Actually I agree with what you say. I honestly believe property101 is right too, just that we are talking about different period of time, not the same period.

Let's start with the beginning, which is next year. We all know there will be a financial meltdown next year, no need to guess, most analyst and government already preparing for the worst, if europe fail, it will be worst than LEHMAN brothers crash.

Do we see gold and silver surging up? Many people think that gold and silver price will soar, and many people also think that the price of silver and gold will drop. 2 school of thought. Which will happen? I'm sure many of us would like to know, as this could be the chance to buy more, or liquidate some and convert them to real estate or your dream car.

I know... in the end, we will reach a period where silver and gold may become the currency for trading. But this will happen only if everyone accept PM as the medium for trade. A few thousand years ago, we did not use gold as currency, we used salt and spice for paying tax.

The video with regards to africa was because the world still accept currency and gold as medium, did they mentioned they accept silver as payment? I think not, anyone caught a glimpse of a mention of silver? Maybe I missed it.


Again, don't get me wrong, I have invested heavily in silver, I know what silver is worth, so I am NOT against buying silver. I just want to know, if the world currency crash, gold will be accepted as payment I'm sure, silver coin, yes I think so too, as it looks like money to most people, but silver bar, i guess only industrial company who are still consuming silver will buy, or those minting company will buy and mint into coin to be re-used. I do see myself accepting gold as payment for food I grow, silver coin may worth very very little, silver bar, if I throw one on the road today, I don't think people will even pick it up.

chef

PS Just what I think, not what I predict..

Move on to start the Gold as Investment Thread and don't let your thinking cloud the aspiring silver investors' sentiment to buy silver as investment. It is similar with Silver Lot Shop, there is a spin off to Gold Lot Shop, rather than staying with Silver Lot Shop and remove the shin away from silver. The issue here is when someone had invested too long in one asset and not seeing his predicted timely return, anxiety and doubt kicks in and irrational exuberance behaviour starts to appear.

Gold and silver are commodities, and like all commodites the demand will follow the incline S-curve diagram. The demand starts slowly with very small incline upward (Phase 1 - may take 10 to 30 years), and when they hit the first deflection point , it accelerates with high gradient slope increase (Phase 2 - 5 to 10 years), and then demand tapers off and slope gradient increase very slowly again (Phase 3 - saturation market). My empirical research assesment idicates Gold is now at middle of Phase 2, and Silver is now 2 years away from the first deflection point (2013). Remember the Robert Kiyosaki's video when he said he starts investing in silver at USD4/oz in 2002, meaning the price had multiply 8 times in 9 years. That price incline indicates we are very close to the first deflection point. I always time my investment and business entry about 2 to 3 years before the first deflection point, so that I can profit the most within the shortest time. Making money is about knowing your timing based on intelligent personal research and able to filter out the noise. The noise now ask you to buy USD fiat currency, noticing the exchange rate is USD1=RM3.20.

Analogy with buying commercial property like shop lot. Phase 1 - buying shop lot from developer, and waiting for business to pick up, and rent and property price to appreciate. Phase 2 - 2nd hand buyer, buying price already quite high but price will increase much faster as more businesses are eager to move into the vibrant business cluster and push up the rental and property price further. Phase 3- 3nd hand buyer, buying at very high price and business growth is saturated now, and price increase slope decreases.

Let me explain the probable reasons why silver was not used in the video posted by Property 101.
1) Zimbabwe experienced a severe hard-currency shortage that led to hyperinflation and chronic shortages in imported fuel and consumer goods.
2) No money to import food and fuel, and definitely no money to import silver from oversea.
3) Zimbabwe naturally has raw diamond and gold, and therefore the improverished man can still struggle to mine gold dust for the exchange of food. They can't mine silver for usage as medium of exchange, can they?
4) Because they don't have silver for small change, and they are cheated by food vendors that accepts gold with no change whatsoever, making them even more impoverise.
5) Most population had given up on the country, and all of them want to run and become refugees in any countries that are willing to accept them. Gold is more transportable than silver as international currency, and therefore gold is what Zimbabwean keep now.

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Added on November 29, 2011, 9:29 amThis is a forum, and any misinformation must be rebuffed otherwise, innocent people will be harm by following wrong advice. Silver coin the main medium of exchange for daily commerce from time immemorial, and they are peg to gold. Gold is only use as exchange for large commerce when currency transportion is an issue.

The following material if from Wikipedia.

