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Old 12th May 2011, 06:52 PM   #361
Fast Eddie B
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Originally Posted by Tippit View Post
I've been in silver since 2000, with an average basis slightly over five bucks.
Good for you, but I don't see how that's possible:



Unless you really loaded up early on 2000 to 2003.

I've been sporadically investing in silver since the mid-'80's, and my average basis is closer to $10.
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Old 12th May 2011, 07:34 PM   #362
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Tippit is an old wise man.

I can feel it.
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Old 12th May 2011, 10:50 PM   #363
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Originally Posted by Tippit View Post
...... I have > 10,000oz of silver....
I know that you have a major gain but a $200,000+ paper "loss" gotta hurt, my condolences.

Then again, unless you have a recklessly unbalanced portfolio, the $320,000+ you have invested in silver is a tiny proportion of your multi-million dollar net worth.
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Old 12th May 2011, 11:01 PM   #364
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Originally Posted by The Don View Post
I know that you have a major gain but a $200,000+ paper "loss" gotta hurt, my condolences.
Thanks. I'm not too worried about the future of silver (or any of the precious metals) though. I could have just as easily sold it arbitrarily at $50 only to watch it advance from there. Hindsight is always 20-20. I am looking at picking up some more SLW though, so it's an opportunity.
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Old 13th May 2011, 02:45 AM   #365
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Originally Posted by mhaze View Post
I didn't even consider selling at this supposed "peak".
Is that because you have no significant position to sell?

Originally Posted by mhaze (20 April 2011) View Post
I'm not seeing any sort of a bubble in gold prices at this time. Silver, quite possibly.
Originally Posted by mhaze (21 April 2011) View Post
Silver is unreasonably high right now because it was being touted about 6 months ago as an alternative to gold which was being said to be overpriced.
Is trying to imply that you have a substantial long silver exposure now another of your fabricated trades? You don't lie well enough.

Last edited by Francesca R; 13th May 2011 at 02:49 AM.
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Old 13th May 2011, 03:38 AM   #366
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Originally Posted by michaelsuede View Post
The next time I sell my silver it will be for food and shelter, not dollars.
I hope you'll be holding your silver for a very long time indeed, I suspect you will.

I hope that if you have to try to sell your silver (yike !) there's still a market for it in exchange for food and shelter. If things go that badly, silver may be comparatively useless and indentured labour may be the only freely exchangeable currency. Or guns, guns and ammo.
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Old 13th May 2011, 03:41 AM   #367
The Don
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Originally Posted by Tippit View Post
Thanks. I'm not too worried about the future of silver (or any of the precious metals) though. I could have just as easily sold it arbitrarily at $50 only to watch it advance from there. Hindsight is always 20-20. I am looking at picking up some more SLW though, so it's an opportunity.
Sure, but I'm reminded of the almost certainly fictitious quote from a very rich person who attributed their great wealth to selling too soon.
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Old 13th May 2011, 04:50 AM   #368
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Originally Posted by Francesca R View Post
Is that because you have no significant position to sell?

Is trying to imply that you have a substantial long silver exposure now another of your fabricated trades? You don't lie well enough.
Edited by Tricky:  Edited for rule 11.
Your contrived argument links do not support this, and nothing I've said does. You have an Argument to Nowhere.

Using a straight out Saul Alinksy tactic "personalize the discussion, pin your opponent" like this in a discussion on financial matters is well, weird. Not to mention it would get you thrown out of any actual discussion on these types of subjects.

FYI I find this not offensive, but pitiful.

All because I asked a still unanswered question "How those bonds and T bills doing, Fran?" Let me help you ladle that crow soup:

Jim Rogers to Short Treasuries and Buy Silver

Last edited by Tricky; 13th May 2011 at 08:25 AM.
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Old 13th May 2011, 05:05 AM   #369
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Originally Posted by The Don View Post
I hope you'll be holding your silver for a very long time indeed, I suspect you will.

I hope that if you have to try to sell your silver (yike !) there's still a market for it in exchange for food and shelter. If things go that badly, silver may be comparatively useless and indentured labour may be the only freely exchangeable currency. Or guns, guns and ammo.
This is largely a fantasy economic scenario. I say this because of the many past economic crises these things you mention did not come to pass. Here are three recent (of approximately a hundred) examples from Wikipedia.

