PMs go up in hard times? Starting to have doubts

[Immy]

All the latest bad econ news (heavy bearish stock sessions, Euro crises, etc.) have done nothing to inflate PMs as they reportedly should. "Flight to cash" has been the reaction more often which has led to a roughly 40% decline in PMs from their peak. Yes, we're up about 25% from last year, but who's to say if the SHTF the "flight" won't break the sound barrier causing PMs to plummet. I just don't get it.

 

Amazon Forum Fav 👍

How to Research for Treasure Hunting and Metal Detecting From Lead Generation to Vetting - Grab it through Amazon!

[jim4silver]

You never really know who is buying up physical gold around the world. We know several central banks around the world are. The paper markets can be "manipulated" for a certain amount of time, but eventually that will only do so much.

Whenever I start do wonder what is going to happen, I look at the last 10 years of charts for gold and silver. When you put it into perspective, this correction is not really that bad. Back in the late 70's in gold there was a decent correction percentage wise after a good gain, only to later blast to the record high of that day. The world economies and currencies are much worse off now than back then when you factor in money supply and debt.

I cannot answer your questions, but I believe within 3-5 years max, the financial world markets are going to fail in many parts which will lead to currencies suffering. If/when that happens, PMs will gain in value like they have in past history whenever such things happened.

I am still hoping for low 20's silver so I can load up. I will start buying gold/platinum if the prices dip a bit more and silver does not. Right now platinum is selling for about 150 bucks less than it costs to extract an ounce from the earth based on last year's mine costs figures.

Jim

 

[blai745]

All the latest bad econ news (heavy bearish stock sessions, Euro crises, etc.) have done nothing to inflate PMs as they reportedly should. "Flight to cash" has been the reaction more often which has led to a roughly 40% decline in PMs from their peak. Yes, we're up about 25% from last year, but who's to say if the SHTF the "flight" won't break the sound barrier causing PMs to plummet. I just don't get it.

its quite easy to prepare for shtf...you need a balance of all 4.... Food, Guns, Precious metals, water.

 

[jeff of pa]

it's all manipulation right now.

The "Have's" want More & Don't want to pay
for it, so they are Holding the Prices down
& Buying.

Once they have most of it, they will
stop Manipulating and let it skyrocket.

Then your going to have to Mortgage your Life away
to buy some from them.

at the end of the day, the one who
makes everyone else kiss their feet
for a Crumb of their Bread, WINS !

 

[gwdigger]

Look, I'm a gold bug till the end. Silver too. This, what we have right now, is a broad market sell off. Nothing more. I think youre too close to the situation and youre looking at JUST gold's recent plunge.

Look at the nasty tumble for gold in 2008. Much worse in percentage than we've had in recent months. Another broad market sell off. Yes, its a flight to cash. Just remember that when the dust settles and the sell off is done, no one in their right mind will want to "stay" in cash. Inflation is real and now. There is no deflation aside from things like housing and oil and I consider those to have been true bubbles that burst. Where will those dollars go? Commodities and stocks because after all this is a commodity super-cycle. A real bull market in gold tests its believers - study past bull markets. It seems you are there right now - being tested. been there, done that. Patience. Some will scream manipulation. If gold is being manipulated then it has been a tremendous failure. What is manipulated down that rises by 20% or 25% per year? The gold chart reads like a Spanish galleon fitted with with wheels sailing from Havanna to Madrid with just a few storms along the way. One that drove directly over the Bahamas instead of sailing around.

The recent bubbly peak in gold was a "baked in" anticipation of a formally announced QE3 that did not materialize.

http://www.kitco.com/charts/popup/au3650nyb_.html

What resulted? A broad market sell off. Remember the DOW below 10,500 at the same time?

http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=DJIA&insttype=Index

When its all boiled down, Govts around the world have only 2 choices:

1. Do not recapitalize/ add liquidity and let the system fail. Contagion will be worldwide.

2. Print bonds and push the problems into the future. "QE to infinity" as borrowed from Jim Sinclair.

The correct answer is #2 because choosing #1 would mean many world govts losing power and the world quickly thrown back into the stone age. No one will be spared except undiscovered tribes living along the Amazon. No tax revenue means no money to fund big govt. Its that simple.

The govt is not going to just lay down and die. They'll choose printing more bonds, that you can be sure.

Keep your eye on real fundamentals like China encouraging its citizens to buy gold- real gold, not digital. There are more than 200,000 people "net" born to the world every single day. Most of which are in Asia. In 20 years or so all those people may want real gold too. Some arent going to get any, plain a simply.

Dont get me wrong, many stocks are very cheap and stocks will do well too. But then there is the issue of trust. Are the companies books legit? Is the custodian of your funds legit?

When you shake the can of gold and you bought it from a company like apmex, you do not have that worry.

Its just there.

