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argent_pur
Penny Sorter Member
78 Posts |
 Posted - 08/23/2010 : 21:19:02
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I read an article awhile back that got me to thinking...
We silverbugs are fond of talking about taking physical silver off the market to one day (hopefully) force the naked shorts' hands and end the manipulation of the silver market. The author of the article was saying that too many silver investors are buying second hand silver like junk silver or back-dated silver bullion coins or non-newly minted silver bars, and that buying those things, while new to us, doesn't constitute new silver in the marketplace as a whole, and doesn't really take silver off the market because it has just been switching hands on the secondary market. If we want to take silver off the market we need to be buying only newly-minted silver coins and bars.
My questions are: First, what are your thoughts on this? and Second, even if I buy, say, only 2010 bullion coins from a dealer, isn't that getting silver second-hand, as the dealer is really the one who took the silver off the market in the first place, not me?
Jim
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frugalcanuck
Penny Pincher Member
Canada
103 Posts |
Posted - 08/23/2010 : 21:45:48
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With that logic as soon as you buy it is off the market and not going to affect the price. If you take the silver off the market there is still the same amount of silver in the world as before.
It doesnt matter what date is on the coin. if it is burried in the back yard I think it is off the market. spot value pending. |
One box of Nickels
11.65% .999 Ni |
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argent_pur
Penny Sorter Member
78 Posts |
Posted - 08/23/2010 : 22:10:16
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Yeah, I'm not saying I necessarily agree with the author, it was just something I hadn't really considered. In any case, I always thought it was more to do with folks taking delivery of big COMEX contracts that affected the market supply more than, say, a big fish going to APMEX or BD or NWTM and taking delivery of the silver that way.
Silver in my hands is just as "off the market" as silver in your hands, even as I buy some from you or you buy some from me. So, what's a silver investor to do if he/she wants to put the pressure on the paper silver market? Buy COMEX contracts?
As a side note, where do large industrial users of silver get their metal? Directly from the mine, maybe? |
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Sheikh_yer_BuTay
Penny Pincher Member
USA
232 Posts |
Posted - 08/23/2010 : 22:44:04
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While I am no expert, I think it does not matter where you buy silver as long as you have "strong hands" to hang onto it.
That being said, if you really want to put the most pressure on the big shorts, buy COMEX contracts and take physical delivery of the 1,000 ozt bars you buy. You would have to buy an enormous amount to do any good. Good luck selling them after you do. Very few dealers want them unless you pay to have them assayed and even then they will say no one wants them. But, that is just IMHO, I am sure there are others with more experience in this matter. |
"The most fiscally irresponsible government in American history."
Mort Zuckerman, liberal columnist and former Obama speech writer |
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HoardCopperByTheTon
Administrator
USA
6807 Posts |
Posted - 08/23/2010 : 23:07:54
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Is it new silver if they melt down old silver and stamp a new date on it?
The market is determined by supply and demand. It does not matter whether silver is old or new. If noone is willing to give it up, the price gets bid up. As the price goes up, new sources become available.. either because the holders of silver are willing to give it up to diversify into other goods, or because the higher price can make mining more lucrative and viable. Taking physical delivery of a COMEX contract is a real bitch. They don't really want to deliver the physical silver. 
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If your percentages are low.. just sort more. If your percentages are high.. just sort more.
Now selling Copper pennies. 1.6x plus shipping. Limited amounts available. |
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argent_pur
Penny Sorter Member
78 Posts |
Posted - 08/23/2010 : 23:14:45
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Thanks for the input guys, and to me it begs the question, "Are (retail) silver investors really fooling themselves by thinking they can collectively put much, if any, pressure on the the supply side of the silver market since most of us can't afford a single COMEX contract?"
Copper, if I'm reading you correctly, you're saying that if I buy 1000 Maples from APMEX or BD, it doesn't put the kind of pressure on the market that a 1000 ounce delivered COMEX contract would? (And I know 1000 ounces is nothing by itself, just using small numbers for illustration) |
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Sheikh_yer_BuTay
Penny Pincher Member
USA
232 Posts |
Posted - 08/23/2010 : 23:26:45
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quote:
Originally posted by HoardCopperByTheTon
Taking physical delivery of a COMEX contract is a real bitch. They don't really want to deliver the physical silver.
HCBTT... That is one awesome bar of white metal! |
"The most fiscally irresponsible government in American history."
Mort Zuckerman, liberal columnist and former Obama speech writer |
Edited by - Sheikh_yer_BuTay on 08/23/2010 23:27:26 |
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Lemon Thrower
1000+ Penny Miser Member
USA
1588 Posts |
Posted - 08/24/2010 : 05:09:15
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quote:
Originally posted by argent_pur
I read an article awhile back that got me to thinking...
We silverbugs are fond of talking about taking physical silver off the market to one day (hopefully) force the naked shorts' hands and end the manipulation of the silver market. The author of the article was saying that too many silver investors are buying second hand silver like junk silver or back-dated silver bullion coins or non-newly minted silver bars, and that buying those things, while new to us, doesn't constitute new silver in the marketplace as a whole, and doesn't really take silver off the market because it has just been switching hands on the secondary market. If we want to take silver off the market we need to be buying only newly-minted silver coins and bars.
My questions are: First, what are your thoughts on this? and Second, even if I buy, say, only 2010 bullion coins from a dealer, isn't that getting silver second-hand, as the dealer is really the one who took the silver off the market in the first place, not me?
