# You shouldn't buy silver. Ever. **URL:** \ **Category:** Miscellaneous and Personal Stuff I Must Share\ **Created:** [November 17, 2013, 1:46am UTC](https://boards.straightdope.com/t/you-shouldnt-buy-silver-ever/674099 "2013-11-17T01:46:16Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![Joey\_P](https://avatars.discourse-cdn.com/v4/letter/j/919ad9/32.png) [@Joey\_P](https://boards.straightdope.com/u/Joey_P)\ **Post date:** [November 17, 2013, 2:52am UTC](https://boards.straightdope.com/t/you-shouldnt-buy-silver-ever/674099/21 "2013-11-17T02:52:55Z")
> [@Bear\_Nenno](#): > > Are you going to make any attempt at all to learn anything here? Or are you just content at showing everyone how ignorant you are about commodities and real estate? As I said in post 11. This would be a lot easier if he just started over and ask the question he actually wanted to answer to since buying and selling precious metals (and not paper the actual metal) really have nothing at all to do flipping houses that you live in. This is a great example of asking the wrong question instead of just asking the question that they actually want the answer to. I like to reread [this thread](http://boards.straightdope.com/sdmb/showthread.php?t=623538) once in a while. ---
**Author:** ![Joey\_P](https://avatars.discourse-cdn.com/v4/letter/j/919ad9/32.png) [@Joey\_P](https://boards.straightdope.com/u/Joey_P)\ **Post date:** [November 17, 2013, 2:59am UTC](https://boards.straightdope.com/t/you-shouldnt-buy-silver-ever/674099/22 "2013-11-17T02:59:45Z")
> [@Chronos](#): > > Actually, the precious metal markets are mostly based on the same sense of ownership as stocks are. If you invest in a stock, you’ll get a piece of paper that says that you own so many shares of stock. If you invest in gold, you’ll get a piece of paper that says you own so many ounces of gold. You can, in principle, get actual lumps of metal delivered to you, but that’s not the way it usually works. The only people I know that had actual lumps of metal delivered to them are hardcore righties and bought them right before Obama took office. Funny thing is, you’d never know it talking to them, they’re perfectly normal people, very smart, own businesses, doing very well, aren’t politically outspoken…just very upset about Obama taking office and convinced that the economy was going to collapse. It’s funny how bent out of shape people get when it comes to politics. I’ve thought about buying some gold/silver/palladium, but only just to see/have/trade it. Not because I want to spend it in the post apocalyptic economy. ---
**Author:** ![samclem](https://avatars.discourse-cdn.com/v4/letter/s/a9a28c/32.png) [@samclem](https://boards.straightdope.com/u/samclem)\ **Post date:** [November 17, 2013, 3:01am UTC](https://boards.straightdope.com/t/you-shouldnt-buy-silver-ever/674099/23 "2013-11-17T03:01:43Z")
> [@Superhal](#): > > This thought just occured to me: > > Lets say the spot price of silver is $20/ozt. You have 1 ozt that you bought for $20. > > -if the spot price decreases to $10, you can’t sell it because you would take a loss. > > -if the spot price increases to $30, you can’t sell it because you can only replace it at $30. There’s your flaw. You sell it at $30 and take a profit. Buy it back when it is at $20. ---
**Author:** ![Chimera](https://avatars.discourse-cdn.com/v4/letter/c/8e8cbc/32.png) [@Chimera](https://boards.straightdope.com/u/Chimera)\ **Post date:** [November 17, 2013, 3:38am UTC](https://boards.straightdope.com/t/you-shouldnt-buy-silver-ever/674099/24 "2013-11-17T03:38:49Z")
Oh my. We’re at that again. To quote a very wise man: Let me explain. No, there is too much. Let me sum up; “Money” is a concept. A medium of exchange by which we exchange widgets for chickens for hours of work for automobiles. There is no such physical thing as “money”. It is a shared illusion of the world by which we assign a certain value and then use it to exchange one thing for another. Deep in the recesses of time, there were no coins, nor was gold and silver necessarily the primary means of exchange. Barter ruled the day. But as civilization advanced, it became necessary to stabilize and normalize exchange rates, and also be able to purchase both chickens in one area, and cinnamon in another, without carrying around 500 different things to try to trade. As metallurgy became more common, metals became a more common means of exchange, usually in