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Selling everything to buy more silver!

Monday, December 31, 2012

The latest issue of The EDGE provided me with much food for thought. However, the article on buying physical silver ended with a paragraph which if ingested might require us to take some digestive enzymes.


"There's going to be another big crash, we are really near it now," said Chin Kuan Yew, a businessman ... who sold all his properties, including his condominium, to buy more metal. "You have on the one hand the US printing money and the European Union is on the brink of collapse."

Although I advocate that all who can afford to do so should have 5% of their wealth in physical gold and silver as a form of insurance against the inherent flaws of fiat currencies, I feel that Mr. Chin is being somewhat extreme.

Selling his properties could be a good move because with the ongoing aggressive building, it is more likely than not that we would see a situation of oversupply in Singapore in the coming years which would mean lower rental rates and lower property prices.

Having most of his wealth in precious metals, however, smells of paranoia.

Related posts:
1. Gold and silver: Still important assets to own.
2. Never lose money in real estate and REITs?
3. Buy gold and silver as insurance.

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18 comments:

AK71 said...

The president of one of America's oldest precious bullion dealers says retail investors purchased gold and silver in unprecedented volumes during the Christmas holiday period.

Bill Haynes, president of CMI Gold & Silver told King World News that the Arizona bullion veteran did more business during the 3 day holiday week than during any single week in years, with one purchaser spending $6.8 million on a single transaction.

Haynes says fear of economic upheaval in the Western world is augmenting, leading to an "unimaginable" buying of physical gold and silver, and foresees further price breakouts to the upside.


Source:
http://www.mining.com/festive-season-saw-unimaginable-purchases-of-precious-bullion-by-public-43292/

ML said...

Thank for sharing your thoughts over the years. love reading it =) Have a happy 2013!

AK71 said...

Hi ML,

I am glad you enjoyed my blogs.

Happy 2013. :)

d34af78e-43ac-11e2-aa43-000bcdcb5194 said...

Hi AK,

With QE›∞ , I'm not surprised the countermeasures people are taking to preserve their wealth or what remains of it. Selling everything and buying silver??? That feels too extreme in my opinion.

Tree

robertan said...

robertan
@AK71
If retailers are buying in record amounts together with a number of central banks, then, why is the price stuck at USD1650 range?

AK71 said...

Hi Tree,

QE to infinity would be unthinkable to me. It has to end one day and 2015 is already stretching it.

Constant QE rewards people who use leverage and penalise those who don't. Basically, conservative people who work hard, save most of their money, have no debt and do not invest are punished the most. This does not sound right and cannot continue indefinitely.

Having said this, we are only the common people and what we can do is to take action to protect our hard earned wealth.

AK71 said...

Hi robertan,

The article is about an increase in demand for gold in the US retail market during the current festive season. Obviously, the price of gold is not determined by this one factor alone. :)

d34af78e-43ac-11e2-aa43-000bcdcb5194 said...

Hi AK,

Your reply really touched on the sore spot I have with life now here...

Consider 2 people.

1. The first takes up a job, buys a house and raises his family in it with a 35 year loan, slogging day in day out for years on end.

2. The second buys 2 houses, maxes out his credit, and when the houses doubled in value in 3 years, sells one and gets a house free. Enjoys life after that.

With the economy in this state of destructive stagflation, the greatest reward goes to all out risk takers. I have no issue with risk takers getting wealthy by taking risk, but not when it is built on disadvantaging prudent folks who have saved for their retirement, mostly baby boomers of our parents generation.

"When an honest person cannot make an honest living by doing an honest day's work, something is very wrong" this quote is my view of our economy now...

Tree

Unknown said...

cant believe everything you read. lots of bullshitters around, especially when it comes to money

AK71 said...

Hi Tree,

I am afraid things did indeed turn out that way for many people in the last few years. Whether risk takers made the money they did at the expense of those who did not take any risk is quite debatable. However, I would say that the system now does not favour the most conservative amongst us.

For those of us who are better informed, we have to make a choice whether or not to take on more risk. The tools are there, use them or not is up to us. :)

Ken said...

Hi AK,

Goodness gracious, this peculiar move is beyond outlandishness and recognition. By placing all eggs in one basket (Silver in this case), Mr Kuan Yew sacrifices Hedging strategy as Opportunity Cost for dominance (Top Priority) in Commodities ruling (Silver to be precise).

It makes me ponder on his aggressive yet defensive tactic. This critical point of precision often entails "Attack is the best Defense".

Warmest Regards,
Ken

AK71 said...

Hi Unknown,

Indeed, we want to be open minded but at the same time, we have to stay critical and ask questions. :)

AK71 said...

Hi Ken,

You must be an avid student of Sun Tzu's "Art of War". ;p

d34af78e-43ac-11e2-aa43-000bcdcb5194 said...

Hi AK,

I guess blaming speculator activity for my predicament is counterproductive, far better to do what I can to mitigate the effects of stagflation. Now where can I get cheap and good silver...

Treezzz

AK71 said...

Hi Tree,

Late night? ;)

Yes, make good use of your resources and take advantage of circumstances to plan for favourable outcomes. This is what we can do and should do. :)

Cheap and good silver? Let me know if you find some. ;p

Well, it seems to have found a floor at US$30/oz. I am not sure if this would hold. If it breaks, then US$27/oz or so is the next support. Try hedging. ;)

JCK said...

To those who wonder why they work so hard and yet.........

“I believe that banking institutions are more dangerous to our liberties than standing armies.” – Thomas Jefferson

… The modern theory of the perpetuation of debt has drenched the earth with blood, and crushed its inhabitants under burdens ever accumulating. -Thomas Jefferson

History records that the money changers have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling money and its issuance. -James Madison

Despite these warnings, Woodrow Wilson signed the 1913 Federal Reserve Act. A few years later he wrote: I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated Governments in the civilized world no longer a Government by free opinion, no longer a Government by conviction and the vote of the majority, but a Government by the opinion and duress of a small group of dominant men. -Woodrow Wilson

“Let me issue and control a nation’s money and I care not who writes the laws.” Mayer Amschel Rothschild (1744-1812), founder of the House of Rothschild.

“The few who understand the system will either be so interested in its profits or be so dependent upon its favours that there will be no opposition from that class, while on the other hand, the great body of people, mentally incapable of comprehending the tremendous advantage that capital derives from the system, will bear its burdens without complaint, and perhaps without even suspecting that the system is inimical to their interests.” The Rothschild brothers of London writing to associates in New York, 1863.

AK71 said...

Hi JCK,

Thanks for sharing the quotations. They make for a gloomy start to the new year. Hahaha... ;)

Ignorance is bliss, they say. ;p

AK71 said...

John Embry, chief investment strategist with Sprott Asset Management, believes silver prices will go "ballistic" as demand massively outpaces supply while investor demand builds due to dwindling above-ground sources.

Speaking to King World News Embry notes that over the past half century billions of ounces in above ground silver have been consumed, with the precious metal serving as both as investment holding and key industrial material.

According to Embry demand far exceeds the amount of silver coming out of the ground or silver being recycled, and prices are set to go "crazy" as the skewed supply-demand relationship unfolds.

Although Embry remains immensely optimistic about gold and foresees a raging bull market in both gold and silver, he also expects the gold-silver ratio to decline as is typical during strong periods for precious metals.


Source:
http://www.mining.com/silver-prices-will-go-crazy-as-demand-overwhelms-supply-embry-36227/

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