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THE Silver & Gold Thread (merged)

Discussions about the economic and financial ramifications of PEAK OIL

Re: What to do with all this gold and silver?

Unread postby Tanada » Mon 21 Nov 2016, 10:29:54

vtsnowedin wrote:
Tanada wrote:
Revi wrote:I think you will be able to sell or barter your silver and gold for things you will need. Hang on to it until you need it. It's better than money in the bank, especially if you paid an average of around $20 per ounce for the silver. Some day you may need it to buy necessities. Don't tell anyone you have it. It's real money. If the price of silver goes up you will have quite a nest egg. There are plenty of people who left uncertain places with small gold coins sewn into their clothes. It gave them a chance to get on their feet when they got to a safer place.


There was an old story that went around the history department at University. It seems that the Jewish folks who managed to buy their way to safety during World War II spent on average three ounces of gold to do so, mostly in the form of small pieces of jewelry that were easily concealed. Unfortunately this tells us nothing about the many thousands of others who tried to buy their way to freedom and were simply murdered for their gold possessions, it really boiled down to who they were dealing with. Some guards and other authorities preferred to accept the small bits of gold and tell themselves they had a clean conscious when it came to killing, others wanted it all and had no compunctions about murdering to get what they wanted.

Strolling through the old threads this evening Tanada?


Nah, gold bugs on the radio love to bring up the Holocaust example. I am just pointing out it has significant confirmation bias, the people who succeeded told others how they survived. Those who were murdered left no record of how they went about their approach so it may often have been exactly the same type of attempt but up against a different type of target for the bribe.
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Re: THE Silver & Gold Thread (merged)

Unread postby Revi » Sun 27 Nov 2016, 22:22:37

Hard to tell what will happen. Silver is just one strategy to hold value. We'll see what happens. It works well in an inflationary environment. There are a lot of other useful things as well. I like old cast iron pans also. They are the new precious metal. If all else fails you can always fry up a squirrel in your cast iron frypan!
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Re: THE Silver & Gold Thread (merged)

Unread postby pstarr » Sun 27 Nov 2016, 22:58:51

I purchased used All-Clad cookware on Ebay to put away for barter. Stainless steel surrounds a core of aluminum. Very high tech, will never be manufactured again. It's ageless can't wear out. Performs better than anything I have owned, the aluminum core moves the heat quickly and evenly so things don't stick. I have a set for myself that I use daily.

I think gold rather than silver might be the way to go after all. If you can afford it. Also doesn't tarnish.
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The Fragile Gold Industry.

Unread postby AdamB » Sun 29 Oct 2017, 08:10:57

This article is reposted from Steve Rocco's website with the kind permission of the author. It illustrates a typical theme of the "Cassandra's Legacy" blog, the fact that all human enterprises are dynamic; they evolve, change, and adapt to the challenges generated by the environment. In particular, the mining industry follows a typical dynamic cycle of exploitation generated by the gradually declining profits that come from mining less and less concentrated ores. It is true for crude oil and it is true for gold as well. The latter is perhaps the mineral mined today at the lowest possible concentrations. For gold, concentration (or ore grade, if you prefer) is the crucial parameter that determines the cost of production. As a consequence, the gold mining industry is especially fragile and vulnerable to depletion coupled to market oscillation. The current situation is explained


The Fragile Gold Industry
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Re: THE Silver & Gold Thread (merged)

Unread postby Revi » Mon 06 Nov 2017, 20:44:27

It's crazy that silver hasn't gone up for years, while bitcoin is racing to the moon! We'll see what happens, but it seems like tangible assets are worth less and less while stocks and bitcoin go through the roof.
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Re: THE Silver & Gold Thread (merged)

Unread postby Revi » Mon 04 Dec 2017, 13:46:14

Silver is now around 16 and change! What is going on? Could it be that the appetite for crypto currencies has wiped out the market for physical silver?
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Re: THE Silver & Gold Thread (merged)

Unread postby KaiserJeep » Mon 04 Dec 2017, 14:29:31

Silver had a metals value as high as it had, because of it's use in currencies and in unexposed film stocks. Digital photography replaced film after silver coins were obsoleted.

Copper is eventually replacing silver as the #2 precious metal in a few decades. Unfortunately you'll then have to guard your residence from copper thieves who will rip wiring and plumbing out of your walls:
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...which is happening already. In case you are wondering, copper presently has about $2.00 per troy ounce value, which is almost $30/lb. The pre-1982 US pennies are worth at least $0.23 because they are 95% copper, frequently more than that as collectable coins. (Modern pennies are a zinc alloy thinly electro-plated with copper.)
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Re: THE Silver & Gold Thread (merged)

Unread postby vtsnowedin » Mon 04 Dec 2017, 15:47:13

KaiserJeep wrote:Silver had a metals value as high as it had, because of it's use in currencies and in unexposed film stocks. Digital photography replaced film after silver coins were obsoleted.

