Gold & Silver revisited.

[ken_behrendt]

As the prices of precious metals continue to soar, we'll see all sorts of wild daily fluctuations or "volatility". But, overall, I think we'll see a slow, but steady, climb in the cost of these metals over the next few years.

I've also notice that there is a upsurge in the price of non-precious metals in progress. For example, the price of copper per lb has almost doubled in the last year. Apparently, China's explosive industrial expansion is pulling down supplies of many of the Earth's structural metals at an unprecendented rate and driving prices skyward. This is also a good time to own a scrap metal yard...



Gordy...

If you want to get some precious metals, then you should shop around on the for the best prices. A lot of people trust Monex. I think it's important that you actually have the precious metal in your possession (and not necessarily in a bank's "safety" deposit box). You need to find a dealer who will sell the gold coins or ingots to you for as small a markup as possible over the current spot market price of the metal.



ken

[racer270]

quote:

Gordy...

If you want to get some precious metals, then you should shop around for the best prices.


ken,
I was just joking around with Jim.

The only precious metals that could fall my way, would be if my fillings fell out of my teeth, the life circumstances that were beyond my control have left me to pour to even pay attention........

I do agree that Jim's perspective on the rising costs of precious metals is inevitable, I wish I had the funds to invest, I just don't.
What I see is that silver has the potential for a bigger growth %'s potential than gold.......!

Opportunities are where you find them, but it takes money to make money.......... so I guess I'll just sit this one out, best of luck for all you savvy investors.
Gordy

[scott]

I do agree that Jim's perspective on the rising costs of precious metals is inevitable, I wish I had the funds to invest, I just don't. What I see is that silver has the potential for a bigger growth %'s potential than gold.......!

Hey Gordy,
I have been researching this for a while and I think you are correct. You probably have a savings account of some sort, right? Maybe just a small buffer in your checking account month to month? No matter how much it is, you could potentially cash it out, drive down to your nearest coin dealer (or the nearest one without sales tax anyway), and buy 1 oz. silver coins right now for about $15 each. Everyone knows that dollars are constantly losing their value, to inflation if nothing else, so why save them at all? IMHO, better to store your savings in silver or gold coins. And even if you don't have much money, silver is still pretty cheap these days (About $15 for a 1 oz. coin as of Friday).

By the way Jim, thanks for the tip a few months ago, I sure wish I'd picked up on it sooner! You put your comments in that Off-Topic thread I was only barely skimming, so I missed it entirely until quite recently... :-( Still a long way up to go though I think.

Next week, I'm expecting a continuation of last Thursday's pull-back, but then full steam ahead after that... I hope. :-) My bet is that the silver/gold monetary ratio is going to eventually come back down near the ratio at which the two metals are found in the earth's crust, which is about 16/1. Plus, the significant extra demand on silver for industrial purposes is definitely not going to hurt.

-Scott

[racer270]

Hi Scott,
as a matter of fact,
I don't have any extra money, to make a long story short me a brother owned a house together, it was free and clear of any mortgage in 2002.
he took out equity loan after equity loan to a total of $340,000 and just stopped paying on them.
add another $50,000 for attorneys fees to stop the bleeding and I now own the house solely owing $380,000......O-boy what a treet......

you guys can start calling me "EX-RACER"........!
I went through a divorce in 1994 were I lost everything but the bills, that was only about $90,000 loss.
I got married three AND 1/2 years ago, and I just found out my current wife just begged me for the $10K i had stashed, it might be divorce time again....!
You know what a treat that is, I remember talking to you on the phone about the divorce you went through, a couple of kids and alimony and child support and worse ,i am sapost to live on how much a month.....!

not so funny .......A....!
and with that in my future and having to pay 1800 bucks a month for a mortgage that I had to take out last month to cover my derelict brothers wicked ways it looks pretty bleak from here on out as far as finances, ...... can you say stick a fork in the guy I'm all done, ....!
I'm going to have to fire sale this house in the next couple months and move to some frozen Bering wasteland like Missouri, and when I sell the house I'll probably get slammed for child support/alimony....... so no I don't have money to invest .
unless I would just wont to flush my credit score down the toilet and let the house going to foreclosure......!

that's what I call life unforeseen circumstances,.......!
Gordy
PS. now you know why i havent hit the "paypal" to make a donation.....and what i have been up to for the last year......lol....:(

[Wheeler]

I mentioned the gold/silver thing to a friend.

