Our friend Chris Duane of Dont-Tread-On.me examines three recent premium spikes seen in physical silver, their causes, and what the spikes mean about the silver market.

Duane examines the late 2008 spike caused by a massive paper silver sell-off during the 2008 financial crisis, the premium spike/shortage seen in March/April 2011 due to massive demand as silver neared $50, and the recent spike in premiums this January as a shortage of Silver Eagles and Maples developed as the Mints stopped production and rationed silver.

The Tale of Three Silver Premium Spikes

 

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  1. This is why I’m Stacking Silver, not for profit but survival WTSHTF and it will eventually and I’ll be ready but it’s good to note according to Chris, that Silver will be, A Once In Humanity Investment.

    • Yes, he absolutely MUST be if he bet his house on it.  While I like silver a great deal, there is no way that I would be willing to bet my future on it.  Not that I doubt that silver is a great investment.  The doubts that I have are much more about the market and its manipulation than about physical silver itself.  Crazy markets can stay insane longer than any of us can remain solvent and that’s a fact. Because of that, I will make a considerable bet on silver and perhaps gold as well but will temper that exuberance with other investments in case this goes on longer than we expect.  Rotating out of stocks and other investments and into silver and gold over time seems like a wise course to me.  I’m not an all or nothing investor.  Seen too many of those guys go down in flames to be comfy with that approach.  Back in about 1998, there were lots of these guys screaming about mortgaging their homes and selling everything they owned to buy the latest and hottest Internet stocks.  They called people like me fools for not jumping into that boiling pot along with them.  Those who still live are probably camped under a bridge somewhere.  Not saying that silver is equivalent to Internet stocks, just that the all or nothing investing method has a very poor track record.
       

    • He “bet” his house on it when silver was in the single digits. I buy silver as a store of wealth. Personally I wouldn’t put a dime in the stock market. I prefer hard assets like antique cars and motorcycles,land like costa rica and cape cod. Don’t want all my rabbits in one hat.

    • “Ed B- Very well said.  I totally agree.”
       
      Thanks, Duck.  We all have to make our way in the world and this is my path.  It is a reasonable one, it’s worked well so far, and there are many others who are on it too.
       
      “He “bet” his house on it when silver was in the single digits.”
       
      So, it worked out for him.  I am happy for him.  This does not make it  a valid investing strategy.  This is like running through a mine field and not going BOOM!  Yes, it worked out but… it’s still not a good idea.
       
      “I buy silver as a store of wealth.”
       
      Many of us do.  Buying on a routine basis works well, as does loading up more heavily during the dips.
       
      “Personally I wouldn’t put a dime in the stock market.”
       
      That is just as valid a choice as me choosing to do so.  Of course, knowing how to invest carefully and wisely will improve an investor’s odds of success considerably.  Been there, done that, made a small fortune, & retired young.  :-)
       
      “I prefer hard assets like antique cars and motorcycles,land like costa rica and cape cod.”
       
      Nothing at all wrong with that if it works for you.  I prefer a more diversified approach is all and that works for me.  At least, it has for the past 36+ years.  Precious metals are a good thing to have and almost everyone should have some, IMO.  How much and of what type depends on their situation, needs, goals, responsibilities, etc.
       
       

  2. Once in humanity investment? C’mon, seriously. Like there is not a bunch of stocks that has appreciated more than even the most spectacular Silver prediction. What about the start-up investments in companies like MSFT, APPL, Coca-cola, tetrapak?

    Not to mention all future opportunities that will come.

    • Those are rare occurrences plus they are loaded with counter party risk like all paper investments. Paper is a losing proposition in this economy.

    • “Paper is a losing proposition in this economy.”
       
      It can be.  But then, there are smart ways to invest, even in lowly paper, and there are dumb ways to invest.  I understand that paper investments tend to encourage dumb investing behavior and all but that does not mean that money can’t be made in paper investments.  I agree that the long-term future for paper, whether as investments or as currency, does not look good to me.  In the short to medium term, however, it is still possible to find good solid stocks that can pay the investor in them quite well.  Lots of solid big cap companies survived The Great Depression.  Others will also survive the coming World Greater Depression.  These are the companies that generate the products that people need and that are very solid financially.  Typically, these names do not include banks.  They do include names like Johnson & Johnson, McDonalds, IBM, Exxon, Procter & Gamble, and at least several others.
       