Copper is eventually replacing silver as the #2 precious metal in a few decades. Unfortunately you'll then have to guard your residence from copper thieves who will rip wiring and plumbing out of your walls:
Image
...which is happening already. In case you are wondering, copper presently has about $2.00 per troy ounce value, which is almost $30/lb. The pre-1982 US pennies are worth at least $0.23 because they are 95% copper, frequently more than that as collectable coins. (Modern pennies are a zinc alloy thinly electro-plated with copper.)

You have slipped a decimal place there KJ. Copper is priced by the pound not the troy ounce. Today in NY it is 3.09 a pound. Still high enough for thieves to strip abandoned houses but they will even steal manhole covers for the scrap price.
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Re: THE Silver & Gold Thread (merged)

Unread postby Outcast_Searcher » Mon 04 Dec 2017, 15:55:19

KaiserJeep wrote:
Copper is eventually replacing silver as the #2 precious metal in a few decades.

I'm not sure about that (due to substitution, such as using more aluminum or other conducting metals) if copper gets expensive enough. However, given the demand for copper likely rising a lot as the world moves toward more electrificantion with lots more wiring, motors, etc. -- I certainly hold copper (as well as oil) stocks as a long term investment. For one thing, copper (IMO) is a hedge against oil, if the move to green energy happens as fast as the bulls like Tony Seba predict.

KaiserJeep wrote:
In case you are wondering, copper presently has about $2.00 per troy ounce value, which is almost $30/lb.

Sorry, but I don't understand this at all, and unless I am missing something fundamental, this is just flatly wrong. Copper has been trading on the futures markets at roughly $3 a pound, not $30 a pound.

So by what metric are you saying copper is worth $30ish a pound, ot ten times the futures price? Are you saying you think it WILL be worth $30ish "soon", that the markets are just plain valuing it wrong, or something else entirely (like perhaps the RETAIL price of copper for pipe or wire, which just occurred to me might be what you mean)?

(What really throws me is you using the word "currently" for this claim, as unless I am missing something major, the futures market is the very definition of how copper is currently (and in the near term future) valued by the markets.)

If I'm just being dense here, I apologize up front. I'm NOT just playing semantics games -- I'm trying to understand what you're getting at here (as an investor in copper for the past decade, and coming decades).
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Re: THE Silver & Gold Thread (merged)

Unread postby KaiserJeep » Mon 04 Dec 2017, 16:58:19

No, I didn't slip a decimal place. I Googled "price of copper troy ounce" since troy ounces are how gold and sliver are priced, and this was the top of the search response:

"Remember that the copper rounds are currently trading about $2-$4 per troy ounce. Copper prices however are quoted in pounds, not troy ounce. Since there are about 14.5 troy ounces per pound, the mints that produce these rounds are getting between $29 and $58 dollar per pound for their copper rounds."

...which does not seem related to copper scrap prices, but to .999 fine copper ingots. When you search ".999 fine copper per pound" the retail price is $18.50/lb for those:

Image

This seems to correspond quite well with discrepancies between scrap gold ($450/oz) and .999 fine gold ($1278.63 as of 2PM Pacific time). For both metals, when minted as coins, there is a 50% premium over bulk ingot pricing, for .999 fine metal.
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Re: THE Silver & Gold Thread (merged)

Unread postby vtsnowedin » Tue 05 Dec 2017, 00:49:49

KaiserJeep wrote:No, I didn't slip a decimal place. I Googled "price of copper troy ounce" since troy ounces are how gold and sliver are priced, and this was the top of the search response:

"Remember that the copper rounds are currently trading about $2-$4 per troy ounce. Copper prices however are quoted in pounds, not troy ounce. Since there are about 14.5 troy ounces per pound, the mints that produce these rounds are getting between $29 and $58 dollar per pound for their copper rounds."

...which does not seem related to copper scrap prices, but to .999 fine copper ingots. When you search ".999 fine copper per pound" the retail price is $18.50/lb for those:

Image

This seems to correspond quite well with discrepancies between scrap gold ($450/oz) and .999 fine gold ($1278.63 as of 2PM Pacific time). For both metals, when minted as coins, there is a 50% premium over bulk ingot pricing, for .999 fine metal.

