Silver for gold -- and vice versa

159
Fri, Aug 16, 2013 - 4:33pm

The warden said:
"The exit is sold.
If you want a way out,
Silver and gold."


https://www.youtube.com/watch?v=-9NaIYULk6s

There's been a lot of talk, maybe too much talk... :-) about which precious metal is best to own, why, when, in what ratio (if any, for some). Not a trivial question to ask if one is just beginning to stack -- and not one to ignore if one had at one point tragically lost a sizeable stack in choppy waters on a midnight fishing expedition.

There are economic, monetary, industrial, geopolitical, social and in ALL cases personal considerations -- I cannot hope to cover them all: but I would like to try to start a conversation about them, and eventually dig up more details in future posts. We are all our own 'financial advisers', to a greater or lesser extent we are trying to act as such for our family and friends. It's important to have a solid, well-founded understanding of at least the pillars influencing the decision which metal to choose and in what ratio. And whether and when this decision should be revisited.

Being the Luddite that I am, I do NOT feel comfortable investing my savings in paper representations of legal claims on property I do not physically control – as I see a non-trivial risk in being subordinated if not outright dispossessed of said ‘ownership’ as and when the current monetary paradigm hits a convenient milestone on its lurching path towards its eventual demise (and subsequent transformation). While I do not (as yet) foresee the end of the world as we know it in ALL areas of life, I DO remember, and therefore anticipate the possibility of ‘bail-ins’ on a much more breathtaking scale than we have seen thus far -- at least recently. Perhaps direct registration of shares or physical certificates will help. The fact that I see this as a ‘perhaps’ is enough for me to stick to physical, tangible, directly held assets. But as Ernest Hemingway said, you go broke gradually, then all at once. I don’t think we’ll get a red-striped letter in the mail saying ‘WARNING’ beforehand (any more than we already have, of course) – the entire point of making an (admittedly pretty final) move like this is to have as many people still holding the bag as possible. While general warning signs abound (and will multiply), there will be no text message telling me it’s no longer safe. Year early, minute late and all that. Hence my focus on physical accumulation.

My very first investment in precious metals did not bode well for my future in being a PM bug -- a spouse who vehemently enough disagrees with a particular allocation decision is a powerful impetus for liquidation. It was, to others, a trivial sum -- 50 oz of silver -- but it was powerful enough that it forced me to start over, re-examine all my premises, information and informed predictions about the future. In doing so, I realized that my conclusions and planned course of action were correct. I ultimately convinced my spouse that my efforts to keep a portion of our nest egg in PMs was not founded in specious, get-rich-quick arguments, nor stemmed from a gambling addiction.

Going through the process of checking the premises helps think through a cogent, convincing argument for others as well. In my mind THAT is why TFMR is invaluable - the persistent reader can find ALL kinds of opinions to challenge one's premises. Main Street is called thus for a reason -- it represents a numeric majority of like-minded individuals, who will have a number of shared assumptions and experiences. But in the Forums you will find views to challenge ANY assumption, if you choose to look.

The element of metal allocation that I wanted to focus on (and ask YOU about) is the GSR -- the number of ounces of silver required to get an ounce of gold. My own perspective is that I am currently overweight in silver, and want to increase wealth preservation and decrease risk, and for the moment have no current intent to sink further savings -- unless there are extraordinary circumstances (e.g. silver drops to 14-15 and can ACTUALLY be bought anywhere near those prices). My thinking has been voiced earlier by DPH and others several times -- trade silver for gold as their relative valuation in fiat shifts (and thus, for the time being, their tradable ratio) and gold becomes less expensive in terms of silver. Simple enough, on the surface.

There are some who expect this ratio to drop to (or even below) 1 [you know who you are] -- and some who suggest a ratio around 15:1. There are those who think 15:1 is bollocks.

There are those who think they can identify turning points in the GSR -- Silver: The GSR Bottom Finder

There is a good bit of detailed (if dated) material in this old article from The Moneychanger. It's a REALLY long piece with lots of detail, but I have not had a chance to vet its sources, so DYODD. Despite the title, the 'meat' (swapping metals to increase net ounces held) of the article is at the end.


