Investing in silver

[Silent_Gunner]

So, I've been reading things online, and one of the pieces of advice I've been seeing a lot of lately is that silver, in the event of a crash (which I heard could happen thanks to the situation with GameStop stock and some other factors), could be a windfall as opposed to the USD, and that one should go into purchasing the bars physically as opposed to paper.

Thoughts? Opinions? Especially on people like Peter Schiff who, as far as my understanding goes, predicted the housing market crash back in 2008, and is predicting another one...albeit, he's been doing it for the past 10 years and my gut is saying that it's a possible scam as I'm a complete noob when it comes to investing. I am afraid to invest in the stock market thanks to the circumstances I mentioned above that makes investing in it a possible big loss as far as I'm perceiving it.

 

[FAST6191]

Silver has a few more chemical/industrial uses than gold but is still largely only valuable because human like shiny.
Some also find it more useful than gold because it is less valuable as these things go -- hard to shave off fractions of a gram of gold (see clipped coins though for a fun historical one https://britanniacoincompany.com/blog/coin-clipping-the-great-recoinage-of-1696/ ) to buy your bread in post apocalyptic wasteland, small bar of silver though is a different matter.

Paper vs physical.
Paper then means the security is either in the paper or the one holding it for you in the event of something more virtual. If they go pop, some government decides to take it or the internet goes down you have a piece of paper/login details and all the good they do. At the same time selling it amounts to reassigning a bit of paper/login details/basic internet selling.
Physical means you have a lump of metal and if you are going to get yourself up to 200oz that does mean 5.6+KG out of your pack/carry luggage that can't go to whatever else. Also means if you house burns down (might still recover it from the ashes but hey) or you get robbed... Does however mean if the internet goes down or the government decides the citizens need to fund their last round of silliness then it is a box buried in the woods. Also means if you make it out with the stuff in your pack* then someone somewhere else will probably still go "ooh shiny" where stocks in a dead company is a good story prop at best.
Does not have to be bars though. Can be old coins, and can be old jewellery (see "junk silver").
*or sewn into your belt if you want to kick it 80s soldier of fortune/spook/spec ops style. You are more likely to have a belt on if you can't first get home or have to run out the back door as the front one goes in.

More generally as an investment asset.
https://www.macrotrends.net/1470/historical-silver-prices-100-year-chart seems a reasonable chart to look at, and even has a nice inflation adjusted mode too.
Provided you did not get stung in the 80s or 2011 you would likely have made some money or at least had it hedge against inflation which is better than most things. Last year saw quite a few invest heavily in it as well, and that drove the prices up nicely ($15 USD in Mar 2019, just over 26 today and with some not inconsiderable fluctuations, high of 28, low of 14 in March 2020). There was also talk of a short squeeze on silver, and that could get really fun (makes gamestop look like nothing).
Can compare it to whatever you like -- other previous metals (gold, platinium, some other heavy metals that do thing), antiques, stock market, bitcoin, other crypto.
Stock market wise. Generally never gamble with what you can't afford to lose. Stick to normal buy and hold (whether short term or long) and worst case you lose all that. More generally though unless your investments all go pop you won't lose it all. If we are also comparing it to silver then here is an inflation adjusted chart
https://www.multpl.com/inflation-adjusted-s-p-500
This is to say had you stuck it in an index fund (which is a fund that holds a so many of every stock on the exchange, either there to sell off later or get dividends from) you would have done better still at almost any point.

As far as a crash. Something is coming. You don't print off that much money ( https://tradingeconomics.com/united-states/money-supply-m2 ), see that much political turmoil, fail to build enough houses to meet demand (though depending where you are then demand and price rises mean 2008 is unlikely to see a repeat quite the same, other places might https://www.zillow.com/sellers-guide/average-time-to-sell-a-house/), issue credit ( https://www.debt.org/faqs/americans-in-debt/demographics/ ), have governments (state and federal) spend more than they take in, and take a productivity hit in such a chunk of your economy like the last few years without something happening, to say nothing of automation is still coming. What form it will take is still hotly debated and I have no particularly keen insights here other than to say I hope you have a skill that is in demand.

