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Investing in Silver?

Discuss issues related to business, finance, taxes, investments, cost of living in different countries, etc.

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fschmidt
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Investing in Silver?

Post by fschmidt » July 20th, 2013, 8:27 pm

I am seriously looking at silver because it seems priced below the cost to mine it. Please, no crazy conspiracy theories in this thread. I want facts before I make a major investment in silver.

My inspiration came from this article:

http://srsroccoreport.com/the-primary-m ... 18-silver/

Then I looked at the latest 10-Q of Coeur Mining, Inc. (CDE) and did the same kind of analysis:

$12,270,000 net income
3,076,535 ounces of silver sold
$12,270,000 / 3,076,535 = $3.99 net income per ounce sold
$30.30 realized price of silver
$30.30 - $3.99 = $26.31 break-even price per ounce

When I go to Google News and search for "silver mining", half the articles are about mines slowing down or shutting down.

So why is silver so low? I think it's a typical investment cycle, but with a little extra kick because most silver investors are lunatics. The silver price was rising based on all kinds of nonsense, so the lemmings/morons/people bought as it was going up. It became overpriced, so it began to fall and then all the suckers who bought on the way up began to sell, flooding the market and depressing the price. This pushed the price too low, where it is now. It should be in the high-20s. Unlike gold, silver is an industrial metal that is consumed, so a silver price below the cost of mining silver is unsustainable. All one has to do is buy silver and wait until the existing supply is used up and then prices will be forced up. Does anyone see a flaw with this logic?

SilverEnergy
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Post by SilverEnergy » July 21st, 2013, 4:33 am

Don't worry, silver is going to go up way past 19 dollars.

It's undervalued right now and there is less silver than gold in the world.

You want to buy silver while it's cheap.

If silver falls even lower, I'm going to buy more of it.

Buy low and sell high.

The low price of silver deals with the market manipulators hoping that many people will sell their silver due to frustration and then the elite will buy up that silver.

What is really going to drive up silver is the demand for it since it's used as an industrial metal and the fact that inflation is going to get worse which is going to further drive up silver, gold and real estate prices.

If silver gets to the 10:1 ratio, experts say it will get at least $1,500 per ounce one day.

Mike Maloney did a technical analysis of silver not too long ago and the graph showed that silver is going to go way up and near $65 an ounce.

You better decide on something because the last thing you want to do is to buy when it's very high. I'm buying right now because we may never see silver this low again.

That's why I'm talking so much about this because once we get into hyperinflation and you're not prepared, you're going to suffer greatly.

Watch the Video: http://www.youtube.com/watch?v=ll1TrNyF9jw
"Allow me to show you the Power Cosmic!" - Silver Surfer

Rock
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Re: Investing in Silver?

Post by Rock » July 21st, 2013, 5:46 am

fschmidt wrote:I am seriously looking at silver because it seems priced below the cost to mine it. Please, no crazy conspiracy theories in this thread. I want facts before I make a major investment in silver.

My inspiration came from this article:

http://srsroccoreport.com/the-primary-m ... 18-silver/

Then I looked at the latest 10-Q of Coeur Mining, Inc. (CDE) and did the same kind of analysis:

$12,270,000 net income
3,076,535 ounces of silver sold
$12,270,000 / 3,076,535 = $3.99 net income per ounce sold
$30.30 realized price of silver
$30.30 - $3.99 = $26.31 break-even price per ounce

When I go to Google News and search for "silver mining", half the articles are about mines slowing down or shutting down.

So why is silver so low? I think it's a typical investment cycle, but with a little extra kick because most silver investors are lunatics. The silver price was rising based on all kinds of nonsense, so the lemmings/morons/people bought as it was going up. It became overpriced, so it began to fall and then all the suckers who bought on the way up began to sell, flooding the market and depressing the price. This pushed the price too low, where it is now. It should be in the high-20s. Unlike gold, silver is an industrial metal that is consumed, so a silver price below the cost of mining silver is unsustainable. All one has to do is buy silver and wait until the existing supply is used up and then prices will be forced up. Does anyone see a flaw with this logic?
Have you looked at global industrial use demand for silver and how much it fluctuates according to global economy? How much does it vary at low and high points in a given cycle? Like, does demand fall 20% or more? There's been a lot of noise in last year about China slowing down and with it, demand for copper and other industrial metals. You also gotta consider the stock situation in China. Look at these relationships over time. Also see if you can find a chart of silver price vs. mining cost over time. If you can get this data, you will have a much better insight as to how safe a silver investment would be now or at what price that investment would seem acceptably low risk. Intrinsic value arguments don't always work in financial markets. Often, things trade way about it. But sometimes, they trade well below it. Consider the example of many closed-end funds. And also consider, mining cost may vary a lot depending on many factors. So if price stays low too long, the mines with highest cost could go out of business while the ones who had easier (cheaper) to mine reserves could continue to do so at their lower cost.

Once you get a target price, you could look to either buy at that level (assuming it gets reached) or just sell uncovered options at that price level with view to buy if price ever gets there. If it doesn't, at least you've been paid the option premium and if it does, you get silver at the price you wanted.

