Serious Question For all of you Pros

[coolpix9]

Hey Gang, I have been hoarding silver for awhile now and I have amassed a tidy pile of 40%ers and about 90-95 pounds of 90%ers. My question may be easy for some but not everyone. I have read most of the selling,trading for gold,melting down threads and I have reached a conundrum(not a condom). Am I foolish to keep piling up 40%ers ? Am I going to get hosed by smelters ? I wouldn't dream of selling now at these current prices. Am I setting myself up for a big disappointment with all these 40s ? That's it, I told you it was easy. Thanks for all your input. Jim

 

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[Jeffro]

Hey Gang, I have been hoarding silver for awhile now and I have amassed a tidy pile of 40%ers and about 90-95 pounds of 90%ers. My question may be easy for some but not everyone. I have read most of the selling,trading for gold,melting down threads and I have reached a conundrum(not a condom). Am I foolish to keep piling up 40%ers ? Am I going to get hosed by smelters ? I wouldn't dream of selling now at these current prices. Am I setting myself up for a big disappointment with all these 40s ? That's it, I told you it was easy. Thanks for all your input. Jim

I have sold my 40%ers to dealers and came out just fine. Like you, I wouldn't dream of selling right now though.
I look at it like this- If I bought it for fifty cents, anything I make over that is profit. If you make four bucks off each one thats an 800% profit! Now if the dealer you sold to makes 8 bucks on each one, did you get hosed?
I don't think so.

Sell for whatever you can get, do your homework and sell for the best price you can get. Don't worry about what the other guy makes. No hosing here, LOL!

 

[Jeffro]

Me personally, if you do not need to sell it anytime soon, I would just continue to collect it. As time goes by, you will start to see the price start to go back up. I predict that it will be somewhere between 20 and 30 dollars by next summer, if not sooner.
As prices of everything else going down, and nobody can find anything to invest into, more and more people will be buying gold and silver. When this happens, don't pay attention to the spot price, instead watch and see what the actual physical price is doing.
This is just my personal opinion, I am sure some would agree, and others won't. The best thing to do is look back at some historical silver/ gold charts, and see what they did during certain times in history's past.

DING DING DING!!!!!!! Give the man a cigar!

 

[Shake-N-Bake]

I dont want to sound negative but silver averaged at $5.50 for 22years between 1985 to 2007 when there was a spike that is tapering of now. History is repeating itself, it did the same thing with the gold and silver boom in 1979 and 1980. These spikes in history happen about every 20 to 25 years. Other than these brief spikes(which we are in the tail end) expect silver to be around $7 to $8 range. Sorry i am not tring to sound negative but history charts don't lie. check out KITCO's web site to view the history charts.
I am like all of you here I would love to see silver at $20-$30 and as of three months ago I would have said yes it will be. But I have done some research and charts don't lie.

Just my two lincolns worth.
Jason

 

[Shake-N-Bake]

here is a graph

 

[jim4silver]

I dont want to sound negative but silver averaged at $5.50 for 22years between 1985 to 2007 when there was a spike that is tapering of now. History is repeating itself, it did the same thing with the gold and silver boom in 1979 and 1980. These spikes in history happen about every 20 to 25 years. Other than these brief spikes(which we are in the tail end) expect silver to be around $7 to $8 range. Sorry i am not tring to sound negative but history charts don't lie. check out KITCO's web site to view the history charts.
I am like all of you here I would love to see silver at $20-$30 and as of three months ago I would have said yes it will be. But I have done some research and charts don't lie.

Just my two lincolns worth.
Jason

The problem with using historical price comparisons with silver for then and now is that back in the 80s the dollar was worth much more than it is now, so 7 dollars then is not 7 dollars now, also you have the issue of supply.

I have read that the 800+ gold peak price in the early 80s would equal over 2000 now in current dollars due to inflation.

Supposedly, there is far less above ground silver now than there was back then. Unlike gold which is hoarded, silver is used in industrial applications and often not recycled after the product is destroyed or disposed of when it is used in electronics.

