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Silver is really cheap today; gold, as usual, is overpriced

Posted by John T. Reed on

I do not like junk silver, but I own a bunch of it because my wife inherited it and wants to keep it for sentimental reasons. So I keep an eye on the price. My readers, for reasons unknown to me, think I love it and recommend it. Indeed, that is how my wife inherited it. Her brother read my hyperinflation book, which says NOT to buy gold or silver and went out and bought a bunch which he left to us.
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What I DO and DID in the book and on the net is list the advantages and disadvantages of junk silver. I guess people LOVE the advantages.
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Junk silver is US dimes, quarters, and half dollars minted before 1965. They are 90% silver. The daily price in in the WSJ in a table called Cash Prices under the item Silver—coins—wholesale—$1000 face-a. The price today is $9492 which gets you a large bag of such coins with a face-value of $1,000.
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I was stunned to see it below five figures. Here is a silver price chart.
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https://www.macrotrends.net/…/historical-silver-prices-100-…
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The orice in February was 29% of the price in 2011! All that time, Rosland capital has been urging you to buy it. They have no shame.
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One criteria I have suggested IF YOU WANT TO OWN it, is to buy when its current price is lower than its long-term real (adjusted for inflation price. In 2017, I calculated the long-term average real price of silver as $15.43 per troy ounce. The Kitco asked price today is $12.83. So if you like that rationale for when to buy, it’s time. Like a stopped clock, even Rosland Capital is right occasionally.
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I am NOT buying silver or junk silver for the reasons stated in my article https://www.johntreed.com/search?q=gold+disadvantages
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which covers both gold and silver. By the way, the historical long-term average real price of gold is about $650. Today’s gold price is $1535.73. That would be a SELL signal. Gold has not been below its long-term average real price since a nine-year period ending in 2005.
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If gold were a great inflation hedge, a graph of its real price would be a flat line. Here is that graph, as you can see it is anything but a flat line.
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https://www.macrotrends.net/…/historical-gold-prices-100-ye…

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