When should one invest in Silver instead of Gold?

[StackemHigh]

IMHO you should buy what you like and what you can afford. I collect silver and I collect gold. I also have a modest stack of gold that I can sell if an investment opportunity comes along that i wouldn't normally have the cash for.

[stefffana]

9 minutes ago, SidS said:

Originally it was a Tower Pound, later tweaked to be a Troy Pound. A Troy Pound weighs 12oz/t.

20 pennyweights make 1oz/t, 12oz/t make 1lb/t (or 240 pennyweight).

12 silver pennies made 1 shilling and 20 shillings made £1 (or 240 silver pennies).

A very neat system overall.

A treasury roll dated to the late 1390s, right at the end of Richard II's reign, listed his inventory and the sterling silver items were worth their equivalent weight in currency. So if an item weighed 3oz/t, it was worth 60 pence (or 5 shillings exactly). Silver plate was regularly melted down to make currency and old currency melted down to make plate. The metal and the currency were firmly linked.

Gilded items were worth their silver weight plus a percentage for workmanship on the gilding.

Gold items were worth their weight in gold - which also matched the currency system.

The obsession with ratios, 1:12, 1:15 or 1:16 all came from the days when silver and gold were tied together through their official role as currency.

Gold and silver are no longer currency - they are either industrial metals or investment vehicles and are 'something else' when compared to currency.

Thank you, @SidS! Very good and accurate explanation about pound and correlation with weight of silver/gold.

May I add few questions, please? 

1. There are at least three theories regarding the etymology of the word "sterling". Even Oxford English Dictionary and Enciclopaedia Britannica can not find the same conclusion. See https://en.m.wikipedia.org/wiki/Pound_sterling / Etymology. Which one do you think it is more plausible?

2. Why the symbol for British Pound it is "£", from Lira (Roman Empire) / Libra (lat.) and it is not  "P" or "Lb"? Even in another languages, the British Pound is known as Lira sterling or Lirã sterlinã, not as a pound. See https://ro.m.wikipedia.org/wiki/Liră_sterlină. 

3. One pound was historically equivalent of 20 shillings. Also, 20 shillings were equivalent of 1 Guinea from 1663 to 1717 and with 1 Sovereign from 1817, even their weight it was slightly different. Between 1717 and 1816, 1 Guinea was equivalent of 21 shillings. This was a correction for the difference of weight, or a consequence of gold/silver ratio changes?

Thank you!🤗

Stefan.

 

[SidS]

1 hour ago, stefffana said:

Thank you, @SidS! Very good and accurate explanation about pound and correlation with weight of silver/gold.

May I add few questions, please? 

1. There are at least three theories regarding the etymology of the word "sterling". Even Oxford English Dictionary and Enciclopaedia Britannica can not find the same conclusion. See https://en.m.wikipedia.org/wiki/Pound_sterling / Etymology. Which one do you think it is more plausible?

2. Why the symbol for British Pound it is "£", from Lira (Roman Empire) / Libra (lat.) and it is not  "P" or "Lb"? Even in another languages, the British Pound is known as Lira sterling or Lirã sterlinã, not as a pound. See https://ro.m.wikipedia.org/wiki/Liră_sterlină. 

3. One pound was historically equivalent of 20 shillings. Also, 20 shillings were equivalent of 1 Guinea from 1663 to 1717 and with 1 Sovereign from 1817, even their weight it was slightly different. Between 1717 and 1816, 1 Guinea was equivalent of 21 shillings. This was a correction for the difference of weight, or a consequence of gold/silver ratio changes?

Thank you!🤗

Stefan.

 

With regard to the points:

1. I have to say I have been unable to draw any firm conclusions on that one myself, all are plausible and I suspect it could be any one or even a mixture. All of course is conjecture as the true answer is lost in the mists of time. Most theories are a combination of scant sources and historians conjecture.

2. All official documents were written in either French or Latin - especially after the Norman Conquest. It should be noted that what we think of as the old British currency system actually was a direct importation by Offa of Mercia (or other later kings of the Wessex line) from Charlemagne's currency reforms. Themselves echoing earlier Roman coinage systems. So we have Libra/Solidus/Denarius for £.s.d - hence why the £ sign is a fancy letter L. It should be noted that the British £.s.d system and the Ancien Regime French system (Livre/Sol/Denier) started out as pretty much equivalent - the British version the import. However due to mostly sound money policy in England throughout the Middle Ages (and it's centralised government) it faired better than the French system which debased and devalued over the centuries. By the turn of the Revolution in France their system had degraded to the point where a crown sized Ecu was worth nominally six French Livre but only about 5 shillings in Britain. So a British pound was worth 24 French pounds!