Russian Federation
In 1992, the first year of post-Soviet economic reform, inflation was 2,520%. In 1993, the annual rate was 840%, and in 1994, 224%. The ruble devalued from about 40 r/$ in 1991 to about 5,000 r/$ in late 1997. In 1998, a denominated ruble was introduced at the exchange rate of 1 new ruble = 1,000 pre-1998 rubles. In the second half of the same year, ruble fell to about 30 r/$ as a result of financial crisis.
Argentina
At the beginning of 1975, the highest denomination was 1,000 pesos. In late 1976, the highest denomination was 5,000 pesos. In early 1979, the highest denomination was 10,000 pesos. By the end of 1981, the highest denomination was 1,000,000 pesos. In the 1983 currency reform, 1 Peso argentino was exchanged for 10,000 pesos. In the 1985 currency reform, 1 austral was exchanged for 1,000 pesos argentinos. In the 1992 currency reform, 1 new peso was exchanged for 10,000 australes. The overall impact of hyperinflation: 1 (1992) peso = 100,000,000,000 pre-1983 pesos.
Brazil
From 1986-1994, the base currency unit was shifted three times to adjust for inflation in the final years of the Brazilian military dictatorship era. A 1967 cruzeiro was, in 1994, worth less than one trillionth of a US cent, after adjusting for multiple devaluations and note changes. In that same year, inflation reached a record 2075.8%. A new currency called real was adopted in 1994, and hyperinflation was eventually brought under control.
Remember that severe or hyper inflation a theft of the REMAINING wealth of the common people, and it's transfer to certain people and government operations. It does not matter that the remaining wealth is continuously decreasing, this does not stem the appetite which remains relatively constant.

Generally, the evidence shows that governments do not learn from history, and in severe inflation they repeat the same mistakes other governments made - Price and wage controls, starting a "new improved currency", blaming the greedy capitalists.

Incidentally, the way that Brazil fixed it's problem was to make it a felony to loan money to the Brazilian government.

I am not saying that guns or ammo may not be good investments, incidentally....as for the "indentured labor" part....hmmmm.....

Last edited by mhaze; 13th May 2011 at 05:11 AM.
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Old 13th May 2011, 05:20 AM   #370
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Originally Posted by mhaze View Post
Remember that severe or hyper inflation a theft of the REMAINING wealth of the common people, and it's transfer to certain people and government operations. It does not matter that the remaining wealth is continuously decreasing, this does not stem the appetite which remains relatively constant.
Why should I remember something which is a complete fantasy on your part ?

Admittedly, people who have cash savings in the local currency will lose out, but anyone who owes money will benefit.

You make hyperinflation sound like a deliberate conspiracy as opposed to the results of financial mis-management.

Someone who is concerned about the fragility of the dollar perhaps should move aslo some of their assets into harder currencies like the Euro, Yuan, Rupee rather than just stick with the one currency.

My meagre savings for example are spread across US Dollars, Euro, Pounds and Aussie Dollars
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Old 13th May 2011, 07:52 AM   #371
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Originally Posted by The Don View Post
Sure, but I'm reminded of the almost certainly fictitious quote from a very rich person who attributed their great wealth to selling too soon.
I think one of the biggest mistakes investors make, is ignoring the power of compound growth. They do this by selling whenever they have a profit, regardless of the underlying fundamentals, thereby creating a taxable event. It's just as important to have a good, fundamental reason to sell as it is to buy. This applies to holding on to losers as well. It's also good to avoid churning your own accounts and paying excessive capital gains taxes and commissions.

I liken monday morning quarterbacks to those people in Vegas who criticize the blackjack play of the player on the anchor. They scowl and give the anchor a dirty look if he takes a card that otherwise would have busted the dealer, sometimes even if the anchor played his hand in accordance with basic strat, or how the critic would have played it. Yet those players never seem to notice when the bad play of an anchor results in a dealer bust. I guess the moral is, the future is mostly unknowable, so just play the game to the best of your ability.
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Old 13th May 2011, 11:23 AM   #372
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Originally Posted by mhaze View Post
Your contrived argument links do not support this, and nothing I've said does. [ . . . ]
I beg to differ. How can you claim silver is unreasonably high and possibly in a bubble in late April and then expect to be believed that you were significantly long right after that? Similarly how can anyone take seriously your claim to have bought gold in June 2009 when you were claiming back then that a correction was definitely in order?

The evidence, posted by yourself, rather makes it look like you are inventing false trades in a futile attempt to appear prescient. Perhaps to draw attention away from your extremely vacuous contributions to discussion.

