Silver Squeeze?

WSB is aiming for a silver squeeze but what is the bet? Buying physical is not possible with the outrageous premiums.

Is SLV the one they're trying to pump? PSLV is mentioned on Reddit but you can't buy options.
I think physical is still a deal. Silver should be $100 an oz.

PSLV is easy money, emphasis on money. You won't get any physical silver unless you can afford to buy 300,000 oz. So you're betting that silver will outpace rising inflation but also the dollar can't collapse. It's a good bet if you believe in the squeeze.
 

username

Ostrich
Gold Member
Buying physical is not possible with the outrageous premiums.

It's always been pretty hard to buy silver at spot prices. The exceptions would be pawn shops owner and private deal makers which can sometimes get 25% to 30% below spot. But there is risk with that, desperate people, and overhead. Many years ago when silver was at $12 I had to pay close to $14 to get any and those were ugly generic rounds/bars.

The best available price I could find for regular non-numismatic silver right now is around $29.30/oz. So yeah that is a 16% markup (spot at $25.22/oz) but it's not too outrageous yet. I just bought some at $30.50/oz in bar form and some US Mint numismatic silver at $34/oz.

On my spreadsheets I have my silver pegged at $25/oz and anything I pay above that is a premium. In the last year I've gone kind of crazy with silver and paid a hefty premium. But at the same time I also got a bunch of stimulus checks so I kind of think of it as the government paying the premium and myself converting USD print-all-you-can monopoly money to real money.
 

joost

Kingfisher
It's always been pretty hard to buy silver at spot prices. The exceptions would be pawn shops owner and private deal makers which can sometimes get 25% to 30% below spot.

Minting a coin has a cost. I also paid $14 for American Eagle silver coins when SPOT was $12. A $2/coin mint is very reasonable. But to charge 35% above SPOT is a no-no for me. I think the train passed and it is too late to buy right now. I would wait for calm waters.

I think gold would be better option. Price is around 6.5% above SPOT (if you can find gold coins).


I bought some $26 SLV calls yesterday (expiring March 31st). If SLV goes to $50 (short squeeze dream), my options will be +10800% each. If it goes to $36 (how much they're asking for physical), I'll get +4500% on each contract.
 

zoom

Kingfisher
Gold Member
Anyone who wants the absolute best deals buying and selling should consider Craigslist. Of course, Craigslist comes with its own risks.
 

Eusebius Erasmus

Woodpecker
Sold all my BTC today. Buying silver instead.

My reasons (not financial advice):

1. Most people are not holding BTC for transactions. They are holding it for speculation aka gambling. Thus BTC's intrinsic value is lower than its price (this might change, but seems unlikely, unless everyone starts using BTC tomorrow).

2. BTC's value is always quoted relative to the USD (BTC per USD), suggesting that people's perception of its worth depends on the worth of fiat. This is related to point 1 above; people are holding BTC hoping to trade it for fiat in the future.

3. BTC ledger updates require increasingly more computing power, which only makes sense as long as the price of BTC is high enough to cover these costs. For this to happen, BTC demand must remain high.

4. The Mainstream Media keeps praising BTC, meaning something is fishy.

5. Silver has been tried and tested for millennia.

6. If people knew how leveraged the buyers of BTC are, then they would sell all of their BTC tomorrow.

7. As the police state becomes increasingly sophisticated, access to electronic transfers will become a moot point.

EDIT. Yes, some BTC ape is gonna come at me with "uh, the price is going up to 150k." Maybe, but I don't want trade a BTC for 150k of worthless fiat.
 
Last edited:

joost

Kingfisher
Sold all my BTC today. Buying silver instead.

My reasons (not financial advice):

1. Most people are not holding BTC for transactions. They are holding it for speculation aka gambling. Thus BTC's intrinsic value is lower than its price (this might change, but seems unlikely, unless everyone starts using BTC tomorrow).

2. BTC's value is always quoted relative to the USD (BTC per USD), suggesting that people's perception of its worth depends on the worth of fiat. This is related to point 1 above; people are holding BTC hoping to trade it for fiat in the future.

3. BTC ledger updates require increasingly more computing power, which only makes sense as long as the price of BTC is high enough to cover these costs. For this to happen, BTC demand must remain high.

4. The Mainstream Media keeps praising BTC, meaning something is fishy.

5. Silver has been tried and tested for millennia.

6. If people knew how leveraged the buyers of BTC are, then they would sell all of their BTC tomorrow.

7. As the police state becomes increasingly sophisticated, access to electronic transfers will become a moot point.

EDIT. Yes, some BTC ape is gonna come at me with "uh, the price is going up to 150k." Maybe, but I don't want trade a BTC for 150k of worthless fiat.

