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PaperclipPerfector  3mo ago (text post)   31860 thread views

Culture War Roundup for the week of January 26, 2026

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Seventeen days ago, silver was $90/oz from APMEX. That was list price of a 1oz round, shipped and everything. Spot price was ~$80.

Today, it's $120 shipped, $110 spot, over +30% in a little over two weeks.

Gold is at $5185 for a single round delivered to your door, up from 4650, or 11%. Using spot it's about 12%.

Is this hyperinflation? Is this de-dollarization? A bubble? Does this have anything to do with Venezuela? With Iran? Taiwan? AI?

I'm honestly grasping at straws here, because metals aren't supposed to do this. I've been worried about the specter of hyperinflation since 2008, but it never really materialized, and so my worries were able to be soothed by looking at the lack of hyperinflation in reality.

You can't even tell anything happened in 2008 when you look at the money supply, but you can't help but notice that we've nearly x5 the money supply since December 2019.

Then again, silver is a useful metal. It gets blown up in missiles, it gets used in microchips and electronics, solar and battery technology, and more. Business building these things will simply pay the price for the metal they need and then use it, driving the price up regardless of speculation, but I can't believe that the usefulness of silver has quadrupled in the time since it was going for $25/oz.

Is gold behaving more reasonably? Been looking at some rings and I’m wondering if this is the worst possible time.

More reasonably? Yes. Reasonably compared to everything else? Not really.

Silver is up 4x (+300%) in the last year, gold is up 2x (+100%). It's up 10% in the last week, which is not what I expect from stable metals.

I suppose whether it's the worst depends more on whether you expect the dollar to gain value against gold in the future. I don't see why that would be the case, so I expect the dollar to continue to be devalued in order to get out from under our debt and obligations. We sure can't tax our way out of it, so inflate it away is what we're left with, just like in the 70s. Then again, I've been seeing specters of hyperinflation for eighteen years.

Gold is not behaving more reasonably, but that probably doesn't matter for rings because jewelry prices are not very connected to metals prices- the markup was already big enough to absorb material price rises and stones were the main driver of material costs anyways.

This, BTW, is why jewelry makes a terrible investment- unlike eg guns, which you can usually sell for a decent percent of the initial purchase price, jewelry you definitely can't, due to the very high markup and subjective appraisals.

Yes, but wives don't appreciate you giving them guns for Christmas. At least, mine prefers gold.

As for content, back to Costco. 3.68g of 24k. Spot price is $173, which makes the value of gold $636 out of $760 list price (and 10% sales tax for me). So that's 83% of list price as pure value from the gold.

That doesn't mean you can get spot price for it, of course. I wouldn't consider there to be any value in jewelry beyond metal scrap if it comes to liquidating, but it's a nice way to give a gift and give an investment at the same time.

...

There's discussion below that M1 added accounts that were not previously included in May 2020.

Feb 2020 M2 was 15404. Dec 2025 was 22581. That's +46%.

5x is +400%, not +500%.

My understanding is silver is spiking because of: 1) Solar demand is pretty price insensitive, it had a ton of room to run before they seriously considered swapping out silver for copper. 2) Mining quantity is pretty fixed, it's very often a byproduct of other mining operations. Mines take ages to start up, and even massive spikes just cannot materialize new supply in the short term. 3) Retail demand is narrative driven and price insensitive, has been waiting for a spike for years, and is inclined to continually double down.

My guess is that we'll see another 20-40% rise before the run stops, and then a 50-60% pullback, possibly even deeper when some panel operations shift to copper, across 3-4 years. I don't think it's a concrete sign of de-dollarization. Just a product of massive amounts of money chasing any gains it can find and there being little except AI demanding major investment at this moment.

At these prices, I think silver is a terrible store of value. It's going down eventually.

My guess is that we'll see another 20-40% rise before the run stops

We're up 20% in the last five days, 7% today alone. Are you predicting a crash/leveling off in the next two weeks?

Every 20% rise is more pressure than the last. I'm predicting a peak no later than another 40-50% climb. I've no idea when that will happen, or if it'll end in a level off or a crash, but at that price speculative pressure will begin to crowd out actual applications that use silver like solar panels. The price level might hold for a while, but fundamentals win out on a time scale of years.

I've been in mining for a few years, this has all been known (though only became a goldbug 2 years ago from other commodities.) Here's the current state: https://youtube.com/watch?v=RVacfj1eDYU?si=AY1u7uGg2s0IV2ml&t=1512 described by a business partner.

You can hear him discuss this a few years ago in this: https://youtube.com/watch?v=-mBqpZEc7w8

THX.V remains the best investment around.