The GSR is regularly discussed in The setup for the big trade and lots of other threads here. Casey Research seems to dismiss the GSR as an unreliable indicator for investment: Guest Post: The Gold-Silver Ratio – Another Look

And of course there is the MOPE in the media -- I was not going to get into this, but this report was too good to resist:
This August 15th Gold Council report was referenced by Business Insider, and headlined thus --CHART OF THE DAY: Gold Demand Is Evaporating. Very amusing.

"Total demand has fallen to its lowest level in 4 years, owing to a decline in demand for gold for investment related purposes (demand for jewelry and coins continues to grow).

Here's the chart showing total demand going back to the beginning of 2010, wherein you can see that the last two quarters are the weakest we've seen in recent years."




But onto more serious matters. Is it enough to look at a chart like this:



Or does it make sense to consider a chart more like these:



In both cases, do the more recent (20th century) values now represent the 'new normal' -- or are they extreme swings which will revert to the mean?


This one is for people braver/smarter than I (of which I'm told there are many):

Well, at least it does not seem like the demand for gold for investment purposes HERE is likely to evaporate soon...

So, dear Reader -- what, if any direction is YOUR preference? Buy more silver now, expecting the GSR to fall further? Or just the opposite – when S truly HTF, will GSR shoot to eve-of-WWII levels (and beyond -- according to some)? Buy both in some ratio? Swap one for the other NOW? Is the goal larger net value of assets in current fiat, or a higher number of ounces, and are the two the same thing? Does portability figure into anyone else's calculations? How does this calculus change as prices march onward (dare I say HEH?), or conversely if they should fall further?







About the Author

  159 Comments

Mr. Fix
Aug 16, 2013 - 7:00pm

I have not had a dull moment in months.

I've been feeling one of my classic rants coming on for weeks now, but I just haven't been able to find the motivation to sit down and write it. First off, I've learned some important lessons over the past month, and I thought I'd share them with the gang here.

I know it might be a stretch to tie this into being relevant to a precious metals log, but believe me it is, and you'll know why he for your done. If you've always been annoyed with my longer posts, you will most definitely want to skip this one.

As some of you know, I took on multiple jobs in order to pay for a new kitchen for my wife. Here's how that went:

I took on a new customer who wanted a new bathroom built were there was no previous bathroom on the second floor.

They went on vacation for two weeks, and left me in their house with expectations it would be done upon their return. After dozens of trips to the Home Depot, and many sleepless nights working around the clock, mission accomplished, and my customers were beyond satisfied, in fact I've gotten quite a few referrals because their friends and neighbors thought that the amount of work was extraordinary for the price that they paid.

During the times while I was not at work, I poured footings in my own backyard, after digging the trench that the concrete went in, and mixed the stuff myself, and build a a new wall outside of the old one against the back of my house.

I then took down a barn, and hauled away another 25 foot long 2 x 12s to extend past a loadbearing pre-existing wall on my house's interior, and then build a new roof over the entire structure.

I enclosed a previously outdoor patio, with siding donated from another contractor, (leftovers,) and used Windows and a door scavenged from a previous demolition.

Then I took on another customer's kitchen, it was a simple revamp, with the exception of building headers inside the attic so that I could remove the loadbearing walls that enclose the kitchen, and opened it up to the dining room/living room.

Most of the attic work was done during a heatwave, where the outside temperature covert around 100°. In the process, I lost nearly 30 pounds.

In the evenings, I started tearing out my old roof, which was underneath the new roof previously installed. I also removed the back wall of my house which was now enclosed with the new one, and then removed more walls that had previously been holding up the old roof.

I live in a 1929 log cabin, which is a series of additions, and once upon a time my small galley kitchen was obviously a back porch.

The floor was still pitched, and the old steel plumbing was just laying in the dirt between the floor joists, which were also running in the wrong direction.

The floor in the new section that I built was perfectly level, but when I removed the wall into the old section, I found that one side was a half-inch too high, and the other side was 2 inches too low, and the middle was shaped like a bowl. So I spent a few days in my crawlspace reinforcing the old floor to take out the discrepancies, and using the jack from my car, I jacked up all of the sagging structure, until all the floors were at the same height everywhere.

