Gold and silver prices are down

Varmint said:
They didn't talk much about what it means. Better hope the Fed is able to keep interest rates down or that amount of debt will blow us up.

This week's Treasury auctions have to make you wonder if the Fed can keep rates down while the government is spending so much. The market can't consume so much debt at such low rates.
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If interest rates rose to 3-4% with $78 trillion in debt, very reasonable rates historically, the entire US budget would be needed just for debt service. There wouldn't be a penny left for government, military, social security, entitlements, nothing!
 
ASHDUMP said:
I guess I could have been more specific. Yes minted coins; American Silver Eagles or Gold Eagles. I buy some each year... For my daughter.
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richc said:
If interest rates rose to 3-4% with $78 trillion in debt, very reasonable rates historically, the entire US budget would be needed just for debt service. There wouldn't be a penny left for government, military, social security, entitlements, nothing!
Click to expand...

Yeah this is why the Fed is talking about interest rate control, which means interest rates will never go up. But if they do that the dollar could crash. Some think the dollar's decline in the last 2 months is due to impending Rate Control. Interest rates have been going up, as the bond market can't digest all the increased government spending. The Fed may have to act soon if rates don't stop going up.

May you live in interesting times.
 
Varmint said:
Yeah this is why the Fed is talking about interest rate control, which means interest rates will never go up. But if they do that the dollar could crash. Some think the dollar's decline in the last 2 months is due to impending Rate Control. Interest rates have been going up, as the bond market can't digest all the increased government spending. The Fed may have to act soon if rates don't stop going up.

May you live in interesting times.
Click to expand...

The Fed does not control interest rates. The markets do.

Anything the Fed does is artificial.
 
richc said:
The Fed does not control interest rates. The markets do.

Anything the Fed does is artificial.
Click to expand...

Clearly they do control rates or they would be 8% instead of zero. The question is can they maintain control and for much longer.

And then what happens when they lose control?

I think the 2nd question will be answered a day or two after the first question.
 
richc said:
www.apmex.com

Buy 2020 1 oz American Gold Eagle BU | APMEX

Shop for a 2020 1 oz American Gold Eagle BU today at APMEX.com. Brilliant Uncirculated American Gold Eagles are perfect for investors and collectors!
www.apmex.com www.apmex.com

www.apmex.com

Buy 2020 1 oz Silver Eagle BU | APMEX

2020 1 oz American Silver Eagle BU | Largest selection & fast free shipping on orders $199+.
www.apmex.com www.apmex.com
Click to expand...
I usually buy all my gold and silver from Apmex.... Probably will again. Most likely buy 1/10th gold and 10 or so silver eagles.

I wish I had more money... Ha!
 
Varmint said:
Clearly they do control rates or they would be 8% instead of zero. The question is can they maintain control and for much longer.

And then what happens when they lose control?

I think the 2nd question will be answered a day or two after the first question.
Click to expand...

Fed rates are smoke and mirrors. The interest rate is an illusion cooked up by the government. What the US Treasury agrees to accept as an interest rate from the Fed is not an armed length transaction.

The Fed will lose control when the markets have had enough of the nonsense. Ultimately the markets determine what will happen.
 
NavelOfficer said:
Perhaps the price of the Gold Eagle to the Silver Eagle, $2064.69 : $37.60...
?
I get 54.9 : 1
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I think generally speaking they talk about that ratio in terms of spot price rather than retail price. The current gold/silver ratio at spot is about 73.5.

But you could be right on where Varmint's number comes from. Premium percentages on silver are much higher than gold so when using the retail numbers for calculating the ration it's going to be lower than spot.
 
richc said:
Fed rates are smoke and mirrors. The interest rate is an illusion cooked up by the government. What the US Treasury agrees to accept as an interest rate from the Fed is not an armed length transaction.

The Fed will lose control when the markets have had enough of the nonsense. Ultimately the markets determine what will happen.
Click to expand...

I think the way it works is the Treasury tries to auction say $100 billion in 2 year Treasuries. If bond buyers won't buy the debt, the rate goes up. If the rate goes up too much, the Fed will buy all the bonds (debt monetization). That isn't yet happening - the Fed isn't buying all the new debt that Congress creates, but under rate control, they'll basically buy all of it, or whatever the bond market doesn't want to buy at 0.6-0.8%.

