Realcent.org

Hey all,

Like the title says, i'm fairy new to seriously investing in precious metals... and I do have a few concerns I would like addressed by you guys.

Let me start by saying I always understood the concept gold and to a lesser extent silver have been used for money for over 5000 years. Especially in this environment when the whole world is using a fiat currency system.

My concerns however is when I see people on other metal investing forums, who seem to know what they are talking about, saying stuff like gold and very soon silver will hit a bubble and drop sharply. They seem to have such faith in the fed reserve note. Is there something I am missing? Also I hear constantly how "silly" it is of me to hoard copper and nickel, even boxes at a time, hopeing in the future it will be worth the time. I got really interested in this by listening to Mike Maloney. According to him, we are going to see the single largest wealth transfer from the single largest fall of fiat currency the history has ever known. So silver prices at $40 and even $50 are a bargin and you should keep buying? Please chime in guys and give me some advice. Thanks!

I cannot call myself an expert on this.

Some people might truly believe gold is "in a bubble". Can't see it, myself. The dollar is fiat money, "faith and credence".

The Powers That Be have discovered that they can create extra money and not have it show up as inflation for about two years. Effectively kiting checks with a two year lag time. When the bill comes due, they pay it with another kited check, plus a kited check for the extra spending they have done since then. After a while the amount due goes vertical (hyper inflation). Washington could save the dollar by stopping deficit spending and letting inflation peter out, but they aren't about to do it, being addicted to the "nice things in life".

As may be. But China was the first with fiat money, thousands of years ago, and ran into the printing press problem, and so has everyone else who has tried it. Fiat money is supposed to have an average life expectancy of 200 years. The US has had fiat money for around 225 years, all together. We might figure fiat money since the last default after the Civil War (146 years). But, "200 years average". Washington is trying to do the wrong things better than anyone else.

Some of the people bad mouthing PM might just be jerks, they might be fools, or they might be trying to drive down the price so they can buy more. No telling.

us fiat started in 33 or more like 65 or 70.

People have a bubble mentality. On the way to their eventual highs, we will get too high and too low at times, overbought and oversold or whatever term you choose to use. Those are small bubbles and will be corrected like when silver fell to $8 a while back. - on paper anyway.
but with a publicly stated goal by the IMF to a global currency, the dollar is in it's days of demise. When that is complete our currency will be backed by our manufactured goods which to say the least are non-competitive.
In the end I can count on Gold and Silver to be worth whatever they were when I bought them in purchasing power.

Advice is given from your personal financial adviser.

If you listen to other faceless folks without doing the research then I believe you fall into the definition of "sheeple". I'm not being rude, sir, simply laying it out for you in the best way for your well being in the long run. Do the research, evaluate your risk tolerance, decide on your percentage of wealth to invest, and the type of PM portfolio which you would like to have. This includes diversification into different metals and different styles. Once you feel comfortable with it, then act.

Market Harmony is right. You have to do your own due dilegence. What I said was just an opinion, and everybody has one.

fb101 wrote:us fiat started in 33 or more like 65 or 70.

No, that was when the paper was cut loose from the backing. It was fractional before, and switching from physical gold in 33 and dropping silver in 64 was just stepping a little further away from reality.

Market Harmony wrote:Advice is given from your personal financial adviser.

If you listen to other faceless folks without doing the research then I believe you fall into the definition of "sheeple". I'm not being rude, sir, simply laying it out for you in the best way for your well being in the long run. Do the research, evaluate your risk tolerance, decide on your percentage of wealth to invest, and the type of PM portfolio which you would like to have. This includes diversification into different metals and different styles. Once you feel comfortable with it, then act.

You are right I do need to do my research and I am currently, but to lump me in with "sheeple", people who think the only real money is the dollar, think investing in PM is a joke, etc is a bit too much dont you think? Perhaps advise was not the right term to use. I was simply looking to see what the vets think. Just because I don't know everything about PM does not mean I am a sheep.

Don't be so defensive. One must humble himself in order to learn.

The members here made an honest effort to put you together.

Welcome to Realcent.

Michcool125 wrote:You are right I do need to do my research and I am currently, but to lump me in with "sheeple", people who think the only real money is the dollar, think investing in PM is a joke, etc is a bit too much dont you think? Perhaps advise was not the right term to use. I was simply looking to see what the vets think. Just because I don't know everything about PM does not mean I am a sheep.

I agree. You are not one of the "sheeple." I think MH was being a little hard on you when you were just looking for a few opinions. It sounds like you've already done some research. However, I've been involved in PMs for a few years and still have much to learn. Anyway, here are a couple sites that I like:

http://dollarcollapse.com/

http://www.zerohedge.com/

http://www.financialsense.com/

http://www.kitco.com/

Also, I think that it is just as important to listen to the opinions of those who are not bullish on PMs. Nadler at Kitco is one good example. My only other advice is that if you've decided to build a position in gold/silver buy a little at a time and perhaps a bit more on the dips. If you truly believe that PMs are a good long-term investment, the spot price shouldn't matter.

Good luck.

Thanks guys for all the info... appreciate it.

One more consideration might be diversification. No one really knows how the current multi-year, multi-currency crisis will end. So, hedge yourself. That might include owning some real-estate (or some part of it) or owning some stocks. Or some bonds. Or some precisous metals. Absolutely no one knows how this will turn out, including Ben B. Maybe the fiat currency lasts another 50years. Maybe inflation is moderated by globably over-capacity. Consider diversification so that several different scenario's work reasonably well for you.

For me personally, holding some silver and copper coins will work out nicely however things turn out. THey won't save me in the very worst scenario's, but I don't expect that I would be a survivor in a Mad Max world anyway.

