AMAZING SILVER CHART: Investors Overwhelmingly Prefer Physical Over Paper Silver

Precious metals investors know a good deal when they see it.  Even as the price of silver declined over the past several years, investors overwhelming preferred physical silver over paper by a huge margin.  How much?  A great deal more than I realized until I looked at the data.

Since 2005, precious metals investors purchased a staggering 1.36 billion ounces of silver coins and bars.  This is a great deal when we consider annual demand was a paltry 30 million oz (Moz) in 2001.  All that changed when the U.S. financial system died in 2008.  In just one year, silver bar & coin demand skyrocketed from 51 Moz in 2007, to 187 Moz in 2008.

These figures are based on Thomson Reuters GFMS 2014 Interim Silver Market Report.  If we look at the chart below, we can see how much greater physical silver demand is over paper:

Silver Coin & Bar Demand vs Net ETF Build

From 2005 to 2014 (2014 is forecasted & subject to revision), investors purchased 1.36 billion oz of silver coins and bars, while silver ETF’s saw a net build of 618 Moz.  Basically, physical silver investment was more than double the amount of silver ETF builds.

Of course, we have no idea just how much actual physical silver is backing these ETF’s, but if we take their word for it, the situation becomes even more interesting since 2011, when the price of silver spiked to $50.

Over past three years (2012-2014), precious metal investors purchased an estimated 572 Moz of physical coins and bars.  Compare that to the lousy 73 Moz net ETF build.  Furthermore, the net change of global Silver ETF’s in 2011 was a negative 24 Moz.  Instead of silver ETF inventories rising in 2011, they fell a net 24 Moz.

However, investor purchased a record 211 Moz of silver bars and coins in 2011.  The chart above only shows difference between physical silver demand vs ETF builds from 2012 to 2014, but if I included 2011… this would be the net result:

Silver Investment 2011-2014

Net Silver ETF Build = 49 Moz

Silver Bar & Coin = 783 Moz

Here we can see that since 2011, precious metals investors overwhelming favored physical silver bar and coin 16 times more than paper ETF’s.

Folks, the current Financial & Economic System is not sustainable.  Precious metals investors realize paper is not wise to invest in.  Which is why we have seen such a huge difference in physical silver investment over paper since 2011.

When the Dollar finally goes down in history as another failed FIAT CURRENCY, wealth will come by how many ounces of silver you own… not paper. 

This is the same with gold.  Unfortunately, most of the physical gold is heading from WEST to EAST.  If you have not yet read my article below, I highly recommend it.  To read article click on image below:

DANGER AHEAD FOR US & WEST

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63 Comments on "AMAZING SILVER CHART: Investors Overwhelmingly Prefer Physical Over Paper Silver"

  1. IF, and this is a BIG IF, one was buying silver in the last five years with an average cost basis of 20 per ounce and silver goes to 50 per ounce in the next five years, another big stretch of the imagination, then one’s compounded annual growth rate is 9.5%.

    So for all this analysis, and for all the deep dive research, even if things go right over the next five years one will be lucky to get an annual return of 9%.

    And if you buy silver eagles with the premimium and all and one is lucky to have all the above play out one will be looking at an annual return of 8%. That is IF silver EVER hits 50 ever again in our lifetimes. Doubtful.

    Frank

    • Surely 8% compound is better than -100% simple?

    • Don’t know how long you expect to live Frank. I’m about 60; betting I’ll see $150 + silver while I’m still quite active…UNLESS the dollar has failed and been replaced by the nuevo dollar [or whatever they will call the replacement for the dollar when it dies]. And it will.

    • No disrespect Frank, but for silver to go from $20 ounce to $50 ounce in 5 years would be about 20% annual return

    • I thought you sold all your gold and silver Frank. Isn’t that what you wrote here a couple of weeks back?? So why are you here? You just a glutton for punishment or what?? You DON’T UNDERSTAND ANYTHING ABOUT GOLD FRANK. Did you bother watching that video called Understanding Gold? No you didn’t or you wouldn’t be such a wet noodle when it comes to PM’s. Come on Frank watch the vid!!!! UNDERSTAND GOLD FRANK!!!! Here’s your chance!! Quit being a stick in the mud – you’re ridiculous!!! Here’s a link:

      https://www.youtube.com/watch?v=5ADtwpTbGF0

      “Those that fret the decline in the gold price don’t really understand gold”… Frank buddy that’s you…

    • Actually Frank that’s closer to a 13.5% annual return assuming periodic purchases over the 5 year period. You would have to adjust your investment to an average period of 2.5 years assuming half paid in by 2.5 years, other half paid in second 2.5 years so your return increases. If Silver hits a $100 then you are up to 25% a year No flies on that and really no flies on you erroneous 9%.