The gold standard is a monetary system in which the standard economic unit of account is a fixed mass of gold. There are distinct kinds of gold standard. First, the gold specie standard is a system in which the monetary unit is associated with circulating gold coins, or with the unit of value defined in terms of one particular circulating gold coin in conjunction with subsidiary coinage made from a lesser valuable metal.

Similarly, the gold exchange standard typically involves the circulation of only coins made of silver or other metals, but where the authorities guarantee a fixed exchange rate with another country that is on the gold standard. This creates a de facto gold standard, in that the value of the silver coins has a fixed external value in terms of gold that is independent of the inherent silver value. Finally, the gold bullion standard is a system in which gold coins do not circulate, but in which the authorities have agreed to sell gold bullion on demand at a fixed price in exchange for the circulating currency.


History
Beginnings
The gold specie standard was not designed, but rather arose out of a general acceptance that gold was useful as a universal currency.[1] When commodities compete for the role of money, the one that over time loses the least value, takes on the role.[2] The use of gold as money dates back thousands of years and the first known gold coins were minted in the kingdom of Lydia in Asia Minor around 610 BC. The first coins minted in China are thought to date around 600 BC.[3] During the Middle Ages, the Byzantine gold Solidus, commonly known as the Bezant, circulated throughout Europe and the Mediterranean. But as the Byzantine Empire's economic influence declined, the European world tended to see silver, rather than gold, as the currency of choice, leading to the development of a silver standard. Silver pennies, based on the Roman Denarius, became the staple coin of Britain around the time of King Offa, circa AD 796, and similar coins, including Italian denari, French deniers, and Spanish dineros circulated throughout Europe. Following the Spanish discovery of great silver deposits at Potosí and in Mexico during the 16th century, international trade came to depend on coins such as the Spanish dollar, Maria Theresa thaler, and, in the 1870s, the United States Trade dollar.

In modern times the British West Indies was one of the first regions to adopt a gold specie standard. Following Queen Anne's proclamation of 1704, the British West Indies gold standard was a de facto gold standard based on the Spanish gold doubloon coin. In the year 1717, master of the Royal Mint Sir Isaac Newton established a new mint ratio between silver and gold that had the effect of driving silver out of circulation and putting Britain on a gold standard. However, only in 1821, following the introduction of the gold sovereign coin by the new Royal Mint at Tower Hill in the year 1816, was the United Kingdom formally put on a gold specie standard, the first of the great industrial powers. Soon to follow was Canada in 1853, Newfoundland in 1865, and the USA and Germany de jure in 1873. The USA used the Eagle as their unit, and Germany introduced the new gold mark, while Canada adopted a dual system based on both the American Gold Eagle and the British Gold Sovereign.

Australia and New Zealand adopted the British gold standard, as did the British West Indies, while Newfoundland was the only British Empire territory to introduce its own gold coin as a standard. Royal Mint branches were established in Sydney, New South Wales, Melbourne, Victoria, and Perth, Western Australia for the purpose of minting gold sovereigns from Australia's rich gold deposits.

The crisis of silver currency and bank notes (1750–1870)In the late 18th century, wars and trade with China, which sold to Europe but had little use for European goods, drained silver from the economies of Western Europe and the United States. Coins were struck in smaller and smaller numbers, and there was a proliferation of bank and stock notes used as money.

EnglandIn the 1790s, England, suffering a massive shortage of silver coinage, ceased to mint larger silver coins and issued "token" silver coins and overstruck foreign coins. With the end of the Napoleonic Wars, England began a massive recoinage programme that created standard gold sovereigns and circulating crowns and half-crowns, and eventually copper farthings in 1821. The recoinage of silver in England after a long drought produced a burst of coins: England struck nearly 40 million shillings between 1816 and 1820, 17 million half crowns and 1.3 million silver crowns. The 1819 Act for the Resumption of Cash Payments set 1823 as the date for resumption of convertibility, reached instead by 1821. Throughout the 1820s, small notes were issued by regional banks, which were finally restricted in 1826, while the Bank of England was allowed to set up regional branches. In 1833, however, the Bank of England notes were made legal tender, and redemption by other banks was discouraged. In 1844 the Bank Charter Act established that Bank of England Notes, fully backed by gold, were the legal standard. According to the strict interpretation of the gold standard, this 1844 act marks the establishment of a full gold standard for British money.

