The recent silver market

[Carolinian]

With tight supply, the premiums on silver are crazy. A $10 roll of quarters, or halves has a little over $180 in silver bullion content at today's spot price, but the best one can do today for random US silver coins in over $280 for that roll with one major company over $300. That is one heck of a premium. For halves, it is worse, $316 a roll for the one company that has any, although oddly they have Barber halves (pre-WWI) at $299 a roll.

I picked up a good bit of silver on the dip early last month, and am glad I did as premiums were reasonable then, too. When the premiums are up, the bullion companies pay well above spot when they buy, although I am not in the market to sell, because it looks like silver is going to keep going up. I don't buy from the bullion companies when premiums are that high, however.

I see the US eagle bullion coins up in the $46 range with bullion content a bit over $25, another huge premium over spot, but I have not been buying the bullion coins anyway.

While the spot price of gold has been up, the premiums are still not too bad there. Some of my favorite European gold monetary coins can still be bought about 6% over spot.

Any precious metal in coin form, or for that matter smaller bars will always be priced over spot, but when it creeps up too much over spot, it is not a good deal.

 

[Ralph Sir Edward]

With tight supply, the premiums on silver are crazy. A $10 roll of quarters, or halves has a little over $180 in silver bullion content at today's spot price, but the best one can do today for random US silver coins in over $280 for that roll with one major company over $300. That is one heck of a premium. For halves, it is worse, $316 a roll for the one company that has any, although oddly they have Barber halves (pre-WWI) at $299 a roll.

I picked up a good bit of silver on the dip early last month, and am glad I did as premiums were reasonable then, too. When the premiums are up, the bullion companies pay well above spot when they buy, although I am not in the market to sell, because it looks like silver is going to keep going up. I don't buy from the bullion companies when premiums are that high, however.

I see the US eagle bullion coins up in the $46 range with bullion content a bit over $25, another huge premium over spot, but I have not been buying the bullion coins anyway.

While the spot price of gold has been up, the premiums are still not too bad there. Some of my favorite European gold monetary coins can still be bought about 6% over spot.

Any precious metal in coin form, or for that matter smaller bars will always be priced over spot, but when it creeps up too much over spot, it is not a good deal.

Carolinian, what you are seeing is a slow domestic run on the dollar. Not a run on banks, but on the dollar itself. American people are wanting physical high value commodities, not paper or deposits. The tip-off is the higher values for US marked metals, over foreign marked metals. People are willing to pay a premium for physicality. For items that cannot be newly minted, the premium will stay higher longer than those that can be newly struck, as bullion will be converted into smaller units over time. It will take a drop in preference of physical over notional, for the margins to completely narrow. It's not something that happens overnight.

 

[Carolinian]

Foreign central banks have been buying more gold in the last few years, which means they must have some questions on the dollar, too.

Silver went over $26 an ounce today, and the premiums over spot are still just crazy high. I am looking more at European monetary gold coins these days, which still often carry reasonable premiums, even if the spot price is over $2,000 an ounce.

One I have always liked are the Austrian and Dutch ducats, which were trade coins once minted all over Europe in medieval times and used up until World War II in the Baltic (Dutch ducat) and Adriatic (Austrian ducat). They contain .1106 ounce of gold but are cheaper to buy than the 1/10 ounce modern bullion coins even though they contain more gold. The Austrian version has been restruck with the 1915 date since World War I and still restruck by the Vienna mint. The Dutch version was struck for circulation right up to World War II, and has been struck with current dates for collectors since the war, still using the original medieval design with a standing armored knight holding a sword and a clutch of arrows that has been used since the first Dutch ducats were minted in the 1500s.

One curious thing the last six months or so has been a reversal of which one is cheaper. Until then, the Austrian version was $10-$15 cheaper than the Dutch version but now it is reversed. I suspect, the Vienna mint may have run out of their last batch of restrikes, and when they run another batch, the relative values will go back to what they have been. The premiums also shot up about the same time on the Austrian 4 ducat 1915 restrikes which were once common at as low as 3% over spot, but now carry a higher premium than the 1 ducat pieces.