I spent days doing plumbing, cutting out all the of the rusty steel pipes, replacing them with new copper, and moving the plumbing into the new section, to spread the room out across the back of the house.

I also ran multiple new electrical circuits for the countertops, and all the new stainless steel appliances on order at the Home Depot.

The customers kitchen was another major hit, they loved it, and I was paid well for my efforts.

The work at my own house however was not particularly rewarding if I was expecting brownie points from my wife and daughter.

They constantly complained of the inconvenience, constantly complained about the noise, constantly complained about the dust, and constantly complain having to walk around me while I worked.

Last night we had our first meal in our new kitchen/dining room, and what I got for my efforts was a burnt hamburger, and some of the worst mashed potatoes I've ever eaten. Then I was told by both my wife and daughter who had originally demanded a new kitchen, that it had taken up most of their summer, and that somehow their lives were in disarray, despite the fact that they had spent most of the shopping, and visiting friends.

I must say, even if I'm the only one, mission accomplished, the renovation is complete, and even though nobody knows how to use the new appliances, which use an extraordinary amount of computer power to do things one simple knob would use to do, I'm sure at some point will get the hang of it.

So how does this relate precious metals?

I've been a stacker for the past five years, initially putting my entire life savings into gold and silver, and then adding to my stack on a fairly regular basis, most recently while the price continued to plunge.

My wife was disgusted with my investments, and said that that money could have easily bought the new kitchen that she always wanted.

I told her that I could build that new kitchen, but I would not sell my stack to do it, I would earn it as I went.

She will never know how much work that was to actually accomplish,

I underestimated it myself.

I've lost track of current trends in gold and silver, although I had long said that they would not be any significant movement until the entire system imploded.

It's starting to look like we may be getting close to that point.

I do not multitask very well, and for me to accomplish anything of value, I try not to focus on things that are still relevant to the task at hand.

Taking time to write this post has just been interrupted,

my wife is stuck on the side of the Jersey Turnpike and it sounds like one of her pulleys has seized, and the fan belts have melted.

Being in New York, I have quite a evening in store for me, as I must now drive to New Jersey and fix her car for her,

(which broke well on a completely unnecessary trip to IKEA).

I guess that's just how my summer is going.

Maybe I'll have time to post later this evening,

but I doubt it.

Thanks for being here.

Spartacus Rex
Aug 16, 2013 - 7:06pm

@ Mr. Fix

Hang in there King Stud! I know exactly how you feel!

Spartacus Rex
Aug 16, 2013 - 7:12pm

@ Occasnltrvlr

Perhaps not in your situation, however price is a determining factor concerning "appetite" for a majority of consumers. eg Taco @ .99 versus Chicken Wings @ 5.99 or switch those menu prices and what, presume that those that perceive a different bargain will not change their taste preferences accordingly? BTW, regarding "contentions", I have simply utilized the cycle for over 4 decades and thus am speaking from experience, however you are free to think, contend, and do whatever you want, and seriously, good luck with that.

¤
Aug 16, 2013 - 7:15pm

watchingdogma

Man, oh man...I wish I had that much gold.

Not braggin' at all but as way of an example for others based on your comments which I liked. 

I have approx 30 lbs. of silver and only 1 lb. of gold. Sooo....30-1 isn't exactly a bad GSR when your talking pounds of metal. I like thinking in lbs. cool

I would like to acquire another 1 lb. or so of AU if possible (and get myself up to a kilo) and another 15-20 lbs. of silver and then I'll take a pause and see how it goes. I'm definitely not (ok, maybe not definitely) going to plow more fiat into the PM's until I see some signs where this heads for sure and with little doubt about it. 

Like I said earlier, stacking is a win-win situation no matter what. My hoped for outcome in my case is that I never have to sell it or swap it out and I can leave it for my kids so that in the coming decades they'll have something that probably won't be affordable at that time.

$50,000 gold/ $1,000 silver anyone?

I'd feel good about leaving it to them. I'd also feel good about trading most of it in at some point for land or lots of fiat. Yep, that's right , I said fiat.

Unless we go to a golden implied debit type card (I wrote about this extensively long ago) and we have the option of redeeming our PM's into a regional bullion bank system in the future I'll hang onto it for as long as possible.

