Open question - Financial

[TeeDee]

LOL!
But no.

The only coins still currently in circulation which will have any true lasting value are the pre-1992 one and two pence coins which are made out of real copper.

I'm being slightly pedantic. But its a mix - Copper ( 97%) and Zinc ( 2.5 % ) , Tin ( 0.5 )

"When they were initially minted, the 1 penny and 2 pence coins were minted in bronze with a composition of 97% copper, 2.5% zinc, and 0.5% tin.

This composition was used from 1971 until September 1992. Increasing metal prices around the world necessitated the coin’s composition to change. Since 1992, the coins have been minted in steel and electroplated in copper, causing them to become magnetic.


The 1 penny (1p) and 2 pence (2p) coins came into circulation on February 15th, 1971, the day British currency became decimalised. They are the only two denominations made to the same size specifications from their creation to the present day."

What Are UK Coins Made From? - The Coin Expert

The UK has a variety of different coins, but what exactly is each coin made from? Find out here today at the Coin Expert.

thecoinexpert.co.uk

 

[Broch]

I'm being slightly pedantic. But its a mix - Copper ( 97%) and Zinc ( 2.5 % ) , Tin ( 0.5 )

"When they were initially minted, the 1 penny and 2 pence coins were minted in bronze with a composition of 97% copper, 2.5% zinc, and 0.5% tin.

This composition was used from 1971 until September 1992. Increasing metal prices around the world necessitated the coin’s composition to change. Since 1992, the coins have been minted in steel and electroplated in copper, causing them to become magnetic.


The 1 penny (1p) and 2 pence (2p) coins came into circulation on February 15th, 1971, the day British currency became decimalised. They are the only two denominations made to the same size specifications from their creation to the present day."

What Are UK Coins Made From? - The Coin Expert

The UK has a variety of different coins, but what exactly is each coin made from? Find out here today at the Coin Expert.

thecoinexpert.co.uk

Yep, it still upsets me when 5p pieces get stuck to my phone case - it feels cheap somehow

 

[Falstaff]

So are there two near-future scenarios ?
1) The CME/Theoretical silver holdings market totally collapses - Leaving the big sharks and companies to deal privately. Private little guys will be unable to sell at decent conversion rates unless its a desperate disaster/survival world.
2) Too-big to lose banks and countries continue in denial and find a way to rig the market/ devalue silver.
In either case does that mean that small-time holders of real or theoretical silver will suffer a significant drop in value? In which case selling now at the top of the market would be a good call?

 

[TeeDee]

In either case does that mean that small-time holders of real or theoretical silver will suffer a significant drop in value? In which case selling now at the top of the market would be a good call?

Why do you think that?

Top of the Market??

 

[HorseGuy]

So are there two near-future scenarios ?
1) The CME/Theoretical silver holdings market totally collapses - Leaving the big sharks and companies to deal privately. Private little guys will be unable to sell at decent conversion rates unless its a desperate disaster/survival world.
2) Too-big to lose banks and countries continue in denial and find a way to rig the market/ devalue silver.
In either case does that mean that small-time holders of real or theoretical silver will suffer a significant drop in value? In which case selling now at the top of the market would be a good call?

In both situations you are forgetting one important factor - the SLV ETF on screen 'paper silver' accounting tricks which are currently being used to suppress the price of silver only work while there is still enough physical silver available to satisfy industrial demand. Once the physical silver at metal exchanges runs out and there is not enough left to go round a new pricing mechanism will immediately kick in.

Remember that industrial demand for silver has been continuously and rapidly increasing for years while at the same time mined production of silver has been continuously decreasing. This has caused the existing stockpiles of silver in the metals exchanges to become depleted. These stockpiles are almost empty and when they do run out (probably within a few months) the industries who require a continuous supply physical silver to run their operations will be willing to pay whatever it takes to get their hands on the real stuff or face going out of business. The empty paper promises of futures ETFs will become worthless and only people who are able to supply real physical silver will get paid.

Remember that there is not enough mined production silver to go around at current levels and increasing the mining supply will take many years to come online. Some industries are going be forced to go without and the limited silver which is available will go to the highest bidder at a much higher price than what it is currently being traded at. The 70% increase we have seen in the price of silver over the past six months is nothing compared to what will happen once the existing stockpiles run out. Who knows how high the price is going go to then but it is not unreasonable to expect real physical silver to be priced somewhere in the multiple hundreds of dollars per oz by the end of next year.

 

[GreyCat]

All this makes me think of a quotation- cannot remember where from- "when will they realise that you cannot eat money?"

I'm afraid that I cannot get excited or enthusiastic about a market mania that sees the price of a useful metal/mineral/commodity/climb to stupid levels, although it's interesting from the "people watching" point of view. Whether the sobject of the mania be silver, neodymium, rhodium, platinum, or even coffee. IMO, the only people who really get something out of it are the big speculators who are calling the shots- everyone else (producers, users) tends to lose out.