Yugoslavia also briefly minted its own ducats in the 1920s, but those carry a much higher numismatic premium. In the 19th century, the Dutch ducats were widely counterfeited by the Imperial Russian government at the St. Petersburg mint and they are hard to tell from the real thing. Most of my Dutch ducats are from the 1920s. On an order of Austrian restrikes last year, I had one bullion dealer include an original from the 1880s which has a higher numismatic value in the order, but the rest of my Austrian ducats are restrikes.

Dutch ducats popped up on one of the bullion dealers sites today, at a reasonable premium, but they only had one in stock, so I ordered than one.

 

[easyrider]

This is odd and will likely disappear soon but for the third time the National Debt Clock has a message that to me looks like a hacker is able to mess with it. The last message was a line out of Revelations right before the Hamas / Israeli war. This new one looks like a hippy with a sign that says he will work for gold but prefers silver.

Bill

https://www.usdebtclock.org/

 

[pedro47]

This is odd and will likely disappear soon but for the third time the National Debt Clock has a message that to me looks like a hacker is able to mess with it. The last message was a line out of Revelations right before the Hamas / Israeli war. This new one looks like a hippy with a sign that says he will work for gold but prefers silver.

Bill

https://www.usdebtclock.org/

Do you remember when the clock stated the United States was debt free for a moment ??

 

[easyrider]

Do you remember when the clock stated the United States was debt free for a moment ??

Nope.

I did notice silver hit $39.20 today.

Bill

 

[Brett]

Nope.

I did notice silver hit $39.20 today.

Bill

Also nope but

I did notice that the S&P 500 stock index were at recent record highs and NASDAQ is at record levels

and Bitcoin !!

and ...

 

[easyrider]

Also nope

What price did you see ?

Bill

 

[easyrider]

It's getting closer to that $40 mark.

Bill



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Silver Spot Price​

$39.30 USD

 

[Brett]

It's getting closer to that $40 mark.

Bill

Silver Spot Price​

$39.30 USD

chump change compared to the S&P


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https://www.macrotrends.net/2608/gold-price-vs-stock-market-100-year-chart

 

[Ralph Sir Edward]

Physical silver is being squeezed right now. Rather like the Hunt boys back in the late 1970's. (Sidebar, I once worked with the programmer who kept the books for one of the Hunt boys back in the 1970's.)

COMEX contracts are being demanded for physical delivery, not just rolled over. London metals exchange contracts aren't being honored for next day delivery, but deliveries are being stretched out to as much as 8 weeks.

It isn't we little boys that are affecting this market; it's the big boys causing the squeeze.

 

[easyrider]

chump change compared to the S&P


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View attachment 113072
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https://www.macrotrends.net/2608/gold-price-vs-stock-market-100-year-chart

Yes, we all know that the market has a better return than most tangible assets. The thing about tangible assets is they are tangible and offer a cushion to when the whip comes down, lol.

Bill

 

[easyrider]

Spot Silver hit $41.10 today.

Bill

 

[Brett]

Yes, we all know that the market has a better return than most tangible assets. The thing about tangible assets is they are tangible and offer a cushion to when the whip comes down, lol.

Bill

The thing about S&P stocks is that most companies own "tangible" assets and 75% pay annual dividends
( But it also helps to hold bonds and CD and other fixed interest assets in an investment portpolio )



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https://www.macrotrends.net/2608/gold-price-vs-stock-market-100-year-chart

 

[Carolinian]

A fixed interest rate paid in a fiat currency doesn't do much good as the fiat currency declines in value, especially if it does so rapidly. You might do better if the fixed interest rate was paid in a currency of a country not so racked with debt like Norway or Switzerland. When I was in high school, the Swiss franc was 23 cents and the British pound $2.80. Now they are both worth a little over one dollar. The British pound declined faster than the dollar and the Swiss franc more slowly. Gold was $35 then. Now it is $3,600.