So the Fed can't really lose control of rates, they can buy every single bond so rates never go up. The question is how big can the Fed's balance sheet grow before it causes (a) dollar crash as investors lose faith in the US government, or (b) there is some kind of financial market calamity. I think (a) is the likely route, and so do a lot of investors, that's why silver has doubled in a few months, and gold is at all time highs and rising.
 
richc said:
I think generally speaking they talk about that ratio in terms of spot price rather than retail price. The current gold/silver ratio at spot is about 73.5.

But you could be right on where Varmint's number comes from. Premium percentages on silver are much higher than gold so when using the retail numbers for calculating the ration it's going to be lower than spot.
Click to expand...

Yeah, they don't typically talk about the retail price ratio cause retail silver/gold is like 20% of the overall market, or maybe even less.

But I think the retail market is growing very fast in percentage, and is a good indicator of where the spot ratio is going.
 
Crazy prices, I used to buy 5x ASE's a month and refused to pay more than $18.50 a coin.. Now, not gonna happen... At least I have a "few" for a rainy day.
 
Varmint said:
I think the way it works is the Treasury tries to auction say $100 billion in 2 year Treasuries. If bond buyers won't buy the debt, the rate goes up. If the rate goes up too much, the Fed will buy all the bonds (debt monetization). That isn't yet happening - the Fed isn't buying all the new debt that Congress creates, but under rate control, they'll basically buy all of it, or whatever the bond market doesn't want to buy at 0.6-0.8%.

So the Fed can't really lose control of rates, they can buy every single bond so rates never go up. The question is how big can the Fed's balance sheet grow before it causes (a) dollar crash as investors lose faith in the US government, or (b) there is some kind of financial market calamity. I think (a) is the likely route, and so do a lot of investors, that's why silver has doubled in a few months, and gold is at all time highs and rising.
Click to expand...

You are correct. I got my buyers and sellers wrong! Either way, when there's no arms length transaction involved the numbers are rather fictitious.


:)
 
richc said:
You are correct. I got my buyers and sellers wrong! Either way, when there's no arms length transaction involved the numbers are rather fictitious.


:)
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Fiction is the right word. It's like someone watching Independence Day and not realizing it's fiction. Suddenly they realize it's fiction and their impression of the movie doesn't take years to adjust, it happens instantly. That's what will happen to the markets once people stop believing the fiction. The bond market will crash in hours, not years.
 
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You guys were talking about food costs, wife and I have been noticing this for a while now (couple years). Noticed a lot of inflation by deflation, shrinking of packages. Small price hikes on fruits and veggies and that sort of thing. I’m a bulk buyer, just bought 20lbs of ground beef since McKinnon’s had it on sale for $2.99/lb. We have a 1/4 cow in order from a local farm, and we are in on a 1/4 share of a buffalo that a buddy is going to shoot in December. The buffalo comes out to about $7/lb (it’s on a ranch)

@richc as we were talking about the other day, wife and I are doing a 1031 exchange. Closed on one new investment property and just got a second investment property under agreement. Rate on the new loan is 3.375% (we’re paying 1.5 points but that’ll pay itself back in 18 months or less depending on rent increases). Virtually unheard of. We’re also doing a cash out refi on our house to increase liquidity, just locked in at 2.99%. If anyone’s looking to do anything do it now, cause lenders are already starting to tighten requirements.

eta - on the 1031 we sold one and bought two, a 2 family in Portsmouth and currently purchasing a 4 family in Rochester. We kinda stole the Portsmouth property at just $25k over asking, and had to go $25K over asking one the Rochester 4 fam too. We got beat out on 3 other properties we bid on too.

In talking about the craziness with our contact at the 1031 company, she proceeded to tell me this is not only happening nation wide (overbidding) but daily the investors she’s working with are buying properties sight unseen. Personal speculation that it’s investors selling commercial for residential investment assets.

I’ve been trying to get my wife to allow me to give nieces and nephews a piece of silver or something for their birthdays and such, but of course they need that shiny piece of crap toy they play with for 30 seconds before going back to their tablet.

