13 votes

Is Gold/Silver in a Bubble soon to burst?

I'm considering purchasing silver coins, thanks to all those who have given me advice so far. But what is worrying me is this sudden spike in prices. It is obvious that the dollar is being devalued and it has been for some time. But how much of this increase in price reflects the actual value of silver compared to the dollar versus an over inflation of silver due to hysteria of the dollar crashing?

I guess the long and short of it is, should I invest in silver now or wait for the price to trough out and buy later? Obviously we all know to buy low sell high, and just looking at the charts, silver was at $4 dollars and now is at $35. That seems counter intuitive to be buying at such a high level.

Please give me your opinions.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.

Depends on how you define "soon"

I think the election and other things will cause more fear...and since gold is the color of fear, metals will get a boost for awhile.

But at some point, the gold bubble will burst. It is ridiculously overhyped right now. When those overhypers find something else to hype, gold will fall...I'm guessing under $1000, but it really should go under $500.

Based on?

You say gold "should really be under $500". I'm interested in knowing what you base this on. I see people tossing out all sorts of numbers lately, from $400 to $50,000, and most of it seems based on wishful thinking more than anything else.

I won't argue that some people (especially on here) hype the shit out of gold, but then again I'd rather have my savings in gold coins than in a bank account.

I personally don't see gold ever going to $400 again, at least not in FRNs.

A signature used to be here!

I don't bother trying to reason with gold-bugs anymore

I didn't even read your post.

This is a pro-gold buying site, but everyone once in a while, I like to remind others that some don't buy into the hype.

So where are the pro-fiat

So where are the pro-fiat money sites? Which ones do you recommend?

If you had bothered to read it

You would've realized that I was only curious as to what you were basing your numbers on, nothing more. I like the gold as much as I like anything else, not a "gold bug" by any means.

Maybe if you weren't such a defensive prick, you would've realized that.

A signature used to be here!

interesting gold video clip

Eric Sprott tells how he thinks western central banks are selling gold reserves to artificialy keep the price low. Central bankers will manipulate the price of gold and silver until they can't. What I mean by that is at some point this will be obvious to a large segment of the general population (finance ministers and non western central bankers are already recognizing this) at that point gold and silver will go parabolic.

http://lewrockwell.com/orig13/hunter-greg4.1.1.html

I buy silver when I have money, the price is irrelevant.

That price is in fiat dollars that I know to be mere pieces of paper. Silver is something I can use as currency that anyone from any where will recognize as having "value." How they describe that value is a matter of their culture and what they need the silver for.
If they merely want a shiny trinket to put on a loved one's finger, it will not be worth a whole lot - about the same as perhaps a dozen roses or nice dinner out.
If they want colloidal silver to save the life of a loved one, perhaps it would be worth everything they owned.
If they wish to use it to craft weapons of war, it is worth manipulating markets, controlling the media. selling "paper" silver to cover their crimes.... If silver is worth so much evil to them, it is worth any number of FRNs I can pull together to keep silver OUT of their hands. I am not sure why they really want silver, but I am sure they want silver more than almost any other thing on this planet. If they want it that badly, I want it worse - even if all I do with it is put a shiny trinket on my finger.

Love or fear? Chose again with every breath.

Cyril's picture

+1 Ditto. Same here. As I see it,

+1 Ditto

Same here. As I see it,

There are two main camps, and a third, mix thereof :

1. preppers : stacking, just to preserve long term wealth, for they know the fiat money system will collapse, and they are likely not so old to not care

2. speculators : buy for sell, in several cycles, over more or less long terms, with consumption of goods and services in between, after converting to today's UNCONSTITUTIONAL tender cash (see U.S. constitution, Section 9 for why)

We cannot push one camp against the other; for they have different concerns and interests in different terms of future, and different assumptions often.

The only "bet" to make for oneself maybe is gold vs. silver, depending on the outcome one expects, and in which camp, again.

Just a silver stacker here. For now, anyway.