After they just surged their shoulders, I figured it out, and they admitted that they are all set with oil stock.
Simple and easy money flows to them, so they simply enjoy the continued checks from interest etc.

We have a powerful influence of money that has set people up for life.
Why change if your life is comfortable?

Unless you wake up and suddenly know how much destruction your comfort of oil money is doing, you go on and on in luxury.

Do you think the person who owns a refinery thinks energy is any concern?
All the fuel they need is not a consideration to someone who gets it free.

[ken_behrendt]

Wheeler...

You are quite right. Most people will always seek to make the maximum amount of money with the minimum amount of effort. However, that's just human nature. We tend to want to operate with maximum efficiency and, generally, will continue to do so until our activities begin to become harmful to ourselves. If they are harmful to others they will ignore it, of course, if they are unaware of it. If, however, they are aware of it, they will initially rationalize the harm away by minimizing it or claiming it to be the other person's fault. Only when it becomes undeniable that they are responsible will something be done...and, usually, so as to minimize their own costs.

When someone does decide to depart from this human characteristic and selflessly "give" with no expectation of making a profit, there are a thousand and one messages that come back to him from our "modern" society that tell him he is a real sucker and is wasting his time. The underlying message of Western capitalism is that we really do live in a dog eat dog world and only the "fittest" will survive. "Fit" by today's standards means grabbing as much loot as one can while one can and the hell with tomorrow!

In my own personal dealings, I am, of course, interested in profit, but try to have "win-win" situations where I do not knowingly take advantage of others. If I later find out that I did, inadvertently, benefit at someone else's expense, then I try to "make amends" so that there will be no hard feelings. I'd rather lose some dough then a friend...

I was brought up not to expect to get something for nothing. Wealth was supposed to be the reward for making an effort above and beyond the call of duty and, even then, one still had to be lucky to attain it. Nowadays it seems that everybody wants to eliminate the effort and luck factor, if at all possible, and head right for the good life. If and when they fail to get what they considered to be their "birthright", a lot of depression and hopelessness can set in on them.

I advise everybody I know to live within their means (that is, avoid debt), don't over extend themselves financially and socially (that way there will be less chance of disappointing others if a commitment can not be kept), and to try to enjoy what they have in the here and now (one must learn to ignore the constant media message that one is not good, smart, or beautiful enough unless one buys product or service X before his neighbor does).

Well, I did not mean to preach...those are just my opinions and I intend to follow them as much as possible.


ken

[Wheeler]

Ken
I can not find one paragraph that you wrote, that I do not agree with.
Darn that makes me mad! (just joking)

However, I hope somehow the basic principal you have described can reach people as we all need some sort of guidance as we go through life.

I did want to say that many things are good about how we use oil.
Saving life, and rescue for people are just a few.

It is now time to make the leap into the next great thing.

[jim_mich]

By Levi Folk
National Post, Toronto
Monday, May 1, 2006

We are "in the early throes of paper money getting
seriously debased," warns John Embry of Sprott Asset
Management, and the price of gold is headed to US$700
this year and US$1,000 conceivably "within two to
three years -- maybe quicker."

[Wheeler]

Got Gold?

[ken_behrendt]

Yes, I agree...for the forseeable future, precious metals are the way to go.

There is an interesting little story I remember from the '70's.

Following the collapse of the South Vietnamese government, paper money throughout the then unified country became worthless. However, those people who had managed to hide away a little gold continued to eat and the total death toll from hunger was reduced. Many a women used their wedding ring to feed themselves and their children during the trying times. They would cut the band, straighten it out, and then proceed to clip off a small portion of one end. This was weighed and then traded for a bag of rice and a family was fed for another day or so.

Whatever country one lives in, one must remember that all of the paper money and coinage it produces is just a "promise" by their government that it entitles the holder to a certain weight of gold in that nation's reserves (most of which will not even be located in that country!). How much gold is represented by that surrogate paperwork and non precious metal at any moment is debatable, even by economists. In a severe financial global disaster, the repulping value of the paper could actually be worth more than the gold it could be traded in for...assuming, of course, that one's friendly local federal government will even allow one to trade it in for gold.