1. Completely true. It's all about price these days. It is not a pyramid but a quest to find a greater fool to hold your bags.

2. Not necessarily. If you have gold/silver, won't you change part for fiat for a present expense since few will accept it for a purchase?

3. If demand remains high, price will continue to go up. Mining rigs are getting more efficient and most of mining is done where energy cost is low.

4. When you see MSM praising BTC, stock or something else, it means it is time to SELL.

5. For sure!

6. Leverage is a good way to get REKT, specially the way BTC is so volatile.

7. BTC is also improving. Today you can use a mixer in the same wallet (Samourai Wallet).


I think everyone should have some gold, silver and BTC (among other assets). Buy low, sell high for everything. BTC went from $11k few months ago to $50k right now. If you can take profit from something volatile as BTC and move to gold/silver who's stable, I think it's a good move.

The problem I see with silver right now is the premium. Texmetals is the store I use (hard to find better service and price):
For silver, premium is 43.3% above SPOT! To sell them yours, they pay you 6% above SPOT.
So unless you can buy silver at less than 10% above SPOT, I think you'll be "buying high".
 

typtre

Robin
But the spot is the manipulated paper price. Buying at premium makes sense as long as you are not selling the silver back whilst the bloated premiums are in effect. Unless you think silver is overvalued and that it will go down in price. Seeing as it is an industrial metal always in demand, I find that unlikely.

They way I see right now is that you either buy your physical silver at a ludicrous premium or you wait and buy at a significant increase in spot price if the two markets (paper and physical) should ever coincide with each other again. Assuming there will be physical available by then.

To determine if you are buying physical silver high, I think you should also determine the historical gold:silver ratio, with and without the premium.

The Roman Empire officially set the ratio at 12:1. The ratio reached 14.2:1 in Venice in 1305 and remained at this level up until 1330 when it fell to 10:1. In 1350 it fell to 9.4:1 in some places across Europe. It climbed back to 12:1 in the 1450s.1 The U.S. government fixed the ratio at 15:1 with the Coinage Act of 1792.

Today it is at around 60:1 (spot) and 45:1 (43% premium).
 

bucky

Ostrich
But the spot is the manipulated paper price. Buying at premium makes sense as long as you are not selling the silver back whilst the bloated premiums are in effect. Unless you think silver is overvalued and that it will go down in price. Seeing as it is an industrial metal always in demand, I find that unlikely.

They way I see right now is that you either buy your physical silver at a ludicrous premium or you wait and buy at a significant increase in spot price if the two markets (paper and physical) should ever coincide with each other again. Assuming there will be physical available by then.

To determine if you are buying physical silver high, I think you should also determine the historical gold:silver ratio, with and without the premium.



Today it is at around 60:1 (spot) and 45:1 (43% premium).
It's always been my understanding that the difference in the modern silver-to-gold ratio compared to previous historical eras has a lot to do with the Comstock Load. That is, there is vastly more silver available now than there was before vast amounts of it were mined in Nevada in the mid-to-late-19th century.

 

typtre

Robin
It's always been my understanding that the difference in the modern silver-to-gold ratio compared to previous historical eras has a lot to do with the Comstock Load. That is, there is vastly more silver available now than there was before vast amounts of it were mined in Nevada in the mid-to-late-19th century.

Interesting. I did not know about that. But the solution to low prices are low prices. Silver as I understand it is mostly mined as a byproduct of other metals today. Thus, I think we are entering silver deficit territory.

Demand for silver from the automotive and solar sectors is going nowhere but up. Broad use of silver in many other capacities—including ones yet to be discovered—will only add to the demand coming from literally thousands of industrial users.

This is fine as long as new supply can keep up. But that’s the problem…

Data is starting to come in regarding global mine output from 2020. This is still preliminary, so there will likely be minor changes to the final numbers, but this is what consultancy Metals Focus estimates the silver mining industry produced last year, as well as the prior decade.

A 12.6% drop in four years is a big decline for a key industrial metal. And this is a global trend.

 
It's always been my understanding that the difference in the modern silver-to-gold ratio compared to previous historical eras has a lot to do with the Comstock Load. That is, there is vastly more silver available now than there was before vast amounts of it were mined in Nevada in the mid-to-late-19th century.

The Comstock Lode produced at the highest estimates 300 million ounces of silver, which would make up about 10% of today's supply. While that is big, it's not nearly large enough to justify a jump from 1:15 to 1:60.
 

bucky

Ostrich
The Comstock Lode produced at the highest estimates 300 million ounces of silver, which would make up about 10% of today's supply. While that is big, it's not nearly large enough to justify a jump from 1:15 to 1:60.
True, but I thought it got the gap in ratio going back then and made it easier to manipulate the ratio into what it is nowadays.