3. The Guinea was nominally introduced as 20/- however gold coinage in Britain had disconnected from the silver somewhat due to the wrong ratio being forced upon the currency system. Britain over-valued silver and undervalued gold. Even by the late 1660s Samuel Peyps was trying to swap his silver for guineas and found that he couldn't purchase them for £1 a piece. Quite often he was paying 22-24 shillings per coin. One could argue that Guineas have never really been available for 20/- each. By 1694 the system was so out of whack that Guineas cost up to 30/- per coin! The imbalance relaxed as the 1700s kicked in and Guineas were formally set by law at 21/- per coin.

Edited June 20, 2023 by SidS

[stefffana]

5 minutes ago, SidS said:

With regard to the points:

1. I have to say I have been unable to draw any firm conclusions on that one myself, all are plausible and I suspect it could be any one or even a mixture. All of course is conjecture as the true answer is lost in the mists of time. Most theories are a combination of scant sources and historians conjecture.

2. All official documents were written in either French or Latin - especially after the Norman Conquest. It should be noted that what we think of as the old British currency system actually was a direct importation by Offa of Mercia (or other later kings of the Wessex line) from Charlemagne's currency reforms. Themselves echoing earlier Roman coinage systems. So we have Libra/Solidus/Denarius for £.s.d - hence why the £ sign is a fancy letter L. It should be noted that the British £.s.d system and the Ancien Regime French system (Livre/Sol/Denier) started out as pretty much equivalent - the British version the import. However due to mostly sound money policy in England throughout the Middle Ages (and it's centralised government) it faired better than the French system which debased and devalued over the centuries. By the turn of the Revolution in France their system had degraded to the point where a crown sized Ecu was worth nominally six French Livre but only about 5 shillings in Britain. So a British pound was worth 24 French pounds!

3. The Guinea was nominally introduced as 20/- however gold coinage in Britain had disconnected from the silver somewhat due to the wrong ratio being forced upon the currency system. Britain over-valued silver and undervalued gold. Even by the late 1660s Samuel Peyps was trying to swap his silver for guineas and found that he couldn't purchase them for £1 a piece. Quite often he was paying 22-24 shillings per coin. One could argue that Guineas have never really been available for 20/- each. By 1694 the system was so out of whack that Guineas cost up to 30/- per coin! The imbalance relaxed as the 1700s kicked in and Guineas were formally set by law at 21/- per coin.

I bow in front of you, Sir!

My last question and I promise to not disturb you anymore today regarding this thread:

Do you know if @MoinSheikh from Pakistan, the forum member who started this conversation will ever come back?

I haven't seen him since 10th of June. 🙂

 

[SidS]

20 minutes ago, stefffana said:

I bow in front of you, Sir!

My last question and I promise to not disturb you anymore today regarding this thread:

Do you know if @MoinSheikh from Pakistan, the forum member who started this conversation will ever come back?

I haven't seen him since 10th of June. 🙂

 

No, never.

😁

[flyingveepixie]

On 12/06/2023 at 11:41, JohnA1 said:

...plus when the time is right silver tends to move up more violently than gold (this multiplier works downhill too!)

So you sit on it until it is time to flog it for some shiny rock perhaps, if gold/silver ratio drops below 40:1 for example

But it could be a long waiting game..

In the 2 years since I started with this I've hardly seen silver move at all.  It was around £16.85 at the start, has peaked a couple of times at just over £20.00 and is currently at £17.55.  Compare that with 100% (or higher) inflation in the case of energy, many food and drink items, and a whole bunch of other stuff, and it doesn't paint a very encouraging picture. 

@GoldDiggerDave reckons Doc Martens and tins of soup are a better investment than silver and I think he  has a very good point.  The moral of the story as far as I can tell is if you like silver for aesthetic reasons then buy it by all means, but just don't expect to get a great return on it.

@JohnA1Your story is much like mine.  My silver stack is also completely submerged and has been since the day I purchased my first silver coin. I can't help feeling stung and I wont buy any more silver unless something drastically changes.

Edited June 23, 2023 by flyingveepixie

[Petra]

I hardly buy any silver at all now, however, seeing how much silver shifts on here, it appears to be doing ok?