But you got caught. Twice. So it looks like a most desperate endeavour on your part. You're right about finding it pitiful.


Last edited by Francesca R; 13th May 2011 at 11:24 AM.
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Old 13th May 2011, 12:34 PM   #373
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As an ignorant commodities person and lurker of this thread since the beginning I have a question.

First of all I would like to thank all sides for their contribuitions to the thread..its been a good read.

My question about silver and inflation is this: Is purchasing silver a hedge against inflation such that when the dollar's value decreases silvers value will remain constant against inflation? In Mhaze's examples above inflation of 1000% or more I'm assuming that my $1.00 that buys me a candy bar now will take $1,000 at some future point, but that if I have $1.00 of silver I still can buy my candy bar after the 1000% inflation?

If this is true than I was thinking that any commodity that I purchase would be a hedge against inflation as a $1.00 in oil now would still be a $1.00 of oil after inflation and still get me my candy bar.

This brings me to my second question I guess..why silver than? Portable? Accepted as money eaiser? Other?

Thanks.
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Old 13th May 2011, 01:06 PM   #374
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In a very contentions thread on $1,500 gold, I posted the following after some opined that precious metals were never a good inflation hedge:


(As a reducto ad absurdo analogy, let me play fast and loose with the numbers - it's the concept and not the particulars that matter).

Two citizens of Germany in early 1923 are given a choice in payment types for services rendered. One accepts a paper mark, the other takes a silver coin worth one mark.

Then this happens:





At the end of the year, both are thirsty for a bottle of wine. They go to a wine shop. A bottle of wine had sold for one mark a year ago, but no longer. The one with a paper mark is told he's short about 999,999,999 marks, and is offered the use of a wheelbarrow if he wants to try to round up that much. The other fellow presents the silver mark coin. The shopkeeper knows the value of the silver in a silver mark coin, and trades the fellow a bottle of wine for the coin.

This seems clear and obvious on the surface. I'd say the fellow that took the silver mark successfully "hedged" against inflation. What applies in times of hyperinflation would be true to a lesser extent in times of humdrum inflation - as we've seen in the price of gold and silver over the recent past.
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Old 13th May 2011, 01:33 PM   #375
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There's no way to tell which commodity will outperform (or underperform) which.

Using your oil example, suppose that tomorrow a process utilizing cold fusion for all our energy needs is announced. The value of oil might be decimated.

But, yes, any commodity can serve as a store of value. Precious metals are simply one convenient way - certainly less of a hassle than pork bellies, let's say!

I don't know if I mentioned it in this thread already, but I was a teenager in 1964 when the silver was taken out of US coinage. Prior to that, you could walk into any bank and buy a roll of 20 silver dollars for $20, or equivalents in quarters and dimes. My dad thought the people lining up to buy those coins before the transition were crazy. Of course, there are investments that might have done better since 1964 (a new Corvette bought for about $4,000 and stored away in Cosmoline would be worth a pretty penny now as well!), but those who bought coins then and stashed them away have certainly hedged against inflation.
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Old 13th May 2011, 01:47 PM   #376
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Originally Posted by Fast Eddie B View Post
In a very contentions thread on $1,500 gold, I posted the following after some opined that precious metals were never a good inflation hedge:


(As a reducto ad absurdo analogy, let me play fast and loose with the numbers - it's the concept and not the particulars that matter).

Two citizens of Germany in early 1923 are given a choice in payment types for services rendered. One accepts a paper mark, the other takes a silver coin worth one mark.

Then this happens:

http://www.thepeoplesvoice.org/cgi-b...inflation2.gif



At the end of the year, both are thirsty for a bottle of wine. They go to a wine shop. A bottle of wine had sold for one mark a year ago, but no longer. The one with a paper mark is told he's short about 999,999,999 marks, and is offered the use of a wheelbarrow if he wants to try to round up that much. The other fellow presents the silver mark coin. The shopkeeper knows the value of the silver in a silver mark coin, and trades the fellow a bottle of wine for the coin.

This seems clear and obvious on the surface. I'd say the fellow that took the silver mark successfully "hedged" against inflation. What applies in times of hyperinflation would be true to a lesser extent in times of humdrum inflation - as we've seen in the price of gold and silver over the recent past.
Sure, it's a hedge against hyperinflation of a single currency. But, the claim is inflation, not hyperinflation.

