Great read as always Karl.
Was trying to look at the archive to find your opinion on silver a couple of years back when it was $10. What has been your opinion on silver the last couple of years?
Thanks.

For any new readers here, "BTFD" stands for Buy The ****ing Dip.

I don't consider physical metals to be a reasonable thing to buy or sell due to the premiums charged. Getting raped isn't my idea of a good time when I have choices, and I do.

I haven't had a decent entry I liked in silver for a long time; I do recall talking about it more than a year ago.

If you want my short-term view on things the best way to get it is to have a gold star and watch the videos - I usually offer opinions on the metals, although not always - depends on what's trading and where they are.

Thanks Karl for the response. Loved your podcast yesterday.

Anyone who took my BTFD mention seriously should be aware that I have absolutely zero investing experience aside from trying to sort through a bunch of poor choices for a 401(k).

Genesis wrote..

But..... don't chase price downward if that level fails.

Did that in the 99/2000 bubble in spades. Learned my lesson. Never again. Good advice.

Love your optimism Karl!

Hey Karl,
I am not much of a trader. I like to invest with a longer term outlook. Was wondering if your premium membership provides long term opinions on asset classes and ideal asset allocations for the long term investor?
Thanks.

Generally no; I don't do investment advice as I'm not a registered investment advisor.

It is my general opinion at the present time that the market is overvalued, overlevered, and extremely dangerous - and has been for more than a year.

I don't believe this time is different either.

Nonetheless if you're buying and taking delivery of physical metal then you're not only paying a crazy premium you're also dealing with storage costs and risks. That is, in my opinion, foolish unless you are betting on the end of the world.

And in that case you're likely to lose the bet whether you're right or wrong.

absolute novice here, everything I know is from this blog. That said, there are two things bothering me about precious metal.

1. If, and when we hit the wall, will metal owners be able to buy groceries and needed supplies with it. Will merchants all have little scales to weigh and evaluate the metal. Sounds questionable to me.

2. In a 30 minute talk radio show, there must be at least 5 ads for precious metal. Wouldn't that be the "better mouse trap?" Why would they have to push so hard for sales. Just doesn't sound right.

The only thing I can understand is buy low, sell high.

Comments please!

my sell price for silver is $120. I think an inflation adjusted high would be $140 when the Hunt's were manipulating it and there are manipulators now with deeper pockets. I also think silver has better fundamentals than gold. But it will surely take a dip when interest rates go up. A speculative play that should probably not consume more that 5% of your investments..

Jane
In an absolute meltdown scenario (aka Mad Max) everyone will be hoarding all goods with intrinsic value like food, medicine and weapons. In the scenario where government retains full or near-full control in an economic meltdown, we're likely to see an authoritarian try to confiscate or tax PMs to capture their value for the government - not the people. That is exactly what FDR did in 1934.

The scenario where PMs have SHTF value is a middle ground - where (national) government loses most or all control but civil society remains functional. In that situation, there is still an economy and surplus goods to buy. Obviously if times are hard, no one is going to sell you something they might need to survive for any amount of money (or metal). So it only where there is a surplus in the absence of strong government control can I see a good case for gold and-or silver becoming a strong de facto currency with high value.

If TSHTF and I have a chicken and you have silver, how much silver does the chicken cost?

Answer: All of it, if I'm in a good mood.

Is 45 about to get taken out?

That would be a yes, it appears.

Gen- Are we talking frozen, live, canned, or dehydrated??

Im pretty sure you read atlas shrugged, and taken an economics course or two. Money is what people use to trade. It could be packs of cigs, apples, turkeys, live chickens, silver, or gold.

You may not value silver, but I may not value chicken. But someone out there will.

(I have quanitities of both- :-)

Seems that you're pretty sure of that... and also that whenever society reorganizes government won't force an effective conversion that results in a tax rate of, oh, 99% on that stuff.

Silver and Gold are for possibly protecting your wealth during a full blown SHTF scenario. It's for "the after," assuming there is an "after" and whatever form of government that crops up doesn't just levy a 100% tax on all PM redemptions. My personal take is that if you think Mad Max is coming, haven't bought all the "things" you're going to need just to survive, and are buying gold and silver coins, then you are way way way way off in a ditch.

There simply aren't enough people that own gold and silver coins in the US to provide a fundamental market in a Mad Max scenario. It's more likely that I'll trade you some of my 9mm for some of your rice. Or maybe one of my water filters for one of your goats. Who knows? The only thing I can say with reasonable certainty is that if you think a handful of gold coins is going to get you what you need then you will be dead incredibly quickly. Total Mad Max anarchy? *Click* *Bang* "Thanks for the coins chump."

I like Karl's wording. If you're betting on Mad Max and buying gold, then you lose even if you win. We all do. But it seems like that's the path we're careening down anyway. Sigh.

Maybe thats what the FEMA camps are for? Putting people who fail to report silver sales/bartering taxes?
I hear you. But uncle sam has no clue how much silver I have. Bought it all in cash and its not in a safety deposit box for Uncle Sam to raid during the next banking holiday.

my bet is it will fall back to around 30$, then come right back in the next 6 months as the situation deteriorates.

Yeah Mike, but problem with that is that if we lose the dollar care to bet on the replacement being 100% digital and all metals transactions reportable?

Oh, and the fun part? They have no idea how much you had, or what you bought it for. That's nice - the basis is $0 - now pay the tax.

If thats the case, I will barter the silver coins to get what I need. Of course, I could only do this in known safe situations (cases where I wouldnt get robbed of silver merely for mentioning I wanted to trade in silver).

We all can dance around these type questions all afternoon. I didn't get the silver I got to get rich off of. I didnt buy more than I could comfortably carry. And I still wouldn't sell it even if it went down to $4 per coin. I'd prolly by that much more of it, though.

In a Mad Max scenario a pocket full of loose .22 cartridges may beat a pocket full of silver dimes for shopping in the farmer's market.

Bad thing about a one ounce gold coin you saved to bribe a border guard or whatever. As Karl pointed out - human nature being what it is whomever you try to trade it to knowing you are desperate is gonna want the whole thing.

Karl,

Ignoring the argument that PMs are "money" for a moment, how much do you think that the recent moves are a result of futures expirations? Isn't today an expiry date for gold and silver?

I ask because when I look at other commodities, like oil, and even natural gas, I see some pretty solid percentage moves at or near the expiry dates.

NOTE: If today is an expiry date for gold/silver then that just further reinforces the view that they are commodities.

Second point, Karl, if the basis of a new system assumes zero on PMs, why wouldn't it assume zero on most everything and force the tax for most everything (including stocks, etc.)? I don't see PMs as a worse liability than anything else in that situation. If government does it, we're screwed across the board.

As for the end of the world, I don't think very many sane people want that to happen but what do you do when it stares you in the face? Silver and gold were used by fleeing Jews in the WWII era to move some percentage of wealth out of one economic system and into another (from Nazi Germany to countries like the US). They were not money there either but they did act as a store of value while the world as those people knew it ended and was replaced by something else. That's how I see gold and silver - as a highly portable store of value if you have to get out quickly. My advice to family and friends is invest sanely, prepare for the worst, and once you have all of that done, if you have money left over, consider getting some gold and silver. Not as an investment but as a "Get Out Of Dodge" store of value from here to somewhere else.

Note 2: Having funds offshore, out of the reach of the US government, is probably an even better way to go than carrying gold and silver.

Whew. Thank God I have chickens.