 

[Carolinian]

Physical silver is being squeezed right now. Rather like the Hunt boys back in the late 1970's. (Sidebar, I once worked with the programmer who kept the books for one of the Hunt boys back in the 1970's.)

COMEX contracts are being demanded for physical delivery, not just rolled over. London metals exchange contracts aren't being honored for next day delivery, but deliveries are being stretched out to as much as 8 weeks.

It isn't we little boys that are affecting this market; it's the big boys causing the squeeze.

One thing that impacts the silver price, is that for the last five years, demand for silver has significantly exceeded mine supply, and that is projected to continue and to grow. It is the old principle of supply and demand. Sure, silver is one of the monetary metals that has always had a Foreign Exchange cross in the FX market, and therefore held by many as a store of wealth, but unlike gold, it is also an industrial metal, necessary for such things as AI, EV's, solar panels, and many other applications, including quite a bit of silver in the guidance system of cruise missiles. In many nations where holding precious metals is common among the population like India, the price of gold has pushed a lot of that market into silver, which is sometimes called "the poor man's gold".

Bringing more silver to market is a lengthy process, and even when a new discovery is made, the process of permitting and opening a new mine can take 8 to 10 years. For those who prefer the stock market, a good play is on silver mining stocks. Indeed I read recently where one large silver mining company is putting as much of their production as they can into the vault instead of selling it because their analysis points to prices going up quite a lot on their product. For those looking at ETF's, make sure the ETF does hold the full amount of silver they say, as many believe these funds only hold a fraction of it and could thus implode if called upon for delivery.

One advantage of gold over silver, is that while gold is being bought up in a big way by central banks, helping push up its price, only one central bank is known to hold silver. However, President Trump has recently declared silver among the critical minerals that need to be stockpiled for national defense, and that is another way that government purchases can impact the market. It is likely that other countries are doing the same.

This month, we have bought a lot more silver than gold for our own portfolio. I like the looks of the silver market, and even though the price is up, one of the bullion companies I deal with has had a sale that is still running of US 90% silver dimes, quarters, and halves at spot, and to be competitive, the other two have reduced their premiums on at last some 90% silver coins. Last month, another company had its annual anniversary sale with some really good deals on gold, and that was all I bought in precious metals last month.

We have a fund sitting in the bank in short term CD's to buy another rental house, but the real estate market has been so tight for so long, that we are tempted to put that into precious metals, too.

 

[Ralph Sir Edward]

One thing that impacts the silver price, is that for the last five years, demand for silver has significantly exceeded mine supply, and that is projected to continue and to grow. It is the old principle of supply and demand. Sure, silver is one of the monetary metals that has always had a Foreign Exchange cross in the FX market, and therefore held by many as a store of wealth, but unlike gold, it is also an industrial metal, necessary for such things as AI, EV's, solar panels, and many other applications, including quite a bit of silver in the guidance system of cruise missiles. In many nations where holding precious metals is common among the population like India, the price of gold has pushed a lot of that market into silver, which is sometimes called "the poor man's gold".

Bringing more silver to market is a lengthy process, and even when a new discovery is made, the process of permitting and opening a new mine can take 8 to 10 years. For those who prefer the stock market, a good play is on silver mining stocks. Indeed I read recently where one large silver mining company is putting as much of their production as they can into the vault instead of selling it because their analysis points to prices going up quite a lot on their product. For those looking at ETF's, make sure the ETF does hold the full amount of silver they say, as many believe these funds only hold a fraction of it and could thus implode if called upon for delivery.

One advantage of gold over silver, is that while gold is being bought up in a big way by central banks, helping push up its price, only one central bank is known to hold silver. However, President Trump has recently declared silver among the critical minerals that need to be stockpiled for national defense, and that is another way that government purchases can impact the market. It is likely that other countries are doing the same.

