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PaperclipPerfector  1mo ago (text post)   2581 thread views

Small-Scale Question Sunday for February 1, 2026

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Is right now (after a historic crash) a good time to buy in on silver and gold? The underlying logic still seems sound (needed for electronics, inflation/weakening USD, increased international drama)

Silver has historically crashed all the way back to where it was three weeks ago. Actually, two weeks ago, now that I check. We got as low as a month. I would be careful!

The underlying logic still seems sound (needed for electronics, inflation/weakening USD, increased international drama)

This is a good thesis for why silver should be priced higher than some assumed baseline where we needed less electronics and had less international drama. It's not necessarily a good thesis for why silver should be higher than it is now. Maybe that's already priced in. Maybe it's priced in five times over. How do you know? You should either have a view on the underlying economics / value of the thing, where your decision to buy or sell depends directly on the price, or acknowledge that the last month of price movements have little to do with underlying facts and everything to do with narratives and approach it mostly like you would a shitcoin. In which case, sure, maybe it dumped a little to hard, the narrative still has energy, it was primed for a little more pump when you posted that. But it's important to know why you're buying!

I've held a small part of my assets in gold/silver ETFs for about last 10 years, and it tripled since then. Which gives a solid 11% yearly return. But it was I wild ride, it was underwater for a bit and had pretty mediocre return for a long time, and only my laziness prevented me from selling (unfortunately, the same laziness prevented me from buying more in the dips). But in the hindsight, for a disciplined investor who is better at it than I am, it'd probably be a good investment. I don't see a fundamental change now which would change that for the next 10 years (but then again, I am not very good at it...)

Looking at the long term graph, we're sitting at the top of a pretty sizeable mountain, so not sure "historic crash" is the right way to describe it.

Periodically when I have the extra cash in the bank and the extra room on my credit card, I buy an ounce of gold at Costco on my way out. I wouldn't want to buy gold futures, as the value of the gold to me as an inflation/TEOTWAWKI hedge is minimized by having intermediaries between me and the gold.

If you have significantly higher value assets than I do, that probably becomes impractical for storage reasons.

I'm not sure what's the point of buying Costco gold tbh. It's overpriced (usually not by a lot, but noticeably), if you'd want to sell it you will inevitably pay a commission, you need to store it somewhere in secure place and not lose it, and frankly excluding the scenario where the civilization collapses, I do not see any advantage over holding gold-linked assets. At least I don't run a risk of losing those if I move...

Am I missing something important here?

You are missing Bernie Madoff and SBF. Fraud happens.

Not sure how it relates to gold though. I mean yes, bad investments (and fraudsters) exist and existed since primates invented money and lying. But this does not lead to gold investments, I don't think investing in something like industry-benchmark index would expose me to SBF-Madoff types any more than buying physical gold.

I think it relates to anything. Are you sure that the gold exists? That it is not "fractional reserve" or that it is in storage in USA that refuse to send it back (in the case of Germany).

The argument that if this asset is not in your hands then you may turn to own some very expensive toilet paper in times of crisis is not outlandish. Not saying that is good idea to overpay for physical gold.

Are you sure that the gold exists?

As sure as the rest of the market. Which is enough for me. Again, if the market as a whole collapses, then we're in "canned food and ammo" scenario, that's a different discussion. But until the society has not collapsed, being as safe as the rest of the crowd is enough.

The argument that if this asset is not in your hands then you may turn to own some very expensive toilet paper in times of crisis is not outlandish.

That depends on the kind of crisis. If it's the crisis like 2008, then I think FDIC and similar mechanisms worked as intended. Surely, some risky investments caused losses, but as expected, the government went out of its way (and some say, way too far, but that's beside the point) to preserve the market and not let it fall too deep. If it's the crisis like 1917 in Russia, then yes, people who own property are fucked, and lucky if they get out alive, and may forget about such insignificant things as property. And having a couple of bars of gold won't help much, rather gets one more viable candidate for being murdered.

I use my costco rewards credit card for 2% cash back, and my costco membership gives me 2% cash back. The markup over spot is typically 1%, and I typically just don't buy it when the markup is higher, but the highest I've seen is 4% over spot which is effectively nothing with the cash back and membership.

