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Just my 2 pennies worth, but I really feel we are all in a history making event. There is a historic run up in Ag prices with a very odd pull back not to mention a historic lows in the value of our dollar. There are plenty of stories that discuss price manipulation (which I believe in some fashion or another are true to a point). Oil is spiking along with commodity prices and here comes inflation. The perfect storm for under valued Ag.

The storm has started and it is trying to wrestle the "physical metal" we have all come to hold from us with a fear of dropping prices or the "bubble". It is a made up storm conceived to fool us into letting go for some profits or a fear of loosing $$$.

If you can don't let go of your physical Ag. The fake storm will pass and the real truth will come to light. Silver is going to take off and the players behind the storm know it. APMEX would not be hitting up their customers if they felt the price was going to drop or the bubble was going to pop. They know what is coming and are trying to prepare themselves. The worlds stocks of physical metal are being eaten up and all that is being left is simply paper.

Do you want to be a part of history or a spectator on the sidelines.?

is it possible that by apmex saying they want to buy coins, they are likely to get more people to buy from them thinking "well shoot if apmex is buying i probably should too"

just .02

I would agree with you except APMEX has not done this in the past as far as I know. We all know there is not a glut of Ag on the market either.

APMEX makes $$$ buy selling product. If you have no product to sell you make no $$$. Think if Walmart came calling and said, "Hey we will buy that aluminum foil you bought last week for $1.98 back from you for $2.50." That tells me Walmart knows that item is going to be in short supply and the price is going to go way up.

You need to remember that big dealers are hedged and therefore relatively immune to price changes. They make money from the spread like the bookies and stock and option market makers. They do NOT want to have any exposure at all and will be content with matching buyers and sellers and clearing the markets.

Great post!

Spread the word. Dump that rotten fiat and turn it into real money

lakehouse wrote:You need to remember that big dealers are hedged and therefore relatively immune to price changes. They make money from the spread like the bookies and stock and option market makers. They do NOT want to have any exposure at all and will be content with matching buyers and sellers and clearing the markets.

How do you hedge on paper when you buy at $3 over paper spot? I have a feeling that APMEX is not hedging, but seeing actual physical shortage and the only thing they can do to fill orders is to pay up. They MUST have more buyers than sellers. Their selling premium has also gone up. Why do suppose that is?

I've notice a strong contrarian tone to your posts so far. That's great! You'll learn so much from the good folks here at realcent.

Bring on the history!

As someone who would like to be using PMs and base metals as stable money, I'm a bit divided over the run up in the silver price. Clearly there is more to it than just inflation alone, although public awareness of inflation and fiat instability are obviously factors. I have sold some silver for about double what I paid four years ago in nominal (Canadian) dollars, and it seems obvious to me that paper money has not just diminished in value by a corresponding factor over that period to cancel out any increase in buying power. When a real buyer offers about 3x what I paid I will probably sell most of the rest aside from coins with sentimental value to me. Although that would increase the buying power of my small investment by almost the same factor minus inflation losses, I would actually be happier with a stable low price that roughly tracks inflation so I could just keep socking money away without worrying about downside risk. Barring collapse and hyperinflation as some predict, I expect bargain basement prices to return again someday and that's when I will buy silver again. In the meantime I will focus on what I can still buy cheaply, circulating coins.

I agree that the paper manipulation has gone into high gear. We are still flirting with $46.00 I think the paper tiger is being exposed for what it is. As I stated in a different thread, I am selling my "no name" bullion and keeping my core position intact. I am watching for dips (real dips) to reinvest. The fundamentals of physical silver have not changed, the FED has not changed. The US Govt has not changed.

You want to see me bearish on Silver? Find easy to mine silver all over the world and pass a national budget that starts to pay back the PRINICPLE of US foreign debts.

The Chair of the Fed will clear every thing up at noon today. That is if any one can understand his double talk.

The only manipulation I can reasonably say happens is every year at the week of the state of the union speech stocks go up and metals go down.
I'm not a big believer in 100paper to 1oz(could be though). I'd say it would be more like 20-1. I do not think any institution will crash over this manipulation.

