My Silver Bug Story
(Santa Rosa, CA, USA)
Some time when I was about 12 I got a book on coins and money out of the library. What stuck with me is the story of the Byzantine Empire. It seems that the coin of the realm, the byzant, stayed at the same weight for 1000 years! and the empire and culture prospered. Then an emperor debased the coin and got away with it. His successors kept it up, and one hundred years later the empire was a shadow of it's former self.
I was 16 when it was announced that silver would not be in any coins the next year. I panicked and whenever I got paper dollars I went to the bank and traded for nickels. (Silver coins disappeared instantly.) This drove merchants crazy. I had forgotten that it took 100 years for the Byzantine Empire to collapse. I remember being thrilled to go into a bank and trade a piece of paper I knew was only a piece of paper for a Morgan or Peace dollar. But I didn't keep them for long, a candy bar or a comic book was also better than a small piece of paper. I collected coins and still have some of my old collection in a metal sewing attachment box somewhere.
I saved pennies and once when broke I took the collection to a coin shop to sell, but the offer was so poor I kept it. I have only come out ahead on a couple of trades in my life, I just don't have the knack and the timing.
About 1972 I bought a couple rolls of halves at about 3x face (?), but sold them at a loss or break even when I needed cash.
In the 80's I did some silver smithing and managed to sell most of my saved scrap for a huge profit. I didn't sell it all, and when I went in after the crash, the buyer laughed at me. I have talked up gold and silver to friends all my life and only ONCE a girl friend joined me and we went in on 100 rounds about 1992, the price was about $5 per ounce. I had one other friend that bought gold coins now and then, but he also gambled on sports, so his outlook was from a bit of a different angle, more short term. The silver rounds I had to sell to raise cash, but my friend still has hers! Despite the gain, 5x, she is unimpressed. I guess it did take awhile. She has real estate and that is also a good long term store
When silver took off last year, I thought, here it is, my last chance to get silver under $60-80 per ounce. My current dollar cost average is about $xx. I wonder how long it will be until I am able to break even. That spike was caused by speculators, not the safe haven buyers that will eventually drive the price up and keep it there. It is difficult to look at my overall results of being a long time silver bug, and stay positive, especially with my current 'loss'. But then I think of my friend whose house and stocks plummeted 50%. And I think, if only I had been able to keep hold of my previous buys. Having the big picture right does not guarantee success. Patience and the financial ability to hang in there, and luck are all necessary. Add to that the big boys alleged manipulation. The big picture seems to point to higher prices, or at very least a preservation of purchasing power. I pointed out to a friend recently that a silver quarter bought a gallon of gas in 1964, and it still does today, and he said I was just 'cherry picking' dates. I guess there is some truth to that, but he is a 'cash is king' guy, and I am, and will probably always be, a 'silver bug'. All because of that book I read when I was young and impressionable.
The last year I have been on the internet almost daily reading articles by silver and gold bugs and it looks to me like the Byzantine Empire all over again. But with a world wide fiat money and as much if not more corruption than ever. Cicero, 60BC, is the earliest anti-banker speech I have run across. Coins are more difficult to debase than paper and I can't but help think that
fiat money is a corrupt gov/bankers dream. It seems that the move to digital money is next, no paper at all. That will be the ultimate for bankers I guess. Will we be able to stop this and return to sound metal backed money? It seems unlikely, but we have to try. Buying and holding precious metals seems like the only thing we can actually do. China and other countries, and central banks have all been buying gold the last few years. If the Tier 1 asset rule goes into effect, commercial banks will will be buying. This could put some upward pressure on the price of tag along, poor mans gold, silver.
Good luck to us all.
Good luck to us all, Stefan