The markets and state of the economy will decide for me WHEN I can trade with it, and only if and when my family and I need.

"Cyril" pronounced "see real". I code stuff.

http://Laissez-Faire.Me/Liberty

"To study and not think is a waste. To think and not study is dangerous." -- Confucius

I have been told that silver

I have been told that silver and gold were in bubble when gold was at 350 and silver at 7..

Soros Buying Gold as Record Prices Seen on Stimulus - Wake up

Soros Buying Gold as Record Prices Seen on Stimulus - Wake up Sheeple, join the party.

http://www.dailypaul.com/263721/soros-buying-gold-as-record-...

I saw in a video clip of Jim

I saw in a video clip of Jim Rogers estimating that the gold/silver bubble will burst in 2017. Sounds pretty reasonable.

Do you have a link?

Not to say you are wrong but I follow Rodgers very closely and have not seen what you are talking about. He very seldom gives time frames.

That being said, he did say he expects a global financial crisis in 2013 or 2014.

Here it is. It's from 2011.

Here it is. It's from 2011. (He gives the date at the very end of the video)
http://www.youtube.com/watch?feature=player_embedded&v=3aGtU...

Is there really a spike in prices?

One thing that would be worthwhile to do (disclaimer: I haven't done so) is to compare the price of silver in US dollars vs in other currencies. Of course, fiat money is being printed by central banks all around the world (though in different amounts). But the point is that the price will vary from currency to currency.

From what I know from Peter Schiff, the reason to own paper over a hard asset (e.g. gold and/or silver) is that paper pays interest. However, with the current record low interest rates you don't even get that. So it brings up the question of "why not own gold/silver?"

There is one other important concern, however. You have to pay taxes on the increase in value of your precious metals. So in theory if you buy silver at $30 per ounce and you spend it when it's at $35 an ounce, you have to pay taxes on the $5 in gains (not sure how the tax rates work). Ron Paul has talked about this saying we need to repeal the "legal tender" laws.

http://www.ronpaul.com/2008-09-28/ron-paul-on-legal-tender-l...

Massive deflation on the horizon

One thing I fully agree with some of the members here is that I would buy gold simply to protect my current buying power.

In case of massive money creation, Gold may spike and as one member here said, you *may* be able to buy assets for ounces of gold.

However, 2 other big possibilities are on the horizon:

1-The baby boomer peak spending years have passed in 2008, meaning that a huge part of the population is going into retirement and will be spending A LOT less. This would lead to a massive asset price crash all across the board EXCEPT for healthcare. Hip replacements don't come cheap.

2-In time of high inflation, interest rates HAVE to kick in a big way, and we should all know by now what happens to the market when they do! All across the board asset crashes as people tend to take a lot less credit to buy things (houses, consumer goods), and in times of high interest rates, gold collapses and cash is king again.

This is followed by massive layoffs, meaning yet again even less spending. And this will be a very long term trend. It also means more bankruptcies, meaning massive crash in the money supply, meaning Dollars in big shortage -> Dollar regains massive value.

The government may restrict its spending and allow for the correction or may decide to print uber amounts, but it will always come back to the same conclusion above if the excess printing occurs.

Conclusion, massive price depression ahead (IN MY OPINION, not a finance expert so consider this advice as pure fantasy ;) ). Prepare for all scenarios :)

Deflation in terms of precious metals

However, you can *always* have rising prices (not saying you necessarily will but just that you can) when it comes to fiat money, depending on how much of it gets printed.

Conclusion: Grow you food

Best thing ever to eat home grown food

Has been $50

Now $33.140... and rising.
Get it while it's still on sale.

Cyril's picture

Anyway... Size DOES Matter :

Anyway... Size (read: scale) DOES Matter :

http://www.dailypaul.com/263646/infinity-we-have-arrived#com...

I chose to stay safe and stack on.

Slowly but surely, no need to hurt ourselves, either ... yet.

Peace.