    • #widget
       
      That’s why savings of money (silver is principally MONEY despite all else) shouldn’t be thought of as ‘investment’. It’s a wholly inappropriate use of the terminology and concept of what investment is. To call savings an ‘investment’ is to equate trips to the super-market as ‘investment’. Saving money is provision for future consumption. In keeping with the analogy, storing high protein canned, dried and frozen foods is savings, whereas digging out and construction of the sub-basement in which to store ir all is an investment.

    • “It’s a wholly inappropriate use of the terminology and concept of what investment is.”
       
      Indeed.  This makes me think of the knuckleheads in congress who equate looting the public treasury with “making investments in our future”.  Unfortunately, they are far more likely to be ill-gotten loot in someone’s pocket than they are to be anything of true worth to this nation or the American people.
       

  3. I can’t put my finger on it but Chris Duane just rubs me the wrong way.  Not sure why because he says a lot of great things and has good info but it’s his pompous attitude.  I have watched several videos by this guy and liked many of them.  Then I have watched him get interviewed and get totally turned off.  I think he gets really competitive about information coming out.  I found him on zerohedge trying to get his name out by posting and linking his stuff.  No problem with that but it was this self promoting style that he wanted everyone to know that he understands the world and he needs to teach you.  Keep up the great info Chris but lighten up I told you so attitude.

    • Yes, there really are people who simply do not hit it off well.  It happens.  I’m not getting that impression from Chris, so maybe I am either missing it or am overlooking it as the enthusiasm of youth.  Either way, he does have a good web site and he does put out a lot of good info.  Sean at SGTReport seems similar to me… both good guys.  :-)
       

    • ED B- I think you are not missing it.  It’s just my personal taste of how he comes across.  You can see him in a different light and that fine by me.  I just have seen him kinda beg people to take him seriously on zerohedge.  The people who post on zerohedge are usually a crowd that isn’t impressed or has a smart ass remark to anything you post.  I got the impression that he really wants to have his stuff posted on that site.  It would give him instant credibility within the economic community.  IMO, he will never have anyone of his videos posted on that site simply because he has no outlet other then the silver story.  When you are “all in” your judgement is narrow.  In his mind, silver has to go to the moon.  What other option does he have to believe?  His life savings is in silver.  His future is silver.  He career is silver.  Like I said, his videos are great and the information that he brings is valid.  I personally don’t like his demeanor in some of his interviews.  He comes off as condescending. 

    • “It’s just my personal taste of how he comes across.”
       
      Understood, Duck.  Personal views are just that and who am I to say that your view is incorrect?  It very well may be more perceptive than my own view.  But then… that is one of the GREAT benefits of reading and posting on this web site.  We REALLY can say what we think and then discuss it without getting all pissy about it… well, for the most part, anyway.  :-)
       
      “I just have seen him kinda beg people to take him seriously on zerohedge.  The people who post on zerohedge are usually a crowd that isn’t impressed or has a smart ass remark to anything you post.”
       
      For precisely that reason, I do not read ZH.  I do read a few of their articles when they are posted up here or at SGTReport and can comment on them on those sites without all the BS that ZHers typically throw around.  Because of this, I haven’t seen what you have.
       
      “When you are “all in” your judgement is narrow.”
       
      It can be.  Of course, that could also be seen as “dedicated”.  ;-)
       
      “In his mind, silver has to go to the moon.”
       
      That’s an interesting expression.  The only way we have of getting “to the moon” is via rockets.  As an experienced investor, I am well aware that anything that shoots up like a rocket generally comes down the very same way… and usually with a huge BOOM! at the end of the trip!  There are VERY few investments that ever go to the moon.  There are many that people think are heading that way but that fizzle out long before they get there.  In virtually all cases, the few stocks that really do go to the moon are completely unrecognized as moon flight candidates while they are still cheap.  Think Apple at $8 a share or Sun MicroSystems at $5 a share.

  4. Like many have stated, charts may be interpreted in many ways.
    With market manipulation it is a more daunting task to understand or rationalize
    the ups and downs, much less find truth or real value.
    Our day will come; heaven help us when it does.
     
    @netranger, the Brazilian girls are very proud of their ‘bunda’
    whether it is a volleyball court or beach.  
     
     

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