201 replies to this topic

[ZenOps]

Exactly.

What stock analysts tend to omit, is that the Hunt brothers were basically shut down by the government because they changed the rules. If the government had not stepped in an put a stop to it - than the Hunt brothers would have cornered the market and none of us small investors today would probably own physical silver (as little of it as there is left) So Ironic.

That two men - nearly cornered the entire global silver market 30 years ago definitely does underline exactly how little silver there is out there. This time around, it is much scarcer than it was back in 1980, thirty years of unrecoverable industrial demand and waste.

Silver is also spread around much more evenly. As few as silver investors are - they are still more spread out around the globe than the Hunt brothers. If you try to buy a Silver Maple Leaf today, you will have to wait weeks to get a 2011, all of the bullion of previous years is gone (Remember, coins have been minted for thousands of years) Gold maple leaf? No problem... Lots on the shelf, heh.

Some are predicting at least a 16:1, 10:1 or even better than 1:1 ratio to gold before it settles back at its market value.

And I have to say: That if the government does step in and hammer Silver back down - it would be irresponsible. Keeping such a scarce resource artificially low at this point in time would discourage silver mining and exploration (Silver being far far far more important than oil IMO) and recycling.

And a word of warning to the paper Silver players: A pre-1964 US Government certified "Silver Certificate" is worth a little less than $2.

Edited by ZenOps, 30 April 2011 - 06:47 AM.

[maple_leafs182]

I know my economics professor was suggesting that the US will go through a Japan like recovery where they will have periods of growth when the Central Bank and government are spending and contractions when deficits become too high and they cut back on spending. Something Richard Koo calls a Balance Sheet Recession.



If the Fed does not have a QE3 then the US is bound to slip back into a recession. If that happens I would think silver would take a hit vs the US dollar in the short term. The US dollar has become the worlds carry trade currency and because of this people would be forced to buy dollars to pay off their debts in the event of an economic downturn. I think we could possibly see silver fall down to somewhere in the low 40s or even the 30s against the US dollar. However, if there is a downturn, I think that would be enough for the Fed to justify QE3.

A side note, Peter Schiff brought to my attention that if you look at the US economy when priced in gold, silver or even some other currencies such as Swiss Francs, the US economy has actually been contracting. The Federals Reserves inflationary policies have just been making it appear as if there has been economic growth.

With oil prices also on the rise I think we will see another economic collapse soon.

[GostHacked]

A side note, Peter Schiff brought to my attention that if you look at the US economy when priced in gold, silver or even some other currencies such as Swiss Francs, the US economy has actually been contracting. The Federals Reserves inflationary policies have just been making it appear as if there has been economic growth.

Schiff is one smart cookie. He called the collapse of the housing market two years before it happened. People called him crazy, ... Schiff is a great resource for future money trends, I really like listening to him.

[ZenOps]

I would like to see silver hit the $150 mark (for obvious reasons)

But also because it would put some kick back into capitalism. Put a little bit of greed back into peoples minds. It would make youth get off their Xbox playing asses and go out there and find a silver mine, a gold mine, and an oil deposit.

Nothing creates an economic boom like a gold or oil rush, but the prices have to be high or everyone will just be content twiddling their 44 million food stamp receiving, Xbox sore thumbs.

[maple_leafs182]

I would like to see silver hit the $150 mark (for obvious reasons)

But also because it would put some kick back into capitalism. Put a little bit of greed back into peoples minds. It would make youth get off their Xbox playing asses and go out there and find a silver mine, a gold mine, and an oil deposit.

Nothing creates an economic boom like a gold or oil rush, but the prices have to be high or everyone will just be content twiddling their 44 million food stamp receiving, Xbox sore thumbs.

Ya, I am not that optimistic.

I think a falling dollar will lead to massive unemployment, an increase in the crime rate, food riots, and civil unrest.

[Pliny]

I think a falling dollar will lead to massive unemployment, an increase in the crime rate, food riots, and civil unrest.

It will lead to panic among governments whose revenues won't be able to match liabilities.
If crime rates increase, or food riots occur along with civil unrest it will be because governments can't feed themselves and not because people can't feed themselves. People have been providing for themselves as we go along. It is only when governments get too big and can't fund their liabilities that we get into trouble - other than natural disasters.

Right now there is a bit of a panic in government and they don't know what to do. They need revenues. do they increase taxes? There is no guaurantee of revenues in doing that - the economy has to be growing in order for revenues to increase, upping taxes kills economic activity. Do they just print money? Inflation is the result of that. Do they raise interest rates? Once again that kills economic activity and puts homeowners at risk of foreclosure. So the problem is where can government get their revenues - not how do we get food on the table - we know we can do that. The only solution is cutting the size of government and it's budget the other option is dictatorial tyranny - massive wealth acquisition schemes for government to keep itself funded, control wages and prices and basically keep itself relevant and important in our lives.

[Pliny]

And a word of warning to the paper Silver players: A pre-1964 US Government certified "Silver Certificate" is worth a little less than $2.

That is only because of it's historic value to collector's. Take it to the bank and they will trade you one "silver certificate" for one crisp new dollar. You can argue all you like that silver is now worth $45/oz but a dollar is no longer a weight of silver or gold, it is a value in itself determined by supply and demand.

