Investing in Precious Metals

[KingsOfKings]

 

[Pete Wrigley]

We are going to hear more about this in 2026 since it appears that China has a monopoly on Silver.

 

[Amo Husserl]

Starting to switch to smaller denominations of gold. Left silver alone a while ago, might dip back in and get twenty rounds just to have, but gold is the focus now. Might pivot to platinum.

 

[Gritsngravy]

what y’all think about what’s going on with silver and how it effects the world

 

[Scientific]

what y’all think about what’s going on with silver and how it effects the world

I havent been in this thread in years. Looking at the first page of responses, and theres a dig at Peter Schiff as right wing, which hes not. He's been a fundamentalist, and never lost sight of it. he's been one of the most vocal people to call out the constant QE during the 00s and has been constant on why coming off the gold stand would be a disaster. He's being vindicated, but that could be a bad sign.

I've listened to him since 2010 and his entire message has been that eventually the monetary system will get to an inflection point because of the constant QE. He's called the entire thing a bubble, and he's been called chicken little since forever, but his premise around the Fed and USD wasn't wrong. You can't put too much faith into the system that's propped by fiat currency that keeps printing itself into the ground. COVID and the tanking of rates accelerated that. It took 3 years after 2020 to see any real movement in PMs, despite all other asset classes making their jumps like they had.

Silver and gold are hitting all time highs, as there is no doubt a new Fed chair will be put in place and drop rates this year. The way I see it? Liquidity is having a hard time looking to find a safe haven probably anticipating stagflation. The speed in it happening this fast could be a HUGE red flag that markets know they will get a safe return in PMs. But there's too many moving parts to point to what could happen. I don't feel like PMs are in a bubble, I think markets are aware everything else is.

This whole scenario it's a fragile deck of cards. Banking competes with PMs, because it's seen as a storage of wealth. Banks aren't receiving money if youre not saving in there and central banks could see a wave of investing away from vehicles that depend on credit. Essentially this sector dries up as investors start parking in gold and silver. This is bad for world wide currencies and there will be major cracks. There's also the paper trading of silver and gold, and no one really knows (especially in silver), if these futures can be honored since there's no audit of physical silver. Silver now has so much industrial demand, along with the geo politics going on, it's hard to say.

I only ever bought silver when I came across it cheap. Only ever bought gold in jewelry as close to scrap/spot as I could get it. I never dug deep into these ideas that fiat currency could eventually collapse on its own. But if silver and gold reach say $500 & $10k by the end of the year as the Fed keeps tanking rates again? What happens if real estate and stocks don't go up like in 2021, while PMs stay hot? Could be a sign that markets don't want to be in volatile vehicles using devalued currency. It would be a big message, with potential ramifications.

Old rule of thumb was maybe have 2-3% of a portfolio in PMs. Last year JP Morgan shifted the old 60% equities/ 40% bonds to 20% bonds and 20% Gold. Why? In 2022 stocks dipped, bonds dipped, while inflation pumped up. Markets are paying attention to potential stagflation, as AI keeps thinning out certain jobs.

The speed that this is all taking place could eventually become a global economic disaster. We don't know what cracks there are, until they are stressed (08 and sub prime mortgages). The kind of people who have criticized Central banks, and the constant money printing were always right, it's that post COVID when all Central banks tanked rates, it forced us into uncharted waters. This is happening so fast, it's kind of scary what could be happening. Or could be nothing at the end of it.

 

[Gritsngravy]

I havent been in this thread in years. Looking at the first page of responses, and theres a dig at Peter Schiff as right wing, which hes not. He's been a fundamentalist, and never lost sight of it. he's been one of the most vocal people to call out the constant QE during the 00s and has been constant on why coming off the gold stand would be a disaster. He's being vindicated, but that could be a bad sign.

I've listened to him since 2010 and his entire message has been that eventually the monetary system will get to an inflection point because of the constant QE. He's called the entire thing a bubble, and he's been called chicken little since forever, but his premise around the Fed and USD wasn't wrong. You can't put too much faith into the system that's propped by fiat currency that keeps printing itself into the ground. COVID and the tanking of rates accelerated that. It took 3 years after 2020 to see any real movement in PMs, despite all other asset classes making their jumps like they had.

Silver and gold are hitting all time highs, as there is no doubt a new Fed chair will be put in place and drop rates this year. The way I see it? Liquidity is having a hard time looking to find a safe haven probably anticipating stagflation. The speed in it happening this fast could be a HUGE red flag that markets know they will get a safe return in PMs. But there's too many moving parts to point to what could happen. I don't feel like PMs are in a bubble, I think markets are aware everything else is.

