Buy $500 in silver tomorrow?

[humanic]

Ok, so I have about $2000 to my name right now, including $1000 cash sitting my drawer. This also includes a few hundred dollars worth of 1964 Kenndy Half Dollars (90% silver) that I've bought in the past few months, which have already gone up in value obviously.

I'm self-employed and I don't make very much money. But, I live modestly and don't spend much either. Also, I never borrow money and the only debt I have is the remainder of my student loan, which is under 10K (I pay the minimum towards this monthly, $80). My savings has been pretty steady around $1200 - $2200 over the past year-- some months I'm able to put away a few hundred bucks, other months I have to eat into it a bit for a car repair or something like that.

Anyways, I'm thinking that since I have at least $1000 in Federal Reserve Notes sitting idle, maybe I should put more of it into silver. I was thinking about buying $500 worth tomorrow. Does this sound like a good idea? If so, should I go with more 1964 Kennedy Half Dollars? Or something else? Or should I put it into something other than silver? Or keep the cash? Also, if I'm buying silver, should I just get it off Ebay like I've been doing or elsewhere?

Any input would be great.

 

[Dr.3D]

Watch for a dip.

I would watch for a dip. When the government starts to put gold on the market, those holding silver, waiting for the price of gold to drop from the government sale, will most likely sell their silver and buy the low priced gold. The price of silver should drop at that time as the price of gold starts to climb back up. So, when the silver takes that dip, it would be a great time to buy.

Even if the price of silver doesn't go down from the previously described scenario, there is likely to be some kind of a correction in the price of silver soon.

Just my thoughts on the matter.

 

[RSLudlum]

I was thinking about doing the same thing this weekend. Any suggestions?

 

[Corydoras]

I would make sure to have three to six months of living expenses in the bank first (including stuff you know you will need occasionally like car maintenance).

Yes, it will decline in value, but you need a little bit of a cushion. Say you break a leg, you'll need to order meals and groceries delivered. Say some idiot decides to whack your windshield for fun one night. Say you get burned out of your place in the winter and you need to get shelter before the insurance assessor arrives to look at the damage. Stuff like that.

 

[Dr.3D]

I would make sure to have three to six months of living expenses in the bank first (including stuff you know you will need occasionally like car maintenance).

Yes, it will decline in value, but you need a little bit of a cushion. Say you break a leg, you'll need to order meals and groceries delivered. Say some idiot decides to whack your windshield for fun one night. Say you get burned out of your place in the winter and you need to get shelter before the insurance assessor arrives to look at the damage. Stuff like that.

Excellent advice.

 

[humanic]

Thanks very much for the responses so far!

I would watch for a dip. When the government starts to put gold on the market, those holding silver, waiting for the price of gold to drop from the government sale, will most likely sell their silver and buy the low priced gold. The price of silver should drop at that time as the price of gold starts to climb back up. So, when the silver takes that dip, it would be a great time to buy.

Even if the price of silver doesn't go down from the previously described scenario, there is likely to be some kind of a correction in the price of silver soon.

Just my thoughts on the matter.

That sounds like a pretty reasonable scenario. When do you think the government will start putting gold on the market? How confident are you that this will happen? How big of a dip do you think there would be?

I would make sure to have three to six months of living expenses in the bank first (including stuff you know you will need occasionally like car maintenance).

Yes, it will decline in value, but you need a little bit of a cushion. Say you break a leg, you'll need to order meals and groceries delivered. Say some idiot decides to whack your windshield for fun one night. Say you get burned out of your place in the winter and you need to get shelter before the insurance assessor arrives to look at the damage. Stuff like that.

Very good point. My thinking is this:
If I buy $500 in silver I'll still have around $1200 in cash or so. Also, I anticipate being able to put away at least a few hundred more in the next couple weeks because, maybe even more, because I'll be working a lot. I think this will be a sufficient cushion, especially since I live near family that could help me out if I had some kind of emergency. I could always turn around and sell the silver on Ebay if I got really desperate too, but I'd have at least a few weeks if not a few months before I'd have to do so.

 

[Dr.3D]

Thanks very much for the responses so far!

That sounds like a pretty reasonable scenario. When do you think the government will start putting gold on the market? How confident are you that this will happen? How big of a dip do you think there would be?

I'm not sure of the timing of the IMF sale.