Any asset can be a shitcoin if retail bids it hard enough. There are good reasons for silver to have gone up, but nowhere near this much. Retail sees it, like gold, as a way to invest in "hard money", to avoid your dollars being inflated away, except it's cheaper than gold. And then they're not price sensitive about it at all. And then it gets high enough that speculators get washed out by new margin requirements, big buyers of silver get nervous they'll be screwed if it goes up more and lock in the price, people get short squeezed. For the same reason that accurate prices are good for an economy, this is bad for the economy! It causes silver to be inefficiently allocated among productive enterprises, all so gamblers can get their fix, because Seahawks vs Patriots isn't quite as exciting as pumping a trillion dollar market cap asset.

In a surprisingly apt example, The Great Silver Bubble says that movies were cancelled in 1979 because the Hunt brothers had created a shortage of film by buying up all the silver. The amount of heirloom silver melted down so short sellers could overpay for it and deliver it into the Hunts' longs was also socially destructive.

The good news that time is that the Hunts ended up paying for their fun - the unsuccessful attempt to corner the silver market cost them 1.7 billion dollars (6.5 billion adjusting for inflation, 17 billion adjusting for GDP growth, so a loss that would embarass Bill Gates but not Elon Musk)

And they only ended up paying for it because of pressure by the Fed. So much for the free market!

I was wondering if/when someone would bring up the Hunt brothers in the context of this discussion. Once again, The Motte fails to disappoint!

In Korea, "retail" or daytraders are called "ants": individually stupid and not a lot of money, but they can overwhelm other investors when they all move in the same direction.

You’re mostly right. For the past decade a combination of central bank policy and inertia has artificially prolonged and further inflated the greatest asset pricing bubble in a century. Luxury hotel rooms in Bora Bora or the Maldives cost 8x per night than they did in 2010; everyone has more money, especially people with money. The current spike is froth with the vaguest geopolitical justification, but it doesn’t really matter. For a long time (since the end of 2017, really), if you were “smart” and conservative about the market, you lost out on immense gains as prices kept rising. So now nobody thinks they can stay out of the market, because even the bears have been burned so many times. So everyone’s in but, in the back of their mind, wants to hedge. Bitcoin will crash in a financial crisis, or at least is untested. Gold and silver did well in 2007-2008, we’ll pick that.

In the short/mid term I agree. Precious metals have a pretty good track record of weathering financial crises, and given the lack of fiscal responsibility being exhibited right now, at some point a huge amount of capital is going to be looking for a new safe haven.

The tricky part though is finding new places to park assets long term, the segment of the market that used to be dominated by 30 year treasuries. Each alternative store of value has its corresponding black swan events that could wipe you out:

Gold/Silver -The discovery of a large new lode made available through new tech.

Bitcoin/crypto -Large scale internet outage and/or network fragmentation (ie the US internet is no longer able to talk to Asia for some period of time). Anything that disrupts the continuity of the blockchain. I think this is a much larger threat to crypto than than shor's algorithm.

Index funds -Because they cover the Western economy as a whole, they are highly susceptible to geopolitical risk. A major shift in the geopolitical centers of power would likely take its toll on these markets.

I guess maybe long term a basket of commodities with some real estate sprinkled in might work, but that's not nearly as fungible and lacks a consistent track record. It'll be interesting to see what people do.

I’ve followed the Golden Butterfly portfolio’s asset allocation since 2017. 20% Gold, 20% cash, 20% 30-year treasuries, 20% small cap value and 20% S&P500.

Gold/Silver -The discovery of a large new lode made available through new tech.

Eventually (and I'm not going to hold my breath) the asteroid mining folks seem likely to strike it rich.

While possible, this is still sort of science fiction. The bigger risk to gold is that, as gold gets more expensive, deeper and deeper extraction becomes economical. This pushes innovation in the technologies surrounding deep mineral extraction. If it turns out that there are much larger deposits down there, the market suddenly looks very different.

...

So your point is that it'll give an intelligent investor plenty of time to sell before the market crashes? Because people who have the money to invest in asteroid mining and people who aren't willing to wait years to see a return are, I suspect, non overlapping circles.

...

This has happened before- literally half the silver that has ever been mined was extracted in one lump sum by the conquistadors in the immediate aftermath of pizzarro’s conquest. It caused gigantic inflation in Europe.

China recently added export controls on silver in 2026.

The US added silver to the Critical Minerals list in November 2025.

Declining confidence in the US leads foreign investors to look for alternative investments to US treasuries/dollars.

Part of the move could just be short positioning being forced to cover. When the price moves quickly in a short time and there are a lot of people using leverage then margin requirements can cause some positions to be forcibly liquidated - which causes the price spike to go even higher for a short period of time.