This month, we have bought a lot more silver than gold for our own portfolio. I like the looks of the silver market, and even though the price is up, one of the bullion companies I deal with has had a sale that is still running of US 90% silver dimes, quarters, and halves at spot, and to be competitive, the other two have reduced their premiums on at last some 90% silver coins. Last month, another company had its annual anniversary sale with some really good deals on gold, and that was all I bought in precious metals last month.

We have a fund sitting in the bank in short term CD's to buy another rental house, but the real estate market has been so tight for so long, that we are tempted to put that into precious metals, too.

Taking advantage of market inefficiencies is usually a good thing. The metals market have been trained over the last few decades to only think in round weights (round troy ounces; round gram amounts) People don't want odd weights any more. The US silver market used to be based on silver coinage that had circulated, and could, in extremis, be used as money again. (i.e. a silver quarter could be used as a quarter again.)

But the generation(s) that grew up with "silver in their silver" are dying off from old age. I was 7 years old when silver was phased out of the coinage here in the US. Younger generations give a blank look at actually having money with intrinsic value. Hence the demand for 90% silver is dropping. I'm starting to buy $10 face a month at these prices. Nostalgia, you might say.

 

[Brett]

Taking advantage of market inefficiencies is usually a good thing. The metals market have been trained over the last few decades to only think in round weights (round troy ounces; round gram amounts) People don't want odd weights any more. The US silver market used to be based on silver coinage that had circulated, and could, in extremis, be used as money again. (i.e. a silver quarter could be used as a quarter again.)

But the generation(s) that grew up with "silver in their silver" are dying off from old age. I was 7 years old when silver was phased out of the coinage here in the US. Younger generations give a blank look at actually having money with intrinsic value. Hence the demand for 90% silver is dropping. I'm starting to buy $10 face a month at these prices. Nostalgia, you might say.

yes, it's nostalgia

Pity the people that hoard silver coins in their basement safe. --- well, except for some 1700's silver dollars !

Otherwise ...........
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https://www.longtermtrends.net/stocks-vs-gold-comparison/

 

[Ralph Sir Edward]

yes, it's nostalgia

Pity the people that hoard silver coins in their basement safe. --- well, except for some 1700's silver dollars !

Otherwise ...........
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View attachment 115918
https://www.longtermtrends.net/stocks-vs-gold-comparison/

Brett, the disagreement is about what money is. Example:

The year is 1965. I have $500 I want to save. Do I . . .

1. Save 100 $5 bills? (Hey, it's money, right?)

2. Save $500 in quarters? (A lot bulkier, 50 rolls of quarters, but it too was money at that time.)

3. Buy stocks? (Are stocks money? I can't buy things with them directly, I have to sell them at whatever the market price is, wait for them to clear, and then get the money from the broker. A rather long and involved process.)

The key point is - SAVE. Not invest, but save. Stocks are an investment, not a form of savings.

The most important point is that if you want to save money, you have to define what money is. Fiat currencies (not exchangeable on demand for any fixed product) are always cursed with inflation, which erodes their values over time. Those $5 bills saved in 1965 have lost 95% of their purchasing power since 1965.

Do I use some liquid (easily exchangeable) metal as my "money"? Drawbacks - lose value through bid/ask spreads. Market values fluctuate widely over time. On the other hand, metal values tend to trend up over time. Those quarters have much more purchasing power over time than those $5 bills. . .

A person's "portfolio" should have a variety of assets. It should have investment. It should have savings. It should be structured to handle a wide variety of occurrences.

I have stocks. I have real estate. I have "iron money" (a small hoard of paper money). I have metals. I measure value, not on a paper money scale, but on two different metal scales. (I have a spreadsheet that does all the "donkey work" automatically. The two scales are gold (at $20.67/troy ounce - The pre-FDR dollar value, which I call Mark Twain Dollars (MTD for short.)), and silver (at $.715 troy ounce/dollar (not $.723, average wear loss is factored in.), the 1964 silver standard.)