And that is where it falls flat. For example, gold went from $850 in 1980 to $256 in 2001, but consumer prices doubled in the same period. You can find other periods where consumer went up 30% or so and gold went up 8x or so. There is no correlation in recent history over time periods of 1-3 decades, our normal long term investment horizon.
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Old 13th May 2011, 02:32 PM   #377
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Originally Posted by roger View Post
Sure, it's a hedge against hyperinflation of a single currency. But, the claim is inflation, not hyperinflation.
Have we had hyperinflation between 1964 and the present?

I remember cigarettes being $1.99 a CARTON! In general, prices are up about tenfold, or more, since then.

Someone who squirreled away a bunch of silver at $1/oz did OK, be it inflation or hyperinflation.

And I think being in metals is an OK strategy as part of a balanced portfolio
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Old 13th May 2011, 05:56 PM   #378
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Originally Posted by Francesca R View Post
I beg to differ. How can you claim silver is unreasonably high and possibly in a bubble in late April and then expect to be believed that you were significantly long right after that? Similarly how can anyone take seriously your claim to have bought gold in June 2009 when you were claiming back then that a correction was definitely in order?

The evidence, posted by yourself, rather makes it look like you are inventing false trades in a futile attempt to appear prescient. Perhaps to draw attention away from your extremely vacuous contributions to discussion.

But you got caught. Twice. So it looks like a most desperate endeavour on your part. You're right about finding it pitiful.

Nope. You don't have evidence. You have an inferences from cherry picked comments of mine, and you've ignored scope. You've ignored, or made up relevant investment timeframes to support your pre existing convictions. In short, you have created a delusion, and then proceeded to believe it, and post about it.

You've asserted that the sum of these inferences (which occur inside your brain) add up to lying on my part. This is indicative of problems you have, not of lying on my part. I've addressed this before, and don't really understand why you have gone on a personal attack mode when I just simply asked

"How are those Treasury Bills doing, Fran? I know how those metals I bought are doing"

And in fairness, I didn't mention the exact composition of investments I made 2 years ago. So metals could have been 1%, or 100% of those placements. So your comment:

The evidence, posted by yourself, rather makes it look like you are inventing false trades in a futile attempt to appear prescient.


Does not have any basis in reality except if and to what extent it applies singularly to the comparative statement:

"How are those Treasury Bills doing, Fran? I know how those metals I bought are doing"

But your going on the offensive ad hominem, junior high school mode when faced with this question, instead of simply answering it....which you have never done....is quite telling.

And oh, by the way...your mental acumen in this assertion:

Similarly how can anyone take seriously your claim to have bought gold ....

Really is laughable. Here is why. Some people might not take a claim seriously. So what....they don't go accuse the other person of lying.

You do.

And in the doing of it, you've shown unsupported, emotional, and ill logical work. Meanwhile....

"How are those Treasury Bills doing, Fran? I know how those metals I bought are doing"

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Old 13th May 2011, 06:09 PM   #379
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Originally Posted by mhaze
Remember that severe or hyper inflation a theft of the REMAINING wealth of the common people, and it's transfer to certain people and government operations. It does not matter that the remaining wealth is continuously decreasing, this does not stem the appetite which remains relatively constant.



Originally Posted by The Don View Post
Why should I remember something which is a complete fantasy on your part ?

Admittedly, people who have cash savings in the local currency will lose out, but anyone who owes money will benefit.

You make hyperinflation sound like a deliberate conspiracy as opposed to the results of financial mis-management.

Someone who is concerned about the fragility of the dollar perhaps should move aslo some of their assets into harder currencies like the Euro, Yuan, Rupee rather than just stick with the one currency.

My meagre savings for example are spread across US Dollars, Euro, Pounds and Aussie Dollars
I'm actually not sure how to answer this. You started in the prior post talking about putting money into guns and ammo....now you are talking about multiple currencies. But you say I'm the one making hyperinflation sound like a deliberate conspiracy....while you are the one talking about guns and ammo?



I'm not even sure why you'd think a conspiracy was required...a government thinks it needs 1000 units of value every year, and it has the ability to print money so it prints each year, sufficient paper to get the 1000 units of value. The fact that the value in the paper decreases geometrically is simply a numerical reality.

No conspiracy is required.
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Old 13th May 2011, 07:05 PM   #380
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Originally Posted by Fast Eddie B View Post
Have we had hyperinflation between 1964 and the present?
No.
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Old 13th May 2011, 08:30 PM   #381
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Originally Posted by Fast Eddie B View Post
Have we had hyperinflation between 1964 and the present?....
Assuming you mean the US, the answer is no, and the reason is that until 2009, we had not printed money in the amounts that would create this contingency.

