What's going on with silver?

Discussion of the Gold portion of the Permanent Portfolio

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murphy_p_t
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Re: What's going on with silver?

Post by murphy_p_t » Thu Aug 23, 2018 1:08 pm

Pslv at greater than 4% discount to nav.
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ochotona
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Re: What's going on with silver?

Post by ochotona » Wed Aug 29, 2018 5:42 am

Gold silver ratio is 82
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Ad Orientem
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Re: What's going on with silver?

Post by Ad Orientem » Wed Aug 29, 2018 10:11 am

ochotona wrote:
Wed Aug 29, 2018 5:42 am
Gold silver ratio is 82
My finger is on the trigger.
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Re: What's going on with silver?

Post by Ad Orientem » Thu Aug 30, 2018 1:40 pm

Just got off the phone with 3 of my local coin shops. Two have been pretty much cleaned out of silver bullion. One still has some silver eagles at around a 20% premium and a bag of junk silver dimes for sale at spot. Hmmm...
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Re: What's going on with silver?

Post by ochotona » Tue Sep 04, 2018 6:58 pm

84
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Re: What's going on with silver?

Post by barrett » Wed Sep 05, 2018 8:13 am

Ad Orientem wrote:
Thu Aug 30, 2018 1:40 pm
Just got off the phone with 3 of my local coin shops. Two have been pretty much cleaned out of silver bullion. One still has some silver eagles at around a 20% premium and a bag of junk silver dimes for sale at spot. Hmmm...
AdO, Do you have specific expectations of what silver might do for your portfolio (under what scenarios it might prosper when other assets do not), or does it just feel good owning some?
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Re: What's going on with silver?

Post by ochotona » Wed Sep 05, 2018 9:10 am

And, is bartering with silver a real possibility, or just doomer p0rn?
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Re: What's going on with silver?

Post by Ad Orientem » Wed Sep 05, 2018 10:24 am

My recent silver buys, about 450 ozs over the last two weeks, is speculative. Which is to say that it is not intended as a modifier for my HBPP.

My rational for silver is...

* PMs have been in a multi-year bear market. As usual silver is showing much greater volatility than gold and has dropped about 70% from its record high of near $50 oz.

* I think (read 'hope') that the worst of the bleeding is over. With base production costs of $10.50-$11.00 oz for extraction and then adding on costs for refining for industrial use or minting for collectors/investors I believe (again 'hope') my downside risk is limited. Can it go lower? Yes. But another 10% drop would put it below $13.00 oz and I think that would be getting pretty close to silver's hard bottom below which miners would begin to lose money.

* At least some of the recent severe declines has been the result of short selling. That is becoming a crowded trade and with prices this low the risk reward ratio for short sellers is no longer looking all that attractive. My gut says we will begin seeing the shorts covering and moving on to their next target.

* It feels cheap. All of my silver purchases have been with the spot under $15 oz and with the silver/gold ratio upwards of 80:1. Although not a record, that is certainly high from an historical perspective and in the past has signaled that silver was over sold, especially relative to gold.

* All of my purchases were of products that were "on sale." I got 200 generic silver rounds and 20 10 oz silver bars for .49 cents over spot. Yesterday I picked up another 40 generic rounds at an LCS that was a bit out of my usual travel radius for shopping. They were a mix of different rounds, some long since discontinued, and I got them for .30 cents over spot.

Potential Upsides

* Silver is both an industrial metal and a precious metal. Both inflation and a strong economy could propel demand for silver.

* I think silver is at least moderately over sold. But that falls under the heading of a gut feeling and other than the silver gold price ratio I have little hard evidence. But my SWAG (scientific wild ass guess) says silver should probably be around $18-20.00 oz.

* Silver is far more useful for smaller routine purchases in an SHTF scenario than gold. I do think gold is the better long term investment, but everybody in the HBPP should have a little silver for this reason. I have heard anecdotal reports that silver and gold have become a medium of exchange in Venezuela along with stable first world foreign currencies like the dollar and euro.

* Speaking of gold, even if silver does not recover dramatically relative to the dollar it is likely the silver gold price ratio will narrow and stabilize once the heavy selling abates. When that happens, I expect to flip at least some of my silver for gold.

Potential Risks and Other Negatives

* Even if I'm right about silver being near the bottom, that doesn't mean it's going to bounce. Silver, like any commodity, needs a catalyst for major price moves to the upside. If I'm wrong about the fair mkt value of silver it could hit bottom and just go splat and stay there for possibly a long time.

* Silver's dual role as an industrial metal as well as a precious metal could be a drag. In a severe economic crisis that affects the value of the fiat dollar gold will rise. But that same economic crisis is likely to hit industry that uses silver which could be a drag on silver's response to a weak dollar.

* As I am beginning to discover, being much cheaper in terms of raw price than gold has it's own disadvantage. What I recently spent on silver would have bought 5 gold eagles which I could easily just drop into my safe deposit box with the others. But 400+ ozs of silver, while very pretty and fun to look at, is going to create some safe storage issues. I see a second safe deposit box in my near future. Probably a much bigger one, along with the added expense.
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Re: What's going on with silver?

Post by dualstow » Wed Sep 05, 2018 4:51 pm

I see a second safe deposit box in my near future. Probably a much bigger one, along with the added expense.


I read your entire post with the urge to ask you if you store all that at home. O0
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Re: What's going on with silver?

Post by Ad Orientem » Thu Sep 06, 2018 6:08 pm

We just touched a silver to gold ratio of 85:1. That's not an all-time record. But you would have to go back to the early 1990's to see it this high.
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Re: What's going on with silver?

