The Gold and Silver Thread

[Terral]

Hi guys:

... Get off your butt and buy physical silver right now (28.03 spot 1/29/11 @ 11:42 AM), before the price goes over 30 bucks, so you can cash in on the best opportunity to multiply your money in history . . . use this opportunity to buy and take physical possession of as much silver bullion and silver coins as possible (this company is good).

If someone bought 500 ounces of silver on January 29, 2011 at 28.03 per ounce ($14,015), they would be up 10 bucks ($19,000) in less than two months. That reflects how much the dollar has lost value and silver is going to the moon. ;0)

 

[Mad Scientist]

I appreciate your efforts Terral but it's mostly falling on deaf ears here.

By the way, the head of the Federal Reserve Bank of Dallas said the US is close to insolvency and that "the fix will be painfull". Let's face it, Obama and Congress aren't gonna' do anything about it. I figger the US dollar will melt down sometime in the june-august time frame.

While I don't really have the money to buy silver I am stocking up on food for the coming food riots. Bought a shotgun and I'm looking at a Glock 23.

When the "great unwashed" in the cities realize their gubamint check doesn't buy much food anymore the rioting will start. Shit, they already riot for the NBA championship. Just imagine when those animals can't eat.

And if I'm wrong, I just have a lot of food and a few weapons. No loss for me. But if I'm right...

 

[Gadawg73]

Time to sell gold is now. Buy it back when it is at $700 in 14 months and more when it is at $550 in 28 months.
Buy low, sell high.
Look at the last 50 years.
Stock market has doubled in the last 2 years. Commodities are still under valued but not metals.
Gold is never a long term hold as a investment. Never has been, never will be.

 

[Toro]

Since August 1971 when Nixon finally abandoned the last remnants of the gold standard, stocks have risen 10.1% per year with dividends reinvested while gold has increased by 9.3%. Without dividends reinvested, i.e. you spent the dividend income, the annual return from stocks was 8% per year.

That doesn't mean that one should rush out and buy gold here necessarily. Stocks have often performed poorly when gold has performed well, and vice-versa. And one day the bull market in precious metals will end badly. However people have underestimated the returns of precious metals since they were completely freed as a monetary unit.

 

[Zander]

Speculators should short gold and silver. Set stops at $1448 .60 April Gold and $38.18 May silver.

 

[KissMy]

Speculators should short gold and silver. Set stops at $1448 .60 April Gold and $38.18 May silver.

No! No! - They should do a put call straddle. The comming Euro crisis will send the US dollar on a wild up ride while our own crisis & the Japan disaster will send the dollar on a wild down ride. Expect large swings in gold & silver. Profit from both up & down price swings. Ultimately Gold & Silver will be much higher than today over the next 10 years.

 

[Toro]

I see absolutely no evidence that the top is in. This is not what tops look like. Maybe it's different this time or maybe this is the beginning of the top, but I would strongly recommend against shorting here. Shorts get their faces ripped off during a bull market / bubble. If we are nearing a top and this is the beginning of a bear market, there will be lots of time to make money on the short side.

 

[Gadawg73]

Since August 1971 when Nixon finally abandoned the last remnants of the gold standard, stocks have risen 10.1% per year with dividends reinvested while gold has increased by 9.3%. Without dividends reinvested, i.e. you spent the dividend income, the annual return from stocks was 8% per year.

That doesn't mean that one should rush out and buy gold here necessarily. Stocks have often performed poorly when gold has performed well, and vice-versa. And one day the bull market in precious metals will end badly. However people have underestimated the returns of precious metals since they were completely freed as a monetary unit.

Take out the last year and your return on gold is 1% a year.

 

[Toro]

The compounded annual return of gold from Aug 71 to the end of 2009 was 8.8%.

 

[LordBrownTrout]

I may sell my silver at 200 an ounce in a couple of years, not sure yet, still contemplating.

 

[Terral]

Hi Mad:

I appreciate your efforts Terral but it's mostly falling on deaf ears here.

Amen to that. Silver looks poised to go to the moon, so I have not removed the Buy Silver Now! link from my sig, even though I am already in the silver game at much lower levels.

By the way, the head of the Federal Reserve Bank of Dallas said the US is close to insolvency and that "the fix will be painfull". Let's face it, Obama and Congress aren't gonna' do anything about it. I figger the US dollar will melt down sometime in the june-august time frame.