I see the possibility in the future of TPTB wanting our gold/silver and paying folks a premium to get it OR I can see a point in time where they'd like you to deposit it so they can then lease it out. Most people won't know about leasing like we do and making a royalty or premium for depositing their gold or silver might not be as nerve wracking to consider to them as it is to us now.

I believe something very unique will happen at some point regarding how they'll try to appeal to the masses about our gold and silver and try to pander to our fiat based needs. 

Let me put it this way....is there anyone here today who doesn't want or wouldn't like a lot more cash right now? I'm one of you in that regard and at some point all (ok, some or most) of my PM's that I spent a lot of cash on (to me at least) will need to be cashed out unless some radical new system is in place like an all electronic banking system where fiat is no longer or mostly not the preferred method for purchases by most people.

I think the transition could be almost seamless at this point. Everyone is using a card of some sort more and more frequently and people are very comfortable with them it seems.

John Galt
Aug 16, 2013 - 7:18pm

@ Mr. Fix

A Hat Tip + Hi5 to you Sir.

I. Am. Impressed.

Spartacus Rex
Aug 16, 2013 - 7:21pm

@ DPH

So, then if I read you correctly, you are thinking that instead of TEOTGKE, such will simply morph into merely another variation of same, and thus party on as usual? Have you considered the possibility that perhaps when all trust in bankers finally goes up in smoke, there will not be another variation of the pea under the nutshell / three card monty, and thus actual Lawful Money Gold & Silver Coin will actually reign supreme?

ag1969
Aug 16, 2013 - 7:22pm

Good to see you Fix!

Good Luck on your repair mission to NJ. Don't forget the Duct Tape!

Spartacus Rex
Aug 16, 2013 - 7:25pm
¤
Aug 16, 2013 - 7:35pm

Rex

Yep...but has anyone considered that this drags on for quite awhile and we get a variation of the same old thing like we have for decades upon decades?

I won't spend much time on this but if we were to have lived in the 1930's and we lived through a depression, U.S. bank holiday/Gold Act and a world war etc. I'm sure the future wasn't looking real good back then but look what happened...here we are 70 years later.

Can anyone imagine what the ZH headlines and stories would've said in the 1930's about those situations I just brought up? The sky would've been falling and TEOTWAWKI would be just around the corner...yet here we are 70 years later.

Has anyone ever considered how much inflation adjusted QE stimulus equivalent was spent during the 1930's and during WWII to prop up the economy and war effort? Not to mention the marshall Plan that spent billions oversea's? That money was printed out of thin air back then also. Yet here we are....70 years later.

Like the saying goes...never put all your eggs (emotional one's also) into one basket just in case. I believe this goes on for quite awhile and that a grand compromise or necessary monetary system adjustments between CB's (or simply BIS mandated) are made and that they don't sit around and watch everything melt down around them.

That's my belief at this time but I'm open to multiple scenario's and I'll adjust my thinking or holdings accordingly.

None of this means that I don't think it possible or likely that some type of major monetary deal or situation pops up and it causes PM's to rise significantly. However, I don't see panic stricken chaos.

I could be very wrong.

That's why I stack for myself...and for my kids...for decades down the road. Not tomorrow, but hey, you never know.

Cranky Old Bat
Aug 16, 2013 - 7:45pm

Mr Fix

You, sir, are a rare and wonderful treasure. I hope your wife and daughter come to appreciate what you've done.

benque
Aug 16, 2013 - 7:53pm
wouldyoubelieve...
Aug 16, 2013 - 7:56pm

you have got to be kidding

even if they aren't explosive, they could do some serious damage

Nick Elway
Aug 16, 2013 - 7:56pm

Will the bankers win again?

“Gold is the money of kings; silver is the money of gentlemen; barter is the money of peasants; but debt is the money of slaves,” Norm Franz

If the banks and kings and statists win again, then I expect a high GSR (like it is now or even higher), because the statists control the gold.

If gentlemen (and middle-class humans and freedom) win I expect the GSR to approach 4.5 (our calculated ratio of silver-above ground to gold above ground) The masses of people control silver. (see https://www.tfmetalsreport.com/forum/4591/silver-above-ground ( thanks That_1 for your contribution there.))