The amount of silver shorts vastly exceeds the amount of silver. China sits on a substantial amount of the world's physical silver. China could very well decide to play a game of chicken against the short sellers by wildly buying silver even at high prices. Their silver gains in value as the price climbs and a silver short squeeze is every silver investor's dream. Silver going parabolic would undermine wall street and strengthen the resource rich part of the world.

China doesn't want to replace the dollar with the Yuan, they want a decentralized world with a global reserve currency that isn't controlled by one single entity. Precious metals make an ideal reserve currency for them.

People have been writing this same post since 2008. Probably 1958. And it goes something like JPM is short a lot of it and will go bankrupt etc. Yet JPM is not bankrupt.

Silver still does one of these parabolic moves once a decade. Everyone hyperventilates about the silver conspiracy. A year later it goes back to trading on supply and demand.

JPM isn't bankrupt but the "monetary crank" portfolio of gold, silver and bitcoin still easily outperforms the S&P or JPM stock.

They are also negative societal EV. And the crank portfolio all depends on what time frame you pick.

Negative EV in the sense that spending real resources digging metal out of ground, building a basement to store it in, and paying guards to guard the metal are all resources that could be used doing things like digging metal out of the ground to build high speed rail.

Bitcoin has one interesting thing though. GPU tech is on the same tech tree as build AI. Sometimes doing science for science sake works out. And bitcoin sort of was an enabling tech for AI.

This is where my obsessive buying silver rounds and sitting on them pays off in spades, were I the sort of person who sells things once I've bought them...

Alas my collection is going to keep sitting in my closet for me to sporadically enjoy looking at. I'm actually pretty pissed off by the price jumps because it means everyday silver objects I'd have liked to buy for daily use are now so expensive that even I am passing them over (a standard silver spoon is now over £100...). Plus I have a list of gold jewelry pieces I wanted to commission but put off over the last few years that are now looking like they aren't gonna happen. Honestly this sucks and I hope the precious metal retail investors driving these prices up to stupid levels lose their shirts.

My father-in-law gave all his kids ~10k in precious metals for Christmas and I'm irrationally annoyed by this because if it was cash I'd use it for stuff with a baby on the way and round off the emergency fund but I don't want sell my small pirate treasure hoard that I'd probably never get around to building again.

Man, I wish I had a relative who could/would give me 10 grand in precious metals… I always get a sweater or a book or something for Christmas!

You can sell parts of it, you know, not the whole thing.

Do a partial exit strategy where you sell off any gains?

I’m saying this as someone who lacks such a hoard. I imagine I’d feel different in your position.

Do a partial exit strategy where you sell off any gains?

That's easier to do when you're looking at numbers on a screen. Seeing your position stay constant at $X while your number of shares goes down is one thing. Seeing a half-empty treasure chest where the value is only visible all the way over on the computer (and a couple calculations) is another.

How does one go about investing in precious metals?

physical at your local dealer, futures, miner stocks/etfs (indirect, consider it a 2-3x leverage on the metal itself)

You can buy them from online retailers for a premium over the metal cost. The premium will depend on retailer markup and also on what, specifically, the piece you're buying is; generally for coins state issued pieces have a higher premium than privately minted ones(these latter are called 'rounds' to clarify that they are not legal tender but are in other ways identical to coins) and bars/ingots will have higher premiums the smaller the piece is. Retailers will give a discount for paying in crypto and ship to your house in a package from a fake business so no one knows it contains precious metal. To cash in, pawn shops and coin stores will generally buy at a slight discount from the metals cost- this could still be worth it if it goes up enough in the meantime.

Are you trying to swing trade it, or are you trying to hedge against financial collapse?

Considering the latter.

Store your silver in a cool dark place. Those mint tubes are great, and you can place silica gels in there with them.

Then you need to have the physical metal in your personal possession. There are brick-and-mortar gold and silver shops in most cities. I assume you can just walk in and buy some. Expect a moderate markup though.

You have to knock on the door and be buzzed in, and they may or may not have inventory.

If one really wants to invest in precious metals and doesn’t feel comfortable maintaining futures positions: GLD for gold, SLV for silver, and GLTR for a basket of gold, silver, palladium, and platinum are three popular choices.

Note that these are all relatively expensive, with expense ratios of 0.4%, 0.5%, and 0.6%, respectively, compared to well-diversified stock and bond ETFs/MFs. I personally have never bothered with precious metals (or commodities in general) and would not recommend dedicating a large portion of one’s portfolio toward them.

Buy from eBay and put it under your mattress.

Buy from Costco, when they offer it.

PSLV is the only paper silver stock I trust, there's definitely paper silver distorting the market.

