49.20, making a pull for $50 an ounce tonight. Crazy to think, 11 dimes, 1 ounces is worth $50 dollars. Thats a vote of confidence.
(http://loopy.org/silver-4-25.gif)
Seems the world is losing confidence in our Monopoly money.
I'm hoping alot of this rise is a short squeeze and not the end of the dollar. when I read stuff like this: http://globaleconomicanalysis.blogspot.com/2011/04/no-miracle-cures-from-inflation.html (http://globaleconomicanalysis.blogspot.com/2011/04/no-miracle-cures-from-inflation.html) you have to think what the endgame is and if we as citizens can do anything about this - especially for our kids and future generations. Also an article out that china may liquidate 2 Trillion of US debt...
I thought silver was high at $17 and this seems more of a mania than anything else at this point - but you can't deny the rise.
Quote from: cbc58 on April 25, 2011, 06:58:48 AM
I'm hoping alot of this rise is a short squeeze and not the end of the dollar. when I read stuff like this: http://globaleconomicanalysis.blogspot.com/2011/04/no-miracle-cures-from-inflation.html (http://globaleconomicanalysis.blogspot.com/2011/04/no-miracle-cures-from-inflation.html) you have to think what the endgame is and if we as citizens can do anything about this - especially for our kids and future generations. Also an article out that china may liquidate 2 Trillion of US debt...
I thought silver was high at $17 and this seems more of a mania than anything else at this point - but you can't deny the rise.
Who is John Galt? ???
I have been seeing this a lot. I take a step back and look at the markets for two items when everyone rushed in; Dot com stocks and real estate. It looks like just another bubble, not driven by any real economic value. It has the same justifications as to why to buy it, everyone else is so the price will keep going up and it is "safe". Precious metals have almost no intrinsic value. People will borrow against it and write crazy options and when it takes a dip, the banks will need another bail out. At least in the old days for 60 years banks were not too big to fail and all the assets of our society were not tied to investment banks. Our assets were insulated from this type of speculative market. Now they are all in one entity. I wish they would bring back the Glass-Stegal act.
It is amazing how many people don't see a bubble when an asset jumps 300-400% in a few years without any economic gain. I like the idea of Warren Buffet. If everyone wants it, sell it to them. If no one wants it, that it the time to buy.
It's just another scam to draw in the suckers. The whole thing is rigged. They already know what the price will be next week because they will set it.
Silver and Gold are tied to the U.S. Dollar. The dollar has been sinking fast for awhile now, so silver and gold prices go up. Kitco has a chart to explain if silver and gold really increased in value because of buying or if the dollar simply decreased, or vice-versa. There is no "huge" silver or gold bubble this is being driven by Fed Reserve policies and the drunken spending of the President(s) and Congress. A good example to understand the value of gold (or silver) is to not look at there dollar value, but rather what will they buy. 100 hundred years ago a ounce of gold (stamped $50 by the treasury) would buy a fine suit outfit, now that same ounce of gold, worth around $1,500 will buy a fine suit outfit. What changed? Not the gold, just it's value in U.S$$. The dollar has lost 97% of it's value since 1913 and the inception of the Fed. Since Nixon ended the silver standard the dollar has lost much of its remaining value. Heck just this year it's down several cents.
I agree with Squirl.....Glass-Stegal needs to be put back in place.
QuoteSilver and Gold are tied to the U.S. Dollar. The dollar has been sinking fast for awhile now, so silver and gold prices go up. Kitco has a chart to explain if silver and gold really increased in value because of buying or if the dollar simply decreased, or vice-versa. There is no "huge" silver or gold bubble this is being driven by Fed Reserve policies and the drunken spending of the President(s) and Congress. A good example to understand the value of gold (or silver) is to not look at there dollar value, but rather what will they buy. 100 hundred years ago a ounce of gold (stamped $50 by the treasury) would buy a fine suit outfit, now that same ounce of gold, worth around $1,500 will buy a fine suit outfit. What changed? Not the gold, just it's value in U.S$$.
Come on now, thats not exactly an accurate description.
Looking at charts and data
http://silverprice.org/silver-price-history.html
http://www.elitetrader.com/vb/attachment.php?s=6537273f0de0ff9354b51410e1a557c3&postid=3161409
you have silver up 264% in a year, 280% in 2 years, 963% in 5 years.
For the dollar, today 73.77, 1 year ago 81.58, two years ago 84.86, 5 years ago 87.10.
So silver up 274% while dollar down 9.5% in 1 year.. not exactly a match. Over 5 years, dollar down 16.5% while silver up 963%.
The numbers dont line up for it to be only US dollar based.
.. As for your statement about cash equivilency, you have to look at raw data. Gasoline has not increased 963% in 5 years.
As for the dollar losing 97% of it's value since 1913, well.. please tell me, what percentage did silver lose between 1980 and say 1983? It lost 90%+ in a few years, is that the silver standard you want? Is that better?
Quote...Glass-Stegal needs to be put back in place.
I fully agree with that statement, those 70 years were the longest period of economic stability any country on this planet has ever seen in recorded "civilized" history.