I find the paper dollar useless for measuring value. YMMV

 

[Brett]

Brett, the disagreement is about what money is. Example:

The year is 1965. I have $500 I want to save. Do I . . .

1. Save 100 $5 bills? (Hey, it's money, right?)

2. Save $500 in quarters? (A lot bulkier, 50 rolls of quarters, but it too was money at that time.)

3. Buy stocks? (Are stocks money? I can't buy things with them directly, I have to sell them at whatever the market price is, wait for them to clear, and then get the money from the broker. A rather long and involved process.)

The key point is - SAVE. Not invest, but save. Stocks are an investment, not a form of savings.

The most important point is that if you want to save money, you have to define what money is. Fiat currencies (not exchangeable on demand for any fixed product) are always cursed with inflation, which erodes their values over time. Those $5 bills saved in 1965 have lost 95% of their purchasing power since 1965.

Do I use some liquid (easily exchangeable) metal as my "money"? Drawbacks - lose value through bid/ask spreads. Market values fluctuate widely over time. On the other hand, metal values tend to trend up over time. Those quarters have much more purchasing power over time than those $5 bills. . .

A person's "portfolio" should have a variety of assets. It should have investment. It should have savings. It should be structured to handle a wide variety of occurrences.

I have stocks. I have real estate. I have "iron money" (a small hoard of paper money). I have metals. I measure value, not on a paper money scale, but on two different metal scales. (I have a spreadsheet that does all the "donkey work" automatically. The two scales are gold (at $20.67/troy ounce - The pre-FDR dollar value, which I call Mark Twain Dollars (MTD for short.)), and silver (at $.715 troy ounce/dollar (not $.723, average wear loss is factored in.), the 1964 silver standard.)

I find the paper dollar useless for measuring value. YMMV

I don't want to get in a long discussion about "what money is" but most assets "trend up over time"

And It is true that investment portfolios should have a mix of 'assets' such as -

Pensions
Annuities
Stock Index funds
Bond index funds
Certificates of Deposit
Bonds - corp & gov't
Real Estate
Real Estate funds

sure, gold coins in a safe could be useful at times but for the highest "long term" return in a hypothetical 60-40 mix
It is ...
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https://www.macrotrends.net/2608/gold-price-vs-stock-market-100-year-chart

 

[Ralph Sir Edward]

I don't want to get in a long discussion about "what money is" but most assets "trend up over time"

And It is true that investment portfolios should have a mix of 'assets' such as -

Pensions
Annuities
Stock Index funds
Bond index funds
Certificates of Deposit
Bonds - corp & gov't
Real Estate
Real Estate funds

sure, gold coins in a safe could be useful at times but for the highest "long term" return in a hypothetical 60-40 mix
It is ...
.
.
.
.
.
.
./
View attachment 115921

https://www.macrotrends.net/2608/gold-price-vs-stock-market-100-year-chart

Not a very diversified investment set.

Pensions Financial asset class
Annuities Financial asset class
Stock Index funds Financial asset class
Bond index funds Financial asset class
Certificates of Deposit Financial asset class
Bonds - corp & gov't Financial asset class
Real Estate Real asset class
Real Estate funds Hybrid financial/real asset

6 1/2 Financial assets, 1 1/2 real assets.

No Intellectual property, no productive assets (i.e. things like businesses, producing mineral ownership (forgot to add, I own producing oil and gas mineral interests)), no other real assets, no collectibles, ect.

Not diversified at all.

Please stop repeating your chart. Everybody here has seen it dozens of times. It's become boring.

 

[Brett]

Not a very diversified investment set.

Pensions Financial asset class
Annuities Financial asset class
Stock Index funds Financial asset class
Bond index funds Financial asset class
Certificates of Deposit Financial asset class
Bonds - corp & gov't Financial asset class
Real Estate Real asset class
Real Estate funds Hybrid financial/real asset

6 1/2 Financial assets, 1 1/2 real assets.

