patrick.net

When gold and silver peaked in 2011 the dollar index (ticker: DXY) was down to 73.

DXY is now 113. It near 1999 to 2000 levels.

The high dollar value may be one major reason for silver and gold not increasing in value due to inflation.

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I suspect the Fed economists are wanting the DXY or dollar index to drop when inflation decreases.

That import prices will not be as high if the dollar goes down, since there is less inflation of prices.

And I believe gas prices will remain constant since production is being cut.

OPEC realized gas prices would crash as the economy slows down (in a less inflation or more deflationary environment), so they got ahead of this and are making production cuts now.

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I think one big reason for the decline in gold and silver is the rise in interest rates. Investors are tempted away from gold by increased interest on dollars.

Long term, gold may be impacted by an intergalactically large find of gold in Uganda:

https://energycapitalpower.com/uganda-discovers-31m-tons-of-gold-ore/

Patrick says

Long term, gold may be impacted by an intergalactically large find of gold in Uganda:

Production will be metered or managed to ensure there is no major drop off of gold prices.

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Patrick says

Long term, gold may be impacted by an intergalactically large find of gold in Uganda:

https://energycapitalpower.com/uganda-discovers-31m-tons-of-gold-ore/

I doubt the story is true.

My friend has a bunch of silver coins he bought around 2011 at $45/ounce.
I bought shares of AAPL a bit before that.
He’s underwater, I’m up and my shares split, he’s got the same number of coins.

clambo says

My friend has a bunch of silver coins he bought around 2011 at $45/ounce.

Silver is a good hedge based on it being matched to a price of gasoline.

https://patrick.net/post/1344893/2022-05-01-silver-dime-buys-gallon-of-gas

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I seek capital appreciation first, dividends and interest second.
Hedging isn't among my objectives.

clambo says

I seek capital appreciation first, dividends and interest second.

Apple and Google are two companies that are good long term bets.

I own them as well as Walmart, Goldman Sachs, and Amazon.

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Just bought a few hundred ounces of silver at $25 an ounce. Dealer had it on hand.

When it comes to valuing gold and silver, make sure you separate the fiat paper metals markets, which are highly manipulated, from the real market, which is not.

NuttBoxer says

Just bought a few hundred ounces of silver at $25 an ounce. Dealer had it on hand.

When it comes to valuing gold and silver, make sure you separate the fiat paper metals markets, which are highly manipulated, from the real market, which is not.

iTulip used to recommend these guys:

Bullionvault.com

They have "good delivery" gold held for you in what is called a bailment. Reasonable trading fees and storage costs. The one thing you have to be aware of is FATCA (as of 2013), so if you're thinking of using foreign vaults as opposed to their NY vault, be prepared for mass paperwork.

Edit: Disclosure - I got involved with BV before 2013, so up until that time there was only the collectibles tax to deal with.

CEF and GLD used to be OK, but Sprott bought them out. I don't know how much smoke and mirrors Sprott is doing, but it doesn't bode well when Sprott said they were buying so that shareholder value could be better maintained. Uh - if your business is buying and storing precious metals, there will be associated inefficiencies. That meant that there were lags in share value between when gold and/or silver stocks could be acquired and the swings in PM prices.

NuttBoxer says

Just bought a few hundred ounces of silver at $25 an ounce. Dealer had it on hand.

Congrats on being able to find something in stock. Were they a popular bar brand? Looks like the local place in Marin has Royal Canadian Mint 100oz. bars or Nadir Turkish bars -- oh wait, that is presale. Actually in stock you've got 1 oz. Lakshmi or Ganesha rounds. Silver eagle premium is $16.

stereotomy says

They have "good delivery" gold held for you in what is called a bailment. Reasonable trading fees and storage costs.

As long as they agree to deliver if you ask for it. A vault that won't do delivery, isn't holding anything. It's getting a bit late in the game to be doing storage investments though. Meaning during or after a collapse, what's the likelihood you'll still get your metal?

EBGuy says

Silver eagle premium is $16.

So 80% over "spot" price. Amazing. Sounds like something is broken.

I miss the good old days when silver was $46/ounce

clambo says

I miss the good old days when silver was $46/ounce

I miss the old days when it was $6 an ounce, I was buying then, and I was nervous, because the price before that was $3 an ounce.

Dumped a bit of money into that, don't regret it now.

Ironically, I'm now eager to see the price drop. I bought gold when it was $600 an ounce as well.

Regrettably, it's obviously clear that if you want to fix the system, you have to bankrupt it. If EVERY American bought just 2 ounces of silver (around $50 today) I would drag this criminal government to its knees, but not really, they just wouldn't fulfill the order. Instead, they'd just steal the money.