  2. ….And when the Fed starts hiking rates, and they will because the economy is improving, gold and silver will be the chumps again. And stocks will barely fall.

    We have all been duped by the doomsayers. Everything truly is awesome.

    Frank

    • QueenOfEurope | February 20, 2015 at 4:47 pm |

      My guess is that the FED will probably try to raise the rates but will be force to completely reverse its strategy an go negative once the economy dies.
      So I am sticking with precious metals.

    • If you think the fundamental economy is improving you are very misinformed.

    • But you never answered the question Frankie… If you think PM wealth protection in the face of financial chaos is a waste of time…WHY THE “F”RANK ARE YOU HERE???

    • 100 Million people out of the work force, 50 million in food stamps, malls closing everyday, HP firing 58 thousand people, ever growing deficits, 203K average household debt and still the Fed has the nerve to say “the conomy is improving”, liars , thieves

  3. The price of silver is not going anywhere until the miners decide to stop flooding the market with metal. We can paint all kinds of pictures with all kinds of reasons, but as long as the current spot price of silver is acceptable to the miners, why should anyone pay more? Why should the price be higher? This has always been my point of view. If you need physical silver, if you want lots of silver in size, the best way to do it is to take the price down to below production costs and watch the miners dump metal like there is no tomorrow. Think about that. If the price of silver was $50 the miners would be fat and happy and unwilling to sell thinking they can wait for even higher prices. The way to source metal is drive the costs as low as you can get it.

    Having said that, this pricing model will end. Maybe by 2020, maybe later. Whenever that day comes you will see massive swings in price, perhaps hundreds of dollars a day as people scramble to cover shorts that can’t be covered. That day is far, far away… but it will come.

  4. Dax will go to 14000.Driven by the infinite amounts of paper.

  5. silverfreaky,

    Yup. The smart money is piling into European Stocks–NOT GOLD OR SILVER. Why? Because just like U.S. QE……the trillions will be captive in the banking system, not lent out. This money by the money changers will be absorbed into stocks since something will absorb the excess money supply. So the DAX will probably go up by 100% IN THE NEXT 20 MONTHS. And gold and silver will flounder around and even decline because there will still be virtually zero inflation and just like the U.S. the ECB will want Europe stocks to be the only game in town.

    QE simply doesn’t cause economic inflation. It causes financial inflation. If you missed the boat in the U.S., don’t miss out with Europe. Buy the DAX and CAC and Italion and Spanish Stock market.

    Because that is how you will make a lot of money–that will buy you a lot of purcashing power and real goods and services will still be CHEAP CHEAP CHEAP.

    Frank

    • Buying European stocks now is like buying a first class ticket on the Titanic.

      • Never bet against the central banks while they are printing Gumball. They can make ANYTHING happen when they print.

        Frank

        • are you in collusion with the banks? Your comments sound that way. Why do you even read this stuff if you are so fixated on paper markets and down on metals? Your intentions are questionable to say the least. I don’t want you to stop commenting though, do as you please, this is not to silence you. I just want to hear your answers.

  6. “The price of silver is not going anywhere until the miners decide to stop flooding the market with metal. We can paint all kinds of pictures with all kinds of reasons, but as long as the current spot price of silver is acceptable to the miners, why should anyone pay more?”

    Exactly. I have made that argument too. Why on Earth SHOULD silver EVER or Gold EVER sell much above the marginal cost of production? There is virtually no reason for that. Therefore, when silver hi 49 an ounce in 2011 and gold hit 1900 it indeed was just another stupid bubble.

    All bubbles pop. And least with stocks they actually produce something.

    • The price of Silver will not go anywhere till something is done about the massive manipulation on Comex. Soon demand for Physical Silver should overwhelm it and true price discovery will take place.

    • Price is determined by the laws of supply and demand. To draw a comparison, think about anything you consume. Real estate for instance, the actual cost to build a flat in NY City may be cheap or low compared to the price people pay for the flat.

