The Problems of holding Physical Silver, gold and other Precious Metals today
Problems that affect Precious Metals today and why physical Precious Metals will never be a currency again.
- Physical Precious Metals will always have value
There is the one comfort when collecting physical metals is that their value can never go to zero, where all paper money will always returned to its true intrinsic value which is zero.
That’s all the value you get with owning physical precious metals, its only use is to survive the collapse of a currency and to keep up with the inflated value of whatever currency it serves.
Well done that’s all you will ever get
- At least you get to control your Precious Metals
When you control the money supply as only Central Banks can do, you can do incredible things because everything is directly valued against the money you supply, you get to set the value of everything because everything needs to be valued against the money you print, you get to influence exchanges, you get to influence governments on how they tax and set restrictions on physical precious metals.
When you have this power, in this case, you get to hold Precious Metals captive to the system you alone get to control, you get to change the rules, set restrictions, value and control their use, you get to cut their nuts off.
When you have no control precious metals:
You have no choice but to pay for whatever premiums are set
You have to pay fees and taxes when you own and sell physical precious metals
Transporting them has even has restrictions on how much you can send
How much it costs to store precious metals
This is your control over precious metals, you have no choice but to pay what price the market and your government sets that price for you, you do not get to determine their value, you do not get to say how much you can transport, how countries can tax you for buying them and how much it will cost you to store them.
The central banks have successfully set so many controls on precious metals that their use is meaningless, their use as money will never return all because they use the biggest disadvantage against precious metals, they are physical.
- At least we are free to value precious metals ourselves
I wish that was the case:
In any normal reality the law of supply and demand for mining all Precious Metals, factoring in the costs to mine them would give a good guide on how to price Precious Metals; it should be that easy right.
But that’s not always the case, you would have to factor are so many different aspects at once:
Each miner has different costs
The costs to refine Precious Metals
How different countries tax and recognise different metals
Transporting the metals
How do suppliers and purchasers of precious metals agree on terms
Knowing all these factors it is impossible to know set a price for all physical precious metals.
Enter the system that is allowed to value and price Physical Precious Metals today:
Enter the Comex and LBMA a system where both buyers and sellers can trade for physical precious metals every day so a fair price can be set for all.
This market works by using paper contracts, these contracts represented the physical precious metals so when you purchased the metals you can take physical ownership of the metals and vice versa. It was simple and provided a system where only physical metals represented by contracts could be traded.
For a miner, it guaranteed a market to sell Precious metals on a market where buyers could meet to agree on a price.
For the buyer, this guaranteed you had a guaranteed supply at any time, when you took physical ownership over precious metals you were responsible for shipping and any other costs and fees to take physical ownership over them.
Seems like a Fair system?
How to corrupt a system
Where once, only physical precious metals were purchased and sold on these exchanges they simply changed the rules, now you could include future productions into the mix, now watch as the corruption begins.
Imagine now a market where only 80 million Oz’s of gold could be mined every year; determine supply and demand and the costs of production and all other factors you would come up with a fair price right?
Not anymore:
With this new rule you can magically say that one day you could mine 1 billion Oz’s of gold and then dump 1 billion Oz’s of gold onto the exchanges at any time. You didn’t even need to be a miner to introduce contracts, all you needed to do is create a future contract and say one day you will have this gold to sell.
Now imagine a market where the demand is set at 80 million or more of gold but now 1 billion Oz’s of future gold contracts came onto the market, with so many contracts on the market this would only ever crash the price, now imagine this happening again and again, day after day, month after month and year after year, this is the system you rely on to place a fair price on precious metals.
It is now impossible to price any Precious Metals at a reasonable price any longer as the whole market is rigged.
At any one time there could be 300 future contracts for every 1 single physical Oz of actual mined gold, this is the same for every Precious Metals exchange, it has become so profitable that it would equal the GDP of any large country with the amount of money would flow through these exchanges.
How much is one of these Precious Metals Exchanges worth?
If we take for example just one of the markets, the silver market let’s see how much its worth…
The silver mining market produces around 800 million Oz’s a year, you can also add another 200 million Oz’s if you factor in the recycling of silver, everything included the whole market has 1 billion Oz’s a year for supply, taking current valuations at $14 dollars an oz this only amounts to 14 billion worth in physical terms roughly the GDP of the 136 country richest country Moldova.
Now compare this to the entire paper exchange silver market as a whole that sells and buys silver contracts each year. This exchange market amounts to 5 trillion dollars a year exchange, to put that is perspective, this equates to the 3rd richest country by GDP Japan just for the silver market alone.