the form of trade goods or jewelry, but in bulk as economy of scale increases. Coinage came pretty late to the game. Paper money by itself is pretty old, indicating a certain ‘value’, just as coins do. The metal in the coins was not ‘money’ any more than the paper in the bills was ‘money’. It only represented the concept of a certain amount of exchange value. Over time, convenience, economy of scale, scarcity of resources and technology has moved the mediums of exchange from metal coins to paper bills to, increasingly, mere electrons in a computer. As I keep repeating, none of these things is “money”, they only represent a a certain amount of exchange value. So you can be paid for your labor and be able to pay taxes and buy things you want and need. So you can sell a pile of beans and buy a chicken without having to trade N number of beans for each chicken directly. So why do precious metals have value? Well, Gold is valuable because of it’s rarity, physical properties, beauty and… because people think it has value. It isn’t money, and if we suddenly found Erebor amounts of Gold lying around, the price would drop by a major fraction. Silver, Platinum, same deal. If Iron was as rare as Gold, it’s price would be correspondingly high. But it still wouldn’t be “money”. ---
**Author:** ![Cheshire\_Human](https://avatars.discourse-cdn.com/v4/letter/c/5f8ce5/32.png) [@Cheshire\_Human](https://boards.straightdope.com/u/Cheshire_Human)\ **Post date:** [November 17, 2013, 3:58am UTC](https://boards.straightdope.com/t/you-shouldnt-buy-silver-ever/674099/25 "2013-11-17T03:58:52Z")
> [@Superhal](#): > > Is my reasoning flawed? Very. You’re basically arguing that if you ever come into possession of anything at all, no matter how you got it, you can never sell or otherwise dispose of it. You’ve just argued that we must all become hoarders. ---
**Author:** ![Loach](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/loach/32/350_2.png) [@Loach](https://boards.straightdope.com/u/Loach)\ **Post date:** [November 17, 2013, 5:58am UTC](https://boards.straightdope.com/t/you-shouldnt-buy-silver-ever/674099/26 "2013-11-17T05:58:57Z")
Sell your gold. When the zombie apocalypse happens ammunition will be a better commodity. ---
**Author:** ![GreenElf](https://avatars.discourse-cdn.com/v4/letter/g/9de053/32.png) [@GreenElf](https://boards.straightdope.com/u/GreenElf)\ **Post date:** [November 17, 2013, 6:54am UTC](https://boards.straightdope.com/t/you-shouldnt-buy-silver-ever/674099/27 "2013-11-17T06:54:51Z")
The idea is to buy at $20, sell at $30, showing a profit of $10, then mutter to yourself about the profit you could have made when the price reaches $50. ---
**Author:** ![Little\_Nemo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/little_nemo/32/3120_2.png) [@Little\_Nemo](https://boards.straightdope.com/u/Little_Nemo)\ **Post date:** [November 17, 2013, 8:08am UTC](https://boards.straightdope.com/t/you-shouldnt-buy-silver-ever/674099/28 "2013-11-17T08:08:39Z")
> [@Superhal](#): > > The premise comes from real estate. If the market is up on a home that is occupied by the seller, they can’t sell it because they have to buy a new home at the higher rate, and thus lose money vs keeping the original home. It’s a weak analogy. You need a place to live. You don’t need to own a supply of precious metals. The basic theory of investment rules here: buy low, sell high. Ideally, you bought silver when it was cheap. You held it until it became expensive and then you sold it. But you don’t turn around and buy more while the price is still high. You just go through a period when you don’t own any silver. Eventually if the price drops back down, you can buy some more and repeat the cycle. ---
**Author:** ![panache45](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/panache45/32/64_2.png) [@panache45](https://boards.straightdope.com/u/panache45)\ **Post date:** [November 17, 2013, 9:41am UTC](https://boards.straightdope.com/t/you-shouldnt-buy-silver-ever/674099/29 "2013-11-17T09:41:21Z")
Way back in the early 70s I bought some $20 gold pieces (double eagles). I think gold was around $44/ounce at the time, so the coins may have cost me $50 a piece. In the several years since, I sold some them when I needed the money . . . at a huge profit. I still have some of them, plus newer ones that I got at a greater price. Are you saying I should never have sold any? Then why do I have them? ---