 

[manorman]

The dollar goes up Gold and silver go down.
MIke

 

[Silver Surfer]

I, for one, am beginning to really doubt all the economic gloom that has been forecasted... Not that I don't believe that a major crash could happen, but I also believe that major manipulation is going on in both PM's AND the stock market right now... Snowbirds are here and at least where I live, in droves and spending like drunken sailors.. And the fact that they just reported that this Black Friday broke records for money spent.
So it makes little sense that we are on the brink, yet from old to young, people are spending like they have plenty of money...

 

[jim4silver]

I, for one, am beginning to really doubt all the economic gloom that has been forecasted... Not that I don't believe that a major crash could happen, but I also believe that major manipulation is going on in both PM's AND the stock market right now... Snowbirds are here and at least where I live, in droves and spending like drunken sailors.. And the fact that they just reported that this Black Friday broke records for money spent.
So it makes little sense that we are on the brink, yet from old to young, people are spending like they have plenty of money...

SilverSurfer,

Just like the gov spending money (printing it, etc) does not mean the US economy is strong, people spending money does not mean said people are doing well economically necessarily. Many people have outrageous credit card debt and it is still easy for those people to get credit cards even though they might not have any money in savings. Many like to spend during the holidays beyond their limits. But no doubt there are still many Americans with plenty of money in the bank who can afford to buy lots of stuff when they want.

But if you look at the macro picture in the US, you need to look at the number of unemployed and increasing (record level) amount of people getting gov assistance- food stamps, etc. If in general the people here were doing really well they would not be getting food stamps in record numbers.

I don't believe things are going to collapse here anytime soon. But I think you will see things deteriorate over time in a steady manner, and there could be a point were bad events occur which cause huge stock losses or problems with the currency (either here or in Europe). That would cause the upper and middle class to lose money in their 401Ks and such which would most likely cause many to become more frugal in a hurry.

Although I hope I am wrong, my prediction is that the countries that make up the EU are going to have major problems with debt which will result in defaults and/or the elimination of the Euro. This will affect our stock market badly, but could cause the dollar to go up as the Euro goes down. Each day we hear more and more about the problems there. Now Italy is being discussed. From what I have read if Italy goes so will the EU as a whole. It is a much larger economy than Greece.

Jim

 

[Silver Surfer]

As usual Jim, your post is so better articulated than my blathering. I agree about people spending even when they can't afford it. What I was inferring to more than anything was the media and general public constantly going on and on about how people all over the country are hurting so badly when it comes to their stocks, retirement, etc.
I was really under the impression that a large part of our retired population had lost most of their retirement, most college grads couldnt find work, and that we are teetering on economic collapse. I just don't see that anymore. Just like with petroleum. If our society was really being hurt by the price of fuel, wouldn't we see a huge increase in carpooling? Wouldn't we see Mr. Yehaw with the jacked up 4x4 stepping a little lighter on the pedal?
I know for me, my financial downgrade that came along with my illness and 4 surgeries has caused me to just about give up MD'ing, sell most of my "stuff", and not go home for the last 3 holiday seasons due to $$.
Maybe it WILL have to completely crash before the masses actually cut back drastically?

 

[jim4silver]

I was really under the impression that a large part of our retired population had lost most of their retirement, most college grads couldnt find work, and that we are teetering on economic collapse. I just don't see that anymore. Just like with petroleum. If our society was really being hurt by the price of fuel, wouldn't we see a huge increase in carpooling? Wouldn't we see Mr. Yehaw with the jacked up 4x4 stepping a little lighter on the pedal?
I know for me, my financial downgrade that came along with my illness and 4 surgeries has caused me to just about give up MD'ing, sell most of my "stuff", and not go home for the last 3 holiday seasons due to $$.
Maybe it WILL have to completely crash before the masses actually cut back drastically?

One reason things might not appear so bad is because compared to other parts of the world, many Americans still make decent money at their jobs and can afford to spend on items they want, like big screen TVs, fancy cars, etc. I imagine this will change over time if companies keep laying off and/or sending their factories and such overseas, which happens everyday. Many older folks who saved and invested properly or did well in their own businesses throughout their lives are probably sitting pretty good right now, although many with money in the bank and CDs are making around 1% or so on their money so it is losing buying power due to inflation. I don't think there will be another generation like these older folks for a long time here in the US (by that I mean people who put money away regularly and lived somewhat frugally, paying off their debts and investing wisely, etc).

What I believe is true, is that many today live paycheck to paycheck, and if that paycheck were to end the person would have very little in savings to tap into, except maybe a small 401K or IRA (depending on their age). I know of people making well over $100K per year that are basically living that way, with less than $10K in savings (money in the bank or CDs). These people live in a big house with fancy cars and go out to eat several times a week, and spend on their credit cards quite a bit plus have tons of other debt. So if you were to look at these types of people on the surface you would think they were "livin' large" and doing very well. But one hiccup and the house of cards could fall.

