Posted on 10/17/2008 1:59:14 PM PDT by george76
Like nearly every other stock, commodity stocks have been dropping. But don't misinterpret that as lack of demand. Now would be the time to get in.
That's right: Get IN.
We're building the foundation for the next boom in commodity prices -- and commodity stocks.
I can't give you any guarantee that commodity prices won't tumble further in the short term. In fact, I think that's very likely to happen as the U.S. economy slips into recession (possibly along with the economies of Japan and the European Union).
But right now commodity stocks are factoring in huge declines in demand and tumbling commodity prices over the long term that just aren't going to occur.
Thanks to the current crisis, the world is looking at an even bigger demand-supply gap in the near term ...
(Excerpt) Read more at articles.moneycentral.msn.com ...
You aren’t reading Mish, I gather.
What does Mish say? I think a commodity boom is almost inevitable and will be huge. It’s the only plausible result of Benanke/Paulson inflation success. And B&P have a lot of resources (paper, electrons) at their disposal, so their failure (i.e. deflation) is not likely.
I want to buy oil, copper and silver but will wait awhile longer.
Better get the silver now while you can. Prices for physical are going up. Almost 70% premiums over the COMEX fake paper pricing.
Global silver shortage.
If you don’t believe me call a local coin dealer and ask what they are selling silver bars, coins, and round for. Check the prices on E-bay.
Check the price on the US Mint website. $26 an ounce. 150% increase over the spot price.
>>>Almost 70% premiums over the COMEX fake paper pricing.
If there’s such a premium of physical over futures, why don’t the coin makers just buy and then hold futures contracts until delivery so they can convert the contracts into the real thing, making huge profits in the resulting coins?
Something doesn’t compute here.
I agree with you. There is going to have to be a movement of value from cash to physical assets, because of the inflationary pressures. These are already immense, and are about to take off properly.
I think it is a strategy which Our Leaders have going. They are going to wipe out all this unpayable debt through inflation. Pity about the people who work and save but who cares about them?
I know nothing about these things and because I'm under 59 1/2 I'm stuck with my 401 other than moving it to another 401 within the Fidelity group..........
That helps them but also the only way they can avoid the pain of credit contraction is to create a commodity-driven boom because the other possibilities (housing, tech) can't be driven with credit anymore. Last spring was just a warmup.
They might have an option for gold and silver mining shares. I would caution as long as there is a deflation/inflation battle going on, there will be pullbacks in those funds. Ultimately commodities have to win as it is the only way the credit bubble reflation can succeed.
that's' not exactly true....I bought quite a few silver rounds at $9...
I'm not quite sure I understand who would be paying whom for what. Perhaps you can clarify?
IMHO, I suspect that the reason for the disparity in price between real gold and paper gold is the recognition of counter-party risk. Ideally, if I buy a piece of paper for $900 that's redeemable for an ounce of gold, my only risk would be that the price of gold might be below $900 when I need to sell. In reality, there's a second risk: the person who issued the paper might not be good for it. There's not really anything the holder of the paper can do to reduce the counter-party risk, nor even in many cases to fully evaluate it. By contrast, if someone takes possession of physical gold, there are some additional risks besides valuation (e.g. counterfeits, theft, etc.) but those risks can be controlled and minimized by the actions of the person buying or holding the gold.
If you wish to unload all the silver rounds you bought back at $9, I would be willing to purchase them all at $12/oz.
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