USThe US adopted a silver standard based on the Spanish milled dollar in 1785. This was codified in the 1792 Mint and Coinage Act, and by the Federal Government's use of the "Bank of the United States" to hold its reserves, as well as establishing a fixed ratio of gold to the US dollar. This was, in effect, a derivative silver standard, since the bank was not required to keep silver to back all of its currency. This began a long series of attempts for America to create a bi-metallic standard for the US Dollar, which would continue until the 1920s. Gold and silver coins were legal tender, including the Spanish real, a silver coin struck in the Western Hemisphere. Because of the huge debt taken on by the US Federal Government to finance the Revolutionary War, silver coins struck by the government left circulation, and in 1806 President Jefferson suspended the minting of silver coins. The US Treasury was put on a strict hard-money standard, doing business only in gold or silver coin as part of the Independent Treasury Act of 1848, which legally separated the accounts of the Federal Government from the banking system. However the fixed rate of gold to silver overvalued silver in relation to the demand for gold to trade or borrow from England. The drain of gold in favor of silver led to the search for gold, including the California Gold Rush of 1849. Following Gresham's law, silver poured into the US, which traded with other silver nations, and gold moved out. In 1853, the US reduced the silver weight of coins, to keep them in circulation, and in 1857 removed legal tender status from foreign coinage.

In 1857 the final crisis of the free banking era of international finance began, as American banks suspended payment in silver, rippling through the very young international financial system of central banks. In the United States this collapse was a contributory factor[citation needed] in the American Civil War (1861–1865), and in 1861 the US government suspended payment in gold and silver, effectively ending the attempts to form a silver standard basis for the dollar.

InternationalThrough the 1860–1871 period, various attempts to resurrect bi-metallic standards were made, including one based on the gold and silver franc; however, with the rapid influx of silver from new deposits, the expectation of scarcity of silver ended.

The interaction between central banking and currency basis formed the primary source of monetary instability during this period. The combination that produced economic stability was a restriction of supply of new notes, a government monopoly on the issuance of notes directly and, indirectly, a central bank and a single unit of value. Attempts to avoid these conditions produced periodic monetary crises: as notes devalued; or silver ceased to circulate as a store of value; or there was a depression as governments, demanding specie as payment, drained the circulating medium out of the economy. At the same time, there was a dramatically expanded need for credit, and large banks were being chartered in various states, including, by 1872, Japan. The need for a solid basis in monetary affairs would produce a rapid acceptance of the gold standard in the period that followed


This post has been edited by taurusbull: Nov 29 2011, 09:29 AM

Hi taurus,

your post is too long, and I don't want to limit this forum to be a discussion between you and me only. please PM me if you want to discuss gold.

This forum can't be only for patting everyone back and say it is 100% to invest silver. Occasionally we have to question ourselves, what we are doing is right or wrong.

Let's keep public posting (between us) to minimal, start a blog like goldchan or webpage like property101, they are doing it right for everyone.

chef

check on utah state in US bro

Sorry I am only interested to make sure innocent readers are given opportunity to hear another viewpoint when someone make statements that may not be true. Just like you said, you are questioning on silver investment, and I am just questioning what you are questioning on silver investment.

I am not interested to convince anyone on one-to-one basis, but I am just making sure any questionable statements made that is flawed should by given alternative view, just like what you said.

If the admin had the rule that posting should by less than certain words, I will comply immediately, and not the rule suggested by another forumer. In this forum, only admin can determine the right and wrong on posting format. Starting a blog or website is my personal matter, but thank you for your advice.

Please don't be mistaken that I am against you, as I still regard you as a new friend, and if we meet again I can still buy you coffee, or you can buy coffee if you choose to.

I still like gold but love silver better, and I am ready to repudiate any statement contrary to my believe, and let the circus continue so more people can be educated along the way.

By the way, when Cruzzie qualified his statement and cited his sources, like I always do, is an honourable thing to do, as it gives reader the real perspectives of the facts. Rather than someone making an unqualified statement and a few people becoming the cheerleaders, and then the reader take it as gospel truth. Property 101 had got me into a hot soup when someone in SLS thinking I copied his material because he didn't put in his source of material in his website. He still didn't put it clearly now, and that is not fair. He should put it clearly the souce of advantages/disadvantages of buying physical silver to be Taurusbull of Low Yat Forum, rather than source refering to Low Yat Forum's Silver Investment Thread V2, Chun Yen's posting of Taurus Bull posting with statement of credit to Taurus Bull. How is anyone going to know the real author of the material, if the reference is 3 times over.

