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Fishbone Glover

Is This A Bubble?

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I can't help but feel that having a pm hedge is a good idea at the moment. I've discounted gold, so have been looking at Silver. I've found this chart:

silver_all_data_o_usd.png

And I can't make my mind up. It strikes me as a bit of a risky purchase at the moment, as it appears to be trading much higher than it's historical value. However, it has traded at much higher in the past (now that was a bubble!) I'm not looking to make massive gains, merely preserve the value of my savings in the case of TSHTF, but I don't really want to lose much value if I can help it! If anybody knows the reason behind the previous spike, I'd be interested to know.

Silver seems to be coming to the attention of people as an investment - there are bars of bullion on ebay, for example, which makes me wonder, but has it gone too far yet? I'm not sure. It looks to me that the chart above is starting to show the same sort of pattern as the classic HPC bubble chart.

Any advice to a total noob would be much appreciated.

post-23554-0-26025700-1290256740_thumb.png

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TBH it is hard to tell what stage of the cycle we are in with Silver and Gold.

The previous mega-spike was due to the Hunt brothers trying to corner the silver market and coming a cropper.

The way i think of my small stash: as a way to insure, protect, gamble, evade conventional financial processes :ph34r: , and perhaps eventually leave to my children (avoiding TAX on the way).

My silver/gold longer-term goal is to slowly but surely stack throughout my lifetime... indeed, i may lose money on S+G over my life-course, however, it will ALWAYS retain some value... and besides i just like it around B)

Chav!

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I can't help but feel that having a pm hedge is a good idea at the moment. I've discounted gold, so have been looking at Silver. I've found this chart:

silver_all_data_o_usd.png

And I can't make my mind up. It strikes me as a bit of a risky purchase at the moment, as it appears to be trading much higher than it's historical value. However, it has traded at much higher in the past (now that was a bubble!) I'm not looking to make massive gains, merely preserve the value of my savings in the case of TSHTF, but I don't really want to lose much value if I can help it! If anybody knows the reason behind the previous spike, I'd be interested to know.

Silver seems to be coming to the attention of people as an investment - there are bars of bullion on ebay, for example, which makes me wonder, but has it gone too far yet? I'm not sure. It looks to me that the chart above is starting to show the same sort of pattern as the classic HPC bubble chart.

Any advice to a total noob would be much appreciated.

Yes, it is a bubble. We probably aren't at the peak yet, but it is a bad idea to buy in the hope you can sell before the bubble bursts. By the time you know it is at the peak, it is too late. Unlike property, this bubble will burst in less than a second.

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I can't help but feel that having a pm hedge is a good idea at the moment. I've discounted gold, so have been looking at Silver. I've found this chart:

silver_all_data_o_usd.png

And I can't make my mind up. It strikes me as a bit of a risky purchase at the moment, as it appears to be trading much higher than it's historical value. However, it has traded at much higher in the past (now that was a bubble!) I'm not looking to make massive gains, merely preserve the value of my savings in the case of TSHTF, but I don't really want to lose much value if I can help it! If anybody knows the reason behind the previous spike, I'd be interested to know.

Silver seems to be coming to the attention of people as an investment - there are bars of bullion on ebay, for example, which makes me wonder, but has it gone too far yet? I'm not sure. It looks to me that the chart above is starting to show the same sort of pattern as the classic HPC bubble chart.

Any advice to a total noob would be much appreciated.

The silver market was cornered by the Hunt Brothers and that helped drive the spike in Silver in 1980. But the gold market spiked at the same time. The reason for both was bad financial management of western economies during the 1970's. Only tough measures like sky high interest rates reversed the spike.

I would also caution that the chart you are looking at is not adjusted for 30 years of inflation (see chart). In real terms silver is worth even less relative to 1970's prices, it is very badly suppressed right now. While an unadjusted for inflation gold price chart will show the current gold price about 33% above its 1980's high of around $800/Oz, the 'official' inflation adjusted high on 1980 stands at around $2200 and the average long term price stands at $1650.

Of course measuring inflation depends on the figures used - the attached charts show gold adjusted for CPI chart (using official US Govt. figures), the SGS chart is the shadow stats chart accounting for inflation over the last 30 years using the 1979 Bureau of Labor methodology for measuring inflation, i.e. the US govt. has fudged inflation figures for decades! The charts tell a very different story.

Make of it what you will and place you bets accordingly.

silver-CPI-773868.jpg

CPI Gold.jpg

SGS Gold.jpg

post-20010-0-38411700-1290262038_thumb.jpg

post-20010-0-35723900-1290262057_thumb.jpg

post-20010-0-17156700-1290262066_thumb.jpg

Edited by General Congreve

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Also if you are a total noob, please be aware that silver incurs VAT on purchases, is notoriously volatile price wise and physically bulky (you have to store it somewhere and might want to move it in a hurry at some point) making it a far less attractive investment option than gold, IMO.

