Posted on 08/08/2011 1:33:39 PM PDT by OB1kNOb
How does one conclude that?
Personally, I believe it is the likes of Soros and Buffet wanting to panic the “little” guys out of it so they are the ones that make the killing if you will. Silver is much easier to manipulate than gold. IMHO. I am not an expert in this by any means.
Ravenstar
I’m up to date on those investments. ;-)
You will not see a steep drop in the price of silver unless there is also a steep drop in gold. Silver will always be purchased by investors if the ratio to gold is greater than 45. For example, if gold is selling for $1700 an once then silver should be worth at least 37.77oz (1700/45). In this scenario if the price of silver is less than 37.77 then you should consider buying some silver coins. If the price of silver jumps to $50oz then you should consider buying gold coins if the ratio to gold is less than 45.
I’m confused. You mean silver dollars are not money—esp the ones 90% purity?
So, when QE3 is done, is money “loaned” to the government from the government? Or is it simply more money being printed?
That’s good to know. What’s the underlying factors driving the ratio of 45?
Silver used to have industrial demand -photographic film, xray film, dental fillings. No more. With the advent of composite ceramic fillings and digital photography, silver has very few industrial uses.
IMHO, they have been producing and stockpiling Silver during all those decades when silver was very low. They have succeeded in capitalizing on Silver.
To answer your question, you have to look at and ponder more than a little about the history of silver and more than a little about the present about silver. If you do that, and it is isn’t a ten minute undertaking, you will learn something about what some call the “DNA” of silver. I’ll try to hit some of the main points as I myself see them, in no particular order, without delving too deep into any of them and without any guarantee that I’ll hit all of them.
Silver up here at $40 does not have much volumetric support. That’s one reason why it doesn’t seem to be able to hold it well. It does not “own” $40. IMO, silver is still proving that it can hold $35. And in my opinion, that is not proven. Technically speaking, silver may very well have an appointment with the mid $31’s. Forget not that during 2008, silver got cut almost in half, to $9.
If you look at long term charts of silver, during the early 2000’s, it had lots and lots of trouble at “round numbers”. It took many months to go from $7 to $8 to $9.....Today, those round numbers are sure to be more like $25 - $30 - $35 - $40. In quanta of $5, not units of $1.
Silver spent about a third of 2008 under $10 and really only left $10 behind in 2009. This is very much new territory up here (hence, why I say it has only modest volumetric support up here) I say that silver needs time in “rehab” to prove it can hang at these levels. In truth, if you look at the history of silver, it could very easily take 2 years or more for silver to advance much from here. So...you don’t have to load up the boat this week or tomorrow. It DID its parabolic thing in April and May. Now it needs time in rehab.
Many people believe that commodities (and most markets, in general) behave in 60 years cycles. Silver took a massive 35% hit in July of 1951. One of its greatest % dumps of all time. Coincidence?
Silver is not in any way the same kind of monetary metal that gold is. It just isn’t. We may wish that it was, but it isn’t. It is far more tied to industrial production, as is Platinum and Palladium, both of which are tied mightily to automotive catalytic converters. Palladium, today, got smoked. Platinum is actually trading at about the same price as gold. I myself have never seen that before.
Silver is not especially rare. By that I mean, if you have the money you want to spend on it, you could damage the suspension of your car loading it up with silver.
High silver prices causes lots of sterling and not-especially-rare semi-numismatic coins to get pulled out of the closet and thrown into the melting pot. Particularly in tough economic times.
Now, having said all that, you, generic you, should not buy *any* silver with the idea that you are going to buy it all at once, all at one price. If you want to be a LT holder of silver and hold onto it for a much higher price, that price is not going to occur right away. And if it did, silver would have to achieve a vastly higher price to overcome the punitive dealer margins/premiums on the physical metal. If you want to trade silver short term, SLV is vastly superior because it trades like a stock, with stock-like spreads and stock-like commissions.
So if you want to buy some, just buy some. Don’t buy all you want to buy all on one day all at one time. If you buy 10 ounces today and the price declines $1.50, are you gonna cry over that? Do you think 10 ounces might make a real difference in your life? What if it falls by $5?
Don’t overthink it. That’s as simply as I can say it. I have been telling all the folks I know who regret not buying gold lower: (and that includes me, because while I have been buying silver since $6, when gold was $265, I have not bot any gold under $1500) Just buy one ounce of the stuff and be an owner instead of a spectator.
” silver has very few industrial uses.”
That is very not true. After crude oil and natural gas, silver has the most industrial uses of *any* commodity. Now one might say that the amounts of silver used (up) in industry are, relative to its annual production including mining and scrap, relatively small. But silver has many hundreds of industrial uses.
And....when it comes to photography, silver was not massively consumed in photography. Recycling rates of well north of 92% have been accepted in silver film-processing for at least 60 years. Back then, it used to be uneconomical to recycle silver all that carefully because it really wasn’t worth that much.
“It was closing in on $50 an ounce just a little while ago. I could easily see it doing that again.”
The last time silver hit $50 was in 1980. You should get a substantially history-cognizant view of silver’s “DNA” as we call it. I’ve posted some info downthread on this.
$50 is a 30-year anomaly. If you like silver, please feel free to like silver. I do. Just widen your perspective some.
Totally wrong. Silver has a ton of industrial uses and new ones are created all the time. Silver is the best reflective metal, best conductor of heat & electricity, and also a unique bacteria killer. It also becomes more in demand as jewellry as the price goes up.
It also can be used as money like gold. In fact it is much more useful for small transactions.
It was at $49 around six months ago.
Incorrect with rohs implementation for circuit boards silver finishes and solders are often the only choice left - especially in high reli or non-magnetic situations.
that makes sense, thanks
Correct, I should have said the PRIOR time silver hit $50 was in 1980. I know people who bought 100 oz bars of silver in 1980. They still own them. A friend of mine and I had a deal for me to buy both of his JM 100 oz bars for $1100 in 2001, but he reneged. My point was that if you buy into a big frenzy, you stand the chance of being badly stranded, and for a long time. Thirty years in this case. At $6, silver was priced below what it costs to find it, dig it out of the ground, crush it, smelt it, pour it into a mold or pound it into a coin, and ship it to a dealer. Same with $265 gold. At those prices, I didn’t have think too hard about buying silver.
The answer is not to try to overthink it. All the talking in the world does not obviate the possibility that the metal is smarter than you or I happen to be. Gold has been “too high” since $450, hasn’t it?
Go buy 5 or 10 silver eagles or ten rounds if you want to own some silver. It isn’t going to kill you if it drops $5 and it isn’t going to fund your retirement if it triples.
AG is a two-faced, very interesting investment and normally trades 40-1 ration to AU. Silver as two-faced is industrial and a cheap man’s hedge against the dollar.
Silver is manipulated by Goldman’s, HSBC, and Morgan Stanley...the COMEX manipulates and cheats and if you want to track AG, look at Harvey Organ’s website every day and Saturdays.
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