You guys may think I'm a nut but I'm telling you most of the gold and silver being bought and sold is not real, it is paper just like the money. If they can print silver and gold it's no different than cash meaning it can be manipulated up and down at will. The reason gas is up is not because the dollar is down but to keep it from going down. By driving the oil price up or down they can control the value of the dollar. The more oil costs the more in demand the dollar is. They can do this because they defacto control most of the oil in the world and the oil they don't control gets bombed or invaded. So if they stop selling paper metal it goes up just like if they stop selling oil it goes up.
What do you think will happen if they all take delivery like this Texas university??
Some say the same ounce of gold has been sold on paper over 100 times.
http://www.bloomberg.com/news/2011-04-15/texas-university-endowment-holds-almost-1-billion-in-gold-bars.html
Shawn I have very little trust in Kitco. They are the ones selling the product. Also 1 ounce of gold bought me a nice $400 suit six years ago, now it buys me 4 of them. Did our society become that much more productive? No. The suit example was commonly touted by Glenn Beck. He was also getting paid to say that by the same people selling the product which also makes me distrust it. The rise in price is completely disproportionate to the dollar. Gold would have to not rise another penny and we would be paying $20 for a gallon of gas, have a $5 menu at McD's, and $100 per piece of clothing at wally world for it to be proportional. Muldoon's figures are more telling.
ScottA you are right this is mostly paper trading. The reason that it has gone up so fast is that everyone has rushed in, same with .com stocks, mortgage bonds, junk bonds, silver in the 1970s (hunt), beanie babies, cabbage patch dolls, etc.. It is currently running off the greater fool theory. I will pay X because a greater fool will pay me X+1 in the future, because a greater fool will pay him X+3 ect.
My personal investment prospective is that my silver is up 1,000% more in five years. When I went to buy land 3 years ago it was going for $2000 an acre at auction, now it is $500 an acre. My silver has a cost of carry to keep safe. Land I can garner rents, timber, farm, mine, quarry, lease rights, and hunt, all things people need on a daily basis, for the cost of carry of taxes. ??? Sell high by low.
I'm amazed how many people from different political and investment perspectives agree with the reinstitution of one specific financial regulation yet neither political party is willing to do it.
I am not surprised. The people who own the politicians do not want it or it would be done.
Good article. They touched on the cost of carry of gold, but not how that cost gets born by people who take delivery. You have to transport it, pay sucurity and house it. Not worth it for the average investor.
"To own 100 ounces of gold futures with Lind-Waldock, investors pay a $100 fee and put up $6,571 in a margin account to buy a single contract. To take delivery of a 100-ounce bar, investors have to pay the contract's full price."
What they left out was the explicit math that the full contract price is $150,000 (100 ounces at $1500 and ounce). So people are trading on margins of 95% ($150,000/$6,571). Sound familiar? (1920's stocks)
I agree with Scott on the paper silver and gold. I buy only physical metals that I can take delivery on immediately, or within a few days.
Squirl........All real estate, whether land or metals is important to have. I would say land is more important, because you can grow or raise food on it. But land is not as liquid as a asset as precious metals. Land carries taxes, gov't regs, fees, etc. While precious metals are more liquid and can be traded or bartered discreetly. Remember the idea here is to shelter "money" assets that one has after they have left over from buying land, vehicles, food, tools, etc. The dollar is dying and the Fed Reserve system will end some day. There probably will be a dollar devaluation in the next few years. Do you want to be left holding greenbacks? I don't. As far as Glenn Beck goes, I was using the suit analogy before beck was on FOX. No Beck follower here.
Damn
should have bought more $6 silver
Seems to be a correlation
(http://www.kitco.com/lfgif/ag3650lf_ma.gif)
(http://research.stlouisfed.org/fred2/data/WM1NS_Max.png)
(http://silverprice.org/charts/history/silver_all_data_o_usd.png)
Notice Kitco is selling silver so they crop the data. With the full spectrum, people might get a different perspective. From 1980-2000 the money supply increased 300% (400 billion to 1200 billion, your chart) while the price of silver fell 300% ($15 to $5) I guess thats not the correlation you were referring too. Was the market wrong for the past 35 years or do you think we are in a bubble?
The US economy expanded from 1980 to sometime in the late 90's
Greenspan then decided to give loans to anyone that could fog a mirror and that created demand that lead to the housing bubble
The latest expansion of the money supply is not supported by any economic expansion (indeed on an inflation adjusted basis there is good argument for economic contraction over the last few years)
If the economy is stagnant or contracting and the money supply increases, that is text book inflation
the 80's silver bubble was helped along by the Hunt brothers IIRC
I see what your saying Squirl, and it's a valid point. I bought a lot of gold and silver when the bubble burst the last time.
The real question now depends on just how bad our economy is. If you think the dollar just has a paper cut...I expect this a bubble but if the dollar has cancer, I think the prices may only fall a little.
Both are excellent economic points. It just does not seem to be proportional of money supply to price. There was a 14% increase in money supply during a flat economy from 2005-2010 (1400 to 1600 in the chart) a 1000% increase in silver and a 1.5-2% inflation in everything else. The hunt brothers underscore my example. A handful of market manipulators drove up the price and demand for a few years, but it was unsustainable. From 1975-1980 money supply increase 100% (200-400) we were in an economic downturn from energy prices and the 1000% increase in silver was a bubble.
My worry is that in 1980, when a single market crashed, there were no banks that were too big to fail. If this is being driven by margin trading like the stock market in the 1920's with all the banks and insurance companies connected again we would have the same result or another bail out.