Oh and if you haven’t noticed already, the secondary market is exploding. Watch FB marketplace (the wife is always on there). People are asking crazy prices for used stuff and are either getting it or close to it cause it sells quickly.

inflation is already here
 
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Just got some proof 2020 silver eagles....always dollar cost averaging the last 12 years...now looking for some 1/4 ounce proof gold. Slow and steady :)
 
NH_Realtor said:
You guys were talking about food costs, wife and I have been noticing this for a while now (couple years). Noticed a lot of inflation by deflation, shrinking of packages. Small price hikes on fruits and veggies and that sort of thing. I’m a bulk buyer, just bought 20lbs of ground beef since McKinnon’s had it on sale for $2.99/lb. We have a 1/4 cow in order from a local farm, and we are in on a 1/4 share of a buffalo that a buddy is going to shoot in December. The buffalo comes out to about $7/lb (it’s on a ranch)

@richc as we were talking about the other day, wife and I are doing a 1031 exchange. Closed on one new investment property and just got a second investment property under agreement. Rate on the new loan is 3.375% (we’re paying 1.5 points but that’ll pay itself back in 18 months or less depending on rent increases). Virtually unheard of. We’re also doing a cash out refi on our house to increase liquidity, just locked in at 2.99%. If anyone’s looking to do anything do it now, cause lenders are already starting to tighten requirements.

I’ve been trying to get my wife to allow me to give nieces and nephews a piece of silver or something for their birthdays and such, but of course they need that shiny piece of crap toy they play with for 30 seconds before going back to their tablet.

Oh and if you haven’t noticed already, the secondary market is exploding. Watch FB marketplace (the wife is always on there). People are asking crazy prices for used stuff and are either getting it or close to it cause it sells quickly.

inflation is already here
Click to expand...

So true. I try to tell my wife that a $100 bill just isn't worth what she imagines. In a lot of people's minds the dollar is still worth what it was 10 or 20 years ago. It's hard to adjust to the new reality.
 
Varmint said:
So true. I try to tell my wife that a $100 bill just isn't worth what she imagines. In a lot of people's minds the dollar is still worth what it was 10 or 20 years ago. It's hard to adjust to the new reality.
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we left BJ’s today with maybe a quarter of the cart filled with stuff (and we try to bargain shop) and it was over $120.
 
NH_Realtor said:
You guys were talking about food costs, wife and I have been noticing this for a while now (couple years). Noticed a lot of inflation by deflation, shrinking of packages. Small price hikes on fruits and veggies and that sort of thing. I’m a bulk buyer, just bought 20lbs of ground beef since McKinnon’s had it on sale for $2.99/lb. We have a 1/4 cow in order from a local farm, and we are in on a 1/4 share of a buffalo that a buddy is going to shoot in December. The buffalo comes out to about $7/lb (it’s on a ranch)

@richc as we were talking about the other day, wife and I are doing a 1031 exchange. Closed on one new investment property and just got a second investment property under agreement. Rate on the new loan is 3.375% (we’re paying 1.5 points but that’ll pay itself back in 18 months or less depending on rent increases). Virtually unheard of. We’re also doing a cash out refi on our house to increase liquidity, just locked in at 2.99%. If anyone’s looking to do anything do it now, cause lenders are already starting to tighten requirements.

eta - on the 1031 we sold one and bought two, a 2 family in Portsmouth and currently purchasing a 4 family in Rochester. We kinda stole the Portsmouth property at just $25k over asking, and had to go $25K over asking one the Rochester 4 fam too. We got beat out on 3 other properties we bid on too.

In talking about the craziness with our contact at the 1031 company, she proceeded to tell me this is not only happening nation wide (overbidding) but daily the investors she’s working with are buying properties sight unseen. Personal speculation that it’s investors selling commercial for residential investment assets.

I’ve been trying to get my wife to allow me to give nieces and nephews a piece of silver or something for their birthdays and such, but of course they need that shiny piece of crap toy they play with for 30 seconds before going back to their tablet.

Oh and if you haven’t noticed already, the secondary market is exploding. Watch FB marketplace (the wife is always on there). People are asking crazy prices for used stuff and are either getting it or close to it cause it sells quickly.

inflation is already here
Click to expand...

