Good Time to Buy PM's?

[jim4silver]

Every ounce Im stacking will still be in my safe in 20 years unless something crazy happens, or we turn out like Venezuela.

I say that too with respect to silver's price not going up. However, I believe that at some point down the road, silver will move up like Bitcoin did. One mistake many traders and non-traders make is not taking profits at the appropriate time. Many stock holders are like this and think selling is evil or bad and that they have to hold the stock forever or until it goes to zero. All stocks eventually go to zero or close. Think Sears, JCPenney, GM, soon GE?

My advice is a person should have a certain price in mind that when it gets there they sell a certain percentage. My current number is $50 or thereabouts. If we ever get that high I plan to sell 1/3 or so of my stash. At that point I will be playing with the house's money so I won't feel bad selling. The next level is $100, and I would dump another 1/3. The final 1/3 I would hold forever or if I needed the funds would sell. This way I am still in the game if there was a total fiat collapse and we hit some really crazy high number.

I know a guy that bought Bitcoin years ago at $25 for 5 coins. He sold them all when Bitcoin hit $800 or so. He felt good at the time, not so much today. But not as bad as the guy that bought at $5,000-$10,000 but didn't sell at the top and now is underwater big time.

Jim

 

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[Johnnybravo300]

I would definitely sell some if it would help me pay off my land haha. I hope to use some for that if I can eventually but that's about all I would sell it for....even to pay off a chunk of it would be awesome.
When times are good theres lots of work and payments are easy and silver is cheap. It's the other times I'm saving it for haha.

 

[fistfulladirt]

Sorry guys but I’m not selling.

 

[Johnnybravo300]

Sorry guys but I’m not selling.

Hahahaha I know the feeling! I'd probably have some bad feelings about it but if it went to $50 I'd only have to sell about half and I could live with that.
I'm pretty attached to my PM'S and it would be tough to sell to be honest.
I would always doubt that I'm doing the right thing, switching it back to FIAT JUNK!!!

What would an average lcs pay out an oz if silver spot was say $50? Anyone have an educated guess?
I know they need to make a buck and that's the game. I've never asked my lcs what he paid out last time it spiked but hes told me he had lines out the door and down the street and couldn't hold any inventory. It was bought up as fast as he could get it and the craziest was at sky high prices. Nowadays he hardly moves any of it between my visits there.
It's like people like to suffer hehe.

 

[fistfulladirt]

Hahahaha I know the feeling! I'd probably have some bad feelings about it but if it went to $50 I'd only have to sell about half and I could live with that.
I'm pretty attached to my PM'S and it would be tough to sell to be honest.
I would always doubt that I'm doing the right thing, switching it back to FIAT JUNK!!!

What would an average lcs pay out an oz if silver spot was say $50? Anyone have an educated guess?
I know they need to make a buck and that's the game. I've never asked my lcs what he paid out last time it spiked but hes told me he had lines out the door and down the street and couldn't hold any inventory. It was bought up as fast as he could get it and the craziest was at sky high prices. Nowadays he hardly moves any of it between my visits there.
It's like people like to suffer hehe.

My LCS pays roughly seventy cents on the dollar. Last time I checked, you’d have to pay him to take 40% halves lol...

Today’s 50 dollar bill would buy around $160 worth of goods back in 1980, when adjusted for inflation.

For me to consider selling today, silver’s value in fiat would have to approach that number. ($160/oz.)

 

[Johnnybravo300]

Yeah no one wants 40% halves or war nickels. The shops that have them cant get rid of them and most stackers dont want all that copper in their safes haha.

Portion sizes have also shrunk over the years so along with the inflation you receive less for more money.

Most commodities have risen 3-5x or more since I graduated high school in 89 so the 50-160 you stated may even be low.
We used to feed ourselves and two kids on 75-100 a week and fill up a shopping cart. Now I can carry out $75 from city market in 2 or 3 bags in my hands haha.
I remember on 9/11 when that reset happened and gas doubled. Went from $1.60 -$3.50 while the towers fell, and it leveled out and stayed there. Food prices soon started rising and we noticed that within a trip or two to the store. It's funny how the quiet resets seem to happen while no one is looking.....almost like it was planned that way!

Its hitting this generation harder than any other in the past and I feel for them. The days of buying a decent house with one years wage are over!

You know things are weak when it's cheaper to drill holes in quarters when you need washers for something, because real washers cost too much at the hardware hehe...then theres the gas to get there.....and nickels are worth more in melt so dont drill the nickels....things are so upside down.
I trust the inflation numbers about as much as I trust the unemployment numbers usually. They only count certain things in their criteria and nothing that would make the numbers look bad.
None of it is realistic or very accurate in my opinion but we can see it in everyday life pretty easily.
I never dreamed of the day where $8 cheeseburgers and $6 coffees were the norm, or even that a damn cell phone can cost more than my car insurance for the year!

 

[jim4silver]

I remember on 9/11 when that reset happened and gas doubled. Went from $1.60 -$3.50 while the towers fell, and it leveled out and stayed there. Food prices soon started rising and we noticed that within a trip or two to the store. It's funny how the quiet resets seem to happen while no one is looking.....almost like it was planned that way!