This whole scenario it's a fragile deck of cards. Banking competes with PMs, because it's seen as a storage of wealth. Banks aren't receiving money if youre not saving in there and central banks could see a wave of investing away from vehicles that depend on credit. Essentially this sector dries up as investors start parking in gold and silver. This is bad for world wide currencies and there will be major cracks. There's also the paper trading of silver and gold, and no one really knows (especially in silver), if these futures can be honored since there's no audit of physical silver. Silver now has so much industrial demand, along with the geo politics going on, it's hard to say.

I only ever bought silver when I came across it cheap. Only ever bought gold in jewelry as close to scrap/spot as I could get it. I never dug deep into these ideas that fiat currency could eventually collapse on its own. But if silver and gold reach say $500 & $10k by the end of the year as the Fed keeps tanking rates again? What happens if real estate and stocks don't go up like in 2021, while PMs stay hot? Could be a sign that markets don't want to be in volatile vehicles using devalued currency. It would be a big message, with potential ramifications.

Old rule of thumb was maybe have 2-3% of a portfolio in PMs. Last year JP Morgan shifted the old 60% equities/ 40% bonds to 20% bonds and 20% Gold. Why? In 2022 stocks dipped, bonds dipped, while inflation pumped up. Markets are paying attention to potential stagflation, as AI keeps thinning out certain jobs.

The speed that this is all taking place could eventually become a global economic disaster. We don't know what cracks there are, until they are stressed (08 and sub prime mortgages). The kind of people who have criticized Central banks, and the constant money printing were always right, it's that post COVID when all Central banks tanked rates, it forced us into uncharted waters. This is happening so fast, it's kind of scary what could be happening. Or could be nothing at the end of it.

About that point of a new fed coming in to drop rates, how would the us benefit from a weaker dollar?

 

[Scientific]

About that point of a new fed coming in to drop rates, how would the us benefit from a weaker dollar?

Oh man that's a lot to unpack without context. but the big theory is, we are the world reserve currency so everyone has to use the USD at some point or another. Its the too big to fail idea. The potential benefit is, we can keep the economy going without dealing with a downturn (kicking the can down)

Inflation was always baked in, it was a yearly 2% metric before lockdown. So basically every year, the dollar was devalued in a controlled environment. The Fed lowered rates when demand tanked (9/11 and 09). They were used as emergency levers to spur the economy and compete for investing. Lost in this is that most of the other major central banks like Japan and Swiss, had decades of rates at less than 1%. So the U.S. could control the slight devaluation, when we're the largest economy and the USD is THE reserve currency.

A Finance professor said in a class i was in, and it always stuck with me when rates had been down for years leading up to COVID: The Fed wants more investing, its why theres so much of it in real estate. Our real estate rates were low then (~3%) and it was a known secret that Chinese investors were coming in with little risk on depressed prices on top of cheap rates. But this was seen as ok since we were coming out of a recession, and demand was down. The devaluation wasnt rearing its head.

Lowering rates (QE/cheaper credit/money printing) was the biggest way to ignite an ececonomy. So when COVID happened, and remember, Japan and Swiss were already so low? The Fed tanked rates so low, we "printed" something like 40% of al US money in less than a year and a half. Markets shot up just based on the principle of "cheap debt/money" flooding the market.

Depending who you listen to, it was either by design or as an unintended consequence. The back and forth between Trump and Powell is because he's fearing we're on the verge of a recession, and the Fed cannot takes rates down again. then we would be out of maneuvers. On Trump's end, his economic advisors are under the theory that because the other Central banks have lower rates? We're still the reserve currency. So what if we cheapen the dollar a bit more, if can spur the economy to offset that. You're trying to create more jobs, by attracting more investments and access to capital by cheaper credit.

If the Fed keeps lowering rates? It's like almost swinging for the fences. Our agriculture, manufacturing, and services have a high price tag due to inflation. But that's true across the globe, and things are starting to feel flat. Can we attract investing and economic growth by going at it this way? It's why Trump wants to cap CC rates, while car loans and mortgages feel cheaper at lower rates. We're essentially stuck in a corner.

So either markets are baking in the rate hike in Gold and Silver, or this is markets saying the constant printing is making less and less sense. Risk is starting to be accounted for, even if rates come down. In every scenario of runaway inflation, it starts to become obvious when that loaf of bread used to be .99, suddenly cost $10. Eventually the system recognizes the entire mechanism to make that bread is all expensive. There's no more money to be made with devalued currency.

The crazy silver stackers everyone called right wing or conspiracy nuts, always said the Fed's entire role is to print currency into the ground. Since it's not backed by anything other than the power of the dollar itself. But even they couldn't have predicted the lockdowns. And when there were hardly moves after those years of inflation, only the most indoctrined believed it. These are the choppiest waters in modern economic times.

