Inflation in America - Part II: Pondering Platinum

[NerdyBoy99]

Re: Inflation in America - Part II: Pondering Platinum

Thanks for the input guys.

[raja]

Re: Inflation in America - Part II: Pondering Platinum

Lukester:
You said that only 7% of Ag is speculation. This makes me think that in the coming recession, Ag is more susceptible to a dramatic price drop caused by demand destruction for its use in electronics, etc. I believe gold would be different in this respect, and would not suffer the same level of decline due to demand destruction.

GRG55:
Thanks for your comments on oil investments!

[Guest]

Re: Inflation in America - Part II: Pondering Platinum

Raja - Here's a great interview with Jeff Christian, a veteran commodities analyst (former Goldman Sachs lead analyst in commodities back in the late '80's or early '90's I think). He writes the CPM yearbook on gold and silver and is considered a sober "institutional" adviser on the metals. Listen in on his report on silver 2008. I see you've been voicing much the same misgivings about the entire commodities complex for the past year to eighteen months. Your stance is "wait until the big washout" - but the washout is not obliging you by arriving. In the meantime, the fundamentals for the precious metals have not been this bullish in any preceding year.

http://www.netcastdaily.com/broadcas...008-0531-2.ram

Silver will likely not be this cheap again, even less likely in nominal dollars. An alert buyer could have scooped some up just last week at $16.60, just a hair off it's 200 MA. Hesitate, or choose to wait for the washout before you trust this segment, and you'll more likely be buying silver at a $25. I've read everything I could get my hands on about silver the last two years, and the more I read, the more misconceptions about it I read about. Meantime silver is apparently not waiting for any of us! It's 200 day moving average is moving smartly up past $16 and it's hugging close to it's 200 day average right now. Great time to add a "non-trivial" amount to one's portfolio.

The 200 day average does not break trend easily unless a secular trend is changing and that trend is looking more "secular" every day now, due to Peak Cheap Oil, if nothing else. That event will be massively inflationary (as if central banks were not enough), and geological events are one category which cannot be described as "passing fads". I think you have 10%-15% max downside in silver (and after the recent washout I doubt even that much), and 500%-800% upside in comparison. Meantime I think every last bond in the world today is a toxic idea for the next decade. To each his own. I also think "Sell in May and Go Away" for precious metals is a bad idea this year. Cheers.

[necron99]

Re: Inflation in America - Part II: Pondering Platinum

A propósito, estoy pensando en buscar un pequeño hogar abajo en el Lago de Chapala en Guadalajara. No es muy lejana volar, de San Diego. No pienso que tendré que esperar muchos más años, antes de terminar ese plan.

No soy hombre de inversiones, sin embargo, les escribo de la ciudad de Tepic, dos horas al Oeste de Guadalajara. (No he realizado la "ubicación" en mi perfíl por mucho tiempo.) Puedo decir que vivir en ésta region se vale la pena! Guadalajara es una ciudad grandote, como Los Angeles, con la tecnología y entretenemiento de una ciudad de los EE.UU. Pero el estres sigue quizás la mitad. La ciudad es verde, la clima agradable, con el energía de los jovenes de varias universidades, y la gente simpatica generalmente.

Ésta region es muy chida. Puerto Vallarta es demasiado turistico en mi opinión, pero me gustan mucho las playas de Nayarit y sur (Guerrero, etcétera). Si investigas lugares cerca Guadalajara, que me mandes un PM, quizás nos veremos aquí! Hasta pronto, güey!

[Guest]

Re: Inflation in America - Part II: Pondering Platinum

Necron99 -

Gracias por la oferta. Tepic aparece interesante y en un cierto punto estaría interesado explorar las ciudades costeras adelante allí. ¡Ahora todo lo que necesito hacer es persuadir a mi patrón alemán de mover nuestra (pequeña) oficina americana entera así que puedo moverme allí y traer a mi compañía entera conmigo! Este dueño de la compañía de ingeniería en Frankfurt (Alemania) tiene gusto de explorar el mundo, y él ha hecho cosas más locas en el pasado. ¿Es posible nosotros comprará Ocelotl una cerveza fría, eh?