      To that point, you can imagine the same principles applied to monetary metals in a state of currency wars. Once demand takes over, the cost of the extraction out of the ground is not as important.

      I dont know where SLV will go from here, but if it gets past the psychological mark of 50USD, then its off to the moon. Can you think of any other commodity that is cheaper now than it was in 1980 in US terms? Even GLD has smashed through its 1980 nomical highs.

    • Why should Tiffany & Company be able to sell 40 times over their “marginal cost of production” of sterling silver trinkets? I released “The $150 Cufflinks” in July 2005 at Silver Investor site about Tiffany and its bizarre markup of silver, in stark contrast to the peanuts tossed at miners for the essential metal they produce.
      http://www.silver-investor.com/charlessavoie/cs_july05_the150cufflinks.htm
      Tiffany’s is famous for the arrogance of its sales staff.

    • The Fed thinks gold miners should sell for cost of production. I don´t believe they think the same for home constructors in that case they are happy they can make good profits and inflate the bubble even more, the same for tech companies they love, actually for most sectors they love the inflation. The only exception is PMs (fraudulent money hates sound honorable money)

  7. You really are lonely… aren’t you….Im not pro nor con pMs. but I can tell you, silver is stupid low priced. By the way…. you know that 9% of 1.2mil is a good annual income that allows one to live life without a job and travel free as a bird ….. dont ya ..

    c ya.

  8. I had been looking around for something to invest in that made sense at the present time.
    Almost all my past investing was in stocks.
    But I saw in 2000 and 2008 what can happen when stocks get overpriced and markets are at all time highs. Does not pay to get to greedy.
    Bonds are shakey and do not pay much interest for the current risk.
    Savings accounts , CD’s same thing. (In Europe it costs you money to leave it the bank.)
    Plus we now have bank bail in laws on the books.
    Inflation eats away at cash savings.
    That brought me to Silver and Gold.
    At under $20 for good coin (Eagles and Maples) its a steal.
    There is very little physical silver avalible for sale.
    About 15 Billion worth.
    If 10% of the world population wanted to buy just 1 ounce each I do not think it would be possible.
    A country or a couple of big funds could wipe out the current supplies.
    15 Billion is a pebble on the mountain of investments.
    One company like facebook = value of all the avalible silver for sale in the world.
    With thousands of uses for silver could this really be?
    For thousands of years Silver has stored wealth, along with Gold they are real money.

    • The “only so much in inventory” so physical demand will overwhelm narrative has become so old and tired that I simply don’t think it will EVER happen. Actrually, it defies logic. If silver were truly tight….then the price would be much higher. It is really that simple. An Occams Razor if you will. I could go on and on and on with deep logic why there is no silver shortage, nor is the market even remotely tight, but there is really no need to. The facts are what they are. Silver at 21 or 22 makes it extremely profitable for the gold miners and gold at 1200 makes it really profitable for most gold miners. Hence, Nemont’s blockbuster earnings today.

      In a nutshell, there is no reason today, tomorrow or in dozens of months or years why silver should be any higher than the cost to mine it slightly profitably. JP Morgan and Goldman Sachs know this—and they control the price around this outcome.

      Silver is just a plain stupid investment. And guess what? Let us assume Eric Sprott and company are right and a shortage TRULY developed?

      What do you think WILL REALLY HAPPEN? I can tell you: Only SELLING will be allowed, buying will be outlawed in ANY WAY. And a price will be pre-determined, say, like 22 per ounce. And guess what? No one will care! No one! And there will not be one thing anyone will be able to do about it.

      So guess what? No matter what, no matter what the outcome is: YOU WILL LOSE IN GOLD AND SILVER. Trust me. I KNOW the prices SHOULD be higher—BUT THEY ARE NOT for good reason and THAT WILL NEVER CHANGE.

      Peak oil isn’t going to happen. Trust me. Offshore Drillers are going to clean up in the years to come. Haliburton was saying that at 90 oil, production in deep sea offhshore drilling can ramp to an EXTRA 40 MPD!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

      And that is why stock mulitples will keep going higher. Along with earnings. And employment. And prosperity.

      The ONLY ONES LIVING IN A DEPRESSION RIGHT NOW ARE GOLD AND SILVER OWNERS! For EVERYONE else, there is America. Don’t bet against it. YOU WILL LOSE.

