Not smoking is really messing with me. Since I gave up, I'm drinking, eating and just living hard - really hard. Last week I got a bit rat arsed and posted some random thought like this one.

Getting to the point. Petermac33 posted this link as a response to my post.

stansberryresearch.com/pro/1103PSIEOAVD/LPSIM3CH/PR

I woke up and thought to myself "what was I doing last night?" I re-read my post and the responses and listened to the info on this link.

As economics is a bit of a pet interest of mine and the speaker actually made a bit of sense, I listened to the whole freak'n thing - it went for two hours or something. I didn't believe everything he was saying but, some of it definitely rang true to my majorly hungover and angry mind.

One of the key things this guy said was invest in silver. It's not the first time I've heard it so I did some research and thought I'm going to sink some of my money into it - I've always done pretty well on gold, let's give silver a go I thought.

On Monday I was looking to buy some shares in SILVER MINES LIMITED (SVL) but there was a run on and it went up 15% in the day. Yesterday, I found another silver miner ALCYONE RES (AYL) and decided to buy 50,000 shares in it.

Guess what happened today - it freaking went up 15% So I sold my shares and made just a tad under $500 for the day.

www.asx.com.au/asx/share-price-research/company/AYN

Not only that - I went out to lunch with this really hot girl from work and told her this story, she was really impressed by it and suggested that I thank petermac33.

Thanks petermac33

FormulaNova said...

Can you paraphrase the information from that link? I know how you don't like to cut and past so a summary is fine.

Ok I'll do my best. But I think this really relates to the U.S, more so than Aussie.

The imminent collapse of the US Dollar will cause riots and scenes that we are not accustomed too living in the first world.

Think of John Holmes raping a 10 year old and you may be pretty close to what life may be like for the average citizen in the U.S, when that happens.

Smart people like me and petermac33 will need to find somewhere to ride this out and have lots of silver and gold bullion and obviously lots of food stocks, weapons to ride the inevitable out.

Even if it doesn't happen Gold and Silver will still go up in value - cause the $US is f%cked. They are repeating the mistakes many other countries have made throughout history by printing more money.

The reason for Silver being a good investment, is that silver throughout history is valued at about 16 x less than gold. Silver in the last 10 or so years has gone up 700% and and Gold about 400% (don't quote me here) Silver still has a long way to go before it gets back to it's natural level - currently it's about 32 x less than gold.

If you are interested - just listen to it and you can paraphrase it.

SomeOtherGuy said...

So you bought yesterday at about 90c and sold today at just over $1 ? Good work!

Lucky you didn't buy on Wednesday at $1 and sold yesterday at 90c

Or worse... lucky you didn't buy in 2006 at $8.90 and sold this time last year at 3c! Looks like it's been in a bit of a nosedive since 2006 and just starting to recover.

au.finance.yahoo.com/chart/AYN.AX?ltr=1;range=my;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=;

I have a rule that I won't sell unless it's gone up.

I bought some Babcock and Brown Shares in 2008 and lost the lot - they went broke. I still have some AGL shares from that time that are almost back even now. If I don't have the cash I don't do it.

Trading on the share market is gambling - but the big advantage the punter has got is that he/she can sell at any time.

Yeah AYN was just total unbelievable luck - I've waited for over two years to make 10% on some BHP shares that I still hold.

FormulaNova said...

I still don't understand how silver is going to be useful if the economy collapses, any more than gold, or lead. Funnily enough, I think oil would become a great currency.

I'm not 100% sure how to explain this. But just because a piece of paper has $100 printed on it - doesn't mean it's more valuable than something with $1 printed on it when the economy collapses?

Gold and Silver have, throughout history always had an intrinsic value to it - they have been used in coins and have for a very long time been used as currency throughout the world. Oil can't be used in the same way.

The reason gold/silver/coffee/rice/milk/oil/wheat/$A and most other commodities is going up in price in the US and elsewhere is not cause it's more expensive, it's more to do with the fact that the US dollar is losing value.

Any person who has lived through the collapse of their currency will tell you that gold/silver is a very good asset to have during these periods.

The price of silver has been held artificially low by shorting its price. This was the subject of a scandal aired by Max Keiser.

Precious metals are priced on availability against gold. Silver is 14 times more abundant than gold and up until manipulation, ie the last 2000 years , worth 14 times less than gold.

That equates to roughly $100/ounce on todays prices of gold. The really great thing is that gold is likely to reach $2000.

In which case silver will be worth $140/ounce

There are heaps of tossers out there who are paid to push the value of paper money. It serves it's purpose, but at the end ot the day, when confidence is lacking the wise retreat to the age old solution. Metal.

I love it when folk expand in awe at the parity of the aussie dollar with the us $ and the price of gold.

Gold is not increasing in value, nor is silver. Gold is gold and silver is silver. It is rare and it does not devalue. It takes the same amount of human effort to mine it in relation to iron ore and copper now as it did 2000 years ago.

Metals are not going up in value. Fiat money is losing value, fast.

oliver said...

FormulaNova said...

I still don't understand how silver is going to be useful if the economy collapses, any more than gold, or lead. Funnily enough, I think oil would become a great currency.

I'm not 100% sure how to explain this. But just because a piece of paper has $100 printed on it - doesn't mean it's more valuable than something with $1 printed on it when the economy collapses?

Gold and Silver have, throughout history always had an intrinsic value to it - they have been used in coins and have for a very long time been used as currency throughout the world. Oil can't be used in the same way.

The reason gold/silver/coffee/rice/milk/oil/wheat/$A and most other commodities is going up in price in the US and elsewhere is not cause it's more expensive, it's more to do with the fact that the US dollar is losing value.

Any person who has lived through the collapse of their currency will tell you that gold/silver is a very good asset to have during these periods.

Ahh, okay, I think I see the difference in perspective.

My argument is that if the US economy were to collapse, there would be a whole host of other economies that went down with it, and silver, gold, and any other precious metal would only be worth what you could use it for.

If the US economy failed to where the point the USD was worth very little, I don't think we would be any better off. There is just too much overlap with the US economy.

In your scenario, it makes more sense for a small economy that is not linked as intrinsically to the rest of the world, where a collapse in the currency would not affect many other economies.

I think inflation is putting up the price of everything, so there is always going to be an increase in cost for everything. It is not specifically because the value of one currency is dropping significantly more than the others. Unless people stop wanting wage increases and a better standard of living, prices always go up.

A case in point, in 20 years, your $1M house is probably going to seem like a bargain.

oliver said...

I'm not 100% sure how to explain this. But just because a piece of paper has $100 printed on it - doesn't mean it's more valuable than something with $1 printed on it when the economy collapses?

Gold and Silver have, throughout history always had an intrinsic value to it - they have been used in coins and have for a very long time been used as currency throughout the world. Oil can't be used in the same way.

The reason gold/silver/coffee/rice/milk/oil/wheat/$A and most other commodities is going up in price in the US and elsewhere is not cause it's more expensive, it's more to do with the fact that the US dollar is losing value.

Bzzzt sorry - the market price of precious metal commodities these days has absolutely nothing to do with the intrinsic value, and everything to do with speculators in the market.

If the price of say Gold was related primarily to intrinsic value, you would see the price go down when gold mine output volumes increased.

Instead the price goes up when markets are nervous, see:

oliver said...

Any person who has lived through the collapse of their currency will tell you that gold/silver is a very good asset to have during these periods.

Absolutely! But the only reason this is true is because the market values gold as a completely artificial and market nominated "standard".

I have been following these guys for a while, seem to make a lot of sense:

www.moneymorning.com.au