[stefffana]

4 minutes ago, flyingveepixie said:

In the 2 years since I started with this I've hardly seen silver move at all.  It was around £16.85 at the start, has peaked a couple of times at just over £20.00 and is currently at £17.55.  Compare that with 100% (or higher) inflation in the case of energy, many food and drink items, and a whole bunch of other stuff, and it doesn't paint a very encouraging picture. 

@GoldDiggerDave reckons Doc Martens and tins of soup are a better investment than silver and I think he  has a very good point.  The moral of the story as far as I can tell is if you like silver for aesthetic reasons then buy it by all means, but just don't expect to get a great return on it.

@JohnA1Your story is much like mine BTW.  My silver stack is also completely submerged and has been since the day I purchased my first silver coin. I can't help feeling stung and I wont buy any more silver unless something drastically changes.

I understand your point of view, but as you said already, silver is now extremelly undervaluated, so it is possible in next future to be a reconsideration of its value. Silver still have a great potential to grow, so I will continue to buy it, just in case. I don't want to regret later, when something drastically changes.

A balanced stack 50/50 in value was always my objective.

[flyingveepixie]

14 minutes ago, stefffana said:

I understand your point of view, but as you said already, silver is now extremelly undervaluated, so it is possible in next future to be a reconsideration of its value. Silver still have a great potential to grow, so I will continue to buy it, just in case. I don't want to regret later, when something drastically changes.

A balanced stack 50/50 in value was always my objective.

It's the bloody paper silver scam which buggers everything up.  If by some miracle that was to disappear and all paper silver investors demanded physical, spot price would rise massively because there wouldn't be enough to go round. 

We can only live in hope... Cross your fingers 🤞 (or press your thumbs as they say in Germany)...🤣.   

I wonder what the origin of those two silly little sayings were...🤔...🤣

Edited June 23, 2023 by flyingveepixie

[GoldDiggerDave]

1. Silver is not an investment FACT. 

2. Silver has never kept up with inflation  for any sustained period of time FACT

3. Silver is not a hedge against inflation FACT see 2. If it’s never kept up with inflation how’s it supposed to hedge something it doesn’t keep up with? 

4. cash in the bank since 1971 has out performed silver over the last 52 years FACT

5 cash in the bank today is smashing silver FACT

6 silver is not a good store of wealth FACT see 1,2,3,4,5

 

im not out to dance on anyone’s hopes and dreams but that’s what silver is a hope a dream that someday it will be worth more than you paid and it’s kept it’s store of wealth even out performing inflation…..it could but then we are describing a gamble not an investment. 

[Petra]

1 minute ago, GoldDiggerDave said:

1. Silver is not an investment FACT. 

2. Silver has never kept up with inflation  for any sustained period of time FACT

3. Silver is not a hedge against inflation FACT see 2. If it’s never kept up with inflation how’s it supposed to hedge something it doesn’t keep up with? 

4. cash in the bank since 1971 has out performed silver over the last 52 years FACT

5 cash in the bank today is smashing silver FACT

6 silver is not a good store of wealth FACT see 1,2,3,4,5

 

im not out to dance on anyone’s hopes and dreams but that’s what silver is a hope a dream that someday it will be worth more than you paid and it’s kept it’s store of wealth even out performing inflation…..it could but then we are describing a gamble not an investment. 

🤔🫣🙁… but true!

[Aldebaran]

2 minutes ago, GoldDiggerDave said:

1. Silver is not an investment FACT. 

2. Silver has never kept up with inflation  for any sustained period of time FACT

3. Silver is not a hedge against inflation FACT see 2. If it’s never kept up with inflation how’s it supposed to hedge something it doesn’t keep up with? 

4. cash in the bank since 1971 has out performed silver over the last 52 years FACT

5 cash in the bank today is smashing silver FACT

6 silver is not a good store of wealth FACT see 1,2,3,4,5

 

im not out to dance on anyone’s hopes and dreams but that’s what silver is a hope a dream that someday it will be worth more than you paid and it’s kept it’s store of wealth even out performing inflation…..it could but then we are describing a gamble not an investment. 

It also takes so much space!!
But will be very handy as loose change when the ***t hits the fan 🌞

[Paul]

9 minutes ago, GoldDiggerDave said:

1. Silver is not an investment FACT. 

2. Silver has never kept up with inflation  for any sustained period of time FACT

3. Silver is not a hedge against inflation FACT see 2. If it’s never kept up with inflation how’s it supposed to hedge something it doesn’t keep up with? 