Junior miners? I made some money in the last month on CDE and NEM. I lost some money today on HL, AG, USAS, and EXK. Probably should have just stuck with SILJ or just SIL.

Mostly its been buy and hold the physical metal for me, but WA wants 10% sales tax converting my paper money to metal money, so I'm back to the tickers.

Starting Jan. 1, 2026, sales of precious metals and monetized bullion will no longer be excluded from the definition of a wholesale or retail sale and will be taxable.

Wow Washingon is really going to shit recently.

You are not kidding. Democrat trifecta rule is awful.

You can't blame this on the Democrats. New Jersey eliminated its sales tax on coins and bullion by unanimous vote while having an all-Democrat government.

New Jersey Democrats flirtations with precious metals might be a special case. Because its a major component of their corruption racket.

Markets do stupid shit all the time now. Best analysis I’ve seen in production costs are $25/30 per ounce and solar power profits collapse to $0 at $125 an ounce. Bitcoin has collapsed right now too. It’s probably free money shorting over 1-2 years if you can handle the volatility of supply and demand balancing while retail punters work thru the market. Mstr raised like $50b last year for an etf at a 4x premium to bitcoin so there has been plenty of the markets do stupid things now.

You likely need the price level to go up 4x so $25/ounce mining becomes $100/ounce or very big changes in supply needs for AI chips that has to be silver. The best I can tell a lot of industrial demand disappears in this $120 area within a year and longer a lot of supply can enter the market around $30

In May 2020 FRED changed it's definition of M1 to include savings accounts, which is why there's a huge spike in specifically that month. If you switch the graph from billions of dollars to % change this is much clearer. Changes in M1 (percentage wise) seem to have been pretty similar before and after (perhaps even less volatile after), based on my eyeballing the graph. They have a blog post explaining it.

M2 goes +500 +1000 +800 in the same timeframe.

It is pitch black. You are likely to be eaten by a grue.

Seriously, whose idea was this? We should have just kept calling the old definition M1, and created the new definition as M1.5 or M1b or something. Instead we've got a definition of M1 that's so screwed up, explaining precisely how screwed up it is is a famous problem in philosophy.

My impression is that continuing to construct the previous series was not really practicable. The blog post talks about this a little bit. The change in the definition wasn't arbitrary. The fed changed a regulation that required "savings" accounts be permitted no more than 6 withdrawals a month, otherwise the account had to classified as a "transaction" account. Transaction accounts are included in M1 but savings accounts aren't. They also count differently for capitalization requirements. It sounds like when the fed changed the rules about limited withdrawals banks largely started reporting all their accounts as "transaction" accounts, and therefore contributing to M1. So the fed can't really construct the old M1 anymore because they relied on banks to make the relevant distinction between accounts and banks largely stopped making that distinction in reports to the fed once it no longer served a purpose.

There's actually a little blurb under the FRED chart noting this discontinuity in definition for the M1 and M2 measures.

Oh that's why banks did that! Thanks.

Yeah, that makes sense, but defining a new measure that we can calculate and giving it the same name isn't actually a solution to our inability to keep calculating the old measure, it's just a very interesting case of the streetlight effect error. We should end our M1 graphs at the date where we can no longer calculate the original M1 definition, start our "M1b" graphs at the date where we have enough data to calculate the new M1b definition, and never plot them as the same line on the same graph. OP here isn't the first or even the tenth person I've seen who didn't realize that that graph discontinuity was an artifact of a definition change, despite (or, really, because of) the paragraphs underneath that are needed to explain that.

That's fair. I think it's a hard problem that I don't have a strong opinion on. In the case the fed chose, there's the obvious potential for confusion due to a very dramatic change in the graph. Notwithstanding any kind of clarifying text on the page. On the other hand, if you create a new series it can be hard to discover that the old series exists, when it might be useful. FRED actually already has at least one discontinued M1 series, which was weekly data.

My perception is that, from FRED's perspective, they are still reporting the "same" thing (the sum of some field on a report bank's file with them). If they changed their underlying methodology I suspect they would discontinue the old series and create a new one (as with the weekly data) but in this case it's the reporting entities whose behavior changed.

FRED actually already has at least one discontinued M1 series, which was weekly data.

That's really interesting!

From a discoverability standpoint I'd think that the solution would be a simple hyperlink - the discontinued M1 page has a link to the new M1SL; just add a link in the other direction too and we're good.

But from a epistemological standpoint? The mathematician in me wants to say that it's silly to call the new data a new series, so long as it's the same thing being measured, even if it's evaluated with a different frequency. But the engineer in me is bowing in awe to whomever decided something like "we're using a different evaluation process at the lower frequency, therefore it's a different measurement even if it's the same measurand, therefore we're putting it in a different series".

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