We have now commenced on that path, and the possibility of hyperinflation certainly does exist at this time and will continue to exist. Let's say for ten years, just to get a frame of reference.

Originally Posted by roger View Post
Sure, it's a hedge against hyperinflation of a single currency. But, the claim is inflation, not hyperinflation.....
???

Properly speaking, the issue is inflation of what, just about all of the G20 currencies. Their value is all falling although at differing rates. This is very different than historical cases of inflation. Take for example Argentina, where the currency dropped like a rock and people moved to the USD.

Now you have a level of unprecedented uncertainty and interdependency.

The USD looks bad.

Suppose the PIGS collapse the Euro, and it fractures into a northern Euro and a Southern Euro.

That makes the USD look good.

Or the Euro stays together, by way of massive bailouts,

The USD fractures.

Last edited by mhaze; 13th May 2011 at 08:34 PM.
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Old 14th May 2011, 01:32 AM   #382
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Originally Posted by mhaze View Post
I didn't mention the exact composition of investments I made 2 years ago. So metals could have been 1%, or 100% of those placements. [ . . . ]
Talk about a risible climb-down!



Quote:
[ . . . ] Some people might not take a claim seriously. [ . . . ]
Maybe now you see why
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Old 14th May 2011, 04:10 AM   #383
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Originally Posted by roger View Post
No.
(re: Have we had hyperinflation between 1964 and the present?)

Agreed. It was meant as a rhetorical question.

I remember when both a gallon of gas and a pack of cigarettes were each about 25. I just Googled the current price of cigarettes and found the current price in NY city can be as high as $15 (!).

My point was that it doesn't take hyper-inflation to have a situation where metals can aid one in storing value.

Imagine being alive in 1963 (I was) and scrounging up $2,000 (about the price of a basic new car then) to buy 2,000 silver dollars before the silver was taken out of our coinage (I didn't). At the time, remember, all you had to do was walk into a bank and ask for rolls of silver dollars. If held until today, those coins would be worth about $70,000 - still enough to buy a new car (for now, quite a bit more than a basic one).

With hindsight, there were other things one could have done with that $2,000 that would have WAY outperformed silver or gold, but at the time, none of these were obvious - and there were many ways to lose your money as well.

Inflation is insidious, even when not "hyper". Check out the prices on coffee or cashews in your grocery compared to a year ago. My wife and I can easily spend $100 on groceries on what seem like basics - and we're both vegetarians without exotic tastes. As long as one's wages or investments keep up, one can do just fine. But those on fixed incomes or with their savings in dollars will get hurt. Some badly.

Last edited by Fast Eddie B; 14th May 2011 at 04:12 AM.
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Old 14th May 2011, 05:33 AM   #384
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Originally Posted by Francesca R View Post
Talk about a risible climb-down!

....
Nope, you are still in ad hominem mode. There's no risible climb down. There's simply Francesca throwing a fit when someone, namely me, asks...

"How them Treasury bills bought two years ago doing, Fran? I know how my gold is doing"

In pointing out your errors in logic and your rash presumptions, I don't excuse your baseless accusations one bit. You can't think straight, but you'd talk about investments.

And you can't answer my simple question, apparently.

"How them Treasury bills bought two years ago doing, Fran? I know how my gold is doing"

So go back to prattling about bond investments....likely the very worst thing anyone could do right now. And if you think this is going away, no it ain't.


"How them Treasury bills bought two years ago doing, Fran? I know how my gold is doing"
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Old 14th May 2011, 05:42 AM   #385
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Originally Posted by Fast Eddie B View Post
My point was that it doesn't take hyper-inflation to have a situation where metals can aid one in storing value.
Then again, bying any property -- be it metals, real estate, blue chip stocks -- is a great weapon against inflation if you get them cheap. If you bought silver during the Hunt brothers bubble or Microsoft shares at the height of the dot.com bubble, inflation just adds insult to your injury.
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Old 14th May 2011, 05:46 AM   #386
Fast Eddie B
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Originally Posted by mhaze View Post

So go back to prattling about bond investments....likely the very worst thing anyone could do right now. And if you think this is going away, no it ain't.
I have some of my portfolio in a couple of Georgia Muni Bond Funds, free from both Federal and State taxes.