Here is an article about it:
http://goldnews.bullionvault.com/IMF_gold_sales_G7_tokyo_021120081

Just watch for a correction, in any event. The way the price of silver has been going up, I would imagine a correction should soon follow.

I can't say it will or not, but in the past, when prices shot up, they corrected again shortly afterward. Usually a correction is like the reverse of a Dead Cat bounce in the market when prices drop suddenly. A price will shoot up rapidly and then fall back just a bit before they shoot up some more.

Don't take my advice for anything, but instead, do you own research.
I don't want to be responsible for any problems that may arise from thoughts I have expressed here.

 

[humanic]

Don't take my advice for anything, but instead, do you own research. I don't want to be responsible for any problems that may arise from thoughts I have expressed here.

No worries, it's just nice to have input from people who know more about this kind of thing than I do. I've found browsing this forum, Daily Paul, and others has been great/fast way to learn. In the time it would take me to read a book by an expert, I can read the opinions and suggestions of dozens and dozens of people who-- while not all experts necessarily-- are often quite saavy. Individually they don't have all of the answers (no one does), but by sitting in the corner listening to the discussions, following links to articles that they provide, and considering the various viewpoints is a great way understand the scope of the debate and triangulate the best consensuses.

 

[Corydoras]

If I buy $500 in silver I'll still have around $1200 in cash or so. Also, I anticipate being able to put away at least a few hundred more in the next couple weeks because, maybe even more, because I'll be working a lot. I think this will be a sufficient cushion, especially since I live near family that could help me out if I had some kind of emergency.

As long as you have thought about emergencies... and if you think $1500ish plus family help is going to be good enough for an emergency. Will your family be willing and able to cover your rent or at least pack your stuff and put it in storage if you get hit in the head and are in the hospital and aren't well enough to sell your silver?

So you'd get 20-25 ounces of silver. So you only make less than $20-25 for each dollar that silver goes up, because REMEMBER you will have to sell below spot. Still better than in the bank. But just think about whether $20ish per dollar that silver goes up is worth not having that money available for an emergency. You know better than I how far that money goes in your part of the country.

 

[piotr1]

Get your advice here, http://goldismoney.info/forums/index.php

 

[Dr.3D]

U.S. Dollar Index vs. Gold/Silver Ratio

No worries, it's just nice to have input from people who know more about this kind of thing than I do. I've found browsing this forum, Daily Paul, and others has been great/fast way to learn. In the time it would take me to read a book by an expert, I can read the opinions and suggestions of dozens and dozens of people who-- while not all experts necessarily-- are often quite saavy. Individually they don't have all of the answers (no one does), but by sitting in the corner listening to the discussions, following links to articles that they provide, and considering the various viewpoints is a great way understand the scope of the debate and triangulate the best consensuses.

Here is a chart I made showing something interesting.
It shows the U.S. Dollar index versus the Gold/Silver ratio.
I don't know if there will be a correction so soon after all.

Notice how the last part of this chart doesn't look like the rest of it.
Something is going on here!

 

[humanic]

Woah, yeah. I noticed that myself because I bought a little silver off Ebay a few nights ago when it was just over $18. I looked the next day and it had made a big jump, and this has happened every day for the past few days. It's already up to $19.84 and I haven't even gotten it in the mail yet. That's what made me kind of go "WOW, something is going on here... maybe I should I hurry up and buy more."

 

[Corydoras]

Do I understand that graph correctly, Dr. 3D, that it says that in the past week, silver has risen sharply against both gold and the dollar?

 

[Dr.3D]

Do I understand that graph correctly, Dr. 3D, that it says that in the past week, silver has risen sharply against both gold and the dollar?

Well, at least the U.S. Dollar index, rather than the dollar itself.

The U.S. Dollar index is only an indicator of the value of the U.S. Dollar relative to a basket of other currencies.

See this link for more about the U.S. Dollar index:
http://en.wikipedia.org/wiki/US_Dollar_Index

Since all of the other currencies float in relation to the dollar, the indicator is only relative. While the other currencies could be falling in value at the same rate as the dollar, the USDI would not reflect the loss in value of all of the currencies in the basket.

 

[Corydoras]

Well, at least the U.S. Dollar index, rather than the dollar itself.

dollar : other currencies :: gold : silver

Something like that?

 

[Dr.3D]

dollar : other currencies :: gold : silver

Something like that?