As the next generation comes up they are finding it hard to get decent paying jobs that are in any way tied to the degree they got at college or that even require a college degree to fulfill the duties. These poor folks will have huge student loan debt and be working for just a little over minimum wage in many cases. I know some small business owners who hire recent college grads to be receptionists and such at their businesses, making $9-10 bucks an hour or so. If you calculate that to a full time job that is around $20K per year in salary. Hard to pay off debt and living expenses these days on that much, especially if you have children. Many of these grads are moving back home with their parents because they cannot survive on their own.

If you look at people in some of the developing countries (India, China, etc), their standard of living is improving compared to what it was. All those US businesses that left here to go there are resulting in many now being able to buy cars, houses, etc, where before they could not. They say the 1800s belonged to England, the 1900s to the US, and the 2000s will probably be these BRIC nations as they are called, (Brazil, Russia, India, China).

No way to know how it will all play out.

Jim

 

[MRBeyer]

I'm in OKC right now and everywhere I turn I see businesses hiring. However, the jobs are $10-15 per hour or less. The problem is in the hiring. Those with educations or past work experience with a significantly higher pay scale aren't applying for these jobs so the jobs are remaining unfilled. When those who don't have a job realize unemployment checks won't be coming back, they think it over and realize they have to take a step back to go forward, then I expect our economy to start improving.

From what some of the financial gurus have been saying, the government is manipulating the markets to string any potential collapse out as long as possible. Don't know if it is true but it would make sense. Also, the hollidays may mean more people are cashing in their silver and gold which would depress the market. That is why I feel the precious metals market has taken a hit lately.

 

[Silver Surfer]

If you calculate that to a full time job that is around $20K per year in salary. Hard to pay off debt and living expenses these days on that much, especially if you have children. Many of these grads are moving back home with their parents because they cannot survive on their own.

Your overall post makes me rethink this a bit.... BUT... The above quote I have a tough time agreeing with, even though it mirrors what most people say/think....
The last three years has taught me one thing.. We are a VERY spoiled country/people, and wouldnt know "hard times" if it smacked us right in the arse... Of course, generalizing, but these kids moving back home because they cant survive is (maybe not ALL cases) really hard to swallow.. I guarantee you they have cell phones, xboxes, vehicles, etc... My own kids included, whine about how tough they have it sometimes, and I have to remind them exactly how "tough" they have it... For the first two years of my illness and subsequent surgeries, we had nothing to live on but my wifes small unemployment check (fired for missing 4 days in 90 due to having to drive me to Mayo in Jax), and my luck at detecting. Mind you, for the last 1 1/2 yrs, we also had to shell out $1300/month for our "Cobra" medical premiums.. Sure, we had to really change our lifestile since we were used to making a combined &160- 180k/year, but I cannot dare complain- I have never NOT had my internet, which is surely not remotely required to live comfortably... I will NEVER again fall into the "stuff" mindset I had prior to illness...
My wife has applied at over 200 local businesses since she cannot get a nursing job where we are living, only two hospitals, very low turnover in her specialty, and probably because she was terminated. We simply have to move as there are plenty of jobs back home in her field. We are losing our home here. Just a matter of time.. But complain about how poor we are? We STILL have more "crap" (stuff) than I care to move, and will be selling most of it before we do move. And I will NEVER again fall into that mindset that I was in, and most of the country suffers from... The "i gotta have it, or I am not successful"... The older people you speak of are about extinct, as the Boomers are really the generation that started all of this "gotta have it" attitude.. Those that lived through the depression as young adults still see value in simple things, save, and get by with just the necessities.. The rest of us (mostly) dont... Just the other day I heard an old snowbird complaining like you wouldnt believe about the rising prices of food at the store... Yeah, they have shot up, no doubt.. Then, I see him out in the parking lot and he gets into a late model Corvette... Jeez, c'mon, really?? $70k car with Ohio plates (so he has at least two homes) and he is bitchin cause food is 10% higher? If you can afford a new Corvette, sorry bud, no sympathy here.. Same with my brother.. He whined to my mother over thanksgiving about "its getting really tight", yet he has a $700k home in Seattle (paid for), a beautiful home on a lake in the mountains of Washington State (paid for), and is now retired at age 54 on the big Island of Hawaii in an ocean-view home complete with guest house and new inground pool (also paid for)... So how bad can it really be for him? Maybe he can only eat out 3 times a week now
I probably overstated my point, but I guess I made it... The generations starting with the hippies of my youth, through today, have no idea what "bad times" really are, they really dont.. And when we do suffer a real crash, or one of the natural disasters that many countries suffer several times a decade, we will NOT be able to cope with it... Katrina comes to mind...
Anyway, enough of my hijacking the post. But I think we have a long way to go before we have paid enough dues to rightfully whine about how bad our situation is...