Post by ochotona » Thu Sep 06, 2018 6:26 pm

What is the all time high? 100?
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Re: What's going on with silver?

Post by Ad Orientem » Thu Sep 06, 2018 9:25 pm

ochotona wrote:
Thu Sep 06, 2018 6:26 pm
What is the all time high? 100?
Yeah, give or take.
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Re: What's going on with silver?

Post by dualstow » Sat Sep 08, 2018 11:09 am

Well, you’ve influenced me. I picked up a few silver Roos.
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Re: What's going on with silver?

Post by Ad Orientem » Tue Sep 11, 2018 9:46 am

And the blood letting continues... Silver briefly dropped below $14.00 oz, though it has since moved slightly above that level. The silver/gold price ratio is now 85:1. Gold is also down below its $1200 oz support level.
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Re: What's going on with silver?

Post by ochotona » Tue Sep 11, 2018 12:14 pm

$11.90 silver! (Aspiration, not fact)
Last edited by ochotona on Tue Sep 11, 2018 1:35 pm, edited 1 time in total.
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Re: What's going on with silver?

Post by dualstow » Tue Sep 11, 2018 12:50 pm

8) ok. Never mind, in light of ocho’s edit. 8)
ochotona wrote:
Tue Sep 11, 2018 12:14 pm
$11.90 silver!
Apmex says $14.23 (1:50 EST). I guess that was a brief blip?
Last edited by dualstow on Tue Sep 11, 2018 8:10 pm, edited 1 time in total.
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Re: What's going on with silver?

Post by Cortopassi » Tue Sep 11, 2018 3:34 pm

I am hoping a multi-decade low in silver corresponds with my rebalancing in early Jan! In any event, it will likely be close (I hope)
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Re: What's going on with silver?

Post by Ad Orientem » Tue Sep 11, 2018 7:07 pm

ochotona wrote:
Tue Sep 11, 2018 12:14 pm
$11.90 silver! (Aspiration, not fact)
I would not mind that on a temporary basis. But I would prefer that it not get there for a month or so. My discretionary (VP) reserves are somewhat depleted at the moment.
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Re: What's going on with silver?

Post by dualstow » Tue Sep 11, 2018 8:21 pm

Remember when we all used to discuss the exact composition of golden eagles and gold krugs? I don’t remember anyone exploring silver in a similar, uh, vein.

Silver eagles have a tiny bit of copper, but the wiki page doesn’t tell us about what non-silver metal is in Vienna philharmonics. Is it always copper?
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Re: What's going on with silver?

Post by dualstow » Sun Sep 16, 2018 9:38 pm

I had no idea that Apmex shows your whole portfolio that you bought from them. It's not merely order history. It shows the current value and the % that is gold, that is silver, etc. Nice.
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Re: What's going on with silver?

Post by Xan » Sun Sep 16, 2018 9:58 pm

dualstow wrote:
Sun Sep 16, 2018 9:38 pm
I had no idea that Apmex shows your whole portfolio that you bought from them. It's not merely order history. It shows the current value and the % that is gold, that is silver, etc. Nice.
Eek. I'd much rather they forget they ever heard of me. Am I wrong?
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Re: What's going on with silver?

Post by dualstow » Sun Sep 16, 2018 10:04 pm

Xan wrote:
Sun Sep 16, 2018 9:58 pm
dualstow wrote:
Sun Sep 16, 2018 9:38 pm
I had no idea that Apmex shows your whole portfolio that you bought from them. It's not merely order history. It shows the current value and the % that is gold, that is silver, etc. Nice.
Eek. I'd much rather they forget they ever heard of me. Am I wrong?
I can understand that sentiment, too. I think you can order as a guest, without logging in.
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ochotona
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Re: What's going on with silver?

Post by ochotona » Mon Sep 17, 2018 7:41 am

So if I got a monster box of silver, and hid it in my attic, how could I armor it so that it could withstand a fire? What kind of container would I have to put it into? What is the UL designation or whatever of such a box? Could I make one? Silver melts at 1763 deg F.

Would a broken mini-refrigerator that no one wants be a place to start?

{Genuine green monster box from the United States Mint. Dimensions are: 14.75" x 8.5" x 4.5". Holds up to 25 tubes for Silver Eagle coins.}
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Re: What's going on with silver?

Post by Cortopassi » Mon Sep 17, 2018 8:25 am

Attic? What happens when the joists burn through and it ends up in the basement, spilled all over? I think the lowest level of the house is more appropriate.

Fire Rating
Fire ratings are evaluated by testing to see if safes withstand varying furnace heat for specific amounts of time. For example, the UL Class 350 1-hour fire rating means that the internal temperature of the safe will not exceed 350°F for at least 1 hour when exposed to external temperatures over 1700°F. A safe may have a 1-, 2-, or 3-hour time classification. Additionally, safes will be heated and then dropped from heights reaching 30 feet to test against explosions.
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Re: What's going on with silver?

Post by dualstow » Mon Sep 17, 2018 8:31 am

ochotona wrote:
Mon Sep 17, 2018 7:41 am
So if I got a monster box of silver, and hid it in my attic, how could I armor it so that it could withstand a fire? What kind of container would I have to put it into? What is the UL designation or whatever of such a box? Could I make one? Silver melts at 1763 deg F.

Would a broken mini-refrigerator that no one wants be a place to start?

{Genuine green monster box from the United States Mint. Dimensions are: 14.75" x 8.5" x 4.5". Holds up to 25 tubes for Silver Eagle coins.}
Never mind where silver melts. You don't want the plastic box melting all over it, right?
I feel like I read very recently that someone suggested a fireproof box inside a safe. I think that's what I would do.
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