If we put any statement out in a forum, we must be ready to be challenge by alternative views. It is just when your view continuously differ seriously in one particular forum, like singing gold in the "Silver as Investment" thread, it becomes a consistent contrarian to the forum stated objective, and therefore generated so many postings that repudiate the singing gold statements. The Facebook, LowYat Silver and Gold Group clearly get it right as a forum for silver and gold and allows trading. Go there as it will be the right forum, or start a new Gold as Investment or Gold and Silver as Investment thread, and we will not have any issues. Majority of people coming to this thread actually started with gold, your postings will make them "gostant" back to gold, and may missed the biggest investment of a lifetime in silver. I am making sure I am doing my parts, that is all, and collecting my karma along the way.

There isn't any limit on each posting.

try to use spoiler to hide the history or any long paragraph so that only those who would like to read can click it to read that.

example:



taurusbull,, nice information.. i learned a lot

This post has been edited by basSist: Nov 29 2011, 11:44 AM

just now visited SLS in facebook, the sellers there are selling with very low price, I really wonder how they make profit?

maybe they are desperately in need of cash, so sell whatever they can even at a loss....

Hi Guys,

Thanks for your help on my first post regarding buying physical gold and silver.

I have some doubts on investing (gold/silver) coins vs (gold/silver) bars.

I know that coins always come with premium price for some reasons. I question here is:

Lets says I bought a 1 oz silver coin at the silver price of USD32.00 and I paid for USD95.00 for the 1 oz silver coin. In this case I paid extra USD63.00 (USD95.00 - USD32.00, almost 200% over the silver price) as premium. My question is,

1) if the silver price goes up to USD40.00, will the price of the 1 oz silver coin I bought also goes up proportionally to USD118.75?

2) if the silver price drop to USD25.00, will the price of the 1 oz silver coin I bought also drop proportionally to USD74.22?

Simple answer would be yes.

But it boils down to the willing seller willing buyer. This is if you buy and sell with individual traders/collectors.
For this, you have to find buyer who agrees to your price.

If you buy and sell with a company, they normally have a buy back policy, which is a certain percentage lower than their selling price.
So, if you buy when it is high, and suddenly the price drops, you will incur losses IF you sell it back to the company.
But if the price continues to go up, you can sell it back to the company and maybe gain some profit.
For this, you don't have to find the buyer. The company will buy it back without much hassle (I think).
But your profit would be not proportionate to the premium that u pay previously due to the buy back policy has already 'eaten' some of your profit.

Example:

You buy from Company A - 1oz Silver at RM150 when the Spot is RM120 (Premium is RM30 or 25%)
Company A has a buy back policy - They will buy your silver at -15% from their selling price.
So, you have to wait for the price to increase to RM177 (Spot at RM141) just to break even.
This will mean that you already lost 15% when you buy your silver.

However, if you can find a private buyer and sell the coin at market price @ RM177, you've already gained 18%.

My 2 cents worth.
Please correct me if I'm wrong.

This post has been edited by Nidz: Nov 29 2011, 12:37 PM

Hi Nidz,

Thanks for your reply.

I dont understand why people buy coins and pay for the premium... because of the design and it looks better than bars?

At this moment I still prefer bars over coins as I think there is no reason to pay for the premium... unless someone can persuade me with strong reasons.

I am still looking for my way to buy silver directly from Perth Mint as I found it is very hard to find silver seller... (Poh Kong, Wah Chan, Tomei all selling gold only)

i suspect it's the mind set of people.
bar is definitely valued for money but coins seem more like "money" compare to bar.

I've seen Tomei KLCC is selling Pamp Suisse Silver Bar..also got 1kilo bar with EPP

Agreed!

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Added on November 29, 2011, 2:46 pmI did tried to browsed Tomei's website but did not see anything news saying that they are selling silver...

By the way what is EPP?

This post has been edited by Kokolat: Nov 29 2011, 02:46 PM

EPP is easy payment plan.

For me, I buy both bars and coins. Even some numismatic coins also i buy.
Bars for its low premium, suitable for investment.

Coins and Numis, high premium, more beautiful, limited edition, and some of them holds their premium even though the spot price goes down...
So, I buy this for trading.

Problem with those kind of forum where selling is allowed is that most posting are bias towards getting their sales done instead of putting informative information regarding precious metal.Many seller use past precious metal wave as their selling point instead of using the proper fundamentals of investing in precious metal.Many if not all people who are in this mad silver rush is due to the sudden popularity of the surge it created currently.