The sheer amount of money in play in any one of the precious metals market is staggering, the system is controlled by a fictional paper contract system that won’t be replaced and they know it because they can continue to set new rules, set new controls so they alone get to continue making billions from this market.
Who is going to stop them?
Corrupt, manipulative and sadistic but it has shown how much Precious Metals have evolved and moved on
Looking past the corruption, manipulation and the ability to create future contracts out of thin air it has shown how much the whole market has simply moved on from the Physical aspect of Precious Metals and moved into the digital market.
The advantages over the Physical Markets are just too great for us to ignore any longer:
It’s so easy, the paper contract market makes it so much easier to get around the controls(and there are so many controls) when you deal with physical precious metals
You get to control a large amount of paper metals contracts at very little costs to you
you don’t have to worry about storing them
shipping them only matters if you take ownership over them
You can take physical ownership over them at anytime
The costs involved when buying and selling paper contract precious metals is nothing in comparison to when you have to buy and sell physical precious metals
All it takes to make a transaction is the click of a button; it’s simple, effective and fast.
From a physical market of only just over 14 billion in value to an exchange value that is just over 5 trillion(this is only the silver market other precious metals can trade for more) you will see that the world has simply moved on from Physical Precious Metals and left those who collect them in the past.
The physical precious metals market can never match this
The physical precious metals market is a joke, a dead system that has been allowed to go on so it can be of use to the paper contract exchange, their only remaining uses, as an industrial metal, support the mining industry and as a protection of value against inflation and a failing currency but any other use or power absolutely meaningless.
All money is now in the digital market, everything else is going to get left behind.
The pain for a Physical Precious Metals Holder
If you step back for a second and look at the physical side of the market, unfortunately everything works against Physical Precious Metals compared to the digital market.
Premiums when you buy them
shipping costs if you have them delivered
storage costs to protect them
governments usually tax you on them to purchase them and tax you again if you sell them
See for most when you purchase Physical Precious Metals you have to accept a loss the minute you purchase them because there is always a premium involved, then you have to take into account shipping costs, costs to store them, then worst of all you often have to take a loss when you sell them in the short term, the use of all precious metals are only meaningful only if you are willing to wait it out but time will always be more precious than gold, silver or other precious metals to most hence why so little invest in Physical Precious Metals.
This is the hard and difficult life of a Physical Precious Metals holder all you can ever do is wait it out, a decade, a generation, how long are you prepared to wait for a currency to collapse? That’s why for most collecting precious metals is a waste of time, why most who ever get into physical precious metals will regret it.
While the entire market and world have moved on, those who collect physical precious metals are left behind, hoarding their precious metals away waiting for something to come.
- There is one last dying hope for Physical Precious Metals
Do as I say and not as I do
Often you hear an argument of why governments or the banking system telling you one thing like ‘’do not buy physical precious metals’’ but at the same time they are buying them as quickly as they can themselves. It’s a case of ‘’Do as I say and not as I do’’
This has always been the last argument or hope for purchasing physical precious metals, why would governments and banks buy so much physical precious metals if they didn’t believe in them?
There is no argument that all precious metals especially gold have value as they have always required hard work to produce, but unlike the general public who hoard them away, fearful that someone will take them away one day, the truth is that the rest of the world has simply moved on from this backward way of hoarding them in a safe or vault only to be forgotten about, waiting always waiting for something to come.
The reality is that banks and governments freely exchange these physical precious metals with one another on a daily basis just as you would with paper money; they simply exchange Physical Precious Metals like money but in digital form between banks and governments.
While we have all slept and remained stuck in the past, banks and governments have made Physical Precious Metals money again by simply adapting to change and recognising that as long as you own the physical metal you can trade it in whatever form as long as in the end you own the physical form and cut out all the movement of the physical metals.
Instead of adapting what keeps us stuck in the past?
I really hate the saying ‘if you don’t hold them you don’t own them’
All this does is keep all those who are stuck and controlled in the old ways of thinking, while the world moved on, those of us who placed their faith in physical precious metals are stuck in the past, controlled and forced to obey the restrictions set on all Physical Precious Metals.
I own Precious Metals so what’s next? Wait for the collapse, then what? They are useless as money in physical form so we can never again base a currency on physical precious metals, all you can do is exchange them for whatever new worthless money system that will replace the one you serve.
That’s it? There has to be more?
Please let there be more…
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