If you do any research on this, please share it here. I would be willing to contribute to the effort.

Moretorque
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Post by Moretorque » July 21st, 2013, 3:44 pm

Both the Silver and Gold markets are completely rigged, first off can you eat it? our ruler's know this that is why they are busy taking over the food and world wide water supply.

Silver is more plentiful than gold but also has 18 times the demand for production uses.

It is undervalued but make sure you have more important priorities taken care of first.
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SilverEnergy
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Post by SilverEnergy » July 21st, 2013, 6:02 pm

Moretorque wrote:Both the Silver and Gold markets are completely rigged, first off can you eat it? our ruler's know this that is why they are busy taking over the food and world wide water supply.

Silver is more plentiful than gold but also has 18 times the demand for production uses.

It is undervalued but make sure you have more important priorities taken care of first.
Not anymore.

This is the first time in the history of the earth that there is more gold than silver.

Some even say we have only 10-12 years worth of silver on planet earth.

Remember that the dollar has lost over 95 percent of its purchasing power.

It won't be long before the U.S. Dollar is no more.

Then that's when all hell will break loose in the world and silver and gold will shoot up.

Those who are putting their faith in stocks, bonds and mutual funds are going to suffer greatly.

Because once the market collapses, the stock, bond and mutual fund markets will collapse as well.

Basically, the biggest stock market crash is on the way....
"Allow me to show you the Power Cosmic!" - Silver Surfer

Moretorque
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Post by Moretorque » July 21st, 2013, 7:37 pm

SilverEnergy wrote:
Moretorque wrote:Both the Silver and Gold markets are completely rigged, first off can you eat it? our ruler's know this that is why they are busy taking over the food and world wide water supply.

Silver is more plentiful than gold but also has 18 times the demand for production uses.

It is undervalued but make sure you have more important priorities taken care of first.
Not anymore.

This is the first time in the history of the earth that there is more gold than silver.

Some even say we have only 10-12 years worth of silver on planet earth.

Remember that the dollar has lost over 95 percent of its purchasing power.

It won't be long before the U.S. Dollar is no more.

Then that's when all hell will break loose in the world and silver and gold will shoot up.

Those who are putting their faith in stocks, bonds and mutual funds are going to suffer greatly.

Because once the market collapses, the stock, bond and mutual fund markets will collapse as well.

Basically, the biggest stock market crash is on the way....
Silver is 17 to 18 times more abundant in the earths crust than gold but we use alot more silver in manufacturing to gold. So because more gold is being mined to silver silver is becoming rarer to find because most of it has been slated for production uses compared to gold.

These guys have unlimited funds to try and keep the system afloat and as long as Daa Daa herd plays it will go, however the whole system is going to collapse literally bad eventually because the planet is giving up the ghost.

You better make sure you have good resources for food, water, health, shelter and so forth before you mess with trinkets because I will tell you your last worries from what is coming up on this planet if the destruction of the ECO system continues at it's current pace unabated will be wondering what a hunk of dead metal is worth.
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SilverEnergy
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Post by SilverEnergy » July 21st, 2013, 8:11 pm

Moretorque wrote:
SilverEnergy wrote:
Moretorque wrote:Both the Silver and Gold markets are completely rigged, first off can you eat it? our ruler's know this that is why they are busy taking over the food and world wide water supply.

Silver is more plentiful than gold but also has 18 times the demand for production uses.

It is undervalued but make sure you have more important priorities taken care of first.
Not anymore.

This is the first time in the history of the earth that there is more gold than silver.

Some even say we have only 10-12 years worth of silver on planet earth.

Remember that the dollar has lost over 95 percent of its purchasing power.

It won't be long before the U.S. Dollar is no more.

Then that's when all hell will break loose in the world and silver and gold will shoot up.

Those who are putting their faith in stocks, bonds and mutual funds are going to suffer greatly.

Because once the market collapses, the stock, bond and mutual fund markets will collapse as well.

Basically, the biggest stock market crash is on the way....
Silver is 17 to 18 times more abundant in the earths crust than gold but we use alot more silver in manufacturing to gold. So because more gold is being mined to silver silver is becoming rarer to find because most of it has been slated for production uses compared to gold.

These guys have unlimited funds to try and keep the system afloat and as long as Daa Daa herd plays it will go, however the whole system is going to collapse literally bad eventually because the planet is giving up the ghost.

You better make sure you have good resources for food, water, health, shelter and so forth before you mess with trinkets because I will tell you your last worries from what is coming up on this planet if the destruction of the ECO system continues at it's current pace unabated will be wondering what a hunk of dead metal is worth.
In ancient Greece and Rome when the fiat currencies failed, the prices of gold and silver shot up and people who had their wealth in gold and silver did well.

When the fiat currencies fail, you will be able to buy goods and services with gold and silver.

Gold and silver has been used to buy goods and services throughout history when the fiat currencies failed.

Fiat currencies ALWAYS FAIL.