4. cash in the bank since 1971 has out performed silver over the last 52 years FACT

5 cash in the bank today is smashing silver FACT

6 silver is not a good store of wealth FACT see 1,2,3,4,5

 

im not out to dance on anyone’s hopes and dreams but that’s what silver is a hope a dream that someday it will be worth more than you paid and it’s kept it’s store of wealth even out performing inflation…..it could but then we are describing a gamble not an investment. 

But but but but but but but but . . . . . . . 'reasons' 

[GoldDiggerDave]

15 minutes ago, Aldebaran said:

It also takes so much space!!
But will be very handy as loose change when the ***t hits the fan 🌞

No 7, it will cost more to buy the safe than the silver you can store inside it……it’s better just to stack safes than silver🤣🤣🤣

[stefffana]

14 minutes ago, GoldDiggerDave said:

1. Silver is not an investment FACT. 

2. Silver has never kept up with inflation  for any sustained period of time FACT

3. Silver is not a hedge against inflation FACT see 2. If it’s never kept up with inflation how’s it supposed to hedge something it doesn’t keep up with? 

4. cash in the bank since 1971 has out performed silver over the last 52 years FACT

5 cash in the bank today is smashing silver FACT

6 silver is not a good store of wealth FACT see 1,2,3,4,5

 

im not out to dance on anyone’s hopes and dreams but that’s what silver is a hope a dream that someday it will be worth more than you paid and it’s kept it’s store of wealth even out performing inflation…..it could but then we are describing a gamble not an investment. 

Yes, you are absolutely right with what are you saying and I can not come with better arguments to combat your facts and to start a debate pro and contra.

But.....you are a dreambreaker, mate! A destroyer of Hope, Faith and Dreams! You bring terror and despair among silver lovers!

 

[JohnA1]

1 hour ago, GoldDiggerDave said:

1. Silver is not an investment FACT. 

2. Silver has never kept up with inflation  for any sustained period of time FACT

3. Silver is not a hedge against inflation FACT see 2. If it’s never kept up with inflation how’s it supposed to hedge something it doesn’t keep up with? 

4. cash in the bank since 1971 has out performed silver over the last 52 years FACT

5 cash in the bank today is smashing silver FACT

6 silver is not a good store of wealth FACT see 1,2,3,4,5

 

im not out to dance on anyone’s hopes and dreams but that’s what silver is a hope a dream that someday it will be worth more than you paid and it’s kept it’s store of wealth even out performing inflation…..it could but then we are describing a gamble not an investment. 

Haven't done the figures for #4 but I totally agree with the rest. PMs are not investments anyway, they have no yield.

I see silver as a form of savings with a strong speculative element thrown in (a punt).  I hope that I'll call 'Bingo!' in my lifetime - but then again I might not..

 

When doing my calculations from 1980 using shadowstats (not RPI) silver came out 25x cheaper than March 1980, while gold is 9x below.

Using official RPI silver is down only 3x and gold is almost on par

[theman73]

1 hour ago, stefffana said:

But.....you are a forumbreaker, mate! A destroyer of Revenue, Faith and Dreams for Chris! You bring terror and despair among silver lovers and hopes for gold pushers!

Wow

[theman73]

1 hour ago, GoldDiggerDave said:

1. Silver is not an investment FACT. 

2. Silver has never kept up with inflation  for any sustained period of time FACT

3. Silver is not a hedge against inflation FACT see 2. If it’s never kept up with inflation how’s it supposed to hedge something it doesn’t keep up with? 

4. cash in the bank since 1971 has out performed silver over the last 52 years FACT

5 cash in the bank today is smashing silver FACT

6 silver is not a good store of wealth FACT see 1,2,3,4,5

 

im not out to dance on anyone’s hopes and dreams but that’s what silver is a hope a dream that someday it will be worth more than you paid and it’s kept it’s store of wealth even out performing inflation…..it could but then we are describing a gamble not an investment. 

You are doing something wrong with your silver, my bank balance contradicts you. But, yes you are right, sitting on PM hoping to become rich is the wrong way. We just need to move a little bit our bones and the results will be different.

Edited June 23, 2023 by theman73

[Darr3nG]

2 hours ago, GoldDiggerDave said:

1. Silver is Doc Martins are not an investment FACT. 

2. Silver has Doc Martins have never kept up with inflation  for any sustained period of time FACT

3. Silver is not Doc Martins may be a hedge against inflation FACT see 2. If it’s never kept up with inflation how’s it supposed to hedge something it doesn’t keep up with? 