Yes the official inflation numbers are really bogus because they exclude certain items from the calculation. All one has to do is compare the prices of items from say 20-30 years ago and compare with today and it is obvious the dollar does not buy as much as it once did.

If demand ever gets hot again for silver/gold, the prices will reflect such "inflation". But right now nobody but stackers and such want the stuff so the price stays low. Even with "manipulation" in the paper markets, the price for silver will rise when buyers demand to have it in their hands.

I believe we will see more talk of "inflation" in the MSM, and eventually the Fed will stop raising rates (for a while at least) if they want to keep the stock market from getting hit. If things get too bad we could see more QE again. That would be great for PMs like it was last time.

I am speculating, but there are some financial dark clouds out there that in time could become a big problem, think Deutsche Bank. It seems they have some ongoing issues. They write many of the popular ETN products. Thus they are the "backstop" for those products. Unlike ETF shares, ETNs are not backed by futures or something else. They are backed by who writes them. If DB takes a big dump, I imagine it would wreak havoc in the ETN markets and much more.


Jim

 

[jim4silver]

File this under FWIW.

I was talking to one of my coin dealers who buys much of his inventory from the big wholesalers. He said that things appear to be tightening up a bit on the wholesale end. The premiums he pays have gone up for first time in quite a while on generic average types of bars and rounds. Also in the middle tier common date gold double eagles and silver dollars (XF and AU uncertified) have seen premium increases recently.

That seems promising since we haven't gone up in price which can sometimes draw in more buying. Also, it seems to me if premiums are increasing on physical it will be more difficult for them to push too much lower in silver, at least for sustained periods (sub $14 etc).

I'm having a difficult time scoring any cool silver at these price levels in that folks don't like selling at these prices unless they desperately need the cash. Found some 1 oz generic nice bars and a few toned 70s art bars for 75 cents over and grabbed those.

 

[Johnnybravo300]

I went in three days ago and some slim pickings. I went ahead and took the secondary and generics and what few ase's and a roll of bu 64 Kennedy's. I didn't go through any junk silver and he didn't have any silver dollars which was a bummer. My son got the junk silver the next day hehe.
Not much selling going on from the little guy and he said it's been slower lately.
I like to browse with the big dealers online and I've noticed some inventory has been out of stock regularly for the last year or so most of the time. Like as soon as its listed it's all gone that fast!

I did notice the 100 oz bar was gone and I asked if he'd sold it.
He said nope, I'm keeping that!

 

[Diver_Down]

Jim - nice pickup on the '70s art bars. Believe it or not, there is a niche market of collectors (mainly have to go through eBay to reach them) that pay a good price for them. You might be interested in finding an older copy of the Complete Guide to Silver Art Bars by Kidd. They attribute a rarity value that would surprise most silver stackers.

 

[fistfulladirt]

There was good stacking a couple months ago, bought a bunch of Walkers. I’m fond of those.
Still time to stack!

 

[Johnnybravo300]

I read something not long ago about how the 64 Kennedys were a huge production. As many minted as the 50 years previous or something like that. No idea how many have been melted since but I'd guess truckloads of them are gone. I bet there are far less walkers and franklins.
I've never seen those art bars before but pretty unique stuff there and .75c over seems super cheap for that. Anything I see thats unusual or designer brings at least a few bucks over easy.

 

[Mackaydon]

Johnnybravo:
A few years ago, when silver reached over $40, I sold ten rolls of uncirculated 64s that I had purchased in 64 when I worked for a bank.
Thanks for awakening that memory.
Don..

 

[Johnnybravo300]

Sounds like silver eagles have taken big hits the last few years and not too popular with many people. I never understood the hype about them but maybe it was just that. You see one you've seen them all and I've never understood grading them? If they are all brand new how are they different? There must be millions of perfectly graded silver eagles by now, common as new zincolns. No wonder the graded ones sit and collect dust for years...everyone already has a few just like it?

 

[jim4silver]

Sounds like silver eagles have taken big hits the last few years and not too popular with many people. I never understood the hype about them but maybe it was just that. You see one you've seen them all and I've never understood grading them? If they are all brand new how are they different? There must be millions of perfectly graded silver eagles by now, common as new zincolns. No wonder the graded ones sit and collect dust for years...everyone already has a few just like it?

I agree with you on the Eagles. High premiums and the coins are to me not that cool looking anyway. If someone is willing to shop around they can get better deals on stuff other than Eagles. I have a few tubes put away in that I used to buy milk spotted ones for the same price as generic bullion, but I wouldn't do that again.

 

[Diver_Down]

I agree with you on the Eagles. High premiums and the coins are to me not that cool looking anyway. If someone is willing to shop around they can get better deals on stuff other than Eagles. I have a few tubes put away in that I used to buy milk spotted ones for the same price as generic bullion, but I wouldn't do that again.

