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26

To be honest, I think a lot of people on this site are doing you a disservice by taking your idea as seriously as they are. Not only is this a horrible idea, but I think you have some alarming misunderstandings about what it means to save for retirement. First off, precious metals are not an "investment"; they are store of value. The old saying that a gold ...


12

This sound like a very bad idea. If you invest exclusively in silver, your investment is not diversified in any way. This is what I would call risky. Have a look at index funds and ETFs and build a diversified portfolio. It does not take much time, and you don't need to let it do by someone else. They are risky too, but I see "silver only" as much riskier. ...


9

Coins are legal tender. They're authorized by governments and have a face value. Rounds are simply coined pieces of metal minted by private manufacturers. They do not have any face value and are not legal tender. Rounds are used to own metal, they have no value other than the value of the metal in them. Any premium you pay over the price of the metal is ...


9

Of course. The rationale is exactly the same as always: profit is taxed. The fact that you use intermediate barter to make that profit is irrelevant. To clarify, as it seems that you think it makes a difference that no money "changed hands". Consider this situation: You produced item X, which cost you $100 to produce. You have 100 of those in stock....


8

All public available information indicates the two ETFs you mention are 1:1, no leverage. GLD is priced as 1/10 oz of gold, so 10 shares is one ounce, as will move as one ounce of Gold, no leverage. 100 to 1? How would that work? A 1% drop would wipe the ETF out? By the way, I'd ask that you provide a link or two to the sites you cite. Are they mainstream, ...


7

First is storage which is a big and a detrimental headache. Security is another big headache. Investing in precious metal has always been an investment opportunity in the countries in the east i.e. India and China because of cultural reason and due to absence of investment opportunities for the less fortunate ones. It isn't the case so in the West. ...


7

Their "worth" is whatever someone is willing to pay to have them. The mint presumably thinks that some people (collectors) are willing to pay at least 55$ CAD for them. Their value as currency is only 3$ CAD. Their value as precious metal/crystal is irrelevant, as its illegal to melt (without explicit permission) coins that are legal tended in Canada.


6

Read the prospectus for the funds. Don't listen to quacks. The GLD prospectus has a fairly comprehensive evaluation of risks associated with the fund. Be careful with blogs or individuals, particularly individuals with "proprietary techniques" for making money, who talk about gold & silver. Crackpots of all stripes gravitate towards gold like flies to ...


5

Because most of the posters have disparaged the pursuit of silver without a reflection upon what you wrote in the question - your concern about Hungary and its government, I'll weigh in it. In a stable and solid political and economic environment, this advice against silver would be generally correct. As you commented, though, this has not been the case ...


5

The S&P 500 represents a broadly diversified basket of stocks. Silver is a single metal. If all else is equal, more diversification means less volatility. A better comparison would be the S&P 500 vs. a commodities index, or silver vs. some individual stock.


5

How do the mint set the value? Surely it cannot be a value plucked from the sky. Actually, that's exactly how it is set - plucked from the sky. Not by the mint, though, by Congress (in the case of the US, similarly in other countries). The US mint merely executes orders given by the US Congress and signed into law by the US President. For example, the ...


5

What you are doing is barter trade. Most countries [if not all] would tax this on assumed fair value. There are instances where countries may relax this norm in border areas for a small amount. Barter is not just for gold – one can virtually do this for any goods, i.e. sell garments in exchange for oil, sell electronic chips in exchange for consumer ...


4

For gold versus the DJIA the most interesting short analysis I've seen is located here. They do a reasonable job of highlighting some pitfalls of looking at just the basic numbers, and they also don't try to claim there's any magic - it's an intellectual exercise.


4

The points given by DumbCoder are very valid. Diversifying portfolio is always a good idea. Including Metals is also a good idea. Investing in single metal though may not be a good idea. •Silver is pretty cheap now, hopefully it will be for a while. •Silver is undervalued compared to gold. World reserve ratio is around 1 to 11, while price is around 1 to ...


4

The SPDR ETF GLD? The fund intends one share to match 0.10 ounce of gold, and the wikipedia article states it's one of the top 10 holders of bullion in the world.


3

This isn't new. Even before silver hit $50 in 1980, silver coins were worth 3-4X face value for 'junk' silver. There were people writing articles on how one could sell their house and specify a lower price, but paid in silver coins. Since silver coins have a face value, it was suggested that this was a legitimate process. These people also suggested that ...


3

What about allocated (or even unallocated) storage in a vault - I know very little about it myself except but you own numbered bars (or rights to a percentage in the case of unallocated) in a vault. Worth mentioning anyway I think. Here's the first link I found it may help


2

Silver is a commodity. It's valuable for certain kinds of manufacturing, jewelry, and as a speculative financial instrument or hedge against the dollar. The S&P 500 includes companies which make money off of mining, manufacturing, medicine, media, technology, banking, dining, agriculture... There's a lot more variety there.


2

I don't think zero would ever be ones basis for this type of situation. The face value is as safe harbor as you'll ever find. While you need to pay on this gain, like kids selling baseball cards, I don't know that average folk are actually claiming such small transactions.


2

For what it's worth, here is a Granger causality test on 10 years of daily gold and silver data downloaded from Nasdaq. Here is the data plotted:- and here are the Granger test results:- This shows in the 16th lag a significantly low probability of the null hypothesis that the price of gold does not affect the price of silver. That is to say, the price ...


2

"Limited Price" is probably equivalent to the current par value of a "limit order". Markets move fast, and if the commodity is seeing some volatility in the buy and sell prices, if you place an ordinary buy order you may not get the price you were quoted. A "limit order" tells your broker or whomever or whatever is making the order on your behalf that you ...


2

The coins are produced as bullion, not intended for circulation. The fact that 1 ounce is stamped with a 'face value' means the coin is counted as issued money as would other coinage, but with its value over $1100, the $50 is meaningless, in my opinion. I'd imagine those in favor of a gold standard would encourage the mint to use a higher value, say, $1000/...


2

There are various exchanges around the world that handle spot precious metal trading; for the most part these are also the primary spot foreign exchange markets, like EBS, Thomson Reuters, Currenex (website seems to be down), etc. You can trade on these markets through brokers just like you can trade on stock markets. However, the vast majority of traders ...


2

Is pure (.999) gold or silver actually available in China for considerably less than the US rate? No. Whoever told you that is talking nonsense.


2

I have some gold investments. I simply bought a couple of small bars of gold and put them in my house. That's pretty cheap in terms of storage costs. Why don't you want to do it this way? You won't find cheaper storage. Anyway, looking at the numbers presented; 0.01% holding fee per month. So after a year, you'd be down around 0.10% So if you had 100 ...


2

This is how mints make money. They sell limited runs of items at a price significantly higher than their manufacturing cost. Some buyers hope that the scarce nature of the item will cause others to value it higher than the initial offer price but also some people just like to have them.


1

The futures market allows you to take delivery at the lowest cost. Most people don't deal in 100oz gold bars and 5000oz of 1000oz silver bars though, especially at the retail level. That said, when you are at the retail level, often times you will find reputable Internet dealers offering the lowest cost of ownership. Keep in mind brand name though when ...


1

littleadv gave a great answer, but neglected to mention one thing. Modern minted coins usually only contain a (high) percentage of a precious metal. For example pre-1965 quarters are 90% silver and 10% other, to maintain strength and durability. Rounds of silver bullion are usually .9999%, or fine, silver, which is considerably softer.


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