4. cash in the bank Doc Martins on my feet since 1971 has out performed silver over the last 52 years FACT

5 cash in the bank Doc Martins on my feet today is smashing silver FACT

6 silver is not Doc Martins are a good store of wealth FACT see 1,2,3,4,5

 

im not out to dance without my Doc Martins

FTFY

[SidS]

2 hours ago, flyingveepixie said:

It's the bloody paper silver scam which buggers everything up.  If by some miracle that was to disappear and all paper silver investors demanded physical, spot price would rise massively because there wouldn't be enough to go round. 

We can only live in hope... Cross your fingers 🤞 (or press your thumbs as they say in Germany)...🤣.   

I wonder what the origin of those two silly little sayings were...🤔...🤣

The GameStop silver squeeze tried to break it and failed miserably.

[HillWalkerDundee]

I am quite simple in my approach. The money I spend on silver is pin money that I have no use for. I buy silver because it is beautiful whereas gold (at least to me) is ugly and clunky. I also think that gold is way overpriced. I see a concerted effort to force the price down long before it goes boom. Besides, the silver is my grandkids inheritance.

[monkey]

I attempt to buy on a cash cost average each month and any spare cash is saved up for local dips (like now).

My tactic for now is to let the gold silver ratio dictate whether to buy gold or silver. I’ve not been stacking long so my approach has a stack of only silver at the moment. Once the gold silver ratio falls below 80 I will start to accumulate gold.

Some of the silver stack will be traded for gold when the ratio has swung about enough from where it is now.

Poured silver I’ll buy any time if it pulls my heart strings enough. But will be staying out of the trading stack.

[BearlyHere]

On 12/06/2023 at 00:41, HillWalkerDundee said:

Money is kind of like energy, it doesn't get used, it gets converted. Spending cash by buying silver or gold is not losing money, simply converting it to another form.

Metal, unlike fiat currency, cannot fall to zero value.  A buck is a buck because the US Feral Reserve says so.  If the world decides differently, it can collapse.  An ounce is worth an ounce because the inherent demand (world) says so.  There has NEVER been a time that the world said gold and silver have no value.  You cannot count the times a fiat money system has collapsed.

[Becca]

On 10/06/2023 at 13:32, MoinSheikh said:

The title pretty much says it all, sorry if it sounds naive, I'm actually new to all this.

When you only have £17.50 left of your pocket money

[HonestMoneyGoldSilver]

If you make a statement that "silver is not an investment" while holding gold as an investment, you are making an incongruent argument

As @JohnA1 said, gold isn't an investment as it has zero yield (words of Warren Buffett). If we take an infinite horizon (all available data) then stocks outperform gold by a factor of more than 10. Even bonds, which are "risk-free", outperform gold and silver

Let's be realistic. The Risk-Free Rate is currently 5.19%. In light of central banks hiking rates gold and silver are currently depreciating - those seeking safe havens are piling their funds into Treasuries. If you want a secure investment then buy Treasuries. Of course buying stocks/paper/Treasuries are subject to 3rd-party risk, just as with vaulting gold or silver, and all of your trades are monitored and subject to taxation

The reasons to own both gold and silver transcend markets and investment decisions. It is for security, generational wealth, it is enjoyment, it is numismatic pleasure. You don't invest in precious metals to get rich - to get rich you invest in stocks. You invest in precious metals to not get poor.

Anyone running a totalitarian ratio one way or the other - 100% gold or 100% silver - is taking a naked bet on those assets. It's the same as holding 100% of your investments in GBP or USD. This is a fact that escapes most people. NOT INVESTING in other currencies and assets is taking a huge naked punt. It is diversifying your investments to some degree that is your insurance and your hedge. It is never prudent to invest 100% of your funds or close to it in a single asset or currency. In those circumstances you are gambling, not investing. 

Silver is actually much more lucrative than gold from a re-sale POV. With gold you're buying at 3-5% over spot and selling at 5-10% over spot (assuming you're using eBay or something, not including fees and shipping). There are numerous large businesses who will sell gold at a more competitive rate than you can offer as a private seller. With silver if you buy on TSF or from private sales, you can always offer a better deal than the largest dealers as you have an inherent 20% VAT advantage as a private seller. You have to work a lot harder to make £1500 sales in silver than £1500 in gold (a single coin) but your margin is significantly higher with silver

Edited June 23, 2023 by HonestMoneyGoldSilver
bad maff