One line of the chart, the black line, is the ratio of the number of ounces of silver it takes to buy one ounce of gold. It has been mostly above 53 ounces of silver to one ounce of gold for most of the chart. On the 22nd of February it dropped below 53 and has been going down steadily ever since.

The other line of the chart is the U.S. Dollar Index.
The lowest it has been on the chart until lately, has been 74.86 on the 27th of November. On the 27th of February, it dropped to 74.70, the lowest in the history of the Index. It has been steadily dropping since that time.

I took the reading of the USDX every day at 19:00 EST when it resets for the day.
I took the readings for the gold and silver prices at the close of the NY market every day.

So pretty much,since the 26th of February, the price of silver has been going up relative to the price of gold and the value of the U.S. Dollar relative to the basket of currencies it is computed from.

Here is a chart of the last three months of the gold silver ratio:

Here is a chart of the last three months of the United States Dollar Index:

 

[buffalokid777]

Ok, so I have about $2000 to my name right now, including $1000 cash sitting my drawer. This also includes a few hundred dollars worth of 1964 Kenndy Half Dollars (90% silver) that I've bought in the past few months, which have already gone up in value obviously.

I'm self-employed and I don't make very much money. But, I live modestly and don't spend much either. Also, I never borrow money and the only debt I have is the remainder of my student loan, which is under 10K (I pay the minimum towards this monthly, $80). My savings has been pretty steady around $1200 - $2200 over the past year-- some months I'm able to put away a few hundred bucks, other months I have to eat into it a bit for a car repair or something like that.

Anyways, I'm thinking that since I have at least $1000 in Federal Reserve Notes sitting idle, maybe I should put more of it into silver. I was thinking about buying $500 worth tomorrow. Does this sound like a good idea? If so, should I go with more 1964 Kennedy Half Dollars? Or something else? Or should I put it into something other than silver? Or keep the cash? Also, if I'm buying silver, should I just get it off Ebay like I've been doing or elsewhere?

Any input would be great.

BUY THE SILVER!!!

Some people think there will be a corection of gold at $1050 ounce and silver at 25$ ounce

I would disagree completely.

The fundamentals of what is driving the price of metals has NOT changed.

The war in Iraq has no end in sight.....thus driving the US economy further into debt and higher metal prices.

There is a record number of short postions in the silver market.

The four biggest traders in shorts in the silver market = 170 days of the entire silver production of the world.

The eight biggest short traders= 210 day of world production of silver.

These contracts will come due this year and drive silver to new records.......

As for your question as where to pick up silver...ebay is awesome....with minimal work....silver can be had for slightly under spot.....

Trust your instincts.....buy that silver and enjoy your profits.

When talking about silver I AM BULLISH!!!!!!! Don't say no one gave you good advice if you do not take this chance to profit!!!!

 

[CitizenPlain]

Take your $2000. to the bank,

...

 

[Carole]

I was reading an article by McAlvaney that hinted GATA more or less put an end to this practice and that Greenspan and others ( in collusion with Fed-Treasury and central banks) rightly ought to be in jail for trying to depress the gold market and using the PPT-(ESF) through Goldman Sachs and Merrill Lynch, etc. troughout the nineties to effect this, selling gold reserves at bottom prices below $300 per oz. Bank of England sold 415 tons-over two thirds of its reserve in May 1999. They successfully suppressed gold price for years.

Smart countries like China, Japan, Russia, India, Saudi Arabia, UAE, Indonesia and others have been buying gold up over time at bargain prices I suppose since gold dumping countries were practically giving it away. Rubin and Greenspan are still around. Greenspan just was in mideast advising OPEC countries to drop the dollar and suggesting it is time for their own currency.

Is it not likely that The Fed, US Treasury, etc. no longer have any reserves to dump? All our gold is likely gone is it not? Except for a little bit of junk gold that could be in Ft. Knox and of little value?

Would that also help explain, since the Fed has lowered interest rates three times in a few weeks, and gold is finally going up that no more suppression of gold is possible?

Just thinking and just curious here.

 

[JSutter]

Im my opinion silver in hand is better than cash in the bank. The cash might earn 3% in a savings account while inflation outpaces that. The silver should earn money and if you run into an emergency it's fairly easy to sell the silver for cash pretty close to the spot price.

I say buy the silver.