iPath S&P 500 VIX ST Futures ETN Message Board

Part 2

In 1964, a new car cost $3500 on average. Let’s say you had 3500, silver dollars from back then. Today, a new car with an average cost of over $30,000 will only require you to give up around 1000 of those silver dollars!

The average cost for a home in 1964 was $19,000, which required 15,000 ounces of silver ($1.30/oz) to purchase. Today, you would only have to give up 9,000 ounces of your stash – and that’s even after you factor in the average cost of a home now being $263,000. At $32/oz, your 15k ounces of silver is worth roughly $480,000!!

As you can imagine, there are a lot of things you can do with the additional $217,000…see this quick infographic for some examples.

Of course, these scenarios are really just theoretical in the end.

First off, it’s highly unlikely anyone held that much silver back in 1964. Outside of the pre-’64 dimes and quarters and a few other pieces, it was illegal for Americans to own bullion at that time. During the Great Depression, all gold and silver bullion was confiscated by the U.S. Government. Owning these metals for investment purposes was not allowed again until the 1970s.

Even if you could have owned that much silver, you would have been very well off if you had. In 1964, 15,000 ounces of silver (at $1.30/oz) was worth roughly 3-times the average salary of $6000/year.

Today, 3-times the average income equals roughly $150,000 while the silver is worth almost a half a million!

This fact alone shows that silver has not only kept pace with inflation, it has covered it several times over again.

Again, not many of us (regretfully) have saved that many silver quarters or dimes from that era, although it’s still fascinating to compare the purchasing power of silver from then to now.

What will be even more interesting is when today’s silver bullion investors make these comparisons 20, 30 or 40 years from now.

You're metrics are (and I say this with all civility) "out to lunch"...
Remember when US coins actually had silver in them? Here's an interesting look at the reality of the REAL purchasing power of silver... great article... Remember, in 1964 US quarters and dimes were 90% SILVER!

Part 1
The Amazing Purchasing Power of Silver – 1964 vs. Today

October 11, 2012

Most of us have either told or heard those tales of yesteryear about how you could get a hamburger for a dime, or a gallon of gas for a quarter. This was the reality in 1964!

Of course, these nostalgic facts become a bit slanted once you take income into account – in 1964, the average wage was only $6000 per year. While there are a lot of sources documenting the decline of the dollar, there really isn’t much out there illustrating the rise of silver relative to purchasing power.

A recent piece in Silver Enthusiast though breaks down how much things cost back in 1964 in both dollars and silver and compares these numbers to today. If a person held onto a stash of quarters and dimes from 1964 (extremely rare, we know), their purchasing power would have outpaced inflation many times over.

Consider the following scenarios:

In 1964, it would take 10 dimes to buy 10 hamburgers at McDonald’s. Today, that same number of dimes would buy you approximately 20 hamburgers (value of coins = approx. $23, hamburger = $0.99 each)

At around $0.25 per gallon in 1964, it would have cost you 13 quarters to fill up a 12-gallon tank. Today, you could buy 20 gallons of gas with the same number of quarters (value of coins = approx. $75, cost of gas = $3.70/gallon).

When we get into houses and cars, which are by far the two most expensive items an ordinary person will buy in their lifetime, the differences between 1964 and today are even more staggering.

Well, we'll see... I am on a wait list for a small position in silver (2-3 weeks delivery). Yesterday's buy price has no correlation to the orchestrated paper price of silver. It's $27.50 if you want the real thing... not a promise... Demand for physical is extremely robust TODAY. Think about this: The dollar is "stronger".. Stronger that what? other fiat currencies? currencies built on massive debt and printing presses? At the end of the day, silver is traded in dollars here. The dollar will move much lower at some point (no idea when). When that happens silver, which is traded in dollars, will move higher. Plan on it. When that will happen? I have no idea, other than when the world realizes the emperor has no clothes... This is not a "money game". There are enormous consequences to the fallout from a falling dollar. Prudence (not "investment savvy" ) is the watchword. Buy your favorite high quality stocks... live your life to the fullest... and put some gold and silver in your pocket. It simply makes good sense.

Spot is $23.87 as I write. There is a massive disconnect between paper and physical. This is pricing from this morning at APMEX.for Silver Maple Leaves... Silver will trend higher.

IRA Eligible Hot Item
Volume Pricing:
Qty Check or Wire Credit Card
1 - 24 $30.34 $31.25
25 - 99 $29.84 $30.74
100 - 499 $29.34 $30.22
500 or more $28.84 $29.71

Well... From 8, you'd be down roughly 19%. This will decay (exclusive of price action) 1/2% per day.... With silver down an incredible 10% this morning (on top of 6% from Friday) and nearly as bloody for gold, the wheels are beginning to come off. The major market are going to follow. Remember though, this is ECONOMIC WAR and the USG will do everything in it's power to support this market (crushing you be damned!) What will happen now is a great "tug-of-war" between vying economic interests. You have three basic choices: 1) Hope "normal market" conditions prevail (you will clean up long). 2) Recognize you are being fleeced holding (so you must TRADE THE MOVES AHEAD). 3) Cut your losses and get out. Foe 90% of those here, #3 is my recommendation. That said, if you stay in... IF this derivative does what it's supposed to do, AND they don't manipulate the VIX futures (They would never do that would they?), This should move exponentially higher soon, BUT I trust NONE of them. We are not in a free market anymore. Anyone who advances that old notion is a fool. If you've lost half your speculation. Isn't keeping half better than keeping 25%? ... or worse? LOWER YOUR BETA!! SLOW THINGS DOWN!