Each metal has its advantages and disadvantages, the US mint sells roughly 50 ounces of silver for every ounce of gold, so my buying ratio is about normal, I'm putting about equal value in each metal for a variety of reasons.

The bankers and their FOFOA spokespeople don't control silver and lobby aggressively against silver as a store of value. They are just talking their book. This has been true at least since 1872..

From https://www.iamthewitness.com/books/Andrew.Carrington.Hitchcock/The.Hist...

1872 Ernest Seyd is sent to America on a mission from the Rothschild owned Bank of England. He is given $100,000 which he is to use to bribe as many Congressmen as necessary, for the purposes of getting silver demonetized, as it had been found in huge quantities in the American West, which would eat into Rothschild's profits.
1873 Ernest Seyd obviously spent his money wisely, as Congress pass the, "Coinage Act," which results in the minting of silver dollars being abruptly stopped. Furthermore, Representative Samuel Hooper, who introduced the bill in the house, even admitted that Ernest Seyd had actually drafted the legislation.
1874

Ernest Seyd himself admitted who was behind the demonetizing of silver in America, when he makes the following statement,

"I went to America in the winter of 1872-1873, authorized to secure, if I could, the passage of a bill demonetizing silver. It was in the interests of those I represented, the governors of the Bank Of England, to have it done. By 1873, gold coins were the only form of coin money."

thisismynewname
Aug 16, 2013 - 8:18pm

@DPH

Good points - one of my underlying thoughts is that it will not be TEOTWAWKI - but a muddle through, like the 30's and the 70's. When my thoughts are more in that direction, I tend to view AU as less critical. When I fear a system collapse, I lean more towards AU. Right now, all of my AU is in numi form ($5 gold indians, a couple of double eagles). I don't even really count it - so now I consider myself 100% AG. I still have retirement assets, a trading account, other misc stuff, but in my head I'm 100% phys AG. A few hundred pounds of it scattered around. But I hear what you're saying about fiat and land. I pine for those as well. 

My AG thesis is that it has been (and still is) more undervalued because it was demonitized in the 60's, and governments around the world had a supply overhang that has only recently disappeared. I didn't see this prolonged slowdown that would see less industrial usage for such a long time (no end in site) - but even so - it's done well over the past 13 years and (I hope) will continue to out perform once we get out of this swoon. We'll see - but I see diversification in my future once the AG is well into the triple digits. 

I did opt to take the loan route for paying for the wee one's extended education. I could have swapped AG for tuition, but chose to go the more risky route. At times like these I'm glad I'm divorced and don't have to worry about being hounded by an ex.

So now if I'm lucky, and we get a nice long steady streak in price appreciation, I can use the trading account to fund the tuition and the Tige RZ4 before I'm too old to wake board.

Spartacus Rex
Aug 16, 2013 - 8:21pm

@ DPH

Re: "look what happened...here we are 70 years later." Right, and if One were to examine the charts of prices between 1930 and today, that "here we are" has a definite difference in connotation. Prior to the Coinage Act of 1965, FRN's could not simply be printed out of thin air ad infinitum as they could still be redeemed at face value in Silver Coin, ergo Domestic Fiat leveraged Debt was kept in Check. After August 15 1971, Nixon's closing of the Gold Window and the subsequent Monetary Act of 1980, the owners of the Phederal Reserve, holding an illegitimate monopoly of the World's de facto "Reserve Currency" have been able to rape the rest of the World with the same impunity as with American Citizens since the late '60s. Even though the Sheople here cannot apparently read the proverbial writing on the wall, the Eastern Powers have indeed reached the point where enough is enough, and have begun implementing a well thought strategy to combat this blatant fraud. When it is finally in place and the overwhelming majority of FRNs currently in existence come flooding back the U.S. Shores, each FRN supposedly representing a claim on America's actual Money Stock ($) are you confident as to what the fully discovered price ratio between FRNs to Gold or Silver will be? Or put this way DPH, if Gold / Silver prices denominated in FRNs were to double this coming Monday, how much of your current stack would you happily convert back into fiat FRNs when the Defecation has yet to Hit The Oscillation?

wonderer Mr. Fix
Aug 16, 2013 - 8:29pm

Mr. Fix, I think you have

Mr. Fix, I think you have earned a total male melt-down. Make it a bit dramatic, and leave her is a pool of guilty ashamed tears of remorse.