Personally, with my metals allocation, I am 90% gold, 10% silver. I think Silver will ultimately deliver better % returns, but for the reasons listed above (chiefly the VAT and bulk) have kept my allocation relatively small.

I see gold as the cake and silver as the icing, as gold will should deliver solid dependable gains and silver should follow it up with higher leveraged gains, that will hopefully make the VAT I paid insignificant and give me a nice little bonus on top of my gold returns.

Of course you could go all in silver and make a killing if it all goes your way, but that's your decision.

Edited by General Congreve

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Also if you are a total noob, please be aware that silver incurs VAT on purchases, is notoriously volatile price wise and physically bulky (you have to store it somewhere and might want to move it in a hurry at some point) making it a far less attractive investment option than gold, IMO.

Personally, with my metals allocation, I am 90% gold, 10% silver. I think Silver will ultimately deliver better % returns, but for the reasons listed above (chiefly the VAT and bulk) have kept my allocation relatively small.

I see gold as the cake and silver as the icing, as gold will should deliver solid dependable gains and silver should follow it up with higher leveraged gains, that will hopefully make the VAT I paid insignificant and give me a nice little bonus on top of my gold returns.

Of course you could go all in silver and make a killing if it all goes your way, but that's your decision.

I agree with this but at the moment I'm smelling blood so I'm going to invest everything in silver to deliver a death blow.

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There's an old Wall Street saying - Put 10% of your net worth in gold and hope it doesn't go up.

Basically you are insuring yourself by holding 10% of your wealth in Gold (or Silver) should paper become trash, which is what's currently happening.

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I agree with this but at the moment I'm smelling blood so I'm going to invest everything in silver to deliver a death blow.

Well done for leading the charge against JPM! I've already got enough of the stuff (both physically and in the sense of not having any mpre cash that I can afford to invest) to think about buying any more at this point.

Personally I feel they'll fudge it somehow, the Chicago CME raising margin requirements being a great example. But I think that whatever happens in the short term, the complete global financial train wreck will reach it's destination with death in the end.

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Yes, it is a bubble. We probably aren't at the peak yet, but it is a bad idea to buy in the hope you can sell before the bubble bursts. By the time you know it is at the peak, it is too late. Unlike property, this bubble will burst in less than a second.

Less than a second?

Anyway, you got a point about defining an exit strategy. For example if you think it can hit a certain price and you set that as your exit point then you must exit. You have to live with the consequences but at least you'll know you traded in a disciplined and controlled manner.

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Be very afraid

"When the US government ran into money problems in the 1930’s, Franklin Roosevelt confiscated all gold held in the hands of the public, and those who refused to give up their gold were either fined or imprisoned. Incidentally, the communists in Russia and eastern Europe did the same thing throughout the 20th century, but those penalties went a bit further than just imprisonment."

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Less than a second?

Anyway, you got a point about defining an exit strategy. For example if you think it can hit a certain price and you set that as your exit point then you must exit. You have to live with the consequences but at least you'll know you traded in a disciplined and controlled manner.

Indeed, less than a second isn't true. Providing you watch the market closely (at least on a weekly basis, preferably more often - easy in today's iphone world) you'll have sufficient time to get out of the market should it move too far against you.

As needsleep states, you need to have a strategy with any investment. Just blindly riding a bull market with the belief it'll never stop is idiocy.

Having said that, as per my first post, I believe we are a long way from a bubble and my example was only looking at charts, there are a host of other reasons why this PM's bull will run and run, can't be bothered to list them all here though, got work to do!

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Be very afraid

"When the US government ran into money problems in the 1930’s, Franklin Roosevelt confiscated all gold held in the hands of the public, and those who refused to give up their gold were either fined or imprisoned. Incidentally, the communists in Russia and eastern Europe did the same thing throughout the 20th century, but those penalties went a bit further than just imprisonment."

The process is being prepared

"Starting Jan 1 2012, Form 1099s will become a means of reporting to the Internal Revenue Service the purchases of all goods and services by small businesses and self-employed people that exceed $600 during a calendar year. Precious metals such as coins and bullion fall into this category and coin dealers have been among those most rankled by the change.

So every time a member of the public sells more than $600 worth of gold to a dealer, the transaction will have to be reported to the government by the buyer."

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Be very afraid

"When the US government ran into money problems in the 1930’s, Franklin Roosevelt confiscated all gold held in the hands of the public, and those who refused to give up their gold were either fined or imprisoned. Incidentally, the communists in Russia and eastern Europe did the same thing throughout the 20th century, but those penalties went a bit further than just imprisonment."