You are either heartless fool or something worse if you truly believe what you wrote in your first entry...... Nothing wrong with making money, but flippantly "wishing" death upon your military (by implication) simply for you to "see things crash" is beyond shameful. (For the record, I believe "things will crash", so I am positioning myself for it, BUT PROMISE YOU, I WISH ALL WAS WELL AND I WAS LONG.)

Take these stats in for a moment:
*2,177 US military dead in Afghanistan
*4,486 US military dead in Iraq
Any idea how many died in the Korean War? 36,914.

Now, go out into your street... close your eyes an try to imagine that many people there with you. (your street is packed!!) ........ They are all dead on your lawn... and down the street... Then... imagine their wives, husbands, ... sons and young daughters coming to get them and bring them home for burial... Words have meaning, friend... I'm 49. I've made a lot of money (and lost some too) in these markets. One thing I can tell you without a moments hesitation, is that I'd give my money... ALL OF IT... if it would bring back the life of one... just ONE of these brave Americans. Try to see your money through the lens of American military casualties.... May they rest in peace and their families find consolation in their loss.... I hope your views change....

Curious? Have you been in battle? ... I have... Do you know what our soldier's face the DMZ? Here's a description: The DMZ itself reflects all the characteristics of any typical No-Man's Land: A strip of land devoid of character, loaded chock-full of mines, machine gun nests, security cameras, fields of fire and barbed wire that separates two ideologically polarized armies. 4 Km wide from the Southern to Northern Boundaries, the DMZ is heavily patrolled by soldiers.... You get the idea... Do you volunteer to lead the assault?

Like clockwork. This is a day trading ETF. You can expect that as "normal". The real trick... the real money will be made (and very quickly) when this thing catapults up from here. This thing will seek zero by design. We know that. Still, we are living in unprecedented financial times. This USD and economy will absolutely will come crashing down (UNLESS a drastic reversal of course comes from Washington... so don't hold you're breath). The question is how long can they keep hitting that balloon up in the air and keep it there? I have no idea. From time immemorial, the LAWS OF ECONOMICS HAVE NOT CHANGED. You can swim and hold a balloon underwater for a long time... until you're tired. Then what? This "balloon" is inflation from irresponsible monetary policy. Remember, the hare wins the race (IF he/she can survive contango ; ) Enjoy your profits now, but be ready to exit. Anyone who is sold on the idea that this will only go down will get crushed in a run up. It can, has, and will do this again... Good Luck!

Obvious typo: "days of this party are coming TO AND END soon"...

Your plan is a very bad one, friend. UVXY (should go up if the SPX goes down, but doesn't have to. This is a trading vehicle on steroids based on a differential between two VIX (volatility) futures contracts. It is imperative you know what this is (and is not) before you try to trade it. If you must, then go "paper trade" it and experiment. My (humble) advice to you (if you want to play the downside) is to either short a beta one S&P 500 ETF or go long a beta one inverse ETF. AVOID LEVERAGE if you are not very comfortable managing risk! You can lose A LOT of money here VERY QUICKLY. You need a 0.5% gain EVERY DAY just to stay even with futures decay.... then there is "contango"... If you have no idea what I'm saying, please don't trade this ; ) at least until you have done a lot... and I mean a lot more homework ; ) Good LucK!

what's worked for me: If you are "underwater", FORGET that you are down. View EACH DAY as the benchmark. Wait for a run up on UVXY then WRITE (SELL) AT THE MONEY, current month, CALLS AGAINST YOU POSITION. Today, for me that was April 8 calls. Sold 76 contracts (ya I got a lot) for $.80. My average price is $8.50. This maneuver took my new average price to $7.70 (IF I held to expiration later this month). When UVXY "dumped" at the end of the day, I closed out (bought back) those options for $0.60 each. Now my average price had been knocked down to $8.30 (ignoring commissions).... a 20.4% improvement in one day. I'll wait for the next setup and do it again, lowering my average cost along the way. IF (WHEN) this thing spikes, I should do well. I have a feel for the psychology now that I didn't have before. Study the daily patterns and you can at least give yourself a fighting chance to stay in the game, rigged as it is... Going into the end of the day flat on options (options position gone), You can sit patiently an be ready to move when inter day run ups happen. This strategy works to constantly lower your average price, yet keeps you in if UVXY runs up.... The only down side is IF you are carrying those call options (short) and the market runs. You may need to hold them a few weeks to expiration and take a loss IF the strike price plus the premium you took in together is less than your average purchase price... Then, there are other strategies to address that contingency... I hope you start making money. To do that, you need to learn how to STOP losing money first. Some people have no idea how hard this simple truth is... This market will take 90% of your money IF YOU LET IT! Good Luck!

Moral of the story? Stay off that bike ; )

You can point straight to Bernacke for this.... Read Stockton's commentary today on Yahoo. He has it right. This "pumping" has ARTIFICIALLY inflated the equity, bond and housing markets. It is not sustainable. We're in deep sh&%. How long this will continue? one month? one year? two years? No one can say for certain. Playing UVXY will crush you long term if long, unless you are "lucky" enough to call the start of the "end of the party" on Wall Street as the FED fails us all. You''ll hit it out of the park (IF you can survive contango in the interim) These bubble levels are insane... utterly insane. The day is coming when we will see a "no bid" day on today's "value" stocks, as well. If you're new to "investing". Do nor by into the hype that we are in a recovery. This is no recovery. Don't bet the farm on this garbage either (UXVY) ... or paper silver and gold. If you're able, buy PHYSICAL gold and silver at today's prices and you will be well served. That said, don't bet the farm here either! (20-40%)... The rest? Buy stuff people need. Can you say toilet paper futures ; )

BS flag thrown. You don't "downgrade (or upgrade) volatility". SPAM

Like clockwork... profit taking near 8.50.... If they want to go higher 8.50 will be breached... I think we end in the green. Been wrong a lot... We shall see...