Friday, 7/12/2013 18:19
Yes, if it's gold coins you're after. But not if it's gold bullion in other forms...
OVER the last few years, during the great investment
demand for precious metals, we have seen sporadic shortages in silver
and gold coins, writes Miguel Perez-Santalla at BullionVault.
Many people have written about these shortages as a harbinger of things
to come in precious metals more widely. One of the fads is to decry
supply issues in silver and now recently gold.
However, the truth of the matter is less dramatic, if not quite so simple.
In most cases, supply issues with silver or gold coins are caused by
abnormal or let's say surprising increases in demand from bullion coin
buyers. Simply put, coins don't come out of thin air. They need to be
manufactured. This all takes time and money. No one wants to tie up
their money in a product that is not going to sell. That exposes gold
and silver buyers to "just in time" inventory gaps if it's coins they
want to buy.
Imagine you are selling a low-cost product with a high margin. It is
much more likely that you will have enough inventories for almost all
eventualities. Look at a typical retail product – how about lip balm? I
don't really know the costs but I can guess. Some of the more premium
brands sell individually for $10 each and more, but many quality brands
sell for $1.00 or so.
I have never seen a retailer that sells this product run out. Though it
is possible, most likely that chance is very remote because I believe
their profit margin is probably around 100% or more. This typically is
called the Keystone markup.
My guess is that the retailer pays lower than $.50 for each one of
these $1.00 lip balms. So their profit of 50 cents or more covers any
carrying charges that may be represented from holding the inventory.
MAKE SURE YOU GET PHYSICAL SILVER IN YOUR OWN POSSESSION. Don't Buy SLV, or Futures or Pooled Accounts or any other BS paper silver product .Remember anything on paper is worth the paper it is written on. Go Long Stay long the bull market have even started yet