Apparently only 1% of gold holders (sheep were afraid of authority no doubt) in the US handed the gold in and there were no recorded imprisonments or fines.

I don't see it happening again. I do forsee the reinstatement of VAT on gold and a massive CGT hike though. Although these will just be bullish indicators that TPTB are scared to hell of gold for the good reason that their fiat currencies aren't worth the paper they're printed on! When we get to that stage CGT won't stop the bull, it'll be black market time instead.

BTW, the prisons are rammed and the coming depression is only going to make them even more full, with all the petty criminals getting nicked for trying to get by in hard times. There's not going to be a lot of space left for everyone holding gold.

Edited by General Congreve

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Apparently only 1% of gold holders (sheep were afraid of authority no doubt) in the US handed the gold in and there were no recorded imprisonments or fines.

I don't see it happening again. I do forsee the reinstatement of VAT on gold and a massive CGT hike though. Although these will just be bullish indicators that TPTB are scared to hell of gold for the good reason that their fiat currencies aren't worth the paper they're printed on! When we get to that stage CGT won't stop the bull, it'll be black market time instead.

BTW, the prisons are rammed and the coming depression is only going to make them even more full, with all the petty criminals getting nicked for trying to get by in hard times. There's not going to be a lot of space left for everyone holding gold.

I think you need to take a reality check.

We are in the electronic age now and very, very few financial transactions can be hidden from the authorities.

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Guest spp

I think you need to take a reality check.

We are in the electronic age now and very, very few financial transactions can be hidden from the authorities.

I think you need to take a reality check.

That or just bend over and take what the looney politicians and banksters give to you!

Servitude? Sounds like you are there already.

Edited by spp

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I think you need to take a reality check.

That or just bend over and take what the looney politicians and banksters give to you!

Servitude? Sounds like you are there already.

That is true, pretty much all purchases can be tracked these days. They know where you live. Luckily, some of us are a bit smarter than the dullards who work for the govt. Should they ever come knocking, I won't be concerned.

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I think you need to take a reality check.

That or just bend over and take what the looney politicians and banksters give to you!

Servitude? Sounds like you are there already.

Sounds like you're both a bit sensitive to the possibility of having gold confiscated or more likely taxed heavily when you sell it.

Much of any speculative wealth could well be taken by a Government in trouble.

Unless of course you dont sell it. In which case you'll watch the bubble collapse in front of you.

How do you propose tackling this possibilty.

Edited by bumpy

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That is true, pretty much all purchases can be tracked these days. They know where you live. Luckily, some of us are a bit smarter than the dullards who work for the govt. Should they ever come knocking, I won't be concerned.

I think they may find it under the mattress.

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I think they may find it under the mattress.

They'll start with CGT, the confiscation if/when it comes is unlikely to be sudden, so they'll be time to prepare. I don't keep the stuff at home anyway, not insured for starters.

There are places other than the UK where gold can be sold, for the small holder it would be fairly easy to transport out of the UK without detection, if need be.

If the govts. of the world, or at least Europe, all collude to tax PM's to infinity, thereby closing off the option of selling it abroad (which will only come about as a last ditch effort to save crumbling fiat), this will only result in a thriving black market, because only a fool would exchange it for rapidly depreciating fiat, even if his investment faces heavy taxation if sold legally.

Personally I have dealt with the black market in currency myself in Zimbabwe (where the police are a lot more vicious than here), it was as easy as talking to a bloke in the pub and I did it numerous times without a problem. One time I even hitched a ride in a cop car with my pockets jammed full of black market Zim dollars I'd just purchased. :ph34r:

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They'll start with CGT, the confiscation if/when it comes is unlikely to be sudden, so they'll be time to prepare. I don't keep the stuff at home anyway, not insured for starters.

There are places other than the UK where gold can be sold, for the small holder it would be fairly easy to transport out of the UK without detection, if need be.

If the govts. of the world, or at least Europe, all collude to tax PM's to infinity, thereby closing off the option of selling it abroad (which will only come about as a last ditch effort to save crumbling fiat), this will only result in a thriving black market, because only a fool would exchange it for rapidly depreciating fiat, even if his investment faces heavy taxation if sold legally.

Personally I have dealt with the black market in currency myself in Zimbabwe (where the police are a lot more vicious than here), it was as easy as talking to a bloke in the pub and I did it numerous times without a problem. One time I even hitched a ride in a cop car with my pockets jammed full of black market Zim dollars I'd just purchased. :ph34r:

Sounds about as legal as robbing the local post office.

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Sounds about as legal as robbing the local post office.

the way i see it: there are 2 types of law, those that have a morel reason ie robbing the post office. And those that have polical reason, ie currency conversion.

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  • 259 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
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