Each to their own, but I always remember that for every person who benefits from a speculative bubble, many more lose out.

GC

 

[HorseGuy]

All this makes me think of a quotation- cannot remember where from- "when will they realise that you cannot eat money?"

I'm afraid that I cannot get excited or enthusiastic about a market mania that sees the price of a useful metal/mineral/commodity/climb to stupid levels, although it's interesting from the "people watching" point of view. Whether the sobject of the mania be silver, neodymium, rhodium, platinum, or even coffee. IMO, the only people who really get something out of it are the big speculators who are calling the shots- everyone else (producers, users) tends to lose out.

Each to their own, but I always remember that for every person who benefits from a speculative bubble, many more lose out.

GC

A speculative bubble?

The 'magnificent seven' AI companies which are currently propping up in the stock markets are a classic example of a speculative bubble. What’s happening with silver is not. With silver it is real world industrial supply/demand dynamics. The demand for silver is increasing while supply is reducing. This is just a physical reality of the electronics dependent world that we live in now. A silver shortage is going to happen and there is nothing either you, me or anyone else can do to change this situation.

So it’s inevitable that anybody who holds a bit of the limited amount of physical silver which will be left once the metal exchanges run out will profit from selling what they hold into a tight, limited supply market. It’s as simple as that really and it’s your choice if you would rather the person holding some silver to be you or someone else. Either way someone will be holding it and there is nothing morally right or wrong either way.

 

[Keith_Beef]

All this makes me think of a quotation- cannot remember where from- "when will they realise that you cannot eat money?"

I'm afraid that I cannot get excited or enthusiastic about a market mania that sees the price of a useful metal/mineral/commodity/climb to stupid levels, although it's interesting from the "people watching" point of view. Whether the sobject of the mania be silver, neodymium, rhodium, platinum, or even coffee. IMO, the only people who really get something out of it are the big speculators who are calling the shots- everyone else (producers, users) tends to lose out.

Each to their own, but I always remember that for every person who benefits from a speculative bubble, many more lose out.

GC

While it's true that you can eat paper money, it isn't very good for you.

I bought some fictional silver a few weeks ago at around €40 a unit and sold it this morning at €49 a unit, made myself a little profit, after fees, of a shade over €50.

That'll put some butter in my parsnips, which I can very definitely eat.

 

[Falstaff]

I think the Speculative bubble referred to are those investing in paper silver. Those like Keith, who are aware and not too greedy, the paper silver before it potentially crashes. They will have butter for their parsnips, those left holding worthless paper will go hungry.

Going with the mining/demand imbalance, thank you for the explanation, make perfect sense.
If the paper silver market ceases to exist, buyers of large quantities for industry and holders of large stocks will as stated, trade privately at huge prices - but how and to whom, will the "householder" be able to sell their small silver holding?
The big large stock guys will not be interested in small quantities and will not offer very good terms, (albeit still offer profitable price), but at well below the private industrial market rates.
Jewelers will probably migrate to selling jewelery in alternative metals (as at present), and maybe old jewelry. The Brummie gold/silver dealers (for example) will align their price offers with those of the big guys as it means increased profits. It will take them time to amass enough physical stock to be of interest to the major players, and probably there will be inter-dealer deals being done to speed this up.
I therefore wonder if this is close to the top of the market for the small guy, as TC asks. For sure there will be some fat left for small stockholders, but I suspect not much.
Industry is not blind to this risk, and manufacturers probably have an alternative solution, at a higher cost than present silver, but at less than the future silver price.

This thread is a long way from bushcraft...unless for those who lose their home aswell, due to the paper silver bubble....

 

[HorseGuy]

buyers of large quantities for industry and holders of large stocks will as stated, trade privately at huge prices - but how and to whom, will the "householder" be able to sell their small silver holding?

There won't be enough silver for all of the industries so some of them will simply be forced to go without and they will either go bust or find an alternative workaround using less silver. The biggest and richest industries will probably buy direct from the refineries themselves once the metal exchanges are empty. The refineries don't care where the silver comes from and will buy at whatever the current market value is. The market value for different forms of silver varies depending on how much energy and work will be required to process it into the large 99.9% pure bars which is the finished prodcut they sell on to industries to use.

The cheapest/lowest value form of silver for a refinery comes in the form of unprocessed or partly processed metal ore straight from a mine. Metal ore mixed with rock is the cheapest because it requires the most energy and work to convert it into large 99.9% pure bars. Next is the fairly high purity silver alloys (usually around 80-90% pure silver) which comes in the form of recycled jewelry, cutlery, orniments or old coins. Finally the most valuable form of silver for refineries is 99.9% pure silver in the form of investment grade coins and bars. 99.9% pure investment grade silver is worth the most to refineries because it only needs to be melted and recast without requiring the rest of expensive refinement process to convert it into 99.9% pure bars.