Frankly, I don't see the point of gold-linked assets outside of short term gambling. Half the point of goldbugging is what if civilization collapses. I want to have my gold, not a piece of paper that tells someone else that I have the rights to a piece of gold, in that case I'd rather have other assets anyway. My safe is protected from fraud, embezzlement, mismanagement on the part of the asset managers. It is protected from a hostile banking system or government entity freezing my access to it. It is fairly opaque to outsiders how much I have at any given time, it can quite easily be given to someone or spirited away with minimal paper trail.

There are, obviously, risks. Theft, fire, loss. These can be minimized but never eliminated. What I think still makes physical gold appealing is that those risks are uncorrelated with the risks tied to other assets, other than I guess a fire at the property. I'm not advocating for keeping all your assets in your home or office, but I find it gives me peace of mind knowing that I have negotiable assets on hand that don't depend on a financial system that is rapidly turning into a cross between a casino and a social credit panopticon. Much like with crypto, if you don't have the wallet it's not really yours.

Frankly, I don't see the point of gold-linked assets outside of short term gambling.

As I noted in other comment, my gold investment produced a solid 11%/y over the last 10 years. No civilization collapse, no drama, just buy and hodl. I don't think embezzlement and fraud will be an issue for funds like GLD. But if you feel touching physical gold makes you feel better, sure, why not.

Much like with crypto, if you don't have the wallet it's not really yours.

I'd argue it's not like crypto. In crypto, math is the only thing you can rely on. In traditional assets, the legal system is the thing you rely on - if, say, Fidelity suddenly decides to zero-out my account, I rely on US legal system to make me whole. If US legal system collapses to the point bank accounts are irrecoverable, then we're in the prepper scenario, which is properly served only by a bunker with multi-year stock of basic vital supplies. Having couple of bars of gold won't do - you will just get bonked over the head (in the best case) and relieved of it at the first opportunity.

I find de-banking to be a significant enough risk to outweigh the downsides of physical gold. Not enough to build a bunker, or to put my entire net worth in physical gold, but enough to have a few thousand dollars in solid assets that can't be frozen or confiscated with a few keystrokes. The functioning US legal system is the risk that physical gold hedges against, it could be targeted against you for a variety of reasons.

I do find it funny when my father asks how we would prove his stocks belonged to him if Fidelity's "computers crashed." Dude, if Fidelity suddenly and irrecoverably lost all its data, a little stock certificate isn't going to save you, ammunition will be the new currency.

FWIW: I think a big part of this disagreement likely goes back to living situation. If I lived in an apartment and worked in an office building I would probably feel differently.

For United States, we're not there yet for confiscatory debanking yet, all the debanking cases I've heard of were of the sort "take your money and gtfo", not "we will now take your money". If the US ever gets there, and you upset people that want and are able to disconnect you from financial system, your only alternative will probably be cash, but how long can you hold out on your gold reserves, without the ability to hold any non-shitty job (there are probably jobs that don't check IDs but I don't think there are any non-shitty ones) and without access to pretty much any place that checks ID. But yes, for this scenario having a substantial gold reserve in small denominations would work, if you know people who would buy it from you without turning you in.

That said, if you look the part, probably moving to California and pretending to be illegal immigrant would also work. You may get yourself an entirely new identity eventually, get a bank account and even vote (which ironically wouldn't be illegal if you were a citizen before).

if Fidelity suddenly and irrecoverably lost all its data, a little stock certificate isn't going to save you, ammunition will be the new currency.

That said, internal corruption is also a plausible scenario. It's not hard to track if the company is willing, but large bureaucratic corporations are very lazy so it's not impossible that they may refuse to deal with the problem until given the undeniable proof it exists. So downloading statements once in a while and keeping them somewhere on the backup drive may not be a bad idea.

That said, if you look the part, probably moving to California and pretending to be illegal immigrant would also work

Time to get a tan and work on my Spanish accent.

That said, if you look the part, probably moving to California and pretending to be illegal immigrant would also work. You may get yourself an entirely new identity eventually, get a bank account and even vote (which ironically wouldn't be illegal if you were a citizen before).

If I claimed to be from South America, the "when exactly did your grandparents leave Germany?" jokes would write themselves.