      • Dear Mr Frank Bernanke,

        If the U.S. economy is getting better, if rates are getting higher, if….. If…. If….

        I am afraid that you missed it all.

        Buying PM, is a strategy against “if”….

        If you still have metals, can I buy your gold for 500$ per ounce? You can better sell it to me a this reasonable good price…

      • Admire Ted Butler or not, he has A LOT more knowledge and understanding of silver than Frank does. Frank only understands and accepts rising prices, not the underlying fundamentals of why PM’s are stagnant in price for now.

        A recent quote:

        Fifteen years ago, talk of a silver shortage and wildly escalating prices were mocked (except by those who looked beneath the surface). By 2011, prices had risen tenfold and silver was closer to a worldwide physical shortage than ever in history. Currently we’re back to the mocking stage, but that is as unlikely to remain permanent as it was before that. The 2011 peak in price and unprecedented physical tightness came as a result of a 65 year consumption deficit and the ongoing COMEX manipulation. Yes, it is true that same manipulation caused prices to then crash and the resultant cooling of investment demand relaxed the physical tightness; but the question is—what now? Can the 10 billion ounce depletion of world silver bullion inventories (1940 thru 2006) be restored any time soon or ever, particularly at the current depressed prices? (No knock on gold, but the yellow metal has never experienced even one year of lower world inventories, to say nothing of silver’s 65 consecutive years of inventory depletion). Can the increasingly blatant COMEX silver manipulation become permanent or self-perpetuating in light of these circumstances?

        I know these things are hard to consider objectively in the face of continued deliberate price declines, but, nonetheless, remain at the core of the decision to invest in silver, namely, there is so little of the stuff remaining. As far as the question of why large investors haven’t rushed into silver, I am convinced some will. Certainly, large investors have done so in the past, in the form of the Hunt Brothers and Warren Buffett. The case of Mr. Buffett is particularly instructive and, I believe, should serve as the model for the future. – Silver analyst Ted Butler: 18 February 2015

        In a previous post Frank says he bought/owned gold/silver for about fives years. Sounds like 2009 through 2014. If so he saw the 2011 rise, didn’t sell then, and is frustrated by his decision not to do so.

        Like a heavy smoker who has meant to quit for a long time, then finally does, that ex-smoker sometimes becomes the most obnoxious and non-compassionate person toward current smokers.

        He acts this way towards people who hold and still acquire PM’s.

        • Friends,

          I have no fight for or against PM bugs. I am simply saying I used to be one of them–and have gone the other direction. I am also not saying the world is anywhere close to being out of the woods……..in fact, many are in deep slumbers, most specifically sovereign nations.

          So here is the thing: I woke up one day recently……and I decided that I WANT TO HELP AND BENEFIT mankind. And I know most of the world population and civilization owns ZERO gold or silver.

          So I dumped them. And am slowly climbing back out into the world from the walls I have put around myself. Holding on to silver/gold and thinking I’ll come out ahead (greatest transfer o wealth and all that bullshit) when it hits the fan is just not what I decided I wanted to live for. I want to better humanity and sitting on non-productive assets doesn’t benefit ANYONE except perhaps myself in a SHTF scenario.

          In a SHTF scenario I’ll be on the side of the plebs that is all. In the meantime, I am going to live life to its fullest. And invest in companies that will benefit humanity instead of constantly betting against it. Gold and silver are that bet. That is not for me anymore.

          Frank

          • Frank,

            Follow your heart.

          • Frank,

            Nice explanation for your position. It can too be said that Gold and Silver are the investment that represent freedom and liberty. Additionally many PM investors don’t like to support crooked markets and prop up a corrupt system. Many of us see what you are doing (investing in various paper markets) as supporting the bad people who are at the top of the ponzi scheme.

            I speak for myself when I say I want the system to end because it is the only way to end the corrupt, crooked, theiving paper ponzi scheme we have from the banks and government. This does not mean I want to see innocent people hurt. The general antipathy of the public is very disappointing and the shallowness in people influenced by pop culture and mainstream media can be downright disgusting. However, the only way the system is going to change is from a crash and the longer the ponzi goes on the harder the fall will be. It’s unfortunate that it will take so much pain for things to change but that is what it will take and if you think the system isn’t going to come crashing down one day then you are drinking the kool-aid. Like all ponzi schemes it will eventually end.