'Householders' and other small investors can already sell their silver to refineries via middle men companies such as bullion shops or other companies who buy lots of small amounts from people then sell this larger collection in bulk direct to the refineries. You will have already heard their adverts on the radio or seen them advertising in magazines or on junk mail through your door offering to buy your old jewlery or other silver and gold from you for cash.

 

[HorseGuy]

If current trends continue silver will be the second highest asset by global market cap value before the end of this month pushing Nvidia down into third place. Yet there's still hardly any mention about this in the mainstream media. Even in the Financial Times it's crickets. Anyone else starting to think they're not going to tell us until it's too late?

Edit - the word "no" changed to "hardly any"

 

[slowworm]

The BBC ran this on their front page a couple of days ago. Not the best way to keep a secret.

Why has the price of silver hit a record high? - https://www.bbc.co.uk/news/articles/c62vn22523xo

 

[demented dale]

The BBC ran this on their front page a couple of days ago. Not the best way to keep a secret.

Why has the price of silver hit a record high? - https://www.bbc.co.uk/news/articles/c62vn22523xo

The record high was in 1980. it just passed the 1980 price this week but the buying power was x4 then. I dont know what all the fuss is about. It has got a very long way way to go to reach that.

 

[Falstaff]

I find that a lot of folk don't actually take much in about BBC articles or consider the wider impact. The BBC article highlights in bold a statement at the start, most read that, and then switch off. The real impact is only in para 2, and even then it is quite muted.

In a similar way, the Gaza attack and war was not a surprise to me. The BBC had reported several years prior, the problems Hamas command was having restraining their angry young local groups from making individual attacks on Israel.
Again, second para, Hamas did it by promising that they had something bigger in the pipeline, even gave a timescale, and diverted the groups attention by getting them to practice dummy attacks on ply tanks etc etc.
The question there is, if even I knew that, how could Israeli Intelligence not have known,... or did they?

 

[HorseGuy]

Yesterday the FED announced that they're about to start up the Quantitative Easing printing press again. They were using terms like "technical buying" and "managing market liquidity" but the result is still QE no matter what name they try to call it. $40 billion new dollars are about to be digitally created out of thin air which will result in an increase in inflation due to the debasement of the dollar. That's just for starters. It's a pretty sure bet they'll be forced to do more QE in the coming months and years to prevent the whole global financial system from ceasing up like it almost did in 2008 due to a lack of liquidity.

...and whatever the FED does the other western central banks usually follow suit shortly afterwards too. So it's highly likely that sometime in the new year the Bank of England and EU central bank will also announce that they're going to be restarting QE (by another name) as well. Hyperinflation end game here we come...?

 

[Falstaff]

Madness, they're just kicking the can further down the road. Now the US has said they will, for sure the rest of Europe will do the same. Wonder if the UK foresaw this or were given the heads up before the last Budget. The Chancellor made several references to a reserve for a future potential event.

 

[HorseGuy]

Wonder if the UK foresaw this or were given the heads up before the last Budget.

Absolutely yes. If myself and other people could look at the data and see it coming saw then the FED and the other central banks who all talk to each other could see it coming too. Oh yes they would know for sure.

Since the last round of QE injected new currency which happened a few years ago during the covid period the overnight banking reserves have gradually drained down to a level of almost nothing now. Since the covid QE printed reserves have now all but run out they're having to begin injecting new currency into the banking system again to prevent it from locking up due to a lack of liquidity. Without excess liquidity the whole banking system would literally grind to a halt and stop functioning. Just think what would happen if no transactions were able to take place between banks. There would literally be a complete and total banking system collapse right across the board. It would be total chaos and the governments/central banks would rather inflate their currencies away to nothing than let that happen.

To learn more about banking reserves you could watch Rafi Farber on Youtube. A rather odd and eccentric character for sure but he is very clever and has a good understanding about how the behind the scenes plumbing of the banking system functions. He occasionally make videos about it and explains what is a rather complex subject in relativity easy to understand manner. He also has a cracking sense of humor too. I'll see if I can find one of his videos on the subject for you and post a link to it below.

 

[HorseGuy]

The last time Rafi made a video looking at banking reserves data was over a month ago.

 

[Dan00001]

I paid £170 for 3x 1oz Britannias last week, you'd have to pay around £240 today

 

[Dan00001]

So are there two near-future scenarios ?
1) The CME/Theoretical silver holdings market totally collapses - Leaving the big sharks and companies to deal privately. Private little guys will be unable to sell at decent conversion rates unless its a desperate disaster/survival world.
2) Too-big to lose banks and countries continue in denial and find a way to rig the market/ devalue silver.
In either case does that mean that small-time holders of real or theoretical silver will suffer a significant drop in value? In which case selling now at the top of the market would be a good call?

Prices will crash at some point, but it will be momentarily. Over the long term, prices will continue higher as long as the central governments continue to print currency money.