Posted on 01/30/2021 10:05:16 PM PST by Technocrat
APMEX prices started rising by the minute two hours ago and they are now out of stock on all significant silver coins. Available rounds if you can find them are now priced at double to triple the spot price. A coordinated attack against JP Morgan and other silver market manipulators was proposed on Reddit on Friday. The link above goes to junk silver.
The action now appears to be spreading to Gold somewhat
It appears the second part of your question has been answered. Concerning the first part, which is ambiguously and unkindly stated --- in a normally cycling market numismatic coins are highly rated as an investment, mostly long term investment. Mild inflation and wide spread prosperity increases interest in the venue.
If you buy metal coins as a hedge against inflation, obviously in a financial crisis the demand for bullion coins will far outstrip demand for collector coins, in general. If you own, for example, silver proof sets, and you find yourself needing liquidity, you will likely have to negotiate the best price that you can, hopefully more than spot prices or melt prices.
Junk silver, bullion coins, possess an immediate market value - supply and demand. Obviously commodities, in anything, are worth what the buyer is willing to pay. What I have stated are just generalities. But if, for example, the dollar were to collapse (which it is likely to do sooner or later with this present regime), those in a position to barter for goods with precious metals should have an advantage. Since numismatic coins are valued under the same barter dynamic, it could be difficult to find a deal that serves as a profit to the seller. IOW, bullion prices and numismatic prices could differ significany.
Re: 155 - Reminds me when COVID-19 was just getting started. Into April and May there was not a lot available.
I do some coin collecting (’64 Kennedys and AE) - looked at some of the prices last night - no thanks.
The CEO of Kimberly Clarke went on TV and said “don’t worry we have plenty of TP”. At first I didn’t understand why the run on TP. I thought maybe it was needed to, um, deal with symptoms of the virus. But there was a run on everything. Wife and I went to Costco in February and loaded up on canned and dried goods after Trump shut down Asian air travel (a drastic move like that has real meaning, even if they talk it down to try to keep cool heads) so I knew something was up. We went to the supermarket in March and the entire place was literally cleared out - no meats, cheeses, soaps, detergents canned good etc. We took photos of the empty aisles just for posterity. Never saw anything like it, and won’t ever believe ‘them’ when they say ‘it can’t happen here’.
The left mocks us, but Venezuela was a comparatively prosperous country a few decades ago.
Hey there, I resemble that remark sometimes!
Typically there will be a pop at the open, commercials will watch how far that runs, and then start selling into it, locking down prices for future production, causing that pop to fade out.
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interesting dynamic in play here
with the reddit squeeze on GME you’re pitting robin hoods vs. the hedgers
when they move the action to silver, they’re bringing in the big guns in Chicago
imo, the hedgers are bull dozing vulnerable victims while the commodity traders are real sophisticated financial pros.
these guys are hard to beat.
Gold and silver are only what people are willing to pay for it TODAY. You need to convert that silver and gold to cash in order to actually purchase goods and services.
And that is the rub.
I always get a kick out of the fact that merchants out there are always willing to take your "soon to be worthless cash" in exchange for this "precious" silver and gold.
I have usually bought from sd bullion and from the local coin dealer. I buy a few ounces any time I have some extra cash above my monthly budget (which thanks to kung flu lockdowns hasnt been much). I don’t buy as speculation or betting but did with the “squeeze” news. Silver hasn’t done anything but crash and remain stable since about 2008. Just turning paper in to metal of all sorts. With Chomo Joe in charge our money will soon inflate like Obama’s ego and silver will be in high demand for the massive solar panel factories he ‘hopes’ to build. I suppose my best investment would be donating to a democrat politician and starting Solyndra Jr.
Chomo Joe and the democrats will slam any domestic mining. So as long as that perverted old mummy and his evil democrats are in charge get what you can for the electric car and solar mandates coming.
What’s the spot on wives?
And we know how much democrats value contracts.........
That's so fitting since this is a fairy tale.
All the reddit boys and girls are really, really excited, after just having gotten a dollar bill under their My Pillow from the Tooth Fairy. Now they are wishing for a new pony. But sadly, they are going to find out that the Tooth Fairy only does dollar bills, and only once a year on their birthday.