Jim
i don't buy silver as a public service but to protect my savings.
the author has a point to a very limited extent but he's applied a very important concept to the wrong target. paper gold and silver - like futures, GLD and SLV, etc. - are what he ought to be targeting. they have an almost unlimited supply and are used to soak up investment demand. but for that paper PM, market prices would be much higher. |
Buying:
Peace/Morgan G+ at $15.00
copper cents at 1.3X
wheat pennies at 3X
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Market Harmony
1000+ Penny Miser Member
USA
1274 Posts |
Posted - 08/24/2010 : 07:24:23
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In the statistics of supply and demand as reported by the Silver Institute, scrap from the public is considered as part of the supply. I guess that this is another way to say "second-hand silver"
Thinking of the scenario as presented: When the supply of second-hand silver decreases, then either mining would have to increase (unlikely) or price will respond to reflect equilibrium. As the industrial users require this silver (no substitutes) the price correction can be quite large. At which time, second-hand silver supply will most likely increase again as folks cash in their gains. So, even if it was possible for a mass of silver hoarders to manipulate their part of the supply for a short period, eventually prices will become so attractive that the silver being hoarded will become part of the supply again, as those hoarders sell off their stash. |
goto the new and improved realcent: http://realcent.org |
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novillero
Penny Sorter Member
USA
86 Posts |
Posted - 08/24/2010 : 08:42:40
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My uninformed opinion is that silver does not "go bad," and that old silver coins melted are just as good as freshly minted or mined silver.
Further, I remember reading that bullion silver represents a small portion of today's silver market (I think I read 5%, but don't quote me on that).
So if bullion is 5% of the entire silver market, it would seem to me that whatever you (or we collectively) buy in bullion is miniscule in comparison to the market as a whole.
Please correct me if I don't have my facts straight. |
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Sheikh_yer_BuTay
Penny Pincher Member
USA
232 Posts |
Posted - 08/24/2010 : 14:09:40
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quote:
Originally posted by argent_pur
Copper, if I'm reading you correctly, you're saying that if I buy 1000 Maples from APMEX or BD, it doesn't put the kind of pressure on the market that a 1000 ounce delivered COMEX contract would? (And I know 1000 ounces is nothing by itself, just using small numbers for illustration)
It all depends where the silver comes from to make the 1000 Maple Leafs or a single 1000 ozt bar of silver. If it comes from the same supply, then the Maple Leafs and the silver bar are in direct competition with one another for the silver on hand. If that is the case... it really does not matter which one you buy. The end result is the same. Silver is removed from the market into your hands.
But COMEX does not deal in anything but futures contracts for 1000 ozt bars of silver. If you wish to end the naked short "silver manipulation" position by immediately removing their medium of exchange... you would have to buy on the scale of the Hunt Brothers IMHO.
In the end, just buy what best suits your needs. |
"The most fiscally irresponsible government in American history."
Mort Zuckerman, liberal columnist and former Obama speech writer |
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beauanderos
1000+ Penny Miser Member
USA
2408 Posts |
Posted - 08/24/2010 : 22:41:18
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silver, junk silver coins at least, continues to move from weak hands to strong hands. Just look at the lot sizes offered on ebay of the silver listings. They are dramatically shrinking in size, and are predominately just single coins now... I'd say 70% of the listings are so. There is less and less bullion on the market as we move forward. Yes, it does seem penny ante to dream that we, as individuals, could impact the market by buying up what we can of circulating silver coins... but it all adds up. Even if you're just buying $10 to $100 a month, multiply that by tens of thousands of individuals doing the same and you can see we will make a dent. Somebody is buying all those eagles. Consider this... in just my small town of half a million, there are at least ten Craigslist ads to buy silver... the cheap version of Cash4Gold, but effective nonetheless. We do make a difference!  |
Hoard now and hold on!
http://coppermillions.blogspot.com/
http://wherewillyoubein2012.blogspot.com/ |
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Lemon Thrower
1000+ Penny Miser Member
USA
1588 Posts |
Posted - 08/25/2010 : 05:39:47
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scrap is a source of supply and is rightly counted as such. but what happens is when prices first start going up there is a surge in scrap supply. then it tails off. also, the supply of scrap soon becomes negatively correlated with price. the higher pm's go the less willing people are to sell scrap.
some people argue that gold is in a bubble becuase of all of the "ill buy your gold" shops and commercials. the opposite is true. there are apparently enough suckers around still selling to keep these guys in business. when people start holding their gold tight (strong hands in the words of another poster) then the price will really move up.
but fundamentally the spot prices are set by the futures markets, which are paper markets, and which are thought by many to be controlled by a small number of investment banks. there is a multiple of paper to actual gold of 20 or perhaps even 100 to 1. its that paper which is keeping a lid on prices. |
Buying:
Peace/Morgan G+ at $15.00
copper cents at 1.3X
wheat pennies at 3X
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Numis Pam
Penny Sorter Member
USA
63 Posts |
Posted - 08/25/2010 : 08:40:26
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| I believe even small amounts of silver purchased consistantly by a lot of different smaller buyers do make a big difference over time. |
http://www.extrabux.com/r/4c6f54ba32 1% -27% cash back on purchases. Plus Refer Friends and Get $5 to Spend at Ebay or any of hundreds of participating online stores. |
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assetcoin
New Member
9 Posts |
Posted - 08/25/2010 : 20:10:19
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quote:
Originally posted by Numis Pam
I believe even small amounts of silver purchased consistantly by a lot of different smaller buyers do make a big difference over time.
I'm with you Pam. I gotta believe my little purchases every other week make a difference, since I know there are thousands (tens of thousands?) of us doing the same thing. |
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Buying Second-Hand Silver
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