 

[notimp]

As far as a crash. Something is coming. You don't print off that much money ( https://tradingeconomics.com/united-states/money-supply-m2 ), see that much political turmoil, fail to build enough houses to meet demand (though depending where you are then demand and price rises mean 2008 is unlikely to see a repeat quite the same, other places might https://www.zillow.com/sellers-guide/average-time-to-sell-a-house/), issue credit ( https://www.debt.org/faqs/americans-in-debt/demographics/ ), have governments (state and federal) spend more than they take in, and take a productivity hit in such a chunk of your economy like the last few years without something happening, to say nothing of automation is still coming. What form it will take is still hotly debated and I have no particularly keen insights here other than to say I hope you have a skill that is in demand.

Essentially, Covid Impact should be minimal, Investment in funds to get out of the crisis is seen as important to have enough people working to be able to hold up debt services. More centralized fiscal control is lobbied for (at least in europe). Free money is still given out to companies of structural importance (buying off their risk), and service sector has a problem in the US, because if up to a third of your population worked in gastronomy f.e. there is no pent up demand. So whats lost during the crisis is lost. In Europe you financed the businesses throughout the crisis, in the US you did not - so there should be more 'restructuring'.

Restructuring on the job market probably will come in in a form of a 'fix up', not in the form of a moonshot or a large new 'directional directive'.

 

[Silent_Gunner]

@FAST6191 I take it moving out would be a bad idea atm?

It sucks; just when things were starting to look up for me, what with being out of debt and all, the economy is now on a collision course, and all except those on the top are going to be screwed over again, except this time, the competition for jobs is gonna ramp up even more than before, crime is going to skyrocket because people want to live, and forging a relationship or anything really is looking to be a riskier prospect than ever.

Shit like this makes me wish I could trad places with my father in terms of time periods to live through or something, you know? Because I still have at least 50 years ahead of me, and he has...well, who can say with any certainty when he's approaching 70?

 

[Foxi4]

Investing in silver is a bad idea if your intention is to make money, the market is specifically made stable because access to physical metals is necessary for the stability of industry. When you "buy silver" on the market, you're rarely buying a claim on the physical metal in storage somewhere, you're buying "silver futures", which can be adjusted ad hoc to keep the value stable. It's a great hedge against inflation, but it's not a good for-profit venture.

 

[notimp]

@FAST6191 I take it moving out would be a bad idea atm?

It sucks; just when things were starting to look up for me, what with being out of debt and all, the economy is now on a collision course, and all except those on the top are going to be screwed over again, except this time, the competition for jobs is gonna ramp up even more than before, crime is going to skyrocket because people want to live, and forging a relationship or anything really is looking to be a riskier prospect than ever.

Shit like this makes me wish I could trad places with my father in terms of time periods to live through or something, you know? Because I still have at least 50 years ahead of me, and he has...well, who can say with any certainty when he's approaching 70?

Here is one opinion (largely regarding gold - but also precious metals in general):

I put it through google translate - so, expect some oddness

INFLATION PROTECTION
Dull development: why the gold price has been falling for months
The gold price has been going downhill since August, while Bitcoin sped from record to record. However, many experts do not expect a continuation - and are loyal to gold

Alexander Hahn March 21, 2021, 8:00 am 712 posts
The environment for gold should actually be very good at the moment, but the price development of the precious metal has been weakening for more than half a year. In the long term, gold is seen as a good hedge against inflation worries, which were seriously boiled up in recent weeks for the first time in years. Is it no longer useful in this function - or has it already been replaced by the crypto currency Bitcoin? This is considered digital gold by investors and has recently stormed from record to record.


Is gold no longer a good protection against inflation? Although fears of higher inflation have recently re-emerged for the first time in years, the gold price continued to be weak.
Photo: Reuters
Bitcoin as a replacement for gold - the experts at Commerzbank see this critically: On request, they certainly admit certain similarities between the two, especially since some market participants would see it that way, but Eugen Weinberg, head of raw materials research, states: "Bitcoin is and will remain an extremely volatile speculative object. " He sees only a small chance that the cryptocurrency will be seriously perceived as currency or money. Or even displace gold as a safe haven for stormy times.

In the short term, Weinberg even indirectly explains the current weakness of the gold price in terms of inflation expectations: "Inflation worries have actually increased noticeably recently, but it has also led to a very strong rise in yields in the USA." Specifically, the interest on ten-year US bonds within six months is around one percentage point higher at around 1.65 percent - with negative effects on the precious metal.