Edited by Pliny, 02 May 2011 - 07:33 AM.

[Pliny]

I know my economics professor was suggesting that the US will go through a Japan like recovery where they will have periods of growth when the Central Bank and government are spending and contractions when deficits become too high and they cut back on spending. Something Richard Koo calls a Balance Sheet Recession.

A side note, Peter Schiff brought to my attention that if you look at the US economy when priced in gold, silver or even some other currencies such as Swiss Francs, the US economy has actually been contracting. The Federals Reserves inflationary policies have just been making it appear as if there has been economic growth.

A balance sheet recession? Just a matter of accounting. Of course, that's all it is when electronic debits and credits are the sole means of trade.

With oil prices also on the rise I think we will see another economic collapse soon.

Governments get quite a few revenues from oil. A high price is good for them but not for politicians seeking re-election. The high price has probably more to do with increased demand in China and India than anything. Obama is investigating speculators though - a complete dunderhead. Try looking at government environmental or domestic oil development policy.

[maple_leafs182]

Within minutes following the announcement of OBL being dead silver fell over 5 dollars.

I think I may trade some of my silver in for gold, I'll wait till silver goes back up to $48-$50 first.

[ZenOps]

Osama being dead is probably a factor.

Another factor is that the CME is raising the margins *again*

http://www.kitco.com...0502AS_CME.html

Three times in less than two weeks... There is something not right in the state of Denmark. The CME are doing everything in their power to collapse the paper Silver players right now. The government hammer is hitting silver hard, but only the margin silver paper players are getting smacked.

There will be a dip, because those who cannot afford the new margin, must sell (just like at opening today)

I don't know if they plan to raise the margins all the way to 100% and just have people not borrow any money to own silver? That would greatly benefit the Chinese IMO, as its mainly the US players that buy with leverage and funny money?

Anyone else with conspiracy theories?

Edited by ZenOps, 02 May 2011 - 02:52 PM.

[Pliny]

Anyone else with conspiracy theories?

No. I am generally surprised by my own ignorance of all that is actually going on. Thanks for the link.

Superficially, the US seems strong after Osama's execution, and that is reflected in a return to confidence in the US dollar. Obama will continue with his economic policy and again erode that confidence, I think. The price of oil is the biggest influencing factor in market prices after confidence in the dollar.

In my view, one has to wait and see what the moves are of the power players. Unless one can get an inside line one just has to keep as much on top of the moves as possible.

Edited by Pliny, 03 May 2011 - 09:28 AM.

[ZenOps]

The hammer is falling yet again. Fourth margin increase

http://www.kitco.com...vermargins.html

Forcing all the ones who borrowed money to buy silver to sell! Bring Silver down to $5 again, but it still sucks for the physical people because noone will sell at that price because they know its worth much more than that.

The detachment of "spot" price, "real" silver and "paper" silver has begun.

Its kind of sad, because this does represent what the old Silver certificate does, the US dollar is no longer valid as a currency for "reality" (IE: Not redeemable for what it was originally supposed to be valued at)

I'm thinking about buying canned food before the US dollar becomes detached from "food" reality.

Edited by ZenOps, 04 May 2011 - 04:22 PM.

[Pliny]

The hammer is falling yet again. Fourth margin increase

I think the drop is an opportunity to buy. The economy hasn't changed because OBL is dead. Nor is there a restored confidence in Obama. Confidence in the American dollar, with resultant strength against other currencies and the metals market, comes from a shift in America's self-perception. The reality of the economy will settle in and Obama, if he stays true to his ideological roots, will continue to be intrusive, redistributive and divisive as regards the economy. However, if they change course and raise interest rates in order to fight inflation, which is what they should have done in the first place, then saving will start to occur and money will sit in banks accounts. It will kill the bull market we have been experiencing and limit the volatility of commodities and currencies.

Governments certainly enter an unknown variable that can affect so much in an economy. Politicians making the policy have an inside line that I think is criminal. I'm certain Senator Dodd knew where to move his investments when he was making decisions about stimulus packages and bailouts. Maxine Waters, who had an interest in a bank that received bailout money didn't get much press. It should have had more legs. It certainly isn't a level playing field when government can shift an economy and it takes inside connections to make personal financial decisions. It's corrupt.

So what do you think? Rising interest rates or QE3? QE3 is a continuation of current monetary policy and means further volatility, and rising interest rates means a period of downward adjustment?

Edited by Pliny, 05 May 2011 - 09:47 AM.

[Pliny]

I'm watching commodities and oil and the market drop like a stone. A little bit of a panic, I think.

I note Europe has announced no increase in their interest rates and a 115 billion dollar bailout for Spain's economy. Central banking policy that may be reflective of America's future policy. Who knows?

[maple_leafs182]

I agree. I think OBL being dead made the US seem competent which has renewed confidence in the dollar but I do not think this will last long. As you said Pliny, OBL being dead hasn't changed the economy. It looks like we may be hitting a floor, I think now may be an excellent time to buy, I will be picking up a few ounces tomorrow.

As for QE3, I think the Fed may hold off on QE3 for a few months. They may wait till the economy takes another downturn before they can justify implementing another round of quantitative easing.