 

[jim4silver]

If you calculate that to a full time job that is around $20K per year in salary. Hard to pay off debt and living expenses these days on that much, especially if you have children. Many of these grads are moving back home with their parents because they cannot survive on their own.

Your overall post makes me rethink this a bit.... BUT... The above quote I have a tough time agreeing with, even though it mirrors what most people say/think....
The last three years has taught me one thing.. We are a VERY spoiled country/people, and wouldnt know "hard times" if it smacked us right in the arse... Of course, generalizing, but these kids moving back home because they cant survive is (maybe not ALL cases) really hard to swallow.. I guarantee you they have cell phones, xboxes, vehicles, etc... My own kids included, whine about how tough they have it sometimes, and I have to remind them exactly how "tough" they have it... For the first two years of my illness and subsequent surgeries, we had nothing to live on but my wifes small unemployment check (fired for missing 4 days in 90 due to having to drive me to Mayo in Jax), and my luck at detecting. Mind you, for the last 1 1/2 yrs, we also had to shell out $1300/month for our "Cobra" medical premiums.. Sure, we had to really change our lifestile since we were used to making a combined &160- 180k/year, but I cannot dare complain- I have never NOT had my internet, which is surely not remotely required to live comfortably... I will NEVER again fall into the "stuff" mindset I had prior to illness...
My wife has applied at over 200 local businesses since she cannot get a nursing job where we are living, only two hospitals, very low turnover in her specialty, and probably because she was terminated. We simply have to move as there are plenty of jobs back home in her field. We are losing our home here. Just a matter of time.. But complain about how poor we are? We STILL have more "crap" (stuff) than I care to move, and will be selling most of it before we do move. And I will NEVER again fall into that mindset that I was in, and most of the country suffers from... The "i gotta have it, or I am not successful"... The older people you speak of are about extinct, as the Boomers are really the generation that started all of this "gotta have it" attitude.. Those that lived through the depression as young adults still see value in simple things, save, and get by with just the necessities.. The rest of us (mostly) dont... Just the other day I heard an old snowbird complaining like you wouldnt believe about the rising prices of food at the store... Yeah, they have shot up, no doubt.. Then, I see him out in the parking lot and he gets into a late model Corvette... Jeez, c'mon, really?? $70k car with Ohio plates (so he has at least two homes) and he is bitchin cause food is 10% higher? If you can afford a new Corvette, sorry bud, no sympathy here.. Same with my brother.. He whined to my mother over thanksgiving about "its getting really tight", yet he has a $700k home in Seattle (paid for), a beautiful home on a lake in the mountains of Washington State (paid for), and is now retired at age 54 on the big Island of Hawaii in an ocean-view home complete with guest house and new inground pool (also paid for)... So how bad can it really be for him? Maybe he can only eat out 3 times a week now
I probably overstated my point, but I guess I made it... The generations starting with the hippies of my youth, through today, have no idea what "bad times" really are, they really dont.. And when we do suffer a real crash, or one of the natural disasters that many countries suffer several times a decade, we will NOT be able to cope with it... Katrina comes to mind...
Anyway, enough of my hijacking the post. But I think we have a long way to go before we have paid enough dues to rightfully whine about how bad our situation is...

I agree with your point Silver Surfer. My point is not any different. I have said before in other posts that it seems to me that the recent "generations" in large part seem to lack any personal responsibility for their actions and what occurs as a result.

For example, people blame the banks because they gave them TOO MUCH money for mortgages they could not afford, instead of blaming themselves for taking on too much debt and not knowing their limits and wanting that big house they could not afford.

Also, many feel they deserve a high paying job simply because they went to college. It is not all the fault of said people though in this instance. For years our educational system has trained people to be good employees instead of entrepreneurs and innovators. I heard all the time, even from my own parents, "go to school, get an education then get a good job with a company who will give you security". I went with that for years until I woke up and started my own business. The only real security a "worker" has is when they work for themselves in my opinion. I know it is not feasible for everyone to work for themselves, but in my education (both undergrad and grad school), I don't remember hearing anything about successful entrepreneurship lessons. Even when you do own your own business it can be tough, but at least you know you will never lay off or fire yourself, or send your "job" overseas.

But like I said, in most places, the "younger" generation is going to have a harder time finding high paying jobs in today's world. In years past, a person could work at an auto plant and make 60-80K per year without any college degree and have great benefits and a retirement plan. Most average
jobs today are not anywhere near that, even for college graduates.

And like I said, a person earning 20K per year is going to have a tough time raising a family on that unless they have a spouse also earning $$$$ and live in a low cost city. I am sure some can get by on that and less, but they would have to be very frugal and probably get help from the gov or some other source (family, parents).

Jim

 

[Marchas45]

you will never lay off or fire yourself, or send your "job" overseas.

Love It.