The copper rounds I might buy are in the form of wire or pipes already made into a useful form and the 3.09 / lb price reflects the price paid for the large ingots of raw copper coming from the smelter that the mill used to make these finished goods not the much higher price per pound I will have to pay for the finished product. $450/ ounce for scrap gold reflects the fact that jewelry gold varies from 10 to 14 carrot meaning 10/24 to 14/24 percent pure gold.
Why anyone would want to own or store certified rounds of .999 copper is beyond me and they are certainly being taken to the cleaners if they are paying $18.50 a pound for them. They probably store them next to their 1964 silver"clad" dollars that one of the "mints" is hawking on the FOXB channel at present.
Alibaba.com has pure copper wire 99.99% listed for $2860 USD per metric ton with a 10 tonne minimum order. That my friend is the true cost and value of copper.
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Re: THE Silver & Gold Thread (merged)

Unread postby GHung » Tue 05 Dec 2017, 09:01:34

Our local scrap buyer pays 50%-60% current spot price for scrap copper. Clean bare wire gets the higher price while used copper plumbing is lower. He wouldn't pay a penny more than 60% for KJ's copper ingots. Pawn and scrap gold/silver buyers wouldn't even bother.
I have some copper back plates in my shed from some old solar water heaters I tried to refurbish years ago; several hundred pounds worth a few hundred dollars. If copper goes up a few dollars a pound they may even be worth taking to my scrap dealer. Meanwhile, they remain in 'ship's stores' for my own use, good for electrical/battery terminals and backplanes for antennas; stuff like that.
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Re: THE Silver & Gold Thread (merged)

Unread postby Outcast_Searcher » Tue 05 Dec 2017, 11:47:41

KaiserJeep wrote:"Remember that the copper rounds are currently trading about $2-$4 per troy ounce. Copper prices however are quoted in pounds, not troy ounce. Since there are about 14.5 troy ounces per pound, the mints that produce these rounds are getting between $29 and $58 dollar per pound for their copper rounds."

...which does not seem related to copper scrap prices, but to .999 fine copper ingots. When you search ".999 fine copper per pound" the retail price is $18.50/lb for those:

Ah, thanks for the explanation. IMO, paying a huge premium to buy copper "ingots" is pretty crazy. Copper is super common. I think GHung as the right idea on this. Copper is copper. Paying something like a 500+% premium on it only enriches some middle man.

This seems to correspond quite well with discrepancies between scrap gold ($450/oz) and .999 fine gold ($1278.63 as of 2PM Pacific time). For both metals, when minted as coins, there is a 50% premium over bulk ingot pricing, for .999 fine metal.

With respect, I think this shows you don't know what you're talking about. at least with gold.
And for copper, the prices you're paying are insane, IMO.

First, scrap prices for rare metals have to do with the cost of separating out the non-gold from the gold which involves melting down, and some kind of physical separation process, none of which is free, or even cheap. Plus there is almost certainly some risk factor in estimating the weight of the target metal in the scrap involved.

Now, unless you're buying RARE coins, if you're paying a 50% premium from gold bullion coins (i.e. common coins like the Canadian Maple Leaf, SA Kruegerrand, American Eagle, etc gold bullion coins), then you're just getting massively taken.

When I started buying such coins from the local coin shop in about 1985, the premium was in the 3 to 5 percent range over gold commodity spot for such one oz. coins. I discovered that at Lee Numismatics (in the 80's) I could get all I wanted for a ONE percent premium over the gold commodity spot, so I quit using the local store. There were some postage charges, but buying, say, 5 or 10 coins made it a no brainer, as the postage didn't increase much per order.

Since I haven't bought physical coins in a couple of decades, I just did 5 minutes of research on the net to see if things have changed. Re the premiums, they haven't changed much.

I have NO IDEA how "good" or honest these companies are, but I recognize them as having been around for a long time, and having current quotes:

This shows gold spot at $1265, and bullion coins in the roughly 3 to 5 percent range, and ingots a bit less.

https://www.apmex.com/category/10000/gold

Same story on the premium for gold bullion coins from here.

http://www.bgasc.com/?source=adwords&ad ... U0QAvD_BwE
https://www.apmex.com/category/10000/gold

From my 35+ years of investment experience:

1). SHOP prices and reputation before you buy or sell precious metals. It's not illegal for them to rip you off on price -- buyer beware.

2). Do NOT buy ingots and rounds at wildly inflated prices. Normal, common, well recognized bullion coins are frequently bought and sold at "reasonable" premiums, without requiring ASSAY, because dealers can easily tell that they're genuine.