Interest-free investment
"Since gold is an interest-free investment, the rise in yields weighs on the gold price," says Weinberg. "In addition, the stock markets rose to an all-time high at the same time, which also had a negative impact on prices." However, this should not change the long-term upward potential of the precious metal. With regard to inflation-adjusted bond yields, for example, investment strategist Timothy Hayes of Ned Davis Research says: "As long as real returns remain negative, it should support gold." Currently these are still below zero.

Of course, there are other voices as well - and increasingly from the ranks of traditional financial players and institutional investors. In the previous year, Wall Street banks such as JPMorgan or Citibank had repeatedly compared Bitcoin with gold, and similar tones could also be heard from the house of the fund giant Blackrock. Because some of the advantages of Bitcoin compared to gold are obvious: It is easier to store, for example in an electronic wallet on a smartphone. In addition, the cryptocurrency can also be divided into any smaller units.

Less leeway
According to the Zürcher Kantonalbank in Austria, the strong price gains of Bitcoin have now increasingly attracted institutional investors in addition to private investors. These would also partially use Bitcoin to protect against inflation. "However, given the strong performance, the scope for profits has already diminished," explains board member Christian Nemeth. If the timing is wrong, investors face a significant loss.

Nemeth is also not entirely convinced of the suitability of Bitcoin as an inflation protection. "Currently, almost 90 percent of the possible Bitcoins have already been mined, which limits the long-term inflation potential," he says. "This also entails considerable risks that are many times higher than with traditional investment options." He therefore continues to recommend gold, inflation-protected bonds or real estate as a hedge against higher inflation.

Another increase
Mark Bristow, head of the mining company Barrick Gold, has a clear opinion. He is particularly critical of the soaring Bitcoin and Co. "Everyone is so desperate," says Brislow, "they are buying things that have no real inherent value in the market." He is of course far more positive about precious metals: "We have seen the price of gold rise for the first time," he says, referring to the record high of August at around $ 2070 for an ounce, and adds: "Another (high) will come." (Alexander Hahn, March 21, 2021)

Mostly to understand the systemic risks.

Also dont live on finacial tips from me or any other forum member, imho.. Opinions are still welcome of course.

 

[FAST6191]

@FAST6191 I take it moving out would be a bad idea atm?

It sucks; just when things were starting to look up for me, what with being out of debt and all, the economy is now on a collision course, and all except those on the top are going to be screwed over again, except this time, the competition for jobs is gonna ramp up even more than before, crime is going to skyrocket because people want to live, and forging a relationship or anything really is looking to be a riskier prospect than ever.

Shit like this makes me wish I could trad places with my father in terms of time periods to live through or something, you know? Because I still have at least 50 years ahead of me, and he has...well, who can say with any certainty when he's approaching 70?

Would I sign a 15 year lease, would a mortgage be worth it or would I have kids at this point in time? It would depend where but for the most part very tricky, though one wonders where mortgage rates will end up.

If you are now generally debt free, in good enough health to do things, and flexible with time/what you do. I can see that being a reasonable point to strike out into the world. Would be hard but rarely will it have been easy, and if it comes with the perk of getting out of your less than stellar situation otherwise then that is only more incentive. I am not predicting a seismic shift and if one did happen then most people are screwed either way. If possible then do go in for skills (bonus here is they are generally free to get if you can teach yourself) or be prepared to lean into the "hard/dirty/dangerous" side of the market and otherwise keep it light and prepared to go where the action is. Sounds like you already experienced how crushing debt can be for your options to find somewhere better or tell a moron boss to do one so probably don't need to do a warning there.

Also yeah in terms of financial markets (though with the benefits of hindsight) then post world war 2 US up to around the early 90s were pretty sweet in a lot of ways, at least in the US. It is what it is though and frankly even with a time machine I like modern tech and social structures -- married with kids and church on Sundays vs do what I feel like today and nobody cares... hard to underestimate that one.
I will also note for the list of things earlier that all those that came up/grew up around then are getting ready to pop their clogs (1950+70 and all that) or at least find themselves with a nice bout of dementia. To that end a few companies will probably have a wobble when they give things over to their screw up children.