Each month, they pay out about $800 in dividends. That helps keep food on the table more so than gold or silver sitting in a safe deposit box. If we have hyper-inflation, the 4% or 5% tax-free will look pitiful and I'll get hammered in capital losses. But being bond FUNDS, they'll be able to adjust their bond portfolios to reflect higher bond rates if and when they occur.

I guess I'm just arguing for diversification against what appears to be a false dichotomy: either metals OR bonds. A diversified portfolio should contain both, in addition to common stocks - which IMHO should be the lion's share of most portfolios.
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Old 14th May 2011, 05:57 AM   #387
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Originally Posted by timhau View Post
...if you get them cheap.
Aye, there's the rub.

You never know if they're cheap at the time you're buying.

Lots of people (myself included) bought real estate thinking it was cheap - only to find out that it was in the process of becoming quite a bit cheaper.

I thought Pan Am was cheap at $5, and even cheaper at $3. So it goes.

About Microsoft...

In 1986 I was using Microsoft products on my Mac - Multiplan and Chart, IIRC. I asked my broker his opinion on their IPO, and he persuaded me it was overhyped and I passed.

So sad. At least it taught me that brokers have NO particular insights that I should allow to outweigh my own instincts.

Check out the spreadsheet linked here:

http://www.microsoft.com/investor/Do...Osharecalc.xls

For those who don't care to download it, if someone had bought 500 shares for $10,500 in 1986 and held them until today, they'd currently own 144,000 shares (after nine splits) worth 3.6 million dollars!

Oh, for a Wayback Machine!

Last edited by Fast Eddie B; 14th May 2011 at 06:04 AM.
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Old 14th May 2011, 07:34 AM   #388
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Originally Posted by Fast Eddie B View Post
(re: Have we had hyperinflation between 1964 and the present?)

Agreed. It was meant as a rhetorical question.

...

My point was that it doesn't take hyper-inflation to have a situation where metals can aid one in storing value.
It was 4% for the time period in question.

The problem is you are arguing possibilities, I actually provided data. Sure, it is possible for silver to be a store of value against inflation. The data I presented, however, showed it's not so. Right now, silver prices are not correlated to inflation in any way. Any retiree putting themselves in the hands of people like the Hunt brothers, margin buyers, shorters, bubble enthusiasts, etc., are far more likely to be hurt than those that look to hedge with less volatile investments.

Empiricism, always. Silver prices are not currently correlated with inflation.


Quote:
Inflation is insidious, even when not "hyper". Check out the prices on coffee or cashews in your grocery compared to a year ago. My wife and I can easily spend $100 on groceries on what seem like basics - and we're both vegetarians without exotic tastes. As long as one's wages or investments keep up, one can do just fine. But those on fixed incomes or with their savings in dollars will get hurt. Some badly.
For the most part I'm not keeping up with the various positions of posters, so I'm not sure what you are suggesting as an alternative. But, in general, saying things like 'silver is a viable addition to a balanced portfolio' is just that, words.

We need to see a financial model to believe those words. How much as a percentage of your net worth should you invest in silver? How much does it really protect you in various scenarios (a 1% holding effectively does nothing for you if your other 99% crashes). How much risk does it expose you to? Etc.

As you pointed out in another post, you held bonds that actually paid you a reliable income. All silver does is sit there. It doesn't produce, and the only way to get an income stream from it is to sell it or some derivative on it. Given that silver does not follow inflation over a decade or two, a period of time very pertinent to the average retiree, any large % could hurt them far more than inflation. We (most of us) expect inflation to continue in the 4% or so range. Silver is rising and dropping by tens of percents at times. Is that really a sound retirement package?
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Last edited by roger; 14th May 2011 at 07:48 AM.
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Old 14th May 2011, 08:18 AM   #389
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Originally Posted by roger View Post
Sure, it is possible for silver to be a store of value against inflation.
This! We can agree to agree, then.

Quote:
How much as a percentage of your net worth should you invest in silver?
The figure I've most often heard is 10%. That's pretty close to where I am. Than means that 90% is in stocks, bonds, real estate and business investment. There's nothing magic in that number, and there are many scenarios where 0% is feasible. But believing in diversification, I would never suggest a large majority of one's holdings in any asset class.

Quote:
As you pointed out in another post, you held bonds that actually paid you a reliable income. All silver does is sit there. It doesn't produce, and the only way to get an income stream from it is to sell it or some derivative on it.
Agree to agree, again!