[necron99]

Re: Inflation in America - Part II: Pondering Platinum

Necron99 -

¿Es posible nosotros comprará Ocelotl una cerveza fría, eh?

Tengo ganas hacerlo! Estaremos en contacto.

[ocelotl]

Re: Inflation in America - Part II: Pondering Platinum

Ocelotl -

He pasado los últimos cuatro años comprando plata (casi por instinto), porque la mayoría de los consejeros recomendarán el oro. Pero en el año pasado especialmente estoy leyendo a mucha gente que sugiere claramente que una crisis monetaria internacional es inevitable ahora, en el plazo de los cinco años próximos. Usted mira el oro, y puede ir fácilmente encima de cuatro a seis veces. Pero cuando sucede eso, es casi imposible imaginarse que el mundo no mueve atrás hacia un "re-monetizacion" de los metales.

Está en el contexto de eso, que el precio presente, muy bajo la plata comienza a mirar un pedacito asombrosamente. Es posible que este metal puede levantarse diez veces a veinte veces en esta clase de desarrollo. Esta clase de desarrollo no sucede comúnmente. Es quizás " una vez en cien anos" en probabilidad, y estos acontecimientos del tiempo largo crean mucho movimiento muy grande en clases relacionadas. Y por eso es probable ahora que la plata va definitivamente a hacer algo significativo.

Respeto.

Una revaloración de la plata respecto del oro al doble de su valor actual relativo no parece estar fuera de consideración tomando en cuenta tanto la abundancia relativa de ambos metales como su uso en el mundo actual. Si a esto añadimos la reciente viabilidad práctica del reciclaje de ambos metales de fuentes no consideradas anteriormente (la electrónica y fotografía desechadas), parece que aún tenemos un poco de tiempo extra con precios "comodos" de la plata en comparación con el oro.

Con respecto a lo de las cervezas, supongo que podremos organizarlo.

[Guest]

Re: Inflation in America - Part II: Pondering Platinum

Una revaloración de la plata respecto del oro al doble de su valor actual relativo no parece estar fuera de consideración tomando en cuenta tanto la abundancia relativa de ambos metales como su uso en el mundo actual. Si a esto añadimos la reciente viabilidad práctica del reciclaje de ambos metales de fuentes no consideradas anteriormente (la electrónica y fotografía desechadas), parece que aún tenemos un poco de tiempo extra con precios "comodos" de la plata en comparación con el oro.

Con respecto a lo de las cervezas, supongo que podremos organizarlo.

Ocelotl - I don't know if you noticed, but an even partially re-monetized silver, if this is not an absurd idea, would render Mexico and Peru two of the most formidable "providers of money" to the world. Seems absurd in today's world. Tomorrow? Who knows? China is almost certainly going to be the one of the world's largest economic powers. They were the very last country in the world to demonetize silver (1940's), and they are reputed to have the largest remaining silver stockpiles in the world. In a world where currencies crash and burn, and the one country wth the richest foreign currency reserves is China, and that country also happens to have the world's largest remaining deposits of silver, how outrageous is it to think that silver, along with gold, get's reintroduced as partial backing for a new global monetary standard? Hmmm. Who's got all the silver in the ground thereafter??

[phirang]

Re: Inflation in America - Part II: Pondering Platinum

China = world's largest exporter of gold.

[ocelotl]

Re: Inflation in America - Part II: Pondering Platinum

Ocelotl - I don't know if you noticed, but an even partially re-monetized silver, if this is not an absurd idea, would render Mexico and Peru two of the most formidable "providers of money" to the world. Seems absurd in today's world. Tomorrow? Who knows? China is almost certainly going to be the one of the world's largest economic powers. They were the very last country in the world to demonetize silver (1940's), and they are reputed to have the largest remaining silver stockpiles in the world. In a world where currencies crash and burn, and the one country wth the richest foreign currency reserves is China, and that country also happens to have the world's largest remaining deposits of silver, how outrageous is it to think that silver, along with gold, get's reintroduced as partial backing for a new global monetary standard? Hmmm. Who's got all the silver in the ground thereafter??