Remember gold and silver ARE money and unlike fiat currency, their value can NEVER be zero.

Saying all that......

Of course, I stated that you also need to buy food and water storages. Even better if you know how to farm and own your own farm.

Buy a generator as well.

And lastly......

Buy a gun :wink:
"Allow me to show you the Power Cosmic!" - Silver Surfer

Moretorque
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Post by Moretorque » July 21st, 2013, 8:56 pm

Back than they didn't have guns n cars and planes and submarines and ships to barter with, if somebody needs gold or silver it will be what the market bares but today I believe there are better finished barter items.
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Teal Lantern
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Re: Investing in Silver?

Post by Teal Lantern » July 21st, 2013, 10:58 pm

fschmidt wrote:I am seriously looking at silver because it seems priced below the cost to mine it. Please, no crazy conspiracy theories in this thread. I want facts before I make a major investment in silver.
@fschmidt: Shares, vault certificates, or physical w/delivery?
не поглеждай назад. 8)

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zacb
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Post by zacb » July 21st, 2013, 11:18 pm

At this point no. I would wait for it to drop to 10. I would buy ABX though, although I am waiting for a drop in that as well.
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SilverEnergy
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Post by SilverEnergy » July 22nd, 2013, 4:50 am

zacb wrote:At this point no. I would wait for it to drop to 10. I would buy ABX though, although I am waiting for a drop in that as well.
What if it doesn't get to 10 and starts to shoot up to 30 again?

It's already dropped from 30 to 19.
"Allow me to show you the Power Cosmic!" - Silver Surfer

fschmidt
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Re: Investing in Silver?

Post by fschmidt » July 22nd, 2013, 5:34 am

Rock wrote:Have you looked at global industrial use demand for silver and how much it fluctuates according to global economy? How much does it vary at low and high points in a given cycle? Like, does demand fall 20% or more? There's been a lot of noise in last year about China slowing down and with it, demand for copper and other industrial metals. You also gotta consider the stock situation in China. Look at these relationships over time. Also see if you can find a chart of silver price vs. mining cost over time. If you can get this data, you will have a much better insight as to how safe a silver investment would be now or at what price that investment would seem acceptably low risk. Intrinsic value arguments don't always work in financial markets. Often, things trade way about it. But sometimes, they trade well below it. Consider the example of many closed-end funds. And also consider, mining cost may vary a lot depending on many factors. So if price stays low too long, the mines with highest cost could go out of business while the ones who had easier (cheaper) to mine reserves could continue to do so at their lower cost.

Once you get a target price, you could look to either buy at that level (assuming it gets reached) or just sell uncovered options at that price level with view to buy if price ever gets there. If it doesn't, at least you've been paid the option premium and if it does, you get silver at the price you wanted.

If you do any research on this, please share it here. I would be willing to contribute to the effort.
My view may not be popular here in conspiracy land, but I will tell you all the things that make no difference to me: industrial demand, market manipulation, investment demand, and the future of fiat currencies. There is only one thing that matters to me, and that is the long term cost of mining silver. Industrial demand just determines when existing supplies will be used up, not if. The idea about shutting down more expensive mines and just running cheaper mines to lower costs is also temporary because these lower cost mines will eventually run out. I am patient and I can wait as long as it takes for the cost of finding new silver to kick in.

An interesting aspect of silver is that the yield, meaning ounces of silver per ton of dirt dug up, has been declining rapidly. It was 13.0 in 2005 and 8.1 in 2012. This decreasing yield has to drive prices up over time.

Most silver fans say silver is money. This is nonsense. Silver is an industrial metal and that is why I like it. Gold is money, and that is why I don't like it. The value of money is simply the value people feel it has. I don't like investing in feelings. What I like about silver is that it is the most easily storable useful material around, so it is a good store of value.

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Re: Investing in Silver?

Post by fschmidt » July 22nd, 2013, 5:37 am

Teal Lantern wrote:@fschmidt: Shares, vault certificates, or physical w/delivery?
SIVR

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Re: Investing in Silver?

Post by Taco » July 22nd, 2013, 6:54 am

fschmidt wrote: Most silver fans say silver is money. This is nonsense. Silver is an industrial metal and that is why I like it.
Utah monetized silver and gold last year, the first state to do so. Arizona did it this year.

Utah Passes Currency Amendment
http://www.silverdoctors.com/utah-passe ... ld-silver/

Arizona To Use Gold And Silver Currency
http://www.zerohedge.com/news/2013-04-2 ... r-currency

Over A Dozen States Push Gold As Legal Tender
http://www.zerohedge.com/news/2013-04-0 ... gal-tender

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Post by Moretorque » July 22nd, 2013, 9:21 am

Alot of people like gold because it takes up less space to store than silver. Money is what people say it is on agreement with one another, this is where they got us. People just sat back and let them tell us that money is digits they make up out of nothing and it is going to cost everybody practically all their property rights for allowing themselves to be so duped about understanding how to develop amongst themselves a honest system of trade n barter.
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