 2 silver American Eagles per customer. Not 2 monster boxes or rolls even, but just 2 coins. He may have very well had more in the back room and felt that silver would rebound in due time. That part, I can only speculate on.

I remember checking with a number of dealers in the area and it was VERY DIFFICULT to get silver. I had to resort to buying other stuff than just plain old 90% junk. For instance, on 10/18/08 a dealer did have a NGC MS-69 set of 20 ASE's for sale (dated 1986 thru 2005) that I paid $500 for. But the premiums were very high.

[Rktect]

OK, so when I said $9 I did not mean a massive drop in one day, a week or even a month. It would take some time for silver to do this at these lower levels in my opinion. We get used to prices either higher or lower. People will sell and people will buy. There is a lot of silver on the market these days. Sure, they may not produce a lot more below a certain price point but the market has plenty of old stock. Adding a 50% premium onto old stock silver is crazy in the long term if silver hit $9 and stayed there for a year, two three. eventually the market will settle itself down.

[Treetop]

I am the last to ask about such things most likely, so happily ignore me, but seems to me we will never see silver as low as 9 in the longterm unless we figure out how to mine the oceans ifficnetly or something like that.

[Rktect]

I am the last to ask about such things most likely, so happily ignore me, but seems to me we will never see silver as low as 9 in the longterm unless we figure out how to mine the oceans ifficnetly or something like that.

Maybe not but in 2014 when silver was at $25 did you see $14 coming?

[Treetop]

I am the last to ask about such things most likely, so happily ignore me, but seems to me we will never see silver as low as 9 in the longterm unless we figure out how to mine the oceans ifficnetly or something like that.

Maybe not but in 2014 when silver was at $25 did you see $14 coming?

I kinda did actually. It was honestly mostly a gut feeling. I was tempted to sell the stash (before it was lost in a lake of course) then buy it back later. Not that this was indicative of much, it was mostly a hunch.

[InfleXion]

It looks like the last price check here was at 13.83 on Nov 1st. Today I snagged some CMLs for $2 over spot at 16.35 which makes spot 14.35. The shop keeper said gold demand was up lately, and he couldn't sell me any SAEs which he'd committed to another buyer. Gold fracs were priced well at 1/4 oz (320 ea. ~ 1280/oz) but not so well at 1/10 oz (135 ea. ~ 1350/oz) with spot at 1222. He mentioned that China has a new gold and silver backed currency which I hadn't been tracking.

[68Camaro]

...
The shop keeper ... mentioned that China has a new gold and silver backed currency which I hadn't been tracking.

I still haven't seen any confirmation of that. There are a lot of speculative articles that that is in the works, going back several years, with the most recent being this past summer and largely regurgitating previous speculation, usually working to tie in the creation of the Chinese gold exchanges with trade agreements converting yuan to oil, etc. But nothing concrete. So if anyone has found any news releases on this I would love to see the link.

[Treetop]

Ive read a bit about chinas claimed gold back currency as well. Seemed possible at first but after I had looked into and realized the level of internal debt they have and the speed they are accumulating it, its hard to believe its real. Unless their plan is to completely inflate themselves as much as possible, then have a backed currency rise up as their current one falls on its face.

[InfleXion]

The only thing I found is from last year about a crude oil futures contract that is convertible between yuan and gold to bypass the petro-dollar, but isn't a gold backed currency. Since they are net acquirers of gold they probably enjoy the current price for now.

http://www.eurasiareview.com/05092017-c ... yuan-oped/

[Cu Penny Hoarder]

<snip> If silver drops to $9 quickly, you won't find any to buy at that price except maybe very large bars. <snip>

Could you detail your thoughts on this? I'd be very interested in knowing how you come to see this. Are you thinking sources would dry up?

Refer back to 2008. The market was crashing and people always want hard/tangible assets when that happens. The reason why PM prices dropped so much is because investors were panicking and selling EVERTHING, mostly to meet margin calls. Regarding physical Ag, it was hard to find anything below 100oz bars then. I believe it was a combination of dip-buyers snatching up anything they could get and dealers pulling their inventory. Very few ASE's and $1000FV 90% bags were available and premiums were very high. 100oz bars were there, but it was slim pickins. 1000oz bars were the most available.

10 years later...
This stock market downturn is going to escalate and it will be worse than 2008. The last 10 years of gains was precipitated mostly by Federal reserve liquidity injections. The Fed will try, but they won't be able to stop this next crash. This recent market downturn is only the beginning of it. The stock market is still very overvalued and has much lower to go.

Whoever is sitting on the fence waiting to buy silver, you better get it NOW while it's still available. Don't forget ammo, food and water.

[Recyclersteve]

10 years later...
This stock market downturn is going to escalate and it will be worse than 2008. The last 10 years of gains was precipitated mostly by Federal reserve liquidity injections. The Fed will try, but they won't be able to stop this next crash. This recent market downturn is only the beginning of it. The stock market is still very overvalued and has much lower to go.

Whoever is sitting on the fence waiting to buy silver, you better get it NOW while it's still available.

I agree that the market gains were largely fueled by the Feds injecting massive amounts of liquidity. But I wouldn't be so confident that the ultimate giant pullback has already begun. It could easily go on for several more years before things truly get interesting (maybe I should have said scary). I do think that a 20% pullback in perhaps 2 months or less would be very very healthy.

The analogy I like to use, distasteful as it might seem, is the college student who has had too much to drink. They know that if they throw up they will feel better pretty fast. They try sticking their fingers down their throat and nothing happens. But they just know they need to vomit.