The key with Silver Eagles is the date. Pre-2007 and you have mintages that are 10M or less. Pre-1998 and you are looking at mintages in 4-6M. Anything Post-2007 and you are looking at mintages averaging 30+M. Nothing rare about those years. Take for example 1996 with a mintage of 3.6M. How many of those have been melted? How many of those would yield a grade of ms69 or ms70? Now if someone was putting together a date set, no problem in finding a 2008 and later specimen. Good luck trying to find a '94, '96, or '97.

 

[Johnnybravo300]

I just bought a 94 and 96 last week but they aren't graded or ms69 level. Just in plastic flips and look pretty average for an ase.....which is uncirculated of course but they've been out of the flips and handled no doubt.
I dont know much about them but my lcs didn't have much on hand so I went ahead and got them for 2 over which seemed fine to me as a stacker. I usually pass them up because premiums add up and I'd rather just have more ounces of generics or something cheaper.
For me it's about ounces so I squeeze where I can although I probably have 40 or 50 eagles anyway. None of them graded of course and some in flips and some clanking together in ziplocs hehe.

Has there been two big melts since the 90's? Around Y2K possibly and 2011?
Not really sure on that but junk silver has shot up a few times that I know of. I wouldn't think ase's have been hit as hard by the melts but its definitely possible. They are already a very recognizable bullion and I dont know what melting them would accomplish when theres other stuff to melt.
Besides they were new enough that the nicest ones were probably saved?

Who really knows though....anything is possible. It sounds like things were really crazy during those times. One dealer I read about said he remembers melting 100 bags of 63 Franklin's in one day!

 

[Diver_Down]

With regards to melts, you have to consider the avenue they are sold. If they are sold direct to a refiner, they don't care. They aren't going to take the time to separate something that could be resold as is. It all ends up in the pot. If items are sold at the cash for gold/silver hacks, those items are then being sent to a refiner. Those hacks aren't shopping around to fence what they bought. They are buying so far below market value that they are making money anyway. Now, look at the original buyer. They paid $10 for that silver eagle in the '90's. If they were kept and stored properly, then they would retain the collector value. The older buyer's seeing a run up in price of say $35/ounce goes to the gold/silver buyer and sells their ASE for $25. Everyone makes money, and that individual ASE is lost to the melting pot. Question is what percent were lost? If you have an original mintage of 3.6M and 600K are lost to the melting pot, then you are left with a surviving mintage of 3M. Then say that 1M of that 3M is not stored properly, handled, stashed in ziplock, etc. Now, you have 2M that would be considered collector quality. The percentage that would grade high of that 2M are extremely small. Likely lots of ms65-ms68, but when you look at populations of ms69 or even a perfect ms70, they are a proverbial unicorn.

For me personally when I see the early ASE, I buy. Post 2007 ASE, and I would rather buy a silver art bar.

 

[jim4silver]

With respect to melting of silver dollars, I know that during the high prices in 1980 many Morgans and Peace dollars, even those of some rarity, were sent to be melted. I know a retired coin dealer that was in business back then, and he said getting paid for the silver value was higher than the numis value of almost all the Morgans and Peace dollars he would see back then. I am sure some were worth more and preserved, but not many according to this dealer. Having said that, there are still many in existence so I don't think the melting then or now will really make the coins more valuable for the next decades or probably more in and of itself.

With respect to notion that "we buy gold" and such dealers sending all their stuff to be melted at the refinery is not accurate in my opinion. Much of the reason I get the good deals I get is because I developed relationships with dealers like the "we buy gold" types so I could become their wholesale buyer (on the items I collect). These dealers were/are shipping off to wholesalers or other dealers around the country, sometimes even selling to the better paying coin stores in town if they need the $$$ right away. Unless the coin/bar/round is damaged or messed up in some way, there is always more $$$ in selling to a dealer than refinery for .999 and most nice "junk silver".

After I gave up CRHing due to lack of finds and a developing bad back, I put all of that energy and addiction into building relationships with certain dealers (mid to smaller operations local and out of state later on) and was able to become their wholesale buyer for items I collect. They like me because I pay right away in cash, so they don't have to wait for some out of town dealer to send them a check or pay for shipping.

What makes this possible for me is the fact these guys don't pay high prices to their customers (often they pay less than melt depending on the coin), which means I can buy it from the dealer relatively cheap. These dealers like to flip the stuff as soon as it comes in because they don't really have much of a "store" to display the stuff to try to get more than what I pay for it.

PS The we buy gold type dealers I deal with actually pay better on gold jewelry/scrap than the coin stores (who pay better on coins, etc). The ones I deal with I wouldn't classify as "fences" and have seen them kick out customers who want to sell stuff and look like they are "tweaking" on some type of hard drug. On the gold and silver jewelry they buy, they do melt most of that, except for the nicer stuff which they wholesale to jewelry stores, etc.

Jim

 

[Johnnybravo300]

I like hearing about different experiences strategies or opinions and I usually learn something new. It's all good info to me and sometimes things I never considered.

Been watching the pms creep. The MSM still says strongest recovery ever and best record highs of everything. Plus all the rising wages and low unemployment, just cant hardly go wrong!
According to them it's the best time in history to jump in the stock market with both feet!
They hardly mention metals and especially not in the last week.