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BMO On A "New Paradigm For Silver"

Tyler Durden's picture





 

Courtesy of the Village Whisperer, we are happy to present BMO's latest comprehensive report on silver titled "A new paradigm for silver." While we suggest readers skip the part about price expectations for gold, silver and other metals, which at this point nobody save for the Chairsatan has any clue where these will go (and Bernanke's mind is made up for him by Jan Hatzius, so as always pay attention to Goldman buy/sell signals on PMs), the report does have a very extensive section on the key supply and demand drivers, which for anyone new to the metal, is a must read. Additionally, the report covers virtually all the key silver miners of note (incidentally for those wondering, the San Critsobal strike was lifted earlier today).

In summary:

  • BMO Research has reviewed a number of supply and demand scenarios for silver through 2015E. The analysis suggests that the projected rise in mine supply should largely be consumed by rising industrial demand through to the end of 2012E.
  • The prospects of further quantitative easing combined with sovereign debt concerns, competitive ‘fiat’ currency devaluation in western economies, and the return of inflation could result in investment demand exceeding BMO Research’s projections and extending the supply deficit through 2014E.
  • This shift in the supply/demand dynamic lies in contrast to the broader investment perception for silver, which is rooted in the 1990’s when the metal was in abundance, driven by the demise of the photographic industry and Chinese selling.
  • The paradigm shift for silver suggests that the traditional benchmarks for silver, such as the long-term historical ratio with gold, are no longer valid. Accordingly, the markets are searching for a new set of criteria againstwhich to benchmark the price of silver, with a bias to the upside.

Full report:

BMO New Paradigm for Silver

 


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Mon, 04/04/2011 - 23:37 | Link to Comment slow_roast
slow_roast's picture

Charisatan's hair is streaked with silver; coincidence?  I think not.

Tue, 04/05/2011 - 00:33 | Link to Comment bankrupt JPM bu...
bankrupt JPM buy silver's picture

But but but, this guy just said, "Gold fetishists have fared much better - the metal has been hitting all-time highs - but one of their main reasons for owning it is that it’s the undollar. Once it becomes clear that quantitative easing is not killing the dollar, the true believers in gold may begin to have second thoughts. The fact that gold has underperformed many other commodities for several months suggests that it’s happening already."

 

Read it all here http://moneywatch.bnet.com/investing/blog/against-grain/why-quantitative...

 

Enjoy a good laugh.

 

silvergoldsilver.blogspot.com

Tue, 04/05/2011 - 01:05 | Link to Comment NidStyles
NidStyles's picture

I think I just farted out braincells reading that. Do they actually believe the crap they are putting out, or is it just that they never check the fundamental's anymore?

Tue, 04/05/2011 - 09:59 | Link to Comment Central Bankster
Central Bankster's picture

They call it a new paradigm... then I look at their forecasted metals prices through 2014 and I laugh.  It is the same with all the major firms predicting unrealistically low prices for all precious metals and base metals indefinately.  They say supply shortages and inflation on one hand, and then their forecasts show declining metals prices.  *head explode*

Tue, 04/05/2011 - 14:36 | Link to Comment akak
akak's picture

Yes, they can envision a "new paradigm" for silver --- as long as it remains safely within every one of their OLD paradigms.

[/sarc]

Tue, 04/05/2011 - 19:21 | Link to Comment outamyeffinway
outamyeffinway's picture

New paradigm same as the old. I hate when I send shit out ot a bunch of people before I read it and it ends up being shit!!

Tue, 04/05/2011 - 10:17 | Link to Comment Central Bankster
Central Bankster's picture

double post

Tue, 04/05/2011 - 06:39 | Link to Comment Hedge Jobs
Hedge Jobs's picture

sorry to jump in but this is relevant, worth watching and worth sending to others, fuck the FED criminals!

Ron Paul: People Need Currency Choices - Kitco News

 

http://www.youtube.com/watch?v=uMtilF_v1TI&feature=player_embedded

Mon, 04/04/2011 - 23:40 | Link to Comment vast-dom
vast-dom's picture

Silver.......the new gold.