          • frank,

            Ah…. gave into the DARK SIDE. Oh well. Hey, now you can use your money to benefit mankind. Good for you. All the luck.

            steve

          • Companies that benefit humanity, what like Monsanto?… LOL or Hallaburton?..LOL
            Give me a break!

          • What are your companies that benefit humanity you invest?
            Do not tell us Apple or Facebook because we know the truth about the deep state /spionage/ innocent killings by drones and much more.

  9. By the looks of the stats in your article Steve, a small portion of the investing public ((2%-5%?) since 2011 really “gets it”. Owning physical gold or silver beats owning paper every time, hands down!

    http://www.youtube.com/watch?v=lgNVNTvlpFY

  10. “The price of silver is not going anywhere until the miners decide to stop flooding the market with metal. We can paint all kinds of pictures with all kinds of reasons, but as long as the current spot price of silver is acceptable to the miners, why should anyone pay more?”

    Hummmm,,,,,,,,, I suppose you also feel OPEC will be happy with $50 per barrel after all the marginal drillers are knocked out.
    Now I wonder how oil ever got above $100?

    • Oil prices are collapsing because of a deflationary collapse in demand. It is that simple. With oil, prices can not be manipulated as easily because paper oil is useless to the consumer. Gold, on the other hand, can be substituted with paper as long as buyers are willing to accept paper in place of physical gold. As long as there is a large paper market relative to the size of the physical market, prices can be wildly manipulated — whatever the commodity is. Also if central banks had large caches of (physical) barrels of oil, they could wildly manipukate the oil market, up or down. Silver has some of the properties of gold (large paper market) and some of the characteristics of oil (real physical demand) so it is easier for the banks to manipulate silver than oil.

      • @ Ethan,

        You are correct on your analysis about oil not being able to be manipulated. Oil doesn’t get held and stored for value, it gets used. Silver and Gold are in large part used for monetary stores of value, with Silver holding a dual use of industrial use too. The industrial use is not enough as oil is to not allow manipulation, yet it is enough for it to get lowered in value based on demand for industrial use. Hopefully, silver will continue it’s recent surge in investment demand to return it to being more of a monetary metal which will make it’s value grow exponentially.

        • “You are correct on your analysis about oil not being able to be manipulated.”

          You’re joking, right? OPEC was created just for that purpose and they did it very well for decades. Today there is reason to believe they have less power but they are very much capable of manipulating oil prices.

  11. Great discussion everyone, including Frank. Over the past few years, I kept seeing all of these articles where the “experts” have predicted that the bottom was finally in for silver and the next stop would be the moon. Worse yet, the gold-silver community seems to actively be hoping that our monetary system will fail. They seem to think that as the world is falling apart for everyone else, that they will be reaping massive profits and living confortably. You know who you are – several of you responded to Frank – quoting the same old worn out expressions about QE, fiat money, the US is the next Weimar Germany, blah, blah, blah — we’ve heard it all from the doomsayers before. Please stop wishing for a doomsday scenario you metals bugs: if it ever happens you aren’t going to like it nearly as much as you are imagining.

    The fact is that we have never been in a situation where the entire world was on a fiat system at once, therefore we can not use history to know for 100% sure what the outcome will be. Yes, most likely we will continue to have inflation over long periods of time and as we use fiat — but the metals could languish for years or decades before they finally shine.

    Silver and Gold are meant as HEDGES. In other words, I would want to own them — even in large quantities — but you hope that you’ll never, ever need them because it will mean all of your other assets have been wiped out. Gold bugs make the metals into their primary investment class, with 80% or more of their holdings and then get all whiny and upset when manipulators — and sometimes just natural market forces — drive prices down.

    Now for the other hand: the world is in the midst of a currency crisis, the could devolve into a currency war if deflation starts to set in. There are negative nominal interest rates for the first time in history — aside from a brief period in the 70s in Switzerland. Stock market valuations (see Schiller PE) are at dangerous levels and companies are reinvesting 90% of earnings into buybacks, driving share prices artificially higher (see recent Bloomberg article.) While none of these things gaurantee a market crash, they do make the whole investment / market system inherently less stable so that a “precipitating event” — say a war in the Ukraine, oil prices falling by another 50%, large scale terrosist attack, or Greek exit from the euro — could send things toppling down into a major market crash, deflation, and even hyperinflation. Again, this is why one owns metals as a HEDGE for situations like that and hope that you never, EVER need them.

