So is bitcoin really now more valuable than gold now? You might need to ask a philosopher. All I know is that people sure seem to be willing to pay a lot for it at the moment.
I’m not against junk, it has its place. If you’re one that collects change in a jar or coffee can and then cashes them in ever 6 or 8 months, do yourself a favor and take 20 minutes and see if you’ve got any Pre 1970 and especially pre 1965 coins. If you do, you just hit a little jackpot.
The future is an uncertain place, however one thing is absolutely certain. The current economic system can’t function as it is, for a lot longer.
Over the past few days, I have been looking hard at the miners and shaking my head at the beatings they’ve endured recently. Some truly wonderful mining and streaming operations, have had their stocks cut to the bone. It’s crazy. I think we could very well be looking at at least a nice bounce in the mining area.
Back in 2001 China was allowed into the world trade organization. As far as I was concerned, this was inevitable. China had become the manufacturing arm of the world. They were growing in leaps and bounds, and we were sending trillions of dollars into their economy.
But as time went on and I got older and maybe wiser by a brain cell or two, I started to see silver in a whole different light. By the time 2007 rolled around, and I had spent a few years “looking into this stuff,” my opinion swung 180 degrees. I still don’t much like it for jewelry, but that’s the mechanic side of me talking. When properly polished, it has its own form of warmth that I can indeed appreciate. It can look quite nice, as long as you keep the tarnish away.
Gold and silver prices fell 3.5% and 11.5%, respectively, last year – and started the first official trading day of 2022 down another 2ish percent.
Nevertheless, they’re still a solid – perhaps the best – place to have your savings, especially for the long run.
Why? Because the fundamentals of gold and silver remain strong as we embark on another year of work, play and investing for the future.
I want to take a break in the self/home defense series and chat a bit about recent economic developments, including gold.
So the Feds tossed another 75 basis point hike on us this week. That was totally expected. They have to look like they’re doing something to combat the worst inflation in 40 years.
But in this world, in the year 2022, nothing is as it seems. Nothing is as it should be. See, on one hand they’re hiking rates into a slow economy, which is a recipe for disaster. But on the other hand, the one they hide behind their back, they’re buying up about 320 million dollars worth of assets per day.
Why is that? Remember a couple weeks back, where the ECB put out a news blurb that literally caught me so off guard, I had to rethink a lot of things? That blurb said that the ECB would use “unlimited” resources to keep the debt market intact.
The European Central Bank will unveil an unlimited bond-buying tool next week to help markets better adjust to steeper and faster interest-rate increases than previously thought, economists surveyed by Bloomberg say.
That's it, that's the story. Okay, so what am I going off about here? Let's chat...
As any of you who have read my rantings for any length of time knows, I still have a masochistic love for gold and silver. I say that jokingly, since in reality, both have done pretty darned well if your time horizon is long enough.
When we first started pushing the idea for gold, back in the early 2000's it was under 300 bucks an ounce. So seeing it 20 years later at 1800, isn't a bad return. I was later to the silver party, getting involved there in the 07-09 area. But there too, we've done pretty well.
Many of you longer term readers will remember the two "Vegas plays" we did. By using a ladder of silver miners, the first play took 30 grand to 1.2 million. The second one several years later took 19 grand to 246 thousand. They were nice and boy I'd sure love to see the silver situation allow for a repeat of those good times.
I am not at all suggesting we're ready to whip up another Vegas play here, not yet. But I do think the building blocks are being assembled as we speak. I want you to consider a few things.
First off, silver has indeed done fairly well over the past several months. It was trading in the 18's in September and has recently flirted with 24. So it's been fairly perky. But it isn't the price that's got me the most interested, no it's the demand. We'll get back to that in a minute....
Gold has also done well lately. In October gold was trading in the 1600's and has recently flirted with 1900. Now, gold is the one that always gets the catchy headlines. When it was reported that China had bought up a whopping 30 tonnes of the stuff in December, after buying 32 tonnes of it in November, it made headlines from Bloomberg to Forbes.
Why are they buying it? What's China's angle? Is China trying to make its yuan convertible to gold, etc etc. The articles were fast and furious.
I had way more responses to my article about silver the other day than I expected. Why? Well, it’s not like I haven’t written about the stuff like a zillion times in the past, so I figured most folks knew my stance on things, and why I still think it’s one of the most undervalued commodities on earth.
But, as I said I got a lot of emails, a lot of questions and so I think I’ll use today to talk about them.
First off, the silver/gold miner stocks. Yes I like them. But NEVER get it in your head that any stock is safe. I repeat, any stock. Companies blow up, CEO’s get caught fondling kids, probable ounces in the ground get proven to be less than thought, their debt could catch up with them, I could go on and on. We “TRADE” the mining stocks. But they are not the same as having physical metal. You don’t “set it and forget it” with the miners. For maximum safety, you want physical.
Which of course brought up another question.
I appreciate your emails/articles about finance, life and more. I read your recent email on silver and while I would like to have more silver in my portfolio my issue is where do I store it?
I am not comfortable keeping large amounts of silver in the house. Not comfortable having large amounts in a safety deposit box in a bank so where? I would prefer my home not be a target for thieves if I can prevent it.
Lewis
Well Lewis, it’s like this. Anything you can’t stand over and protect with a gun in your hand…do you really own it? Safe deposit boxes are NO good. First off, most banks say you can’t store precious metals in them and secondly, what happens if the system goes down, and banks fold up? Did you know they’re legally allowed to go through your deposit box? Indeed.
Yes there are silver and gold storage companies, with mega high tech security, and each ounce you send there is registered, etc. But is that ideal? Do you want your silver sitting in a guarded establishment in say Nebraska, but you live in Florida? What if this whole world goes mad max, there’s no postal service/no UPS, no gasoline to drive there?
The secret to storing metals at “home” is you have to be concerned about 1) theft, and 2) especially if you have some cash along with your metals, is fire. So, how do we get around this? The theft part is relatively easy. First off, tell NO ONE that you own any. Why would anyone suspect that you’ve got enough precious metal, to want to come to your house? Don’t tell a soul you have metal at home. No one, including your kids. Secondly, consider shipping it to an elderly relatives place instead of yours. Even they don’t need to know what you’ve been sent, you can tell them it’s a heavy box of ammo or what have you. When it shows up, you go get it. That way, even if the UPS driver took note of a precious metal deliver and told his friends, it wouldn’t be “there.”
A couple articles back, I laid out the "still bullish" case on silver, and one of them being that demand has outstripped supply for 3 years now. But it isn't just silver that's been in a deficit.
AI has a lot of people buzzing, with the "darling" high fliers like NVDA and AMD making these new high powered chips. But lost in the shuffle is one quite interesting fact. All these computers for AI need copper. Every single one of them and guess what? Copper is in supply/demand deficit.
SANTIAGO, April 12 (Reuters) - Copper's bull run should continue for at least the next three years, fueled by global supply challenges and hot demand for the metal to power energy transition and artificial intelligence technologies, industry analysts say.
The outlook is an optimistic harbinger for Freeport-McMoRan and other producers as decarbonization and technological shifts fuel copper's latest demand wave after China's rise powered a similar one two decades ago.
But with question marks hanging over a number of key projects, some estimate production will struggle to meet that demand.
These themes are expected to dominate conversations in the Chilean capital of Santiago at the CRU World Copper Conference from April 15-17, the largest annual gathering of industry executives, investors and analysts. Chile is the world's biggest copper producer but its output has faltered in recent years.
But with question marks hanging over a number of key projects, some estimate production will struggle to meet that demand.