Buying an oz of silver is an act of manipulation in itself.
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Silver has been a great investment for alot of people. You just have to realize the profit, everything else is imaginary. Right now it is a hedge and risky at that I'd have to agree.
But on the flip side I wonder by next year will 50 be stable.
Silver does look like a bubble when you look at the graph. Most people like jim rogers believe that aswell -if it keeps going up from here-, but the trend is up.

What would happen if the fed decided to raise interest rate to 8% for a month? Volker raised rates to 10%, but only a short while. When bernake said he could raise rates in 15 minutes I believe him.

Edit This bottom should have been in another tread-"Silver to sub 40"

Market Harmony wrote:Great post!

Spread the word. Dump that rotten fiat and turn it into real money

Help the new guy(me) out here. If we dump the "fiat" money for metals, don't we eventually have to redeem our metals back and get the "fiat" money again? Unless we ever go back to metal-backed money, what is the difference in the end.
Mind you, I am all for stacking the metals, but not following how we are ever going to get away from selling it off in the end for more paper money.

OldPeddler wrote:The Chair of the Fed will clear every thing up at noon today. That is if any one can understand his double talk.

Never believe anything in politics until it has been officially denied.
Otto von Bismarck

DJS wrote:

Market Harmony wrote:Great post!

Spread the word. Dump that rotten fiat and turn it into real money

Help the new guy(me) out here. If we dump the "fiat" money for metals, don't we eventually have to redeem our metals back and get the "fiat" money again? Unless we ever go back to metal-backed money, what is the difference in the end.
Mind you, I am all for stacking the metals, but not following how we are ever going to get away from selling it off in the end for more paper money.

I'm sure that you've heard by now that silver and gold ARE money. Never doubt that. It is freely exchanged in any currency at market rates +/- premium/discount (transaction costs) for physical at any time. As fiat depreciates and loses purchasing power, silver and gold are hedges against this devaluation due to the elastic supply of fiat and inelastic supply of PM's. Some PM's like silver have been undervalued and are simply catching up to find a new harmony with available fiat. These are the opportunities presented to an astute investor of PM's... finding the most undervalued "money" and buying it until everything around it devalues itself against it.

DJS wrote:

Market Harmony wrote:Great post!

Spread the word. Dump that rotten fiat and turn it into real money

Help the new guy(me) out here. If we dump the "fiat" money for metals, don't we eventually have to redeem our metals back and get the "fiat" money again? Unless we ever go back to metal-backed money, what is the difference in the end.
Mind you, I am all for stacking the metals, but not following how we are ever going to get away from selling it off in the end for more paper money.

We're not recommending that you use your grocery money to buy metals. However, if there are any frivolous expenditures in your life you might consider eliminating or postponing them and using your FRNs for something more lasting in value.

RxForPain wrote:I would agree with you except APMEX has not done this in the past as far as I know. We all know there is not a glut of Ag on the market either.

APMEX makes $$$ buy selling product. If you have no product to sell you make no $$$. Think if Walmart came calling and said, "Hey we will buy that aluminum foil you bought last week for $1.98 back from you for $2.50." That tells me Walmart knows that item is going to be in short supply and the price is going to go way up.

Back when silver dropped to the $9 range and there was a shortage problem they had written to me offering to buy my junk for $2.50 an ounce above melt... so this isn't the first time they've solicited former clients.

Market Harmony wrote:How do you hedge on paper when you buy at $3 over paper spot? I have a feeling that APMEX is not hedging, but seeing actual physical shortage and the only thing they can do to fill orders is to pay up. They MUST have more buyers than sellers. Their selling premium has also gone up. Why do suppose that is?

I've notice a strong contrarian tone to your posts so far. That's great! You'll learn so much from the good folks here at realcent.

Bring on the history!

For advanced hedging they'd use ETFs, options and/or futures if need be, but the easiest way is to simply presell whatever they have agreed to buy. If they buy at spot+3 and turn around and pre-sell at spot+5 they have a nuetral position (absent parties not delivering on either end) and locked in the difference. I've talked to a few scrapyard dealers at auctions about how they operate -- the larger yards try to stay neutral and just make their spread and profit from the volume they put through. The smaller operators tend to be gamblers who think they can time the market. I can't imagine these large coin houses risking their business on the prices of metals.