Quote:
Is that really a sound retirement package?
There are possible, though unlikely, scenarios where someone 100% invested in metals could outperform many asset classes and retire on the profits. But you're arguing against a straw man - just because someone (me) says that metals can be a part of an investment plan does in no way imply that "metals are a really sound retirement package". I certainly never said that.
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Old 14th May 2011, 08:35 AM   #390
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Originally Posted by Fast Eddie B View Post
...If we have hyper-inflation, the 4% or 5% tax-free will look pitiful and I'll get hammered in capital losses. But being bond FUNDS, they'll be able to adjust their bond portfolios to reflect higher bond rates if and when they occur.....
Hyperinflation would set your bond prices at zero, and eliminate the merits of any bond fund based in the currency in question.

If one was concerned about hyperinflation, invest in a fashion that creates dependencies on multiple currencies. From this point of view, yes, one could look at bond funds....BUT TO be sure that their mandates allowed offshore investments. Canadian, Australian dollars for example. Not the currency which was considered susceptible to hyperinflation. Then in that case, yes, the fund manager could move to preserve wealth.

Yet moderate inflation would destroy your 4 -5% yield. Say 10% inflation. The expectation of that existing or continuing, you can see what it would do to the bond prices.

Personally I have reasons to believe that USD bond prices understate future inflation in the USA. Certainly muni bonds face a group of risks going forward that they did not in the past, which make them very unattractive, as compared to the past. Pension obligations, largely.
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Old 14th May 2011, 08:39 AM   #391
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Originally Posted by Fast Eddie B View Post
...If we have hyper-inflation, the 4% or 5% tax-free will look pitiful and I'll get hammered in capital losses. But being bond FUNDS, they'll be able to adjust their bond portfolios to reflect higher bond rates if and when they occur.....
Hyperinflation would set your bond prices at zero, and eliminate the merits of any bond fund based in the currency in question.

If one was concerned about hyperinflation, invest in a fashion that creates dependencies on multiple currencies. From this point of view, yes, one could look at bond funds....BUT TO be sure that their mandates allowed offshore investments. Canadian, Australian dollars for example. Not the currency which was considered susceptible to hyperinflation. Then in that case, yes, the fund manager could move to preserve wealth.

Yet moderate inflation would destroy your 4 -5% yield. Say 10% inflation. The expectation of that existing or continuing, you can see what it would do to the bond prices.

Personally I have reasons to believe that USD bond prices understate future inflation in the USA. Certainly muni bonds face a group of risks going forward that they did not in the past, which make them very unattractive, as compared to the past. Pension obligations, largely.

One investment that likely can be made today and for the next couple months is refinancing a home at 3.75 percent. That's a fake, government engineered rate. Seems reasonable that one could make out by say taking a 150k loan at 3.75. Five to ten years off, that 3.75 would look ridiculously low (and the 150k would look small too).
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Old 14th May 2011, 08:48 AM   #392
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Originally Posted by Fast Eddie B View Post

There are possible, though unlikely, scenarios where someone 100% invested in metals could outperform many asset classes and retire on the profits. But you're arguing against a straw man - just because someone (me) says that metals can be a part of an investment plan does in no way imply that "metals are a really sound retirement package". I certainly never said that.
You are misreading me, or I mis-wrote. My point was in reference to whatever percentage you suggest. 1%? Meaningless in any scenario. 40%? Injurious in many scenarios.

Yes, 10% as a proportion is often trotted out - I am asking for a financial model of this. No one suggesting this ever does the math. Ever.

People that do the math - Buffet and the like - strongly state that you should not invest in metals. So far, I agree (meaning I'm open to a financial model that shows a good risk/benefit profile)

edit: to be fair and intellectually honest, I'm not all that open, as the volatility of silver over the past two decades pretty much eliminates it from consideration. It's not enough to say silver is a hedge for inflation - you have to show that it has been, and will continue to be one. I've shown it has not, and no one has shown that it will be in the future.
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Last edited by roger; 14th May 2011 at 08:53 AM.
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Old 14th May 2011, 08:54 AM   #393
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Not really a "financial model" (I'm not exactly sure what that would look like - would it be some sort of mathematical formula?), but some "expert" opinions here:

http://www.financial-planning.com/fp...Printable=true
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Old 14th May 2011, 08:58 AM   #394
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Originally Posted by mhaze View Post
"How them Treasury bills bought two years ago doing, Fran? [ . . . ]
What Treasury bills that who bought? Have you been implying that I have been long fixed income since 2 years ago? No idea where you get that from. Actually I do--the non-sunny place you got your silver and gold trades from.