Mossy wrote:I cannot call myself an expert on this..

I can call you an expert, Mossy! I also agree.

Michcool125 Welcome To Realcent!

There are lots of great folks here and lots of knowledge....keep reading, doing research and follow your gut and don't be afraid to act.

I see you have four posts and joined Sep 15, 2011 so I'll make you a deal that you want get anywhere....

Market Harmony is not a bad guy and one you can trust! (I have not talked to MH before making you this offer so hopefully he want mind.)

Since you have four posts, I'll make you a little offer. Buy up to four ounces of silver from Market Harmony http://marketharmony.net/ at whatever price he charges you for those four ounces plus shipping, I'll guarantee that I will buy them back from you are the same price on September 15th 2012 or sooner if you wish.

Basically you have no downside rise but the time value of money...I'm that confident that silver is going up and if it dips and you want to cash out and make a little profit, great...

Again, welcome......

Hi Mitchcool125! Welcome to the madness!

The math on this one is really simple (and why it appeals to me! ) Look at any commodity and do the math. Does it cost more today than it did ten years ago? The answer is "yes" to everything I can think of.

Laying the dynamics of supply and demand aside, has the intrinsic value of any commodity really grown in ten years? Take gasoline for example, has a gallon of gas really grown in value in ten years, or did the value of the monetary unit we buy gas with shrink in value? The latter is the case. The purchasing power of our monetary unit, the Federal Reserve Note (FRN), has shrunk, therefore all items purchased with FRN's require more FRN's to make that purchase.

I recently sold some American Silver Eagles (ASE'S). Using dollar cost averaging for all ASE's I bought in the last ten years to gauge my Return On Investment (ROI), the ROI was 314%. I more than tripled my money. (And that is a good thing, for the commodity I buy most is asphalt... it has almost tripled in FRN price in ten years, too. )

Like everyone else has said, you have to do your own due diligence on this. Determine your own risk tolerance. For me, metals are the best safe haven for my meager wealth.

OBTW: Market Harmony can come off a little gruff sometimes, but he is usually right. If you don't like what he says, just tell him to blow it out his shorts! It will be fun to watch the sparks fly!!

Mossy wrote:Market Harmony is right. You have to do your own due dilegence. What I said was just an opinion, and everybody has one.

fb101 wrote:us fiat started in 33 or more like 65 or 70.

No, that was when the paper was cut loose from the backing. It was fractional before, and switching from physical gold in 33 and dropping silver in 64 was just stepping a little further away from reality.

There are different definitions of money. For me the bottom line is that for paper or e-currency to be used (and I would have no problem with it in this context) it needs to be redeemable with PM, and the government needs to literally back every issued note with a full amount of stored hard PM.

I have mixed feelings about fractional in the banking system, and my mental jury is still out on that, but I think there is a liquidity issue if you don't allow the government some ability to expand and contract money supply to support trade and commerce. If the government could actually operate on a balanced budget, and the items here were constitutionally required, I think a workable system could result. It's when our politicians lost all sense of self-restraint in a system with no rules that it all came apart.

68Camaro wrote: I have mixed feelings about fractional in the banking system, and my mental jury is still out on that, but I think there is a liquidity issue if you don't allow the government some ability to expand and contract money supply to support trade and commerce. If the government could actually operate on a balanced budget, and the items here were constitutionally required, I think a workable system could result. It's when our politicians lost all sense of self-restraint in a system with no rules that it all came apart.

Agreed.

Earlier, "they" were using fractional PM backing of the dollar; no way did they actually have enough metal to cover the paper. No way, no how. So long as everything is going well, no harm, no foul. However, since when do politicians, as a group, have any self restraint? Few enough have any restraint when it comes to stuff they could get nailed for (heard some raunchy stories about legislators when I worked in Juneau, including one charactor wandering around a hotel in his underwear, looking for one of his interns, blown out of his mind on illegal drugs and booze). (At least /that/ intern was female, and of legal age.)

Michcool125 wrote: Also I hear constantly how "silly" it is of me to hoard copper and nickel, even boxes at a time, hopeing in the future it will be worth the time.

**Please note that when I say "US Nickel Coins" I mean Nickels between the years of 1946 to 2011

If your hoarding boxes of US Nickel Coins, this is almost a risk free investment, as they should always be worth at least face value, and the metal melt value backing them is worth more then the face value to acquire.

There are only 3 downsides I see to Hoarding US Nickel Coinage
#1. Storage
#2. Thiefs
#3. Opportunity cost.

Out of those 3 reasons, #1 and #2 are not that risky/much of a hassle, What you really have to ask yourself is #3, What other investments could I be doing instead of having Cash sit here, Weather that is Real Estate, Growing a Garden, Hoarding Sugar, Buying PMs. I personally like to keep 10% to 15% in US Nickel Coinage, I like to keep it in 100$ face value boxes for easy storage. Selling Nickels at face value is very liquid with no premium fees.

--- My Personal Thoughts ---
As far as How much Nickels will be worth, It is really hard to say. I see them as far better then FRNs, and I don't see them really going up in value, I think today you can exchange 70 nickels for a gallon of gas today, and I think 50 years from now, you will be able to exchange 70 nickels for a gallon of gas. I cannot say the same for FRNs.

I personally believe in 2 ratios.
The Gold to Silver Ratio of 1:15.
and the Gold to Real Estate Ratio of 100:1 Average Medium House.

There is no ratio for FRNs as they can be worth anything.

Using this information, I do not believe we are in a gold/silver PM Bubble Yet.
I am sure it will happen at some point, and when it pops it will be over corrected.

I am currently buying silver.