No Intellectual property, no productive assets (i.e. things like businesses, producing mineral ownership (forgot to add, I own producing oil and gas mineral interests)), no other real assets, no collectibles, ect.

Not diversified at all.

LOL

Apple, Google, Amazon, etc. probably have some "intellectual properties" and "productive assets"

S&P 500 stock index fund

.



But no baseball cards or labubu collectibles !

....

 

[Ralph Sir Edward]

LOL

Apple, Google, Amazon, etc. probably have some "intellectual properties" and "productive assets"

S&P 500 stock index fund

View attachment 115931

.



But no baseball cards or labubu collectibles !

....

No old masters or old rock'n'rollers music catalogs either.

Looking at your list, I thought you should look at Cisco from 1999 to 2003

Cisco - 35 Year Stock Split History | CSCO

Stock split history for Cisco since 1990. Prices shown are actual historical values and are not adjusted for either splits or dividends. Please see the

www.macrotrends.net

Yes it dropped 95% in that time period. Amazon dropped 98% in the same time period.

If you think that major bear markets have been permanent banished, enjoy the next 10-15 years...

 

[Brett]

No old masters or old rock'n'rollers music catalogs either.

Looking at your list, I thought you should look at Cisco from 1999 to 2003

Cisco - 35 Year Stock Split History | CSCO

Stock split history for Cisco since 1990. Prices shown are actual historical values and are not adjusted for either splits or dividends. Please see the

www.macrotrends.net

Yes it dropped 95% in that time period. Amazon dropped 98% in the same time period.

If you think that major bear markets have been permanent banished, enjoy the next 10-15 years...

Actually I own entertainment "catalogs"

https://en.wikipedia.org/wiki/List_of_S&P_500_companies


I suppose I could also look at K-Mart and Sears and Enron in that "time period"
.

But there's a reason I invest in stock index funds - (~ 60% / 40% investment portfolio mix )
Bear markets haven't been "banished" - there's a reason for the 40% mix of CD's, bonds, etc.
Enjoy the next 10 - 15 years with your "collectibles" ....



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[Carolinian]

When one looks at our debt burden, dollar denominated assets carry risks, but then it is also bad on that score in the UK and much of the EU, so pounds or euros are about the same as the dollar as to risk. The Swiss franc and Norwegian kronor have much lower relative debt, and those countries are outside the EU. So what are the world's central banks moving to as a store of value? They are dumping dollars and euros and pounds and other fiat currencies and buying gold. Gold is a currency play and the central banks are leading the way.

Silver is also considered a monetary metal and has a Foreign Exchange cross in the FX market but it is only held by one central bank. Silver is largely a commodity play, where demand has been outstripping mine supply for five years and is projected to continue and grow. You can play that with ETF's which may or may not actually have enough silver on hand to deliver if necessary, or with silver mining stocks. The problem with the latter is that in most cases, it is not a pure silver play since most silver miners also mine other metals, sometimes gold, but also base metals as well. Mexico produces a lot of silver but its mine production is falling, partly for bureaucratic reasons. So does Canada, but production costs are very high in Canada, and one of the larger silver miners has been selling its mines there for that reason.

With fiat currencies, it is all too easy for governments to monetize the debt through inflation. Some now claim that the new GENIUS Act that recently passed is a scheme to monetize the debt through "stablecoins" followed up by a gold revaluation. That all may be conspiracy theory but who knows. One of the economic gurus called crypto "a digital Ponzi scheme" and I am inclined to agree. When all of that is going is hard to tell, but one thing history tells us that there is no good outcome to excessive government debt, which is what the western world is facing these days.

I like hard assets these days over paper assets. Real estate and precious metals are my go-to categories. With annuities, I would only consider them if paid in a currency of a country that does not have a ticking debt timebomb. The Napoleonic War debt would have taken down the UK economy if the Rothchilds had not bailed them out. World War I debt did take down the German economy in 1923 and nobody was there to bail them out.