3). Copper is a base metal. Buying "ingots" of that for a truly stupendous premium is just beyond me. You do have to pay a premium if you buy, say, copper pipe to a specific standarized form from Home Depot, but you're paying for the manufacturing, shipping, and inventory, plus a retail market.
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Re: THE Silver & Gold Thread (merged)

Unread postby Revi » Tue 05 Dec 2017, 12:53:39

I like to buy the following:
1) Pre 65 US silver coins. The older the better if I'm getting it at a fixed amount times face value. For example go for the walking liberties if you have the choice!

2) Cool old copper coins at low prices. I like any kind of coin that's from at least 200 years ago.

3) Foreign silver coins. They usually have no idea what they are worth, so I get them around the silver price.
I am "mildly numismatic". What I mean by that is that I like to get something at around the silver price, and then you can tack on extra value with the fact that it has numismatic value.
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Re: THE Silver & Gold Thread (merged)

Unread postby Revi » Wed 06 Dec 2017, 11:33:22

Sorry, Copper is priced in avoirdupois, which is 16 ounces per pound. Silver is priced in troy ounces, which are only 12 per pound. It can be confusing. I think copper is the best thing to collect, because it's as simple as keeping any pennies you happen to have that are pre-82. Get a piggybank, dump them in and you double your money!
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Re: THE Silver & Gold Thread (merged)

Unread postby KaiserJeep » Wed 06 Dec 2017, 12:02:07

Actually, troy ounces are 14.58333... per English pound. But when I Googled "Price of copper per troy ounce" I found an answer, and I did so to compare to gold and silver which are normally priced per troy ounce.

All this discussion is aside the point. Some people think that gold and silver will have intrinsic value as currency in a barter economy. I do not, like I said, gold has value as a metal, used for weights and bullets and jewelry. Since the free market acquisition cost for gold is very very high today compared to something such as lead or copper, it follows that gold is a very very bad place to park your money. Collecting gold was a very good idea when it was $35/ounce as it was for decades (Rooseveldt's 1934 Gold Reserve Act up until Nixon's 1971 currency devaluation). At $1200+ dollars per oz, it simply is unaffordable, considering that (I firmly believe) the only currency in use in a post-crash economy will be electronic online currency.

Feel free to disagree. After all, I was 20 years old when Nixon did his thing, I can remember (at least in theory, I never owned any) $35/oz gold and when all US banknotes were redeemable in silver (I never redeemed any either). I just think anybody paying North of $1000/oz stands to lose it all if gold is not part of an online exchange medium. Likely it never will be. It would be a tragedy to discover that your gold hoard could not be used to put food in your belly.

BTW, copper is rising in value because of scarcity. Some copper mine pits are 2 miles deep and yielding only marginal ore. Remember the Chilean copper miners trapped underground in 2010? Most of the copper used comes from recycling today, and copper prices will increase steadily. If the world economy were not going to crash, we could eventually use this price appreciation as a source of wealth, but it's gonna take decades.

Meanwhile, a curious change is happening in electronics. Quality heat sinks for cooling semiconductors were once largely cheap aluminum, not as good as copper, which in turn was not as good as silver in terms of heat conduction. But silver was so expensive that only NASA or the military used it, mostly in very high cost satellites. Now, with the return of all the silver formerly bound up in film emulsions, silver is relatively cheaper and heatsinks are appearing in silver again, displacing copper for high-cost applications.

I was using heatsinks with heat pipes in my own designs - copper or aluminum tubes with a partial vacuum and Freon refrigerant that transferred heat even better than silver, as long as you could chill the end with radiator fins low enough to condense the Freon again, which was then wicked up to the hot spot via a synthetic fiber wick. But silver would have some advantages, including operation in higher ambient temperatures than Freon-infused heat pipes.
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Re: THE Silver & Gold Thread (merged)

Unread postby GHung » Wed 06 Dec 2017, 14:18:44

"...silver is relatively cheaper and heatsinks are appearing in silver again, displacing copper for high-cost applications."

Pure silver thermal conductivity is only about 5% higher than pure copper. Considering costs, seems like a case of diminishing returns unless weight or space is an extreme factor.
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Re: THE Silver & Gold Thread (merged)

Unread postby KaiserJeep » Wed 06 Dec 2017, 14:25:41

GHung wrote:"...silver is relatively cheaper and heatsinks are appearing in silver again, displacing copper for high-cost applications."

Pure silver thermal conductivity is only about 5% higher than pure copper. Considering costs, seems like a case of diminishing returns unless weight or space is an extreme factor.


Yes. Such as military jet fighter avionics and satellites, the "high cost" applications I was referring to.
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