I am a new widow who really misses her husband of 45 years, but am happy he is no longer suffering from Parkinson's Plus. (I miss all the really good years so much - I dream of him every night, and hate to wake up in the morning and face that empty side of the bed). I was his sole care-giver for the past ten years of his illness, right unto the end, when he died at home, with me beside him.

Your post makes me so sad. 

Many women just don't get it, until they no longer have you in their lives. I would love to have a word with your wife, but doubt she would listen to me - so many shiny things out there have absolutely no long term value.

Blessings to you, for you did your best, and you did well. I pray that someday she will figure it out, and be thankful for your wise stewardship.

Spartacus Rex
Aug 16, 2013 - 8:32pm

@ Nick Elway

Unfortunately, the presentment of 1872, etc. wholly ignores one critical fact of history. Due to the prior discovery of the Comstock Lode, the volume of Silver coming to the Market was sending the price of Silver crashing, and counterfeiters were making knock off Silver "Dollars" for as little as .18!!! Thereby exposing the Flaw of Congress making a bi-metal Money ($) and attempting to FIX it's Exchange Rate! 

ag1969
Aug 16, 2013 - 8:48pm

@Wonderer

...I would be happy to put you in touch with my wife!! Do I have to get in line? LOL

I am sorry to hear about your Husband. Thank you for the really nice post!smiley

SE Spartacus Rex
Aug 16, 2013 - 8:50pm

@ Spartacus

Unfortunately, the presentment of 1872, etc. wholly ignores one critical fact of history. Due to the prior discovery of the Comstock Lode, the volume of Silver coming to the Market was sending the price of Silver crashing, and counterfeiters were making knock off Silver "Dollars" for as little as .18!!! Thereby exposing the Flaw of Congress making a bi-metal Money ($) and attempting to FIX it's Exchange Rate!

---------------------

I think the other mistake other than the fixed exchange rate was putting a $ value on the face of the coin... It should only be a measure of weights, and purity.

¤
Aug 16, 2013 - 8:52pm

wonderer

Sorry to hear about your loss.

My condolences and my best to you moving forward.

¤
Aug 16, 2013 - 8:55pm

If gold/silver doubled tomorrow...

I'd have to seriously think of unloading at least a 1/3 of it and then waiting for it to swing backwards and maybe buy back more after the fact.

It all depends on how that price doubles and why. I think it could more then double eventually, no question except for the most important question maybe...how long does it take?

I think some folks (myself probably included ) will try to wait on hitting a grand slam while turning their nose up a little bit at a solid triple or whatever in gold and silver at some point.

In total hindsight, I wish I sold every single ounce of metal I had in mid-April 2011 (even though the thought never crossed my mind) and then bought it back say...1-3 months ago in these price ranges.

At the time I would've been biting my nails off at doing such a thing and then I would've suffered an ulcer waiting until recently to buy it back. True..we're only talking two years and not 70 but I'm pretty sure it would've seemed like 100.

I hope folks really take May 20111 into account and look hard at those charts and think about the emotional and psychological levels and events that happened. Everyone (and that definitely means me) were waiting and almost sure that $2000 and $50 were about to happen. How could it not, right?

The same thing is going to happen again at some point and then maybe again at $2500 and $75 etc. at some point...but when and for how long? I don't know.

Will I sell near $2000 and $50...no way! But if it suddenly doubles on Monday I'd think about it because with that type of volatility you know they'll smash it hard again...unless some monetary/BIS (or China) situation is the cause of it...then I'd hold on and just watch it spike up and see how it all shakes out.

It depends on how it doubles would be my short answer. I think talking about selling and actually doing it are two vastly different things and it's crossed my mind more then once that when the obvious time calls to sell gold (at some wild peak) that it won't be as easy as I think it'll be to dump it for the price you think you're going to be able to get for it.