"Cyril" pronounced "see real". I code stuff.

http://Laissez-Faire.Me/Liberty

"To study and not think is a waste. To think and not study is dangerous." -- Confucius

Yes. They are going to explode.

look at today's spikes at kitco.com

Pandas is bad.

Sudden spike?

Look at the long term rather than the short.....and if anything, I would say that there is not nearly enough interest in gold in silver yet....look at all of the people still buying government debt. Check out this gold chart, smooth as silk.

http://www.kitco.com/charts/popup/au3650nyb.html

http://www.kitco.com/charts/popup/ag3650nyb.html

"Endless money forms the sinews of war." - Cicero, www.freedomshift.blogspot.com

Cyril's picture

+1 and take a look at this ...

+1 and take a look at this ...

This is not just gold.

This is not just silver.

This is not just the dollar.

This is not even oil.

This is this country's "SOMETHING" vs. gold :

http://www.youtube.com/watch?v=dv7H7iiyBsw

Peace.

"Cyril" pronounced "see real". I code stuff.

http://Laissez-Faire.Me/Liberty

"To study and not think is a waste. To think and not study is dangerous." -- Confucius

value investing vs. speculation

you are asking us to speculate on short term manipulations?

I don't speculate, I buy in where I feel comfortable and I don't look back because I am not to looking to cash out anytime soon. You would do much better in the equities market for that.

here is how I see things
to me, gold/silver is money.

dollars or paper or even electronic transactions are mediums of exchange. sometimes gold/silver (PMs) can be mediums of exchange but much less often.

money is a storage of wealth
wealth is your assets minus liabilities
money must meet five requirements
it must be
1)universally recognized
2)divisible
3)durable
4)transportable
5)hard to duplicate (counterfeit)

think about this for a bit and then think about how many pieces of paper you want to exchange to have physical in your possession.

in the final analysis, its a game of confidence...all things being equal if two bubbles pop, one being paper (the dollar) and the other being gold/silver...which would you rather have in your hand?

thanks...

I know, I tend to agree. Just having not purchased before, a bit nervous about putting in the tens of thousand dollar range into precious metals. Then again, even with the tiny bit I know about economics, markets, etc, it still seems at the very least a good investment.
The Feds I should say are the ones making me truly nervous. :(

______________________
*** God bless Ron Paul ***
* Ron Paul For President *

you are very welcome

we use the word "investment" too loosely sometimes. purchasing is more accurate, because there is no return or yield on gold...it is what it is. You are locking in the purchasing power of your paper money at whatever rate that you bought in.

you could conceivably use your PM holdings by leveraging them in the new paradigm which may then give a yield of some sort. I have ideas myself of how to do this, but I have more research to do.

at some point we will want to get out of gold or silver, but when? the best advice i have heard so far is: when fear is at its greatest.

which makes sense because it is afterall a flight to safety, and we are only at the beginning of a big wave of fear.

get out of gold or silver...thanks but into what ? it's mind

get out of gold or silver...thanks but into what, right?

It's mind boggling for someone like me who can intuitively sense what is going on, but with no training on the subject I feel I'm just at the mercy of the NWO and very bad people.

______________________
*** God bless Ron Paul ***
* Ron Paul For President *

I have no 'training' either...i just read ALOT

you have to understand that there will be a seismic shift from a debt based, paper backed society that is driven by consumption...and mostly consuming things that we WANT...not so much the things that we NEED.

what do humans need? most of us eat three times a day(agriculture/food prod), and we wear clothes(hopefully)(textiles/utility clothing/high quality clothing), we need to get around (transportation+energy), we need to lay our head somewhere (real estate), we are social creatures (communications+local entertainment),we need to produce things from raw materials(manufacturing),we need raw materials(mining) etc...

so which of these fields are you closest to? which are you familar with?