I don't know what to think about silver. I've been following precious metals pretty closely for almost two decades now, and on the one hand, the prices do feel heavily manipulated. On the other hand, in all the time I've been following them there's almost always been a chorus of voices promising that either silver or gold or both are going to the moon any day now, and it never really happens.
 
On the other hand, in all the time I've been following them there's almost always been a chorus of voices promising that either silver or gold or both are going to the moon any day now, and it never really happens.

Most of those opinions are either metal selling shills or inflation selling shills. We might see more price increases if things get rocky again. However, overall, gold and silver remain an insurance policy, imho.
 

Eusebius Erasmus

Woodpecker
PSLV is easy money, emphasis on money. You won't get any physical silver unless you can afford to buy 300,000 oz. So you're betting that silver will outpace rising inflation but also the dollar can't collapse. It's a good bet if you believe in the squeeze.

Buying physical is always better. PSLV only delivers physical if you purchase 10,000 shares or more, which amounts to ~$100,000. If I have that much to invest, I'll invest in PMs.

Also, a big red flag: Sprott (manager of PSLV) stores its silver in the Royal Canadian Mint's Ottawa and Winnipeg vaults.

If the Government of Canada decides to confiscate gold and silver, you're screwed. This is not unprecedented: governments have historically confiscated their citizens' precious metals.

I also understand that Sprott charges $6/oz delivery or whatever. PSLV is overhyped.
 

zoom

Kingfisher
Gold Member
I don't know what to think about silver. I've been following precious metals pretty closely for almost two decades now, and on the one hand, the prices do feel heavily manipulated. On the other hand, in all the time I've been following them there's almost always been a chorus of voices promising that either silver or gold or both are going to the moon any day now, and it never really happens.

It's tough to predict short-term prices. This is why I like mining stocks that pay dividends. You can own a mining stock and receive dividends while you wait for the metal prices to explode. Of course mining stocks are riskier than owning the actual metal but I think it's good to invest in both.
 

zoom

Kingfisher
Gold Member
Buying physical is always better. PSLV only delivers physical if you purchase 10,000 shares or more, which amounts to ~$100,000. If I have that much to invest, I'll invest in PMs.

Also, a big red flag: Sprott (manager of PSLV) stores its silver in the Royal Canadian Mint's Ottawa and Winnipeg vaults.

If the Government of Canada decides to confiscate gold and silver, you're screwed. This is not unprecedented: governments have historically confiscated their citizens' precious metals.

I also understand that Sprott charges $6/oz delivery or whatever. PSLV is overhyped.

Sprott is a trustworthy company. I agree that buying physical is better but if you want to go the ETF route then PSLV seems to be the best option.
 

Eusebius Erasmus

Woodpecker
Sprott is a trustworthy company. I agree that buying physical is better but if you want to go the ETF route then PSLV seems to be the best option.
I agree that Sprott is trustworthy, but I just don't think it's worth going the ETF route even with them.

I didn't mean to imply that they're shady; rather, the vaults that they store in are government vaults, and I don't trust the Canadian government.
 
Last edited:

joost

Kingfisher
If SPOT price is manipulated by paper, buying gold now (6% premium) is a better alternative than silver. If you have to pay 50% premium to get your physical silver, you'll start way behind to catch up.

I bought gold/silver/bitcoin when I thought the price was good for me. Sometimes it can take many months or even years. Buying silver at $36/oz right now is a bad idea in my opinion.

I also think silver might go up. Options as an asymmetrical bet is the one that interest me. If price explodes, you can make a good ROI.
Buy SLV options expiring in 2-months. After a month, sell them and re-buy a 2-month contract. You'll spend around $30/month for each contract.
 

Eusebius Erasmus

Woodpecker
If SPOT price is manipulated by paper, buying gold now (6% premium) is a better alternative than silver. If you have to pay 50% premium to get your physical silver, you'll start way behind to catch up.

I bought gold/silver/bitcoin when I thought the price was good for me. Sometimes it can take many months or even years. Buying silver at $36/oz right now is a bad idea in my opinion.

I also think silver might go up. Options as an asymmetrical bet is the one that interest me. If price explodes, you can make a good ROI.
Buy SLV options expiring in 2-months. After a month, sell them and re-buy a 2-month contract. You'll spend around $30/month for each contract.
Just hold both. Better to diversify your assets than put all your money on one pony.
 
Top