Think 'double's and triple's' and try not to get stuck squeezing out a home run when everyone else (or many) will be trying to do the same thing. Your LCS dealer is a smart cookie and isn't going to buy 'high' if he doesn't have to when an abundance of sellers start showing up to cash in on their doubles and triples and you just entered the game in the 9th demanding your home run. Aint' gonna' happen.

I guess it would depend how we got to those price levels were talking about.

robinson.jpg

RationalMind
Aug 16, 2013 - 9:00pm

GSR perspective

My current personal GSR is 77. My initial stack was Au before I started getting into Ag. I am currently biased towards additional Ag, though the April take down in Au, did motivate me to add to my Au stack. I view the fact that JPM has so much Ag as confirmation of this particular metal. And listening to Chris Duane on Ag is always a treat. :)

Re Ag, besides bullion coins, Ag rounds and junk silver coins, I have 100 oz bars. From my perspective, 100 oz bars aren't for bartering, but either to play the GSR or to use as collateral (for fiat loans). Given the premiums for 100 oz bars are much lower, that suits the GSR switch/collateral purpose. And I am convinced the GSR will revert to some level closer to mean.

Strategy wise, I will continue converting fiat into phyzz. I do have a fiat trading account, and hope to generate profits that can be funneled for said conversion strategy. I don't really have a limit for phyzz (as I have all the other preparations in place). I considered farmland, but if things get really really bad, the family will be on a plane. The phyzz will go further outside USA. The stack will be used to take care of our retirement needs, and hopefully, with the rightful re-valuation of Au/Ag, the children's inheritance will also be in phyzz.

Righting Moment
Aug 16, 2013 - 9:08pm

@ Mr. Fix: A Job Well Done !

And welcome back!

Spartacus Rex
Aug 16, 2013 - 9:13pm

@ SE

Kudos! Glad to see that you get it. However, in the alternative by putting the denomination on Gold, and leaving the Market to determine the G/S exchange, and thus issuing sufficient quantities of Silver and Copper coins simply stamped w/ weight and purity would have been the ideal workable solution without any drawbacks.

wonderer ag1969
Aug 16, 2013 - 9:21pm

All I can think of is an old

All I can think of is an old song from back in the day ...

the lyrics most women need to think on...

"you don't know what you've got 'till it's gone, pave paradise and put up a parking lot" (my guess is most women prefer parking lots in front of malls, instead of the wonderful simplicity of a log cabin, a simple kitchen, an devoted and hard working man... I feel so sorry for these women.)

Another song from an early 60s movie, long forgotten- "what's it all about, Alfie?"

And, let's not forget - "Zorba", (and the incomparable Dr. Zhivago - which is where we seem to be heading, rapidly, in a hand-bucket).

My husband was the shy guy in Zorba, and I was the "above his class" country club boarding school princess run-away from the mindless upper-crust set.

We forged a strong and solid love, based on conservative values - We were so lucky. He was an architect, and I was his "girl friday". We worked together for over 40 years, 24/7, with only a few major arguments. 

Most of those were because I ran the computer, and couldn't get it across to him that he had to work with how the computer wanted him to work, not how he wanted the computer to work to accomodate "his way" of doing things. (The struggles I had trying to explain why a computer keyboard was different than an IBM selectric! - should have taped those discussions, so funny!)

That, and he loved his work so much that I never got a vacation from the business. But, that wasn't really a big deal - after all, when you are self-employed, vacations aren't a good idea, for several very important reasons. Most of you self-employed sole owners know why.

treefrog Mr. Fix
Aug 16, 2013 - 9:26pm

mr fix,

i used to have a wife like that, but i had to shoot her. we were out in the desert, and she broke a leg. miles from the nearest vet.

it's good to see you back.

ag1969
Aug 16, 2013 - 9:31pm

This has changed for me so many times

So many good thoughts here. It all depends on your plan. Plan your work, work your plan.

One must understand the premise of why they have chosen to stack. For me, it is because it makes sense to me. The best advice I have heard was from G Edward Griffin. "The only way to stop inflation in its tracks, is to spend your fiat money as soon as you get it. The minute you spend a dollar, you have stopped the ongoing loss of purchasing power on the dollar you held." 