If memory don't fails, and history is a good reference, that's the way it worked since mid 1500's to 1940's Mexico, Perú, Bolivia providing most of the coined silver, and China harnessing it. Even Mexico Mint kept coining the original 24.44 grams of pure silver 0.9027 peso to export to China as payment for imports...

And, adding to that, we in Mexico haven't fully abandoned silver ever, just debased coinage. Last pesos with a hint of silver were minted in 1967, after that we have the olímpicas of 1968, the Juarez of 1972, the Morelos of 1977-9, the 10 nuevos pesos of 1992-5, the 20 nuevos pesos of 1993-5, the 50 nuevos pesos of 1995 and the actual sets of 100 pesos: states, Quijote 4th centennial, and Mexico Mint 470 anniversary.

Only time will tell us really how this develops, given not only overground reserves, but also underground reserves. We don't really know how much coined silver is stored as savings of common people that could emerge when remonetization happens. Still, on friday I checked a few coin dealers I know, and they are struggling due to low sales and higher rents... Even I was talked to try to assist a coin dealer congress and was asked if I had a coin store...

[sadsack]

Re: Inflation in America - Part II: Pondering Platinum

Although in my opinion the future regarding human situation seems very difficult, at least until we do stabilize the population of the globe to a manageable number or begin colonizing asteroids or the moon (ok I'm dreaming on this, but the idea of harvesting a carboniferous rock, or a bunch of them can be considered as a possibility if we don't fall in a global war, also using the aluminum and titanium that is on the moon doesn't seem a very bad idea)

Dream on, as do I and possibly Sapiens does (but DON'T quote me on the latter) . . .

[Andreuccio]

Re: Inflation in America - Part II: Pondering Platinum

silver bug! i bought a pile in 2001.

compared to platinum, 'looks' cheap.





so does gold...



i'd be lightening my load of platinum and buying silver with it.

Silver is cheaper compared to platinum vs. prices earlier in the decade, but not by as much as the graphs make it "look".

Silver from $5 to about $17.5 = 3.5X increase.
Platinum from $400 to $2000 = 5X increase.
Gold from $300 to $900 = 3X increase.

The scale of the graph makes it "look" like silver is relatively much cheaper than it is. Silver's rise only goes about 1/3 of the way up the y-axis, while the rise of gold and platinum both run up the entire length of the graph.

[bart]

Re: Inflation in America - Part II: Pondering Platinum

The long term picture:

[ocelotl]

Re: Inflation in America - Part II: Pondering Platinum

Newbie question. Is it worth paying a premium for Maple Leaf coins or Morgans? I intend to buy a significant amount to keep handy. You know, just in case...

IMHO. I've seen pre 1910 pesos at MXN 175 a piece, around USD 17 a piece. If you pay more for a Morgan Dollar, it is robbery. Also Mexican gold pesos (Centenario, Azteca, Hidalgo and similars) are around MXN 230 to 270 pesos per peso (0.75 grams of pure gold per peso), of course with higher prices for the smaller coins. If you are getting pre 1933 gold dollars (1.5 grams of pure gold per dollar) at more than 45 to 52 USD per unit, you are getting ripped.

[Guest]

Re: Inflation in America - Part II: Pondering Platinum

Ocelotl - from one "silver bug" to another, a friendly reminder. You need to get those grams to ounces conversions ironed out! Come on, Mr. Electrical Engineer.

		one ounce = 28.3495231 grams
		More about calculator.

Other than that, I am squarely in agreement with you - everybody should forget the "rare" or "in-demand", or "special" coin mumbo-jumbo (unless you are a miserable, wretched, nihilistic, metal-hoarding cynic like Metalman, who saw such a black and ugly world seven years ago that he felt compelled to run out and buy a truckful of Morgans that nobody wanted). Starving Steve has the best idea - buy as much CHEAP gold and silver metal as you can afford, and then wait. And wait, and wait, and wait. The rest is all about "waiting".