I don't know if I'd call myself a contrarian per se but rather an investor with a high risk aversion. I've done well with both gold and silver but I'm not going to risk too much trying to squeeze out every last bit. I've actually been shifting over to piling nickels which I view as a better risk/return tradeoff right now. I've also picked up a lot of building materials at bankruptcy auctions (electrical and plumbing mainly) and will try to wait until construction rebounds next cycle. I guess the contrarian tag would apply by definition in that I tend to look at more out of favor areas than riding waves. Gauging supply and demand is always tricky so I try to learn from the past; whether its stocks, metals, collectibles, or whatever.

DJS You will get as many opinions as there are people here. I have a core position that I bought at $25.00 It would have to go to 50 for me to double my money. If I had bought silver at $4.00 I would have doubled my money when it hit 8.00. The higher the price goes, the higher the price needs to go for you to get a "stellar" return.

On the other hand... If APMEX, the US mint, PSLV and the Canadian Mint are on record as having trouble locating physical silver, but at the same time SLV can get 5 million paper ounces overnight....Then I think it is a safe assumption there is paper manipulation goin on. I am waiting for the crash or the bailout. If/When this manipulation is disinfected by sunlight, I believe Physical Silver will return to it's historical value of 16 to 1 Gold ratio. Hopefully the world will return to a gold backed currancy.

I will sell my silver then...if it is not illegal to own at that point.

Also, I am a Hotel Manager. I am not a trader or a money manager. Take what I say with great caution. I NEVER advise people to do ANYTHING.

A lot of people lately have been mentioning that Ag must still be going up and is getting ready to explode. I understand why many would think this way, but it is a very bad idea to factor in the fact that Apmex is trying to acquire more physical ASEs and is soliciting to pay a nice premium into your rational of thought. What Apmex does in their business regarding this latest news should not play into ANY decision making about how you feel about this market.
Look, they are a business and they are out of a product, they will sell you a product today for a high premium and lock in your price hoping they can fulfill your order. Therefore, they are willing to pay less of a premium and lock in a price to get the product, simple business and has nothing to do with the future price of Ag.

Just for kicks, think of it like this:
For instance, what if I told people that I would take their orders for purchasing eagles and lock in the price at $60 a pop
and customer pays shipping. Then, I told other people I would pay $55 for eagles and they pay shipping to me.
In the end, it is still $5 made on every eagle I was able to fulfill.
They do not pay shipping either way, when they sell or when they buy.
I really don't think Apmex is speculating in this situation about the future price, I just think
they can takes orders and make money...seems like an easy choice for them regardless of how the
market plays out. They just lock in the price on both ends and voila.
So, once again, I would caution against using this data as a factor on how you gauge your decision
in the market.
Now, the fact that they are sold out of these is a completely different issue

I didn't do a very good job with my ideas when I started this thread. When I think of history being made I look at all the factors that have an upward impact upon Ag.

National Debt/State and Fed. spending
World Debt
Mideast polictical/social unrest
Oil $$
Fed (printing money, devaluation)
Inflation/basic commodity prices up
Market manipulation
Paper PMs/shorts
Limited supply
High demand
Artifical interest rates (Fed again)
Stimulus spending
Imbalance in Ag/Au ratio
Expanding industrial demand

To me this is the perfect storm and history making. Taking a few items at a time we can argue in multiple directions, but when you take this list as a whole and how interconnected it is I can't come to any other conclusion than prices are going up.

Maybe I have been working in the yard too long and have heat stroke. Again just my two coppers worth.

RxForPain wrote:I didn't do a very good job with my ideas when I started this thread. When I think of history being made I look at all the factors that have an upward impact upon Ag.

National Debt/State and Fed. spending
World Debt
Mideast polictical/social unrest
Oil $$
Fed (printing money, devaluation)
Inflation/basic commodity prices up
Market manipulation
Paper PMs/shorts
Limited supply
High demand
Artifical interest rates (Fed again)
Stimulus spending
Imbalance in Ag/Au ratio
Expanding industrial demand

To me this is the perfect storm and history making. Taking a few items at a time we can argue in multiple directions, but when you take this list as a whole and how interconnected it is I can't come to any other conclusion than prices are going up.

Maybe I have been working in the yard too long and have heat stroke. Again just my two coppers worth.

I concur fine sir, I agree 100%