What, specifically, needs explanation? You do understand simple economics eg. how demand and supply impacts price, right?
Well for starters, there has been a long running theory - some will say conspiracy theory - that the big banks, JP Morgan in particular, has essentially cornered the trading of silver on the commodities exchanges. I don't know, seems implausible (see the Hunt Brothers, they went broke trying to corner silver decades ago). But they may in fact handle the bulk of the trading and/or clearing of trades in the exchange. Normally, an investment bank's clearing/market making desks don't take a position, they just make money from spread between bid price and ask price, and commissions. But the (conspiracy) theory is that they are massively short silver as a means to prop up the US dollar. It gets complicated for an 8 year old after this.
When you short a stock, it basically means you are borrowing the stock from someone else, sell it into the market today hoping the price will go down in the future, after which you can buy it cheaper and return the borrowed shares. The same would be true somewhat for commodities like silver. You can short silver at $27, and if it drops to $23 you can buy it back and pocket the difference.
Anyway, I think it is pretty well proven that there are exploits in the stock market that have been used by short sellers (people betting the stock will go down) and recently, as in GameStop, there was so much money betting on the short side that there were no more shares truly available to short. It gets more complicated from there, even in such a situation it is still possible to short more using options and if you are a big player your bank will "work with you", but the fewer shares available to borrow it gets incrementally harder to short more. What the reddit flash mob did was notice that the short interest in GME was so high that if they could gather enough people to bum-rush the market to buy GME shares in a very short period of time, it would drive the price up and the short sellers would be on the hook for potentially infinite losses. So when GME went from $20 to say $60, the shorts lost 200% of their investment and had a decision to either short more, or buy back in. The problem is for shorts is that you need 100% collateral so if you are short at $20 you need $20 in cash or equity value. And if the stock goes to $60, you need $60 in cash or equity value. So it can get almost as expensive to hold the short position as it is to cover if you don't have lots of liquidity. Eventually many of the shorts in GME capitulated and "bought to cover" to close out their short positions at a loss (because they wanted to cut their losses, or because they didn't have excess cash/equity reserves), thus increasing the demand for shares higher than the flash mob demand created, and thus pushing the price higher still. As they are buying to cover in a market where a flood of new long investors are coming in you have what they call a 'short squeeze' where the shorts are pretty much forced to buy back the borrowed shares at the much higher price. From $20 to $325 (or, $480 I think at it's mid-day high), it's a massive loss that few people can bear. There are more dynamics (such as when the price goes from $20 to $60, new shorts want to come in and the cycle perpetuates). That's the squeeze.
Long story short, some are speculating that this flash mob is going to try to do the same to the silver market, betting that there exists an oversized short position in silver and that by going long they can squeeze the silver shorts, in particular JP Morgan.
If you have questions fire away or send a PM. This board has a lot of very knowledgeable people. Crowd-sourced knowledge, just like "crowd sourced" flash mob of investors :-)
Silver has never gone up to what it was selling for in 2008. I usually buy a few ounces a month. Back then it was about 50 an ounce. Then back down all the way to about 15. Hold on for the long haul.
Where I think silver can jump is the absolute refusal of Chomo Joe Biden’s refusal to allow any new mining on US soil. China will be mining their own all ove the world and everyone else will be selling to China.
The traders aren’t sophisticated. They just have the best government money can buy backing them up. They know they will get a bail out no matter what they do.
But that's the stock market. Here, we're talking about commodities that have worldwide demand not just as an investment or inflation hedge, but also for industrial use. It's not just the big boys in Chicago and Philly, it's the Saudis, the Russians and Chinese and more. If there is something brewing, the people brewing it don't really know just how big a dragon they are attacking. A run on silver prices will impact the value of currencies and oil and just about everything else. But, as ever, there are 2 sides to every position so who knows. And as Big has stated several times, the silver producers will be quite happy to see silver spike - they would very happily sell their future production at today's prices using options contracts, and that should keep a lid on prices at least for a while depending just how much money and for how long the demand for silver goes.