By the way how is the real estate market? I would think with all those empty VRBO properties out there, certain markets should he hurting. But I'm sure the dollar deflation helps property values so it's a trade off.
 
NH_Realtor said:
You guys were talking about food costs, wife and I have been noticing this for a while now (couple years). Noticed a lot of inflation by deflation, shrinking of packages. Small price hikes on fruits and veggies and that sort of thing. I’m a bulk buyer, just bought 20lbs of ground beef since McKinnon’s had it on sale for $2.99/lb. We have a 1/4 cow in order from a local farm, and we are in on a 1/4 share of a buffalo that a buddy is going to shoot in December. The buffalo comes out to about $7/lb (it’s on a ranch)

@richc as we were talking about the other day, wife and I are doing a 1031 exchange. Closed on one new investment property and just got a second investment property under agreement. Rate on the new loan is 3.375% (we’re paying 1.5 points but that’ll pay itself back in 18 months or less depending on rent increases). Virtually unheard of. We’re also doing a cash out refi on our house to increase liquidity, just locked in at 2.99%. If anyone’s looking to do anything do it now, cause lenders are already starting to tighten requirements.

eta - on the 1031 we sold one and bought two, a 2 family in Portsmouth and currently purchasing a 4 family in Rochester. We kinda stole the Portsmouth property at just $25k over asking, and had to go $25K over asking one the Rochester 4 fam too. We got beat out on 3 other properties we bid on too.

In talking about the craziness with our contact at the 1031 company, she proceeded to tell me this is not only happening nation wide (overbidding) but daily the investors she’s working with are buying properties sight unseen. Personal speculation that it’s investors selling commercial for residential investment assets.

I’ve been trying to get my wife to allow me to give nieces and nephews a piece of silver or something for their birthdays and such, but of course they need that shiny piece of crap toy they play with for 30 seconds before going back to their tablet.

Oh and if you haven’t noticed already, the secondary market is exploding. Watch FB marketplace (the wife is always on there). People are asking crazy prices for used stuff and are either getting it or close to it cause it sells quickly.

inflation is already here
Click to expand...

Buddy and his wife sold a ski boat that needed a good amount of work on it on FB. Got $1k over asking as a bidding war broke out. One guy figured out where the lived and showed up un announced to buy it.

I forgot how many responses they got. Think it was 30 in one hour, maybe more.
 
Varmint said:
By the way how is the real estate market? I would think with all those empty VRBO properties out there, certain markets should he hurting. But I'm sure the dollar deflation helps property values so it's a trade off.
Click to expand...

The market is absolutely insane, more inflated than 2007 but different circumstances as part of this is rate driven not just greedy banks pumping out NINJA loans and selling garbage CDO's. Writing in an inspection contingency in this market on a hot property is a virtual death sentence for your offer.

We sold our vacation rental property in the lakes region, had planned it back in the fall before all the covid crap and we have another family camp in the lakes region that we own outright so wanted to take advantage of the market. We got our place (log cabin on a small lake) under contract in 3 days with multiple offers. The buyers agent just happened to be my old broker from when we lived up there. He told me how they put a place on the market on Winnisquam for $630K and did a public open house. 14 offers came in from the open house and it sold for $100K OVER asking cash no inspection 7 day close. Pure insanity, but we speculate that alot of this is driven from the lockdowns and such and if it happens again people don't want to be stuck in the city or burbs.

ETA - the buyers of our property got 2.5% on a 15 year loan which is very good for a second home.

And those VRBO properties? They're completely full, matter of fact the other family camp we have is on Winnipesaukee and we rent that on VRBO. Whenever we had a cancellation in the spring it was literally re-booked within hours if not less. Not only that, we're already 1/2 booked for next summer which is unusual for this time of year. Generally people don't start booking their summer vacations until after Christmas, but not now. People can't or won't fly so they're vacationing local. In talking to our cleaning company the owner told me she couldn't keep up with the demand, and still right now she's getting people calling trying to get on the Saturday turnover schedule.

The next couple years could easily be a great time to be a vacation rental property owner if you want to rent it, but it's alot of work to do it right. Much prefer the long term rentals and VERY happy to get our money out of a rural area and into a stable market like the seacoast.
 

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