JP Morgan is losing the ability to manipulate the silver price down and they are getting beaten on their short position. Many do not know that JP Morgan applied to be a Comex Vault (list) and was approved in only two days rather than waiting the regular 45 days. Now they can claim to send or receive silver and keep the paper game going, while using the FED back door as QE-infinity to pay off silver buyers not to take delivery of the metal. This is corruption beyond belief right under the noses of regulators and Congress watching JP Morgan manipulate the market around their short position (story).

Bernanke is destroying the fiat dollar and JP Morgan is shorting the silver that must go up in value with the crashing dollar, which makes very little sense; unless they are using Fed-created worthless dollars to keep the ponzi scheme going. The whole world is waking up to the fact that silver is WAY undervalued, so the push is on to get as much of the precious metal before JP Morgan loses the paper game short position battle.

While I don't really have the money to buy silver I am stocking up on food for the coming food riots. Bought a shotgun and I'm looking at a Glock 23.

Amen. I bought my food and survival supplies and guns and ammo before getting into silver, because we know that eventually the crap is going to hit the fan and our foe will be all of the unprepared people who refused to heed all the warning signs.

When the "great unwashed" in the cities realize their gubamint check doesn't buy much food anymore the rioting will start. Shit, they already riot for the NBA championship. Just imagine when those animals can't eat.

That day is coming for sure, as the crap is hitting the fan all over the planet. We are in the calm before the storm comes home to roost in the USA.

And if I'm wrong, I just have a lot of food and a few weapons. No loss for me. But if I'm right...

Amen again. Better to have our survival supplies and not need them, than to need them and be left unprepared for what is obviously coming.

 

[william the wie]

I may sell my silver at 200 an ounce in a couple of years, not sure yet, still contemplating.

Look up the asset allocation theory and relative rankings of different portfolios. Depending on the circumstances silver could be underpriced at $1000/oz or overpriced at $10/oz, it can happen.

 

[LordBrownTrout]

I may sell my silver at 200 an ounce in a couple of years, not sure yet, still contemplating.

Look up the asset allocation theory and relative rankings of different portfolios. Depending on the circumstances silver could be underpriced at $1000/oz or overpriced at $10/oz, it can happen.

Thx, Wie. I'll do some research into that.

 

[KissMy]

CNBC: Gold Replacing Dollar as World’s Reserve Currency?

Central banks are shedding dollars, reducing their holdings by about $9 billion in previous quarter, according to Nomura Securities’ Jens Nordvig, global head of G10 FX Strategy.

What are they buying instead? Gold.

N.C. lawmaker wants state to produce its own currency

Cautioning that the federal dollars in your wallet could soon be little more than green paper backed by broken promises, state Rep. Glen Bradley wants North Carolina to issue its own legal tender backed by silver and gold.

The Republican from Youngsville has introduced a bill that would establish a legislative commission to study his plan for a state currency. He is also drafting a second bill that would require state government to accept gold and silver coins as payment for taxes and fees.

Utah Reps. pass bill to allow gold, silver coins as legal tender

The state of Utah is on the verge implementing its own proto-Gold Standard. The House and Senate have voted in favor of HB317, which would make gold and silver coins legal tender. Governor Gary Herbert has until the end of the month to veto the bill.

In fear of the United States dollar being virtually worthless, some legislators in several states have introduced legislation that would allow their state to mint their own currency.

According to the Salt Lake Tribune, Utah residents may soon be allowed to use gold and silver coins in order to purchase goods and services. Lawmakers in the House and Senate have passed HB317 47-26 that would allow Buffalo and Eagle coins to be used as legal tender. Furthermore, the bill exempts the transfer of gold and silver from state taxes. Foreign minted coins, such as Krugerrands, Napoleons and Pandas, would not be accepted under the bill.

 

[Toro]

These are the annual returns of the spot price gold since Nixon took America off the gold standard.

1971 Sept-Dec 1.8%
1972 47.0%
1973 67.0%
1974 72.3%
1975 -23.7%
1976 -4.1%
1977 22.6%
1978 37.0%
1979 126.5%
1980 15.2%
1981 -32.6%
1982 14.9%
1983 -16.3%
1984 -19.2%
1985 5.8%
1986 19.0%
1987 24.5%
1988 -15.3%
1989 -2.2%
1990 -4.6%
1991 -7.7%
1992 -5.7%
1993 17.4%
1994 -1.9%
1995 1.0%
1996 -4.6%
1997 -22.2%
1998 0.2%
1999 0.1%
2000 -5.5%
2001 2.5%
2002 24.7%
2003 19.3%
2004 5.5%
2005 18.0%
2006 23.0%
2007 31.0%
2008 5.1%
2009 25.5%
2010 29.1%
2011 to Feb -0.5%

The past 10 years for gold has been fantastic. I doubt the next 10 years will be as good.

