I’m a big fan of Reddit and very active on r/Coins and r/Silverbugs. Occasionally, I like to hop over to r/WallStreetBets to see what the gambling addicts over there are up to.
Much to my surprise, WallStreetBets and Silverbugs have begun to merge. Coming off the high of the great gains of Gamestop (GME), redditors have been looking for more stocks to make gains from (or teach WallStreet a lesson).
Some Redditors are looking to Blackberry, AMC, or Nokia, but another subsection has begun to eye silver as an undervalued asset worth pumping.
As a coin-collector, I also dabble in collecting precious metals. Silver has beaten stock market returns before, but over most long time periods, silver mostly keeps up with inflation. As much as I like silver, I don’t expect to get rich off of it.
I am a little annoyed to see the mentality around silver stacking changing over the past few hours. A lot of silver stackers liked to watch their stack grow and felt some security in it. Lately, many people are entering the hobby with thoughts of market manipulation and greed.
Here is a screenshot of the post by u/RocketBoomGo on silver prices that began trending and motivating a lot of the current excitement about silver.
Here is another Reddit post by u/TheHappyHawaiian that motivated more of the hype around silver. I am not a fan of technical analysis because I very much doubt it’s efficacy, so I won’t delve into whether or not the prices are possible.
A lot of the posts about increasing the price of silver seem to be looking at a price target of $1,000. (Is this probable? I have no idea.)
Let’s talk about the pros and cons of silver reaching $1000 per troy ounce.
If silver reaches $1,000 an ounce, coin collectors and silver stackers who already own a lot of silver will make an amazing profit should they decide to sell. A silver quarter, currently worth about $3 would be worth almost $200!
It might get more people interested in precious metals. I would definitely like to have more of my friends and family interested in silver. (Although I would prefer if they were interested in investing first.)
It would make owning a coin collection or silver a much greater liability. If silver went up to $1000 an ounce, I personally would sell some because I would be uncomfortable having that much money in my house unprotected.
If silver went up to $1000 an ounce, the value of silver would begin to greatly outweigh the numismatic value of silver coins. That increases the likelihood that silver coins would be melted down for the silver content since lots of silver collectors prefer pure bars. 😦
Most importantly it would make coin collecting an insanely expensive hobby! My friends already think I’m crazy for spending $20 on an old quarter; imagine if I told them I was now spending hundreds per quarter!
Obviously, I’m glad more people are looking at silver, but I am worried about how the culture around silver purchasing may begin to change. Currently, it’s been mostly motivated by interest in it as a material and a community. Using silver as a store of value feels more like a hobby than investing.
WallStreetBets Redditors are more interested in increasing the price in the short term. When someone asks advice of stock purchasing over on WSB it is almost always met with a strong encouraging and pressuring to buy. Silverbugs has been a much more calm, “buy what you can afford and dollar cost average.” I would hate to lose that in the community.
Anyway, that’s enough of my ranting for now! I logged onto r/Silverbugs a few hours ago and decided to write an article here about how I’m feeling about a silver pump.
If you want to learn more about what U.S. coins contain silver click here!
Here is a quote to ponder on for the day, as applicable to stocks as it is for silver.
“In the short run, the market is a voting machine but in the long run it is a weighing machine.”Benjamin Graham
Edit 2/2/2021: A lot of WSB redditors are now trying to distance themselves from the silver pump. There’s a lot of conspiracy theories that the silver pump was manufactured by Citadel.
The silver price has risen a lot in the last week, premiums pushed silver prices to over $32 an ounce. Today, silver has fallen slightly from its highs from yesterday.
I’ve been checking online retailers like SDBullion, and they seem to be running out of almost all their silver in stock.
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