Is gold and silver overvalued right now?

[Andy Griffith]

I know, I've heard all the crap about how gold going to go to $5K an ounce, and silver to $200 and buy now and all that rot...

Um...I think it's a pretty bad deal right now- at least to buy.

In 1940, Heavy Dutys were $37.50 and N-frame .357's were $60.00 when you could buy them with silver coins. Adjusted for the price of silver right now, that would make a heavy duty cost $837.50, and a Non-registered magnum would cost $1432.00! An M&P, which was $33.00 then, would be $787.00 now!

S&W's suggested retail prices actually seem to be following it- but that isn't what they are selling for- a new model 10 can be bought for $569.00- roughly 28% less.

If you look at cars, it's far worse! A brand new 1940 Ford Deluxe would run $808. If paid for it in silver then, but now would cost @ $19,000 today. If you paid for it in gold today, it would be $55,425!

Am I missing something?

I think I'll stick with lead, guns, food, whiskey and toilet paper.
Not sayin' I don't have any gold or silver, but I wouldn't buy more now...

 

[feralmerril]

A ford built today is far more complex isnt it?

 

[Bullseye 2620]

The promoters and speculators are trying to create a bull market. If I was going to speculate in metals right now, which I am not, it would be in rare earth elements, since the Chinese are dialing their exports of this stuff way back. Apparently, prices may go high enough to re-open the one US mine that produces this stuff and enable them to comply with the environment controls on this kind of mining.

Lead, guns, food, whiskey, and toilet paper all have intrinsic value, just like Ball canning jars and seasoned locust.


Bullseye

 

[lagavulin62]

I know, I've heard all the crap about how gold going to go to $5K an ounce, and silver to $200 and buy now and all that rot...

Um...I think it's a pretty bad deal right now- at least to buy.

Not sayin' I don't have any gold or silver, but I wouldn't buy more now...

I agree and think that about sums it up. I've been following gold/silver since the early 90's but I remember during the carter years it got to around 800 ounce. I played and lost my share of funds in the stock market game. the whole time I have had money to invest I have never heard of gold being a serious investment. even now I hear from those saying buy gold that you shouldn't have more than say 10-15 percent investments in it. but if you have it and can part with enough to make a difference that is the way to go. we all know the old truth that when the major media outlets and large financial firms are suggesting a buy it's best to NOT buy. I get a kick out of advertisements that say gold is the highest it has ever been in our lifetime, yet they say it may rise higher. that we may never see this kind of opportunity again. geez if that isn't sound advice to stay away from gold I don't know what is. the gold brokers have been waiting for this opportunity since the carter years. if they don't unload now they will die with their gold. fortunately too many of us couldn't afford this sucker move even if we fell for it. in my opinion I believe the only way for the average joe to invest for the future is with real estate and keeping your debt to a minimum if nothing at all.

 

[oldman45]

The price of anything is subjective.

Are you willing to buy or sell at the current rate? If so, then I feel it is not over valued.

I do not plan on buying or selling gold or silver. What good does it do a person buying a million dollars in gold before the money is devalued if there is no one with money to buy the gold from you? You cannot trade it for anything since merchants are not equipped to measure or rate the gold.

Years ago we had silver certificates and all money was secured by silver. That has long gone by the wayside. So will the current gold rush and precious metals.

I put my money in guns and ammo and feel a lot safer.

 

[Andy Griffith]

I was going to ask if anyone remembers the depression and inflation during the Carter years...I was out of work for quite a while then.

It's funny how so many people don't seem to remember the past. Precious metals went up then too- way up, and adjusted for inflation, above what they are even today.

 

[loutent]

I bought 2 Krugerrands back in the late 70's when it was close to $800 - still have them. I figure that Gold would have to get close to $2K for me to break even with inflation. I worked with a guy back then who saved silver as a hobby and sold it all when it hit $30 (remember the Hunt brothers?) - I thought he was dumb because everyone knew it was going to at least $100.

Gold - no thanks - got all I want.

 

[lagavulin62]

I bought 2 Krugerrands back in the late 70's when it was close to $800 - still have them. I figure that Gold would have to get close to $2K for me to break even with inflation. I worked with a guy back then who saved silver as a hobby and sold it all when it hit $30 (remember the Hunt brothers?) - I thought he was dumb because everyone knew it was going to at least $100.

