Posted on 10/14/2010 9:55:49 AM PDT by bolobaby
The recent silver price action has me spooked. I've been telling friends and family that if silver breaks $24, that's a bad omen. I base this on the fact that the 30 year high was in the 23s and I expected silver to meet strong resistance just shy of $24.
In the earlier morning hours, silver nearly teased $25. It's fallen since then, but it *has* broken the $24 barrier with a fair amount of confidence.
So, given that, the prospect of QE2, the continued dollar drop, ridiculously low bond yields, etc, etc...
How close are we to economic collapse? Who wants to make a prediction?
Dunno.
The difference between our situation and Weimar Germany is that if we go down, we’re taking the world with us. Literally.
Germany’s Deutschmark, for example, wasn’t the world’s reserve currency.
Our dollar is.
Fauxclosuregate is the wide open back door to the elimination of private property. "No clear title", how convenient. A man's home is Obama's castle.
As I remember, and my family was in the coin business, so we profitted handsomely from the precious metal runs in the early and late 1970’s, the Hunt brothers tried to corner the market on silver in the early 1970’s, and that gold did not follow suit.
In the late 1970’s, there was double digit inflation, and silver and gold spiked in tandem. Both crashed in March of 1980 when Volker squeezed the money supply, and interest rates spiked as high as 25% on short term money markets.
Right now, gold is spiking much more than silver, so far.
I don’t see any economic collapse, we can absorb any crisis.
Really? Or are you being sarcastic?
While I’m sure your coin business gave you some valuable insights into the metals markets, I spent much of the 1980s investing in silver futures, and I was pretty familiar with the factors that impacted the silver market at the time.
Suggest you “google” the topic and do a bit of reading to refresh your memory. The Hunts began working on their scheme in the early 1970s, but that effort continued, with the Hunt’s reaching maximum leverage in silver futures contracts in late 1979, when it’s believed that they held approximately one-third of all the silver on earth. Their position held right up to the metals crash of early 1980, when the Hunts were margined out.
The COMEX changed its rules on silver leverage in January of 1080 as a direct response to the accumulation of silver by the Hunts.
“The COMEX changed its rules on silver leverage in January of 1080 as a direct response to the accumulation of silver by the Hunts.”
fourteen years after the Battle of Hastings.
I think it will look like it is slow motion because it moves exponentially and not linearly. For example, let's use the analogy of distance. Let's say the complete collapse is a mile and let's say the time is 1 year. It will take us 11 months to go the first 1/2 mile and 1 month to go the second 1/2 mile. That is way things really work but the way most people look at things, we think it is 1/12 of a mile each month. Does that make sense?
The problem is that for the first 1/2 mile, it looks like very little is happening then all of sudden, wham! Ten months in and we are still less than half way but we are only two months from the end. The trick is to recognize that things work that way and start addressing the problem when it still looks slow.
My father has written an entire book on this subject. It is available for free at 29thday.org.
By the way, we are moving along that mile day by day right now. Check out this article from today.
French police reopen three storage depots as fuel shortage looms
An excerpt:
French President Nicolas Sarkozy sent in riot police Friday to reopen fuel depots blocked by strikes, as the pipeline to Paris airports was cut in an escalating battle over pension reform.
But even as officers forced open the barricades at some depots, strikers threw up new pickets at other distribution centres across the country to fight against moves to raise the retirement age from 60 to 62.
Students took to the streets again in demonstrations across France, with more than 300 schools hit by a fourth consecutive day of blockades or other actions to stop pupils attending classes, officials said.
Sarkozy on Thursday took the decision to send in the police in order to prevent fuel shortages amid reports of panic buying after all of France's 12 refineries shut down or reduced operations because of the strikes.
Yes, but that's a bit misleading. That was a short squeeze caused by the Hunt Brothers trying to corner the silver market, or at least the silver futures market. It was sort of like when Porsche stock went to $10,000 for one day.
This time it is slow sustained growth in price.
Consider this: Gold’s coin value was $20/troy ounce, and the value now is 1,370 or 66 times coin value. silver was $1 per .9 troy ounce. (US coins were 90% fine.) The value now is 24.7, or about 27 times coin value. Coin silver is 17.424/ troy ounce, or 17.424 times face value.
I think gold is in a bubble, while silver is not.
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