    So both Frank and the metals bugs above both seem to be falling into the same trap with the “this time it is different” approach but you are both opposite sides of the same coin (so to speak.) You’re also both right if you view silver as a hedge.

    Ethan

    • Ethan,

      Frank came here for debate at the very least and obviously he was poking a bear (metaphorically speaking). There is no surprise to the reactions he got and I suspect he may have been looking for that for some odd reason.

      You actually are picking sides too when you act as if you are some peacemaker. Your lecture to us appeared more condenscending if anything. Especially when you call the community “metal bugs”. Maybe you are a paper bug.Do what you want but I for one took your words with a grain of salt just as I did Frank’s.

      • Chuck,

        If you think I am a paper bug then you did not read my post. It is the sub-group of metals investors I am talking to, who: 1) blame every single downward move in silver on a government conspiracy 2) mumble about things like the “new world order” and 3) gleefully look forward to the collapse of fiat-based society, are doing the silver / gold market a disservice by drowning out the real message based on fundamentals and solid data. The real data still suggests that silver is absurdly undervalued, that too much fiat currency exists, that the stock market is at its highest level relative to earning since the 2008 / 1929 collapses, and that silver will go up in the long term.

        Ethan

    • Ethan, the “gold is a hedge” wisdom you are repeating is central bank propaganda. When, exactly, did gold become a hedge and what are you hedging against? If you are hedging against fiat currencies losing value then you’d have to argue gold became a hedge about the time you believe gold was no longer money. Based on that reasoning do you consider US dollars a hedge against Walmart gift cards? And do you hold Walmart gift cards as a hedge against toilet paper?

      Gold is money. It used to be more liquid than today but it is still plenty liquid enough. With short notice you can efficiently convert gold to fiat accepted at the gas station. The exchange rate is kept volatile specifically to get you to view it as a risk asset. You have been brainwashed to use dollars as the measurment and to assume price volatility in dollar terms denotes risk.

  12. When silver is so rare and valuable, why did nobody corner this small market?Why did all the Millionärs
    not buy silver.There are roundabout 300 Mill. Cash Millionärs at the world.
    We read about 15 Milliarden(german Notation), that is really nothing.

    Or why does the eastern world not destroy the western ponzi shemata with PM.It is not disarable ,because all great nations need a market.Only russia is not assesable.

    • Nobody has cornered the silver market because it is considered a poor investment in times of deflation, which is what the central banks are fighting now. People usually chase yesterday’s hot investment (stocks, bonds, real estate) and nobody wants to touch commodities, causing them to be undervalued. Silver is being treated like the ugly girl at the dance, who nobody wants — exactly the time for a saavy investor to swoop in and start acquiring. It is when you see silver in the cover of money magazine that you want to start looking for the exits.

      • Maybe.But this Story we heared already for years.With low interest rates and a declining economy this could go a Long time.

    • Silverfreaky, go ask the Hunt brothers, or Warren Buffett, for that matter. Recycling included, about 1 B ounces are newly available each year, and total above ground stocks have been estimated at ca. 800,000 metric tons – that is less than 5 ounces of silver for every ounce of gold out there. Corner the Comex is also not possible, they will settle you in cash, NOT metal. If only a small portion of the global population is drawn to physical silver, it is game over for the paper charade that the PM prices are (same is true for gold). As for me, I have made up my mind. I save in PMs, Ag and Au, with my excessive fiat, and add to positions every month, with a time horizon of decades. The millionaires and billionaires are happy right now with their returns on stocks. But once the PM pricing mechanism fails and shortages become apparent (LBMA default) then the repricing will be swift, possibly overnight, and you will either be holder of fizz or miss the move. Are we there yet? No, but we are getting closer. The lower they push the PM price, the closer draws a singularity event. The current rich (in fiat terms) cannot and will not all switch in time. Their fiat gains was the proverbial carrot to remain in the fiat valuation system, and they do not grasp what is coming down the pike.

  13. Frank ! You sold and went,WTF.You are now moving into the region of troll/shill.Don’t go there.
    In fact I would suggest you make like the flu and 4cough.Have a nice day.

    • Dissident view points are welcome to me, as it helps to assess an investment class by looking at the long and short viewpoints. I wish that Frank could provide more evidence / data to back up exactly how the system will not have big inflation eventually, perhaps eventually hyperinflation (after a deflation first.)