I don't believe that all paper assets will evaporate and we get knocked back to the caveman days or like mad max...well, anything is possible i guess but not probable...but the main point here that there will be huge waves of FEAR...everything will be suspect.

lets say for example, that you are considering stocks in a company, and if you look at it from Peter Schiffs point of view that even though the fundamentals of that company may be sound but the stocks are denominated in dollars, which are being debased daily. So what is the true value of those shares?
"ah hogwash" some of my Keynesian friends have said dismissing this theory...and so, as long as those people are around there will in fact be some value there...people are going to hold onto their pieces of paper until the bitter end, be they stocks, bonds greenbacks whatever. So instead of a flash crash where everybody throws their paper in the air runs off into the sunset like daffy duck, it will be a steady grind downward until we find the true value of those paperbacked assets that remain.
I would add to this theory by saying, that even though the fundamentals of a given company may seem good and the bulk of investors are holding the line and not panicking who is to say that there won't be sudden shocks to that company. Think MF global...or JP Morgan/Chase and the missing billions. It all got blamed on a fund manager or two...but the result is the same. wealth destruction.
today there was a bunch of ones and zeros in a bank and tomorrow...poof its gone.

who can sort all of this out?

I sure can't, nor would I want to...who has the time?

better to just make your way to the exit now.

as for me personally, I happen to like real estate. I am already in it. I took a pounding during 2008 and my search for answers led me here. I have been treading along and crawling my way out and am determined to get ahead of the game in the long run.

I fully expect to be able to trade gold for real estate. maybe some more acreage to grow crops on or rental properties. either way they both will produce a yield.

It may sound absurd to think that somebody would sell their house for an ounce of gold...but then again think, "when fear is at it greatest"

imagine a scenario where milk is $10 a gallon, when it happens to be on the shelf that is, and gold has spiked to 25,000 an ounce. We are engaged in a war with Iran and the debt is well over 20 trillion...interest rates are pushing higher and higher...6% 7%...etc etc you get the idea, the world is falling apart it seems.

now I come knocking on the door and say "hey, I'd like to buy this house" just because gold is currently at 25,000 and they value the house at 50,000 for example, don't think that people will turn me away so quickly because they can be thinking to themselves "hey if gold is that high so quickly, maybe it will go higher"

Cyril's picture

My friend, what follows

My friend, what follows is only the way I see it.

What you call a "bubble" that you're concerned it might burst ... is much more likely, rather... to be an un-detonated bomb.

What you see as price spikes really are the shivers of something meant to literally explode, but still in the waiting.

See... what are gold and silver ?

Money. Real money. Worth of name money. They both have been so, all along ... millenniums of mankind.

Properties :

scarcity, high (in physics sense) work cost to mine, divisible, portable, "liquid", and for the second, silver, in this information technology and new energies age : unavoidable, in as many industrial applications.

The inception in the 1910s of the global fiat money SCAM we have currently is the sole reason both silver and gold, and ESPECIALLY silver, are more than 100x UNDERVALUED today, as we'll remember when the laws of supply-demand come back and overcome the largest RIGGING of currencies ever made in human history.

See :

http://www.dailypaul.com/263594/if-silver-goes-down-all-hell...

http://www.dailypaul.com/261454/the-great-silver-market-myth...

"Cyril" pronounced "see real". I code stuff.

http://Laissez-Faire.Me/Liberty

"To study and not think is a waste. To think and not study is dangerous." -- Confucius

Opinions? Still a good idea

Opinions? Still a good idea to buy gold/silver? :|
Thanks y'all...

______________________
*** God bless Ron Paul ***
* Ron Paul For President *

energy prices may plummet over the next 10 years

The price of natural gas has dropped by 50% over the past few years, because of fracking. This technique is being applied now to oil. North Dakota will surpass Alaska in oil production this year. Soon it will surpass Texas. Our dependence on imported oil is going down.

Add to that, there are three competitors in the LENR (cold fusion) field which intend to roll out consumer products in the next 18 months. If this technology proves out, most other energy sources will become obsolete.

So, what happens to the prices of precious metals if energy prices drop in half? The cost of making nearly everything would go down, including the cost of producing gold itself.