It makes absolutely no sense to me to hold onto something that the longer I hold, the less it will buy me. I think everyone somehow senses this on some level, which just may be an underlying factor in why our savings has been decreasing for decades.

But, it is important to save for the future if I might have an inkling that .gov ain't gonna be there for me, so, what do I do?

Once this dawned on me it became a miracle to me that I could trade ( at the time) 17 fiat ponzi coupons for an ounce of silver. So that is what I did, I bought an ounce here, three ounces there, and sometimes 50 ounces if the stars aligned properly. In essence, any extra money that would have normally funneled to a meager savings account earning negative real interest, I would instead buy silver. I bought it all the way up, I bought it all the way down, and I only bought on red days.

So now, it makes no sense to me to trade my real money that I have worked so hard to collect, and trade it back in for fiat. I do not plan on trading in my phyzz until and unless there is some sort of new money backed in gold or silver. My plan....for me, is to trade 10% of my silver for gold at 40 to 1. 20% at 30 to 1 and 20% at 20 to 1. If it goes to 10 to 1, I will unload another 25%. 25 % remaining for whatever comes. It will be my best silver, the numi stuff, and it is to see what happens because I know that nobody knows. If it does go 1 to 1 at some point like some people speculate, well, I will cross that bridge happily when I come to it. If not, they will pry it from my cold dead hands....

I think saying you are unloading it and actually unloading it are two different things, and I have talked with three different coin dealers who have assured me they will be willing to make these exchanges as the events progress. How will you sell your silver if you need to? How will you sell your gold if you need to.

The only wrinkle to my plan is if...if....silver hits $1000/ounce, I will throw in a hundred ounces to pay off my mortgage, never to be a slave to those dirty bankers again.

That is my plan. Simple.yes

Spartacus Rex
Aug 16, 2013 - 9:45pm

@ DPH

Here is the way I view it DPH. The vast majority of Americans (90% +) currently do not even have 5% percent of their assets in Physical PMs. Yet in Eastern Countries such as the M.E., India, Asia, the demand and appetite is booming, even in the face of controls being put in place by their respective Govt's. So, since the Asian markets are first to open, followed by European Mkts., my guess is that when the plausible deniability, mope, etc., evaporates it will first appear on the overnight Markets, heaven forbid on a Sunday Night in the U.S. and Reality finally knocks the Cognitive Dissonance out of Americans once and for all. Given that the hypothetical Monday Morning doubling scenario could easily repeat the following week, and so on, until the full extent of the deriatives time bomb has ultimately been realized by Americans, ergo The Defecation Hits The Oscillation, I would suggest that a 30% liquidation would be rash, as there is no guarantee of any presumed "correction". And just as hindsight is not always 20/20, given the underlying fundamentals involved, no one can or could accurately predict the full extent of the Banksters' take down target or efforts, and instead only perhaps realize the increasing and unbelievable bargain values being presented. Ergo the difference between the Whiners and those Who were thanking their lucky stars. FWIW, don't simply refer to my post at the beginning of this week pointing out Gold hitting 1363 this week and how that number sends a concrete signal to the speculators that the trend is swung to strongly positive, check my post history for those two specific occasions, in late June and later in early July where Big Red appeared in the Threads, indicating that subsequent prices were not going to subsequently get any better. Then again I am just an old dinosaur WTHDIK, Right? 

Underdawg
Aug 16, 2013 - 9:47pm

DPH "You the Man"

I didn't log in tonite and have been reading all of these great posts on what I consider a great topic, when I noticed your comment to the Wonderer,and I thought what a great group of people we have here. I was just going to log in to give you a Hat Tip, but thought that was just not enough. I don't know how you did the smiley faces, but thought that was not only cute but very caring. Turd must be very proud to have such a bunch of knowledgeable and caring group of people on this blog.

Quisp
Aug 16, 2013 - 10:00pm

Mr Fix

To be honest, I'm not a fan. You and I do not see eye-to-eye most of the time. But I had to give you a hat tip and a comment for your post. On this one, we are in complete agreement. You are an honest, hard worker.... and a dedicated husband and family man. God Bless you. 

I had much more typed up....... but I just deleted it. It will suffice to say.... that you have earned my respect.

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