  14. As I see the “big” picture economic history has been established in an environment of abundant and therefore comparably readily available natural resources.
    However we very well may be moving to a new paradigm where natural resources become more scarce and therefore more valuable.

    To prepare for the above, one can acquire and store all the goods one might need for the future while these goods are readily available, or one can stack a supply of a concentrated natural resource useful for trading in the future.
    IMO PMs will serve the above purpose because their ratio of availability (or scarcity) seems to be holding constant with consumables.

    If above is true, and if one wishes to maintain current standard of living; then one should acquire PMs at today’s price in quantity sufficient to cover a chosen time period.
    For example if annual family expense today are $50,000 per yr and one wants protection for 5 yrs; then a stack of $250,000 in today’s price should be considered.

    • $250,000 is a lot of gold / silver, unless you have a liquid bet worth of, say, $750,000 or more. When — and the question seems to be “when” and not “if” — metals come back into style as a mainstream investment, that $250,000 could gain a substantial amount of purchasing power in today’s dollars, buying 2X, 5X, 10X or more goods and services as they buy now. So $250k worth of silver could easily buy $1M or more worth of goods and services under the right conditions. That is assuming only a moderate level of inflation. In a big inflation gold/silver would likely gain all of the purchasing power that is lost by paper assets. Example, if the $40 trillion bond market were to collapse in a big inflation, then a substantial part of that $40 trillion worth of purchasing power could come flooding into metals as a safe haven. That is just a hypothetical example.

      • Many could convert retirement accts from paper to self stored PMs. It’s a bit complicated but doable.

    • Gig have you ever read the book Crash Course?
      It supports your way of thinking, which I agree with.
      The book has charts from the US Geological survey.
      They say there are about 10 more years of silver left.
      Silver is suppose to be the first element that will go extinct.

      • No, I haven’t read it, but it sounds worth while. Most of my thoughts come from observation.
        I don’t think any natural resource will become extinct; however it might become so scarce it is too expensive to harvest. But that will depend on price.

  15. Paper investments give paper returns. It is when people realise their returns buys them less and less hard assets that pm’s will have their day. I don’t look at the price anymore, i just buy. Surplus fiat goes into hard assets like first class tools, and pm’s. The economy is dead. The monetary system is dead. Peak oil is on its way. The paper fiat school is on fire, it’s not about getting in, it’s about getting out in time. The flames can only be seen from the outside.

    Oh, and ehhh, don’t feed the troll.

    • All of us who live in western society who have jobs have an inherant long position in the fiat system. So yes, I think it makes sense for everyone to own metals as an aggressive hedge against that system collapsing. The more invested you are in the fiat system, perhaps, the larger the hedge(?)

      • ‘The more invested’ is not the point. Investments only excist in your own matrix, attached to the main matrix. Watch your back and enjoy life. That’s the best investment. But i sure don’t have a problem with some personal insurance, like pm’s.

        So no. Your long position in the fiat system is a lie; “faites vos jeux”

  16. What about the reports that JP Morgan is buying up almost all silver coins minted by the US govt.?
    It is said they began to realize the need for the underlying asset as a hedge against their runaway short positions when the silver price reached into the 40’s.

  17. Frank, if all was well the Fed and world’s Central banks would go back to sleep. They all wouldn’t be monetizing the world’s debts since economic growth and good political leadership in balancing budgets would take care of closing all budget deficits. Greece wouldn’t be bankrupt. Domestic oil shale producers would have to cut staff and exploration. My advice Fran would be for you to use all of you money to buy as many stocks as possible and park whatever savings you have in JP Morgan Chase.

  18. Gold…. and silver is REAL MONEY.

    Paper is government money.

    If you trust the government……… well…………..

  19. Clearly there is someone here that is paid by the word, his name begins with F like Fool

  20. Everyone – I have long positions in silver so I want it to go up, at the same time I can’t find any evidence that it must absolutely go up. Yes, it is in short supply, yes there is too mich fiat, but I can’t find any evidence that it is a mathematical certainty that metals will replace fiat in the years to come. As long as the sheeple trust in the fiat system, paper will be popular and metals will be shunned. At some point, yes, metals will soar — but that point could be tomorrow or decades from now. You can’t know the precise timing, and yet, for many of us we may not be able to wait for decades. Just saying.

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