Frontline had this doc 4 years ago about what happened. It doesn't tie into PMs, but lays out what the moves were and outlines why we are where we are now.

 

[Gritsngravy]

Oh man that's a lot to unpack without context. but the big theory is, we are the world reserve currency so everyone has to use the USD at some point or another. Its the too big to fail idea. The potential benefit is, we can keep the economy going without dealing with a downturn (kicking the can down)

Inflation was always baked in, it was a yearly 2% metric before lockdown. So basically every year, the dollar was devalued in a controlled environment. The Fed lowered rates when demand tanked (9/11 and 09). They were used as emergency levers to spur the economy and compete for investing. Lost in this is that most of the other major central banks like Japan and Swiss, had decades of rates at less than 1%. So the U.S. could control the slight devaluation, when we're the largest economy and the USD is THE reserve currency.

A Finance professor said in a class i was in, and it always stuck with me when rates had been down for years leading up to COVID: The Fed wants more investing, its why theres so much of it in real estate. Our real estate rates were low then (~3%) and it was a known secret that Chinese investors were coming in with little risk on depressed prices on top of cheap rates. But this was seen as ok since we were coming out of a recession, and demand was down. The devaluation wasnt rearing its head.

Lowering rates (QE/cheaper credit/money printing) was the biggest way to ignite an ececonomy. So when COVID happened, and remember, Japan and Swiss were already so low? The Fed tanked rates so low, we "printed" something like 40% of al US money in less than a year and a half. Markets shot up just based on the principle of "cheap debt/money" flooding the market.

Depending who you listen to, it was either by design or as an unintended consequence. The back and forth between Trump and Powell is because he's fearing we're on the verge of a recession, and the Fed cannot takes rates down again. then we would be out of maneuvers. On Trump's end, his economic advisors are under the theory that because the other Central banks have lower rates? We're still the reserve currency. So what if we cheapen the dollar a bit more, if can spur the economy to offset that. You're trying to create more jobs, by attracting more investments and access to capital by cheaper credit.

If the Fed keeps lowering rates? It's like almost swinging for the fences. Our agriculture, manufacturing, and services have a high price tag due to inflation. But that's true across the globe, and things are starting to feel flat. Can we attract investing and economic growth by going at it this way? It's why Trump wants to cap CC rates, while car loans and mortgages feel cheaper at lower rates. We're essentially stuck in a corner.

So either markets are baking in the rate hike in Gold and Silver, or this is markets saying the constant printing is making less and less sense. Risk is starting to be accounted for, even if rates come down. In every scenario of runaway inflation, it starts to become obvious when that loaf of bread used to be .99, suddenly cost $10. Eventually the system recognizes the entire mechanism to make that bread is all expensive. There's no more money to be made with devalued currency.

The crazy silver stackers everyone called right wing or conspiracy nuts, always said the Fed's entire role is to print currency into the ground. Since it's not backed by anything other than the power of the dollar itself. But even they couldn't have predicted the lockdowns. And when there were hardly moves after those years of inflation, only the most indoctrined believed it. These are the choppiest waters in modern economic times.

Frontline had this doc 4 years ago about what happened. It doesn't tie into PMs, but lays out what the moves were and outlines why we are where we are now.

That’s interesting

I guess really the name of the game for these countries is who is the better investment, that’s why China is getting acknowledgment for being the future because of its production, the question for the US is can they compete with productivity, which opens up a whole can of worms when you think about the labor of the country education immigration etc.

And If you can’t compete with productivity, I guess maybe they can try to produce the most complex products, have the most valuable assets, but how far does that go really

 

[Scientific]

That’s interesting

I guess really the name of the game for these countries is who is the better investment, that’s why China is getting acknowledgment for being the future because of its production, the question for the US is can they compete with productivity, which opens up a whole can of worms when you think about the labor of the country education immigration etc.

And If you can’t compete with productivity, I guess maybe they can try to produce the most complex products, have the most valuable assets, but how far does that go really

China played a chess move to corner Silver with that export ban this year but I could never trust their books. They notoriously have a cooked economy. Their growth was probably topping off, but theyre trying something with a PM move.

This feels like a real stress test to markets. The middle of the year will say a lot about what's happening.

 

[Gloxina]

Southern-Still-666
•8h ago


Gold and Silver as if they were shytcoins

Upvote2.2KDownvoteReply




ToastSpangler
•7h ago


Noooo they are hard assets with intrinsic value nooo it's different from every other thing with supply and demand how will you pay after the government collapses noooo Fiat is a scam why is currency backed by Italian cars nooo

___________________

Had to; I thought that was a good one

 

[Gloxina]

Admittedly I have no clue who this guy is.
Just an interesting take