Of the past 39 years, gold has been down in 14 years, with an average loss of -11.8%. Stocks were down in 9 of those years, with an average decline of -15.3%. Gold has been much more volatile though, with gold volatility at 28.5% compared to 17.7% for stocks.

If one created a portfolio of 50% stocks and 50% gold and rebalanced at the beginning of each year, the average return would have been 11.9%, which beats returns for both stocks and gold on their own. There would have been only 7 down years in the past 39, with an average decline of 8.2%. Volatility would have been 15%.

 

[Toro]

CNBC: Gold Replacing Dollar as World’s Reserve Currency?

Central banks are shedding dollars, reducing their holdings by about $9 billion in previous quarter, according to Nomura Securities’ Jens Nordvig, global head of G10 FX Strategy.

What are they buying instead? Gold.

N.C. lawmaker wants state to produce its own currency

Cautioning that the federal dollars in your wallet could soon be little more than green paper backed by broken promises, state Rep. Glen Bradley wants North Carolina to issue its own legal tender backed by silver and gold.

The Republican from Youngsville has introduced a bill that would establish a legislative commission to study his plan for a state currency. He is also drafting a second bill that would require state government to accept gold and silver coins as payment for taxes and fees.

Utah Reps. pass bill to allow gold, silver coins as legal tender

The state of Utah is on the verge implementing its own proto-Gold Standard. The House and Senate have voted in favor of HB317, which would make gold and silver coins legal tender. Governor Gary Herbert has until the end of the month to veto the bill.

In fear of the United States dollar being virtually worthless, some legislators in several states have introduced legislation that would allow their state to mint their own currency.

According to the Salt Lake Tribune, Utah residents may soon be allowed to use gold and silver coins in order to purchase goods and services. Lawmakers in the House and Senate have passed HB317 47-26 that would allow Buffalo and Eagle coins to be used as legal tender. Furthermore, the bill exempts the transfer of gold and silver from state taxes. Foreign minted coins, such as Krugerrands, Napoleons and Pandas, would not be accepted under the bill.

More importantly, the CME and JP Morgan are accepting gold as collateral.

 

[KissMy]

Pimco's Gross Sees Little Value In Treasurys As US Debt Grows

Pimco's Bill Gross, founder of bond powerhouse Pimco explained in his April outlook that he had dumped his U.S. Treasury holdings at the end of February because he sees little value in the market given the nation's mounting debt burden.

In addition to the $9.1 trillion in federal debt seen on the books, Gross is worried about the hefty portion of each year's budget that goes toward non-discretionary and entitlement spending. Including obligations for Medicare, Medicaid and Social Security, the "true but unrecorded" U.S. debt is $75 trillion, Gross said, which amounts to near 500% of gross domestic product.

"[I have] been selling Treasuries because they have little value within the context of a $75 trillion total debt burden," Gross said in his outlook published on Pimco's website. "Unless entitlements are substantially reformed, I am confident that this country will default on its debt," but "not in conventional ways."

Earlier in March, reports showed that the bond-fund company, which manages more than $1 trillion in assets, sold all its holdings in U.S. government bonds of more than 12 months maturity. Gross's April newsletter reflected his belief that the nation is ultimately in danger of default if deficit spending is not addressed.

"Unless entitlements are substantially reformed, I am confident that this country will default on its debt; not in conventional ways, but by picking the pocket of savers," Gross said, pointing to inflation, currency devaluation and low to negative real interest rates as the "stealth" forms of default--all of which are detrimental to Treasury holders.

 

[LordBrownTrout]

Ol Ben secretly gave away 3 trillion to foreign banks. Yep, sky is the limit now on precious metals.

 

[Toro]

It was a decent day for the precious metals today. After getting hammered after the jobs report, they recovered and closed near the days highs, with gold at $1430 and silver at $37.70.

Gold is having a hard time getting through $1450 however. Silver is still in an uptrend but gold appears to moving sideways.

 

[Toro]

Gold and silver have been hitting a series of highs over the past few days. Spot gold is trading at $1464 in Asian trading, an all-time high, while silver is at $39.80, a 31-year high.

Gold is breaking out of its six-month consolidation, busting through formidable resistance. Silver sliced through its "formidable" resistance like a hot-knife through butter weeks ago. I would not be surprised if silver breaks $40 while I'm asleep. I am expecting silver to test its all-time high of $50, which, at this rate, may be within a few months.