Speaking of which, I expect 2021-2022 to become another couple of years of stagflation. So maybe some of the rise in Silver is hedging. There is just too much money printed, too much money being allocated by Congress, and supply chains are still capacity constrained due to lockdowns and restrictions related to the virus. I am a producer and exporter, and everything I buy for production has gone up significantly over the last few months - while some other items are very difficult to obtain or have long lead times to deliver. And I live in California, which just reported it paid out nearly $120 billion in unemployment benefits over the last 9 months. The entire state budget is $220 billion. But I think a lot of that $120 billion is coming from taxpayers via the CARES act. But just for some perspective. That's a lot of money being handed out. One of the main issues in my thesis is that the markets are being distorted by regulators, e.g. the moratorium on evictions. Normally if you don't pay rent they throw you out. Right now they cannot evict tenants. So the tenants who are exploiting this and not paying their rent have tons of cash to splurge on limited amount of goods, thus causing inflation. Meanwhile, however commercial Real Estate prices have come down and landlords are not getting paid, and interest rates are so low, housing prices are skyrocketing. These interventions are a huge distortion. But over time they too should normalize. GDP was up 30% last quarter, but that's mainly because the previous quarter the entire country was practically immobilized. Year over year we are still way down. So if there is no real growth and asset inflation, well... think of Jimmy Carter and say a prayer.
Wow. I didn't realize anything was going on when I ordered a $100 face bag of U.S. silver on 01/30 and locked in the price. They promised immediate shipping.
I see that they are out of stock now, so it will be interesting to see if the deal goes through.
The one thing the Reddit Raiders have is their small numbers. The power and influence the FED and other NGOs have over others only exists when there is large money at play by a single player.
Small players with small holdings cannot be touched as was found with GameStop.
As far as JP Morgan having any physical Silver holdings, who cares?? The shorts sells are without physical Silver, and that is the point of this entire situation. It matters not JPM’s holdings, it is that there are far more naked shorts than ounces held by anyone.
This is about naked short selling, which is illegal. A legal short sell simply mean you borrow a stock from someone, sell it at market value, then wait some short period of time for the price to fall, and then you buy that stock back at the lower price and give it back to whom you borrow it. You keep the profit between when you sold it and when you bought it back at a cheaper price.
Naked shorting is when there actually isn’t a stock borrowed, but someone claims there is. This is fraud, and it happens routinely as the SEC does nothing about it because it involves very large and powerful houses who donate to political parties.
Here is an example of a legal short sell. Short selling is very simple.
1. Person A owns a share of stock.
2. Person B thinks the price of that stock is going to go down.
3. Person B borrows a share of stock from Person A, but only for a defined period of time, say 30 days.
4. Person B also pays Person A a flat fee, say $1, to borrow that stock.
So, Person B has a borrowed share of stock that they have 30 days to return and pay a $1 fee to Person A.
5. Person B then sells that share for say $10 (whatever it is worth on the market at that time).
6. Person B then waits up to 30 days for that stock price to come down from the $10 price they originally paid.
So, Person B has $10 in their pocket, but they must buy a share of stock back within 30 days to give back to Person A. They hope like hell that the stock price is less than the $10 they sold the original stock at.
Two things can happen: Stock price goes down or the stock goes up. Either way, Person B must buy a share to give back to Person A.
Price goes down, say to $6.
7. Person B buys a share of stock at $6.
8. Person B gives Person A their share of stock back, plus the $1 fee.
9. Person B had $10 from originally selling the borrowed share of stock. They paid $6 for another share to return to Person A and they paid Person A the $1 fee. This means Person B kept $3 ($10 - $6 - $1 = $3) for themselves, a nice and tidy profit of $3.
Price goes up, say to $14.
7. At the end of the 30 day period, Person B finds the stock actually went up to, say, $14. They are screwed. They must buy a share of stock at market price of $14 to return to person A.
8. Person B had the original $10 in their pocket from selling the borrowed share of stock, but they must fork out another $4 to have the $14 to buy the share of stock to return to Person A. Plus, there is that $1 fee.
9. Person B must pay out $15 total, and therefore has lost $5 in this transaction.
This shows that shorting a stock can result is significant losses if the stock price goes up and not down. Imagine a $10 stock going to $200! Shorting that stock in this scenario may make up to the $9 for Person B, but it can also result in losses of $191 if the price goes to $200.
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