Originally Posted by Francesca R (22 October 2008) View Post
Well I have lost money in equities this year, since stuff I bought is mostly considerably lower than where I did, and I don't have any short positions since July (not that they are allowed anyway now)

Made a huge gain on currencies though, and bonds, but I have shrunk the bets down a lot now so not much exciting to tell.
Originally Posted by Francesca R (8 December 2009) View Post
Bonds are overvalued according to my analysis too. [ . . . ]
I am short of bonds in several sovereign markets. Just not for the loopy reasons you give but won't act on.
Originally Posted by Francesca R (15 April 2011) View Post
I do trade futures and I am also short the Jun 11 CBT 10 year and 30 year. I am also long puts on the 10 year (which is a viable alternative since implied volatility is very low across the curve).

I am--however--not short for the reasons you are, but because I expect stronger economic growth and higher real yields. And (as I mentioned above) because I do agree that there is potential for a negative demand shock to come from the game of chicken that the two political parties are playing with fiscal policy, and/or the lamentable failure until recently for either party to address spending. [ . . . ]
So that's three times you've lied about trades? This is too easy. Sorry to pop your nonsense bubble again.


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Old 14th May 2011, 10:42 AM   #395
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Originally Posted by Francesca R View Post
....So that's three times you've lied about trades?
There you go again. When a question is asked ten or twelve times, and you don't answer, I simply ask it again. Asking the question is not lying, it is simply asking the question. One is welcome to say "No, that is incorrect".

But to you, it is lying, or the opportunity to accuse someone of such. That is the sort of inability to think through a logical issue that seems to plague your postings. Simply said, you reach wrong conclusions, and it seems to be based on emotion rather than facts. You misinterpret facts, and make inferences that are false.
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Old 14th May 2011, 11:25 AM   #396
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Originally Posted by mhaze View Post
When a question is asked ten or twelve times, and you don't answer, I simply ask it again. [ . . . ] One is welcome to say "No, that is incorrect".
Retreat noted, again.

Although you misrepresent yourself:
Originally Posted by mhaze View Post
I assume [ . . . ], you bought US Tbills at that time? [ . . . ]
And "it is simply asking the question" is the trademark of conspiracy woo nutjobs the world over.

Originally Posted by mhaze View Post
But to you, it is lying
The trendier term is JAQing off. Whatever warms your globe. Anyway, are you finally done with inventing investment history?
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Old 14th May 2011, 11:46 AM   #397
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I can sell you some fake gold coins with real chocolate inside. PM me if interested.
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Old 14th May 2011, 12:22 PM   #398
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Originally Posted by MNBrant View Post
I can sell you some fake gold coins with real chocolate inside. PM me if interested.
Hannukah gelt?

Yummm...
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Old 14th May 2011, 01:01 PM   #399
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Originally Posted by Francesca R View Post
Retreat noted, again.

Although you misrepresent yourself:

And "it is simply asking the question" is the trademark of conspiracy woo nutjobs the world over.

The trendier term is JAQing off. Whatever warms your globe. Anyway, are you finally done with inventing investment history?
No, Francesca, there is no retreat in simply looking at words or phrases, and showing someone what they mean. And what they don't mean, and how certain delusional interpretations are not real. Like those of yours.

As for your other nonsense, that's your problem in letting the question be asked a dozen times. It seems to get you going, for reasons unknown.
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Old 15th May 2011, 12:15 AM   #400
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Originally Posted by Fast Eddie B View Post
Aye, there's the rub.

You never know if they're cheap at the time you're buying.
That's not entirely true. According to Yahoo finance, Microsoft has $5.78 net cash per share. The company's profit for the previous 12 months is $2.52 per share; that figure is expected to grow marginally during the next 12 months. If on Monday MSFT stock price suddenly plunges and it sells at $5 instead of Friday's close of a hair over $25, you'd know it's cheap. What you don't know is whether you can get it even cheaper on Tuesday.

Things are a bit dicier with things like silver, because the only thing you have as reference is historical prices. With real estate, I assume reference includes historical prices, rent levels and the cost of construction (but then again, I wouldn't know, because my only real estate "investment" is my home -- and I regard it as a home, not an investment).
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