I’m witnessing three things happening in the silver camp right about now. As the dollar-denominated price of silver is freefalling in slow motion, fellow stackers either 1) freak out and get out 2) try to call the bottom 3) pay no attention.
I’m in that last group — I pay little to no attention. Sure, did I get hosed in the nominal terms when I bought Canadian Moose coins at $38, and they are now $30? Yes, and I would feel bad if I cared. But I don’t.
I feel like bitching about “losing” dollars on a silver trade is like complaining that you should have bought 50,000 rounds of 45 ACP 230 grain ammo, but instead you only bought 48,000.
As a stacker, your very nature is one of a contrarian. You have removed yourself from the insane paradigm of ever-increasing debt by choosing to put your hands on some real things that have real value.
Here’s a quick chart I created to illustrate why I don’t care about silver price denominated in dollars. This is my response to the collective circle-jerk that’s happening right now in the precious metals community as everyone is trying to make everyone else feel better about those $48 dragons they bought last month.
This is a 4 year time horizon hypothetical scenario of buying silver on the dips. Start on January 1, 2009, and get a roll of Eagles at fifty bucks. In 6 months repeat at the same price.
A year goes by, and silver drops $10 to forty bucks. You load up. Price stays the same – keep buying, just now as much.
Another year goes by, another 10 dollar drop. You load up again.
After 4 years of this, silver has lost 80% of its original price and is now trading at $10. A catastrophe, right? Not really, if you keep buying on the dips.
In another year, because the fundamental issues ailing our world have not been fixed, silver goes back up to $40. Instead of losing your ass, the dollar-denominated value of your stash went up by 150%.
This is the type of thing I do, and this is why I don’t worry about the dollar-denominated price of silver at this point in time.