However, when one has one's own supply of precious metals, he is not dependent upon a government to pay him its worth. He already has its worth and will continue to have it despite the turmoil of the international financial markets during a global meltdown.



ken

[jim_mich]

I've a little bit of gold jewelry.

I own shares of AEM (Agnico-Eagle Mines Limited) which is a gold, silver, zinc and copper mining company.

I own shares of SLV which is the new silver Exchange Traded Fund. It's my experience that silver rises faster than most silver mining stocks. It's my belief (I may be wrong) that silver will rise faster than gold, just like it's been doing.

I have some uncirculated straight from the mint American Eagle silver coins, just in case of a major economic collapse.

[ken_behrendt]

Jim...

I, too, favor the acquisition of silver. But, I am a bit leery of owning stocks in precious metal companies. Yes, they have value which can appreciate with increasing world prices, but, in the final analysis, they are still paper. I like to have the actual metal on hand just in case of some sort of financial doomsday scenario in which promisory notes of all types suddenly and dramatically lose value.



I remember reading a story about a decade ago of a Canadian company that sold stocks in its various gold deposits. Their claim was that one could own gold without the hassle of having to provide security for it, etc. It sounded good to me at the time and I was considering making a big investment.

Then they made an annoucement that they had a new gold field that they had acquired on a South Pacific island (I do not remember which one). They said that the test borings that they had made showed that the ground was loaded with one of the richest gold deposits ever discovered!

Wow! That news sent the price per share of their gold stocks sky high. Almost over night, I think they went from something like $6 USD / share up to about $100 USD / share. The rise was so dramatic that I decided not to buy in because I suspected that the shares were overpriced and due for a big downward correction.

Sure enough, over the next few weeks, some really "bad" news began to circulate. Apparently, the original bore samples that were assayed had been tampered with and someone (who was never discovered) had sprinkled them with gold dust to give them an artificially elevated gold content. When uncontaminated samples were assayed, it was discovered that the actual gold content of the mine was very low and hardly worth commencing mining operations for! Needless to say, the price of the company's gold stocks plummeted almost overnight down to near their starting price. Just thinking about how much money a lot of investors lost is enough to make me break out in a cold sweat!


ken

[jim_mich]

Ken, the stock you're speaking of was Bre-X. It turned a lot of investors away from mining stocks. Enron hurt many times more investors than Bre-X.

When the music is playing, you can dance, or you can sit on the sidelines. Dancing is risky, you might fall on your butt, while sitting you're already on your butt.

[ken_behrendt]

BTW everybody...

Today, the spot market price of gold hit a 25 year high. Platinum (another of my favorite metals) also hit an all time high!


ken

[jim_mich]

This is from yesterday evening (May 8, 2006)...

Market Alert From Adrian Douglas

(Intended by Adrian for MIDAS tomorrow. I thought it too important to wait!)

Bill,
I have updated my proprietary analysis with May 8 data and gold is a real beauty! I would rate it as only at the upper end of neutral and not likely to correct any time soon. That is obviously very different from what most of the analysts and newsletter writers are saying, but that is the power of this technique in that it is able to perform reliably when most TA techniques fail.

Silver is looking to be a coiled spring and could shock even the most bullish investors. With the news released this weekend from the Berkshire annual meeting I reviewed my analysis where I had applied it to historical data. It became clear where BuffettÂ’s silver was used. It was from April 8 2004 to Nov 18 2005. It is also clear that the Cartel have blown ALL of this supply trying to quell silver and preventing it going thermonuclear. It didnÂ’t work and silver is ready once again to go thermonuclear.

Back in September of last year I said this gold move would "knock the dust of your monitor"... well here we are $260 higher and looking like energizer bunnies!

Cheers
Adrian

Make that $282 higher from last September till today! This is nothing compared to what it will be in the future!

I expect silver to climb to $20 during the next few weeks. A few weeks could be as soon as 2 weeks or as long as 6 to 10 weeks.