Quote:
Originally Posted by capecodphyllis
Buy gold and silver. The real thing. Take possession. Do not buy the GLD or SLV ETFs unless you like the risk attendant to playing "Old Maid" with a deck that contains mostly Old Maid cards.
I prefer silver, which only now is making a strong upward move to match gold, which itself is about to set repetitive all-time highs. Silver will retake ground that it already covered two years ago, then match and, likely, outpace gold in setting new highs.
Can't you just feel the precious-metals market scanning the horizon and trembling, about to plunge in for a long, long swim?
Get out of dollar-denominated assets. Buy and hold the physical metal for the long haul. There now has been a complete separation of the prices of physical precious metals and the paper gambling markers reported by COMEX.
Physical gold and silver are entering their Black Market days, from which it will be many years before they emerge. Go on line to our most prominent Black market - eBay - and price out completed sales of bullion coins and bars. Premiums are being charged by the few dealers who actually have any stock available for sale. Keep that in mind when you get depressed by the reported spot prices.
Spot prices are for phony paper silver and gold, not the real thing. The real thing has kept its value much better than you might think and it will do far better in the months and years to come.
Sure it is tough to shell out big money today for a one-ounce silver Eagle when silver's spot price is much lower. But that simply reflects the difference in real value. The spread will only get larger, as our government keeps "injecting liquidity" into the banking system. In the not-too-distant future, paper metal will be worth no more than the paper upon which it is printed - less than toilet paper, in fact, as in today's Zimbabwe.
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I agree with much of what you are saying, but on the topic of premiums, the spreads have narrowed quite a bit on physical. Months ago it is true you could not find physical anywhere, none that wasn't promised, and all physical either had a huge premium or had a ship date well out into the future. Investors were scrambling for real metal. Now that the various mints have had a chance to get production online and the price has bounced up a little and enticed sellers into the market, metal is easier to find.
I still believe there will be a better time to buy precious metals in the relatively near future. PM at the moment is up a little in price, but then so are the equity markets, bonds, foreign currencies, and just about everything else, obviously all related to movement in the price of $us. If $us rallies and the deflation gets worse I believe we will have one more big chance to buy precious metals at good prices compared to where they are at now. That's not to say I don't hold PM, but for myself as a true forex all-in type of trade, I think it's a little early. Give all the people who are losing their jobs and having trouble with their mortgages a chance to sell all their old gold chains and such for cash, that is the kind of thing driving the markets right now, liquidation of assets to increase cash positions - i.e. deflation.
In June 2008 before all of this happened we were discussing a lot of this and talking about a rally in cash money, and I think we will probably see more of that before we see the end. Somewhere there is a post I made about gold vs. $us cash during deflation, I will look for it when I get the chance, I don't have time to look right now - but this post is from about June 08 when oil and the other commodities were topping, before we had $us buying and before the deflation really started to kick in (and before the equity markets tanked).
Quote:
Originally Posted by wind_magic
Commodities are just the latest in speculative bubbles.
Nasdaq, housing, commodities ...
Not to worry, soon there is going to be another speculative bubble ... in CASH.
Everyone is going to want to own cash, it'll be the latest rage. They're going to sell stocks to get it, they'll sell houses at a loss to get it, companies are going to lay employees off to get it, reduce inventories, stop placing orders for capital equipment, stop giving their kids an allowance, stop paying their cell phone bills, yes and even sell oil futures and other commodities .... all in an effort to get CASH MONEY.
The bear market in cash money has gone on long enough - low to negative savings rates, historic levels of stock market participation, home equity loans as far as the eye can see, debt for extravagant purchases to keep up with the Jones, etc, etc ... that bear market in cash can't last forever, I think the bottom is just about here.  Maybe it's time to trade some stuff in to buy some CASH! Maybe it's time to buy some cash before everyone else gets the same idea and the price gets too high! 
I remain a bull on cash money.
HURRAY FOR CASH!!!!!
Cash is bubblicious! |