**Author:** ![JBDivmstr](https://avatars.discourse-cdn.com/v4/letter/j/b4bc9f/32.png) [@JBDivmstr](https://boards.straightdope.com/u/JBDivmstr)\ **Post date:** [November 17, 2013, 1:16pm UTC](https://boards.straightdope.com/t/you-shouldnt-buy-silver-ever/674099/30 "2013-11-17T13:16:08Z")
> [@Chimera](#): > > Oh my. We’re at that again. > > To quote a very wise man: Let me explain. No, there is too much. Let me sum up; > > “Money” is a concept. A medium of exchange by which we exchange widgets for chickens for hours of work for automobiles. There is no such physical thing as “money”. It is a shared illusion of the world by which we assign a certain value and then use it to exchange one thing for another. … > > … > > Over time, convenience, economy of scale, scarcity of resources and _ **technology has moved the mediums of exchange from metal coins to paper bills to, increasingly, mere electrons in a computer** _. … (bolding mine) Exactly. On Sept. 25, I went to my bank and ‘wired’ money to a brokerage to set up an account and I then bought 2000 shares of stock @ $4.66/share. On Nov. 8, I sold 1000 shares @ $9.58/share. On Nov. 14, I sold the other 1000 shares @ $12.06/share. I’ve made a profit of $12,320.00, and I have yet to see, or lay my hands on, an _ **actual** _ ‘dollar bill’. 😃 ---
**Author:** ![Miller](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/miller/32/481_2.png) [@Miller](https://boards.straightdope.com/u/Miller)\ **Post date:** [November 17, 2013, 3:39pm UTC](https://boards.straightdope.com/t/you-shouldnt-buy-silver-ever/674099/31 "2013-11-17T15:39:22Z")
> [@Superhal](#): > > The premise comes from real estate. If the market is up on a home that is occupied by the seller, they can’t sell it because they have to buy a new home at the higher rate, and thus lose money vs keeping the original home. That only makes sense if you’re selling one house, and buying another across the street. But real estate prices fluctuate wildly depending on where you’re buying. If I owned a modest home right now in San Francisco, I could sell it and buy half of Ohio. ---
**Author:** ![TBG](https://avatars.discourse-cdn.com/v4/letter/t/c89c15/32.png) [@TBG](https://boards.straightdope.com/u/TBG)\ **Post date:** [November 17, 2013, 11:30pm UTC](https://boards.straightdope.com/t/you-shouldnt-buy-silver-ever/674099/32 "2013-11-17T23:30:59Z")
> [@Loach](#): > > Sell your gold. When the zombie apocalypse happens ammunition will be a better commodity. Yeah, but what if it’s a werewolf apocalypse? Then you’ll be wishing you’d bought silver. ---
**Author:** ![AncientHumanoid](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ancienthumanoid/32/278_2.png) [@AncientHumanoid](https://boards.straightdope.com/u/AncientHumanoid)\ **Post date:** [November 17, 2013, 11:33pm UTC](https://boards.straightdope.com/t/you-shouldnt-buy-silver-ever/674099/33 "2013-11-17T23:33:08Z")
> [@TBG](#): > > Yeah, but what if it’s a werewolf apocalypse? Then you’ll be wishing you’d bought silver. Not at _that_ price. ---
**Author:** ![Bear\_Nenno](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bear_nenno/32/3358_2.png) [@Bear\_Nenno](https://boards.straightdope.com/u/Bear_Nenno)\ **Post date:** [November 18, 2013, 12:10am UTC](https://boards.straightdope.com/t/you-shouldnt-buy-silver-ever/674099/34 "2013-11-18T00:10:21Z")
> [@Miller](#): > > That only makes sense if you’re selling one house, and buying another across the street. But real estate prices fluctuate wildly depending on where you’re buying. And even then, depending on the condition of the house across the street and a ton of variables, it is even possible to sell the one you’re in and use the profit to improve the one across the street and make another profit. The OP’s confusion is itself confusing me. I must have fucked up badly, though. Since I bought the house I’m currently living in for 100,000 in 2011 and after putting only 12,000 worth of improvements into it, it’s on the market for 142,000. And after it’s sold, I may even :gasp: buy another house! Insane, right? ---