You mean the last time the economy tanked. Don't worry, it's coming back around, and for way more.

clambo says

I miss the good old days when silver was $46/ounce

I remember that! What was it 1978 or 79? I remember because I could take an old quarter to the coin shop and get $5 for it.

There is more silver in the world than could ever be squeezed from the water and soil, but not at $20 an ounce.

https://kingworldnews.com/sprott-china-is-replacing-u-s-treasuries-with-gold/




I don't know that this is true, but it makes sense.

do the elites prefer higher or lower precious metal prices?

where does a country like china buy a couple tons of gold?

Patrick says

I don't know that this is true, but it makes sense.

Its true about China's peak holdings of US Treasuries was in 2014 and they have been slowly selling off these holdings.

And its true China has been buying up gold: https://www.bloomberg.com/news/articles/2023-01-07/china-extends-gold-buying-with-fresh-flows-to-central-bank

They are in the top 10 as far as gold reserves: https://www.bloomberg.com/news/articles/2023-01-07/china-extends-gold-buying-with-fresh-flows-to-central-bank

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Onvacation says

I remember that! What was it 1978 or 79?

20-teens, not that long ago.

komputodo says

where does a country like china buy a couple tons of gold?

Heard the Rothschild's stole some from Libya...

komputodo says

do the elites prefer higher or lower precious metal prices?

It's the only real money, and can't be manipulated/controlled, so definitely lower.

The SF Bay Area is an expat community of elites from that part of the world.

My observation is that money from those sorts of folks rushes in at or near peak valuation. They mostly like crowds; feel comfortable in and among crowds, including crowded investments. (This is why they're an outsized portion of Mom and Pop landlords in these parts, making eensy weensy cash flow and counting on speculating on appreciation).

It's a cultural thing.

So I would not be alarmed about their Gold Hoarding and Treasury Sell Off. It could portend of bad news, but it also could be a contrarian signal.

NuttBoxer says

can't be manipulated/controlled

It is manipulated it though:

https://www.reuters.com/article/us-barclays-regulations-gold-idUSBREA4M06620140523

LONDON (Reuters) - Barclays Plc has been fined 26 million pounds ($43.8 million) for failures in internal controls that allowed a trader to manipulate the setting of gold prices, just a day after the bank was fined for rigging Libor interest rates in 2012.

I bet those paper metal inside traders make a fortune. Dip the price, buy. Spike the price, sell. Repeat until you have "fuck you" money.

Our system is so rigged. The world is drowning in federal reserve notes. They are not backed by anything but the faith and good credit of our government.

They need their credit cards cut up.

Onvacation says

I bet those paper metal inside traders make a fortune. Dip the price, buy. Spike the price, sell. Repeat until you have "fuck you" money.

I agree as there is definitely some type of massive collusion to get this type of volatility. I would not doubt if financial media is involved with this as well.

That is why if you go in with silver like the silver ETF (ticker: SLV) then go long term such as at least 10 years and sell covered calls.

Going long term enough and selling covered calls will allow you to not be influenced as much by volatility driven by inside traders.

American investors, the Federal Reserve and the Social Security trust fund are buying up US Treasuries.

Look at the balanced mutual fund like Vanguard Lifestrategy Conservative Growth Fund, about 60% of its assets are in investment grade bonds, which means mostly US Treasuries.

The note holder for a vast majority of the US federal (and states) debt is the American public :-/

Expect Social Security tax to increase, if not a means test is applied within 10 years.

The American public are being conditioned for the future Social Security means test.

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Patrick says

It is manipulated it though:

So just to be clear, when I say gold and silver, I mean gold and silver. Not paper, gold - and - silver. I know it seem like I'm preaching semantics, or making needless distinctions, but if you cannot separate the fake from the real, none of this will ever make sense.

ad says

The American public are being conditioned for the future Social Security means test.

I would bet the public already supports a SS means test. A poll question "Do you support a means test of $200k income or below to recieve SS payments, as a step to preserve SS?" would get overwhelming yes answers.

Foreign governments do not voluntarily get rid of their Treasuries.

China has been using its treasuries to pay for its imports. China runs a trade surplus with the US, but runs massive trade deficits with most of the rest of the world.

There is also the fleeing of dollar denominated assets from the CCP elites into anywhere other than China.

As for gold...China is the largest miner of the metal in the world. They will buy from their mining firms and pay in Yuan. The Chinese government has gone so far as to recommend to its citizens to invest in gold.

The largest international purchaser of gold far and away is India.

They are familiar with paper currencies going poof ! ! !

Gold/Silver ratio is now very high at 88. Could be a good time for silver to run... (or for gold to collapse).

It's been high for the past few years. If you're buying, definitely silver, always physical, always take delivery.

When you buy gold, do you get the gold or just a piece of paper saying you have gold? If it's a piece of paper then it's not much of a hedge against anything.