Jim

 

[Ju8vP3t]

According to the CPI, $5 in 1980, is worth $12.58 in 2008 dollars

 

[Shake-N-Bake]

According to the CPI, $5 in 1980, is worth $12.58 in 2008 dollars

I agree with the $10 - $12 mark. I just don't see it ever getting to the $20 - $30 mark people are hoping for. Trust me I would love to see that price, but it is not realistic.

 

[GPURS]

Jim, my guess would be that with the quantity of 40%'ers that you have accumulated , that you will have no problem getting a very good price when you decide to let go of them. You will be able to bargain or negotiate a little more than some of us small fries! Good luck to you, Gpurs...

 

[jim4silver]

According to the CPI, $5 in 1980, is worth $12.58 in 2008 dollars

I agree with the $10 - $12 mark. I just don't see it ever getting to the $20 - $30 mark people are hoping for. Trust me I would love to see that price, but it is not realistic.

How can the $20 not be realistic when the price hit close to $21 in March 2008? What has changed in the market now that would preclude such a price in the future? Especially now with physical demand so high.

It is not uncommon in commodity bull markets to have large pull backs before a new uptrend begins. This is often designed to shake out the weak hands, which it does quite efficiently.

You could turn out to be correct in your prediction about the price of silver not going over $12, but based on historic action in commodity bull markets and the current inflation conditions, the evidence would point to higher highs than we saw this past spring. In the past, bull markets have lasted at least 10 years, with some quite longer. This one began around 2001 or so, thus even if we have a lower length bull market we should have more time to go. Also, the real price is already over $12. If you go to a coin store and try to buy an ounce of silver right now, most places will charge between $13-$19 depending on what type of round or bar you buy.

The paper price is not an accurate reflection of what silver is going for, unless of course you go long on a futures contract and demand delivery. I understand that many investors are long now and plan to demand delievery on the December futures contracts for silver and gold. This could prove to be interesting with respect to what happens to the paper price when all those bars have to be delivered. If there is a default due to not enough physical metal, the contract could be settled in cash. But that would send a strong message that there is not enough metal out there which could in turn send prices up.

Further, with the trillions of dollars being created, lent or otherwise brought into existence by the Fed now, more inflation should be on its way, thus aiding PM prices. I also don't see any interest rate hikes in the near future which could be bearish for metals. Some countries are now buying up lots of gold, such as Saudi Arabia, China, Russia, etc., so maybe they feel bullish as well.


Jim

 

[jim4silver]

Jim, my guess would be that with the quantity of 40%'ers that you have accumulated , that you will have no problem getting a very good price when you decide to let go of them. You will be able to bargain or negotiate a little more than some of us small fries! Good luck to you, Gpurs...

Right now APMEX is buying $1000 face junk bags of 40% for $2,720. That is only 1.36 per half. I would say hold them unless you really need the money or if you feel silver is going to drop in price from where it is now and never go up again.

Jim

 

[coolpix9]

Thanks to All

Hey Gang, Thank you for all your sage advice. I know I have an enviable problem with these safety deposit boxes. Maybe I should just bury all of them in my back yard and invite youse guys over to help find them. Now that's what I would call Treasure Hunting. Jim

 

[LJ]

Hey Papa.....I have to throw my 2 cents in on this issue.

My personal opinion is this.....I expect to see silver & gold prices skyrocket by the end of the 1st quarter of 2009. I also think $20-$25 is very realistic. Personally, I am surprised that it hasn't already taken off with the government bailing out these companies we have seen recently. They are printing all of this money which weakens the dollar. Our dollar is currently in a downward spiral. When the dollar weakens, silver & gold ususally takes off. Could this be market manipulation? Not sure, but I think so. Look at the supply & demand.....what's up with this? Market manipulation again??

I am no expert by any means, but if anyone is in it for the long run, my opinion is to hold and buy more (silver or gold) if you can get it & can afford it. Buy....buy.....buy.......

The local coin dealer in my area has been collecting 40% halves for a long time....which actually surprised me. This is his personal stash...not for the business. He mentioned to me he collects a certain gold coin & 40% halves for his retirement. He said he has double digit bags of these 40%'ers......a very large amount!! I just thought I'd throw that into this as well.

Again, if your in for the long run.....don't panic. I look at this as a big opportunity.

Papa....I think your a smart man!!!