**Author:** ![Spectre\_of\_Pithecanthropus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/spectre_of_pithecanthropus/32/12343_2.png) [@Spectre\_of\_Pithecanthropus](https://boards.straightdope.com/u/Spectre_of_Pithecanthropus)\ **Post date:** [November 18, 2013, 1:05am UTC](https://boards.straightdope.com/t/you-shouldnt-buy-silver-ever/674099/35 "2013-11-18T01:05:39Z")
There was (or is) a precious metals investment guru in L.A. called Joe Battaglia, who used to have a brief talk radio segment on AM radio every afternoon. His default strategy is dollar cost averaging, which means that regardless of the current spot you spend the same amount of money, say $100 on your metals investment at regular intervals. In a sense this might insulate you from wild price fluctuations, because your overall gain is compared against your ongoing averaged acquisition cost, rather than the spot price at a single moment. Having said that silver is a commodity like anything else. If a new silver region is discovered the market value of silver everywhere in the world can plummet, as happened around 1870 with the Comstock Lode. It’s interesting to recall that in the early 19th century, when a number of countries defined their currency in terms of both silver and gold, a gold/silver ratio of about 15:1 was typical. Today, at the moment of posting, the gold to silver ratio is above 62. Anyone who held silver over the historical period lost very badly. Not surprisingly, however, the people who want to sell you silver often say this is just why you should buy it right now, arguing that silver will soon return to its historical average range against gold. ---
**Author:** ![Chimera](https://avatars.discourse-cdn.com/v4/letter/c/8e8cbc/32.png) [@Chimera](https://boards.straightdope.com/u/Chimera)\ **Post date:** [November 18, 2013, 1:27am UTC](https://boards.straightdope.com/t/you-shouldnt-buy-silver-ever/674099/36 "2013-11-18T01:27:58Z")
Or more likely that Gold is massively overpriced. ---
**Author:** ![RickJay](https://avatars.discourse-cdn.com/v4/letter/r/bb73d2/32.png) [@RickJay](https://boards.straightdope.com/u/RickJay)\ **Post date:** [November 18, 2013, 1:37am UTC](https://boards.straightdope.com/t/you-shouldnt-buy-silver-ever/674099/37 "2013-11-18T01:37:52Z")
The OP is so confusingly weird I can’t tell if it’s serious. If I buy 1000 ounces of silver at $20/ounce, and sell it at $30/ounce, I have one thousand dollars I did not have before (minus some transaction costs, so let’s say $980.) How is that a bad thing? ---
**Author:** ![garygnu](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/garygnu/32/2924_2.png) [@garygnu](https://boards.straightdope.com/u/garygnu)\ **Post date:** [November 18, 2013, 1:43am UTC](https://boards.straightdope.com/t/you-shouldnt-buy-silver-ever/674099/38 "2013-11-18T01:43:58Z")
> [@RickJay](#): > > … > If I buy 1000 ounces of silver at $20/ounce, and sell it at $30/ounce, I have one thousand dollars I did not have before (minus some transaction costs, so let’s say $980.) How is that a bad thing? You wouldn’t own any silver if you did that. Duh. ---
**Author:** ![Count\_Blucher](https://avatars.discourse-cdn.com/v4/letter/c/c5a1d2/32.png) [@Count\_Blucher](https://boards.straightdope.com/u/Count_Blucher)\ **Post date:** [November 18, 2013, 1:59am UTC](https://boards.straightdope.com/t/you-shouldnt-buy-silver-ever/674099/39 "2013-11-18T01:59:49Z")
> [@NoClueBoy](#): > > Not at _that_ price. It could be worse. It could be colloidal silver. It’d be less money & you would be assured that werewolves would never touch you “there”. “…But Sir, colloidal silver has No Meaningful Medical Value at All…” “Shut up and fill up that enema bag. You’ll be well paid out of your share…” ---
**Author:** ![penultima\_thule](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/penultima_thule/32/3833_2.png) [@penultima\_thule](https://boards.straightdope.com/u/penultima_thule)\ **Post date:** [November 18, 2013, 2:00am UTC](https://boards.straightdope.com/t/you-shouldnt-buy-silver-ever/674099/40 "2013-11-18T02:00:28Z")
> [@RickJay](#): > > If I buy 1000 ounces of silver at $20/ounce, and sell it at $30/ounce, I have one thousand dollars I did not have before (minus some transaction costs, so let’s say $980.) How is that a bad thing? Not bad but could be a whole lot better, indeed I’d broker that trade on your behalf. You sell me those 1000 ounces and I’ll cover your costs plus a nice clear margin for you with a bankers draft for $22,000. Then I’ll sell those 1000 ounces spot at $30 and magnamiously cover all the transaction costs. 🆒 You win; me WIN! [Previous page](https://boards.straightdope.com/t/you-shouldnt-buy-silver-ever/674099.md?page=1) [Next page](https://boards.straightdope.com/t/you-shouldnt-buy-silver-ever/674099.md?page=3)