RE: Debanking

I mean we don't know what debanking will look like when it happens, because it hasn't really happened yet, but it's not all that uncommon to see accounts frozen but not closed or confiscated as the result of lawsuits. Particularly against businesses, in cases involving tax debts, where the funds are frozen and can't be accessed until the lawsuit is concluded. This is where half the traditional folk-wisdom of keeping some money in precious metals comes from in my family: among small business owners it's a sort of common sense theory that if you have some non-banked assets you can cover bills enough to keep in business for a while and stay afloat. The other half comes from the refugee corners of my family, who figure you're better off fleeing with a bit of gold than without it.

because it hasn't really happened yet,

Oh, "take your money and gtfo" debanking is happening all the time now. It started with "undesirable businesses" - payday loans, pawnshops, firearms dealers, porn, legal marijuana, that sort of thing. The feds strongly "encouraged" banks to cut them off from the banking system. See 'Operation Choke Point". Then after the Great Awokening and Summer of COVID Love happened, it spread from generic "shady businesses" to political undesirables. Trump businesses were kicked out of many banks. Same happened to various Trump-adjacent people. This is a "soft" variety though - it may destroy a smaller business and make life very inconvenient for you for a while, but as long as you stop being annoying to Powers and hide under the rock, you can survive. In fact, if you're billionaire, it probably would be just an annoying inconvenience for you - there always will be some bank willing to hold your billions.

What hasn't happened in the US, but did, say, in Canada (which of course is using the abovementioned debanking widely, but moved on to more severe approach) is full asset freeze, where you are just told "your money is now ours, good luck living without money". And with most woke countries (Canada, EU, etc.) increasingly trying to delegitimize cash, it may be very hard to maintain any semblance of normal life in that scenario. Which is exactly the point of it.

... ammunition will be the new currency

It seems like in any event where physical gold is more valuable than paper gold, ammunition (and food/tools/etc) will be more valuable than gold.

I highly doubt this. Gold has always had value, and in any future primitive society would retain that value.

I agree; gold's value is societally determined. In cases of societal collapse, your gold will just be taken off your corpse by a spike-covered guy driving a car that's also covered in spikes.

Someone buying physical gold should really be buying bullets, vitamins, and canned protein.

Yeah I mean if you're serious prepper, with the bunker filled with canned food, gas and ammo, then having one shelf there dedicated to gold and silver makes total sense. If that's your model of the world, physical gold fits it well. But doing just physical gold without anything else is just a recipe for losing money, IMO, if you're doing it for the financial reason.

Wait, why the hell does Costco wholesale gold??

The costcos in my area run out of stock of gold pretty much instantaneously. People have figured out when the shipments come in and line up out the door for hours before opening on those days

Costco sells about $200mm of gold every month. I think it comes from catering to Asian customers, who love Costco almost as much as they love buying gold.

For the most part, it just matches what Costco likes in a product: it's easy to beat other retailers on service (costco has a minimal markup over spot price compared to a local pawn shop), there's value in reliability and credibility, and it's a simple business as they do it. Costco's philosophy is built around trying to find things they can do better than other retailers, this is a good example.

Now, you can only buy 2 ounces a day, so you can't necessarily launder a drug business through costco. But it's just kind of a simple investment plan that fits into my standard week.

Probably because people want to buy it. Of course, since this is Costco, the bars come in a pack of 2 so they’re a bit more expensive initially.

That's hardly a small-scale question. Predicting any financial market is hard, and silver/gold (especially silver) is one of the most volatile of all! Volatility levels for both are absolutely insane right now.

My personal opinion is that gold is more or less rational now. Much higher than it was a year ago, less than it was a week ago, roughly balanced by high debt levels and falling confidence in things like bitcoin and treasury bonds. Silver I think is still overpriced (it's "the poor mans gold" for people who want to speculate but can't afford gold), so I have a small bear position against silver right now, selling calls to take advantage of its crazy volatility making options expensive. But obviously nothing is guaranteed and I could be wildly wrong.

You invest in Silver/Gold because you want the physical, hard metal on hand as a way to arbitrage against the dollar collapsing.

Which is probably not what you're talking about. Personally, in terms of speculating/daytrading, going by the past year or so, Silver and Gold are being affected by some seriously whonky market effects and powerful trading groups working in the background. Silver was 30 dollars and ounce a year or so ago, and it peaked around 114 just the other day ago. That's not normal.

God, I wish I was in daytrading. Literally right as I was discussing things with my brother as to how the bubble on silver and gold were going to pop, it was crashing.

...you know, looking at the market for gold right now, I'll go off on a branch and make a prediction - we're going to see the price continue to dip. 4,841.60 as of today, we'll see what happens in the next couple of days.

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