Gold - no thanks - got all I want.

your investment skills are comparable to mine. sometime around 2003 I purchased 2000 worth of a van-kampen technology fund. today that fund is worth around 320 dollars. I figure if I can live to 198 I may break even, but it's doubtful. I keep saying if it gets back to 500 I will sell and buy a gun. the day that happens I bet I can buy a new smith revolver, lock free. (ok a down payment)

 

[JcMack]

I was going to ask if anyone remembers the depression and inflation during the Carter years...I was out of work for quite a while then.

Yes, I do. My now ex wife had talked me into buying a modest house at 12%, just a bit over the going rate. I asked my boss if overtime was going to continue at the rate of 8 hrs. a week. His affirmation closed the house deal. Within 6 mos. overtime was gone and business was so bad I was really afraid of RIF. The wife flat out refused to go to work. I finally had to call in a favor and got her a job. Two years later we divorced, and within 2 years she and the new husband let my ex house go into foreclosure because they lost their jobs. I know it's much worse now.

 

[scooter123]

Gold and silver are both commodities that have long tended to "bubble" behavior. Since the value is mainly determined by emotion and not true value, when the bubble bursts the prices crash hard. In the past when the trading was done with paper and wire, it usually took a day or two before the new price leveled out. Today, with computer trading, when the Gold bubble bursts that new floor will probably get hit in under an hour, might happen in just 5 minutes. Basically, the price will drop faster than any human can respond to. So, anyone holding gold today will see a drop of 80% or more in about the time it takes to brush your teeth.

Needless to say, I wouldn't touch gold with a 10 foot pole. Wish I had bought in when it was 500 an ounce but if I had, I'd be selling it right now.

 

[gregintenn]

I have little use for gold or silver, so I feel they are both overpriced.

 

[2152hq]

Not so long ago many people put alot of their money into primers & pistol ammo 'cause they were only going to go up.

 

[cowart]

In 1940, Heavy Dutys were $37.50 ... when you could buy them with silver coins. Adjusted for the price of silver right now, that would make a heavy duty cost $837.50

Looking at the N frames on the S&W website, the cheapest MSRP I see is $949 for a model 629. That would seem to indicate that silver is slightly undervalued right now.

S&W's suggested retail prices actually seem to be following it- but that isn't what they are selling for- a new model 10 can be bought for $569.00- roughly 28% less.

The 1940 prices you mentioned were undoubtedly MSRP, so to compare apples to apples, you would need to compare to today's MSRP, not today's discount prices.

A new model 10 currently has a MSRP of $719.00

 

[walnutred]

Yes, I was one of those who invested in primers and powder. October of 08 I bought two 8lb kegs of my favorite powder and a few sleeves of primers @17.50 per K. In March of 2009 I sold one keg of powder and half the primers for more than I paid for the whole batch with shipping.

As the song says, ya gotta know when to hold 'em and know when to fold 'em. Gold is the same way in my opinion. Except that I have a practical use for powder and primers. Where I live in a real disaster situation a brick of 22LR would have more trading value than an ounce of gold.

 

[redneckemt]

Why are people buying Gold and Silver? Isn't alot of it as a hedge against an econmic collapse?

What could is gold and silver? You can't eat it, build with it (easily) if our economy collapses all gold and silver will be to most people is shiney stones.


I've got no use for Gold or Silver. 1oz Silver coins are around $25 now right? That's a Brick of .22LR, a Case of Water and some canned goods. What's the better investment for my family?

The way I see it a well stock Pantry is a lot smarter for me. If times get tough in any way shape or form I'm covered. And then my guns, ammo, and reloading stuff....

 

[lagavulin62]

Why are people buying Gold and Silver? Isn't alot of it as a hedge against an econmic collapse?

What could is gold and silver? You can't eat it, build with it (easily) if our economy collapses all gold and silver will be to most people is shiney stones.


I've got no use for Gold or Silver. 1oz Silver coins are around $25 now right? That's a Brick of .22LR, a Case of Water and some canned goods. What's the better investment for my family?