Everyone must remember the mindset of precious metal in this current financial system. Sorry to bring gold into a silver thread but I just want to share similar mindset that is within most community nowadays.Most people will still view gold as superior due to gold being expensive to obtain, silver is a poor men's gold and that is the status that human will inject for quite sometime unless something huge comes along.

I myself have invested in silver but only those which has good numismatic value, example Perth Mint Year of the Dragon series. Just take a look at how people swarm on those limited edition dragon piece and then resell it at higher premium,just because it is limited. This just show how much silver is used to speculate for profit instead of it's fundamental as a precious metal, but this trend will continue no matter what. On the other hand, gold series has no such mad rush, instead it has no fear of such mad rush due to its value itself as a gold.

Selling gold is so much more easier than selling silver(except those which has high numismatic value). I am sorry to say this but in my opinion, the point of view of silver currently is just so out of the fundamentals. You invest in previous metal is because it is precious metal, not because you see other people gaining and join in the bandwagon.

Just my 2 cents.

You can't buy Perth Mint's bullion product directly form Malaysia. You must be a resident of Australia and registered with Perth Mint before you can place an order. I had don't everything required to register but unable to do so, because I am not staying in Australia.

If you want to buy Perth Mint 10oz bars, you can head to Silver Lot Shop in Facebook now, there is a seller name Aslami Amir selling at RM1,350/(10 oz) per bar.

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Added on November 29, 2011, 3:56 pmI have no issue with your statements except that you are not comparing apple with apple by comparing Gold Bullion with Numismatic Silver Coin. The right comparison are gold bullion vs silver bullion, Numismatic Gold Coin vs Numismatic Silver Coin.

I agreed with what Chef said that Silver coin with higher premium plus 15.5% tax (or smuggled), has its own respective market during good time as silver coin exhibit numismatic value particularly with the older minted year coins. Numismatic premium and its followers belong to the collectors group like antiques and arts, buying and selling like what Nidz said is based on willing buyer and willing seller with no reference with the spot price. In Malaysia, there is no player in Numismatic Gold Coins yet, but it doesn't mean that they are not there elsewhere in other countries. Leave Numismatics market consideration separate from pure bullion market, as there are many collectors' evaluation criteria that many silver investors are not familiar with before they jump in like with the recent Lunar Dragon Coin from Perth Mint, as you rightly mentioned the current craze of high markup price last two months, and now sellers are lamenting of the new depressed price. This is a normal phenomena of herd syndrome happening in the crazy buyers chasing for limited inventory, played out intelligently by Perth Mint.

I had wrote enough of Gold Bullion vs Silver Bullion investment, and I not going to bore the reader further.

This post has been edited by taurusbull: Nov 29 2011, 03:56 PM

RM1,350 / RM3.17 = USD425.87, which mean 1oz silver is USD42.587... this price is killing! I buy silver bars to protect my wealth and I will definitely not going to pay a 33% (USD42.587 / USD32.00) premium to kill my wealth.

Anyway, thanks for your help on the above... I am still trying to look for reasonable silver bar around...

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Added on November 29, 2011, 4:22 pmThanks boss... I think I may call To mei to check if they really sell silver bars...

I buy silver is to protect my wealth and therefore I am not going to buy from any party that "mark up" too much. The only option I have now is buy directly from Perth Mint (this option seems not workable) or... buy Maybank Kijang coin (ya I dont like coins but buying from Maybank is better than buying from Poh Kong who will give 15% spread...).

Any other suggestions?

This post has been edited by Kokolat: Nov 29 2011, 04:22 PM

If you resort to buy gold coins from the bank, I would suggest you to go to UOB bank. They offer few different kinds of gold coins such as maple, nugget, kangaroo etc and their buy back spread is quite low also.

Kijang Emas is quite hard to find nowadays. Most of the Maybank branch have sold out.

Make sure you call the banks first before heading there.

This post has been edited by Nidz: Nov 29 2011, 04:32 PM

The most reasonable silver bar is in sls at RM115/oz for 1 oz bar, and not in any bank or goldsmith shops. If you don't care about liquidity comes the time to sell, then you can check with 1stopgold for the 1kg silver bar, now selling at RM3,698.64, getting you RM114.76/oz. When selling 1kg bar, you can sell back to seller at 15% discount. You can dispose off 1oz bar in sls, no discount from market prce maybe take 1 week, 5% discount maybe take 2 days, and 10% discount maybe take 2hours.