The way I see it a well stock Pantry is a lot smarter for me. If times get tough in any way shape or form I'm covered. And then my guns, ammo, and reloading stuff....

yes after katrina your statements were absolutely correct. ike had the same results. I have plenty of co-workers who were stationed outside the house shotgun loaded. I don't think anyone's sounding the alarm when they fear this could happen on a nationwide scale for a lengthy period of time. I never thought I would witness and live through something like this. I am almost 50 and I can't ever remember times this desperate. gold/silver if you don't have it is truly worthless.

 

[2152hq]

Yes, I was one of those who invested in primers and powder. October of 08 I bought two 8lb kegs of my favorite powder and a few sleeves of primers @17.50 per K. In March of 2009 I sold one keg of powder and half the primers for more than I paid for the whole batch with shipping.

As the song says, ya gotta know when to hold 'em and know when to fold 'em. Gold is the same way in my opinion. Except that I have a practical use for powder and primers. Where I live in a real disaster situation a brick of 22LR would have more trading value than an ounce of gold.

I was thinking more of the $75/1000 primers & $50/box 380 ammo at the height of the frenzy.
Buy now,,it's only goin' up.

Maybe it will,,maybe it won't.
I'm not that smart to figure to it all out.
The specualtors are trying to beat the inflation or keep pace with it I guess.

You're right though, if everything came to a halt,,those bricks of 22's would be the gold. Even one of those overpriced boxes of ammo bought during the Obama frenzy would suddenly seem not so expensive.

I've got enough gold to last a long time for my work, wire and plate stock. Purchased in some cases years ago at prices that seem crazy now. But if I were to sell it, I'd just have to pay the inflated new price as I needed it again.
Plus you don't buy it at the 'world price of gold' & to sell it would only get scrap price anyway I suspect.

I'll sit this out..

 

[HEAD0001]

You really can not compare Gold to Silver. Silver prices fluctuate based upon manufacturing concerns(like Copper). Silver is a metal that is used in manufacturing. Gold is not. Golds value is based upon current or expected currency fluctuation. Or as a hedge against what you might think is a devaluation of currency. So it is not reasonable to put the two in the same category. They can go in opposite directions. There is no real correlation of the two.

IMO when everyone tells me to buy something, that is when it is time to sell. There are alot of people making alot of money on Gold right now. And they want that to continue. So they continue to promote the asset. As consumers we probably are not qualified to determine the peak, or when the bubble will burst. So I avoid Gold for that reason. I truly do not know enough to make an educated decision. If I can not make that decision on any investment then I do not buy it.

I have to justify every investment I make to myself. I have to believe that particular stock or commodity is going to go up. Or I walk away. I have made alot of money in the markets by living by this rule.

Yes I have missed some great rides, but I have also avoided some great losses as well.

I normally make money by bucking the trends. When most say buy-I sell, and just the opposite. Personally I am skeptical of any financial advisor. Or in other words I DO NOT TRUST THEM. They are in business for themselves, not me.

So I do all my research in my stocks that I buy. And I do what makes common sense to me. That is why I made a ton of money in CAT in 2010. It just looked right to me. Sold it all today. Taking the profits in 2010, and am buying a new fishing boat with the money. Funny thing was I was watching an investment show this afternoon, and they were touting that CAT was a great buy. NO KIDDING-except you are 12 months too late!!

All the accountants say don't cash in you will have to pay taxes. Heck I have no problem paying taxes on profit. I hope to pay more taxes next year, because that means I made more money. And besides that I can not fish out of a tax shelter. But I sure can fish out of a NEW G3!! Tom.

 

[pharmer]

I bought this for $750 back in '82. It was payday, I was building EPCOT and just had to have it. It was a bad investment all the way around, even though it's worth 4X that now. If I used the same $750 and bought 60 shares of Disney @ $13/share it was at the time, today with 2 4-for1 splits and one 3-for1 I'd have 2880 shares of Disney worth about $108,000 at today's closing around $37.50/sh. Life is for learning. Joe

 

[sipowicz]

All I see are commercials to buy gold since the dollar is becoming worthless...then why are all theses people with gold willing to trade me for my worthless money?