Mon, 04/04/2011 - 23:39 | Link to Comment Spitzer
Spitzer's picture

This is the bank that got money from the Fed.

Mon, 04/04/2011 - 23:50 | Link to Comment tekhneek
tekhneek's picture

Mind bottling, even. Is ANYONE here remotely surprised by this?

I've been saying for some time now the Gold/Silver ratio will be thrown on its head and WILL overshoot even THAT mean. (think 50:1 silver/gold ratio instead of gold/silver ratio. I'm not saying it will hit 50:1 and stay there, I'm just saying... think about the possibility.)

So we'll hit peak production circa 2012E... meanwhile demands growing and diverging from spply... Then the U.S. geological society predicts Silver (Ag) will be the first element exctinct from the periodic table by 2020 so... yeah...

Siver for 10+ more years for me, bitchez.

Tue, 04/05/2011 - 00:19 | Link to Comment Ergo
Ergo's picture

My price target is $50-54 / oz.  Long futures 'till at least then. 

Action today was spectacular.  In a way, I hope Blythe does raid tomorrow, so I can get some more.  It's odd to be both happy and sad. 

Tue, 04/05/2011 - 07:22 | Link to Comment AmazingLarry
AmazingLarry's picture

x50

One cannot get upset about the shortside rollercoaster, just sit back and enjoy the up and down and just know where you're going to end up on the long end of the ride.

Tue, 04/05/2011 - 00:24 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

That (SGR of even 1) I doubt tekh-blythe, but I have enough silver to celebrate as well should your prediction come true.

I still like gold's price going way up when paper gold defaults.

I'm keeping both gold & silver!

Tue, 04/05/2011 - 15:16 | Link to Comment RockyRacoon
RockyRacoon's picture

I'll post again here for those who may have missed it:

The Mint is back selling the 2010 silver quarter sets after taking them down from the website.  (Mint product: SV2)  The previous price was $32.99 as I recall.

The pricing is still very attractive for several reasons.  You all can figure out most of them, but for the tin-foil-hat crowd these are numismatic coins.   The possibility that they would become illegal to own is very slim to nonexistent.  

There is a tad  over 0.90 ounce of silver in the set (regular content of silver for pre-1965 coinage).   The Mint charges $4.95 for any purchase so that is all the charge for any size order. At $39.95 per set there isn't much downside.

I've got mine, so get what you want:

2010 United States Mint America the Beautiful Quarters Silver Proof Set

Tue, 04/05/2011 - 08:13 | Link to Comment Chicken_Little
Chicken_Little's picture

Ted Butler's mentor Izzy Friedman said there'd be a point in the future when silver and gold would equal each other, 1:1. He also said to buy 2 big green monster boxes of silver eagles and put them underneath your bed and forget about them, and one of these days with the collapse in real estate you will be able to trade those 2 boxes for a condo in a Trump building. When TSHTF and most fiat curriencies have to be retired and the new ones tied to a gold/silver/oil standard, Izzy will be right. Physical Ag is already close to being extinct from the LBMA and COMEX warehouses. Get your 2 boxes ASAP. If you don't , you may be extinct element of the middle class.

 

 

Tue, 04/05/2011 - 09:37 | Link to Comment mrgneiss
mrgneiss's picture

It appears big buyers of silver ARE leaving the COMEX.  March 2010 deliveries of silver were over 20Moz, yet March 2011 were less than 10Moz.  Has demand dropped by half over the last year?  I don't think so.........

Mon, 04/04/2011 - 23:43 | Link to Comment Creed
Creed's picture

2011 avg hi $30

2012           $27

2015           $17

 

I better sell now

Mon, 04/04/2011 - 23:41 | Link to Comment Stuck on Zero
Stuck on Zero's picture

I have an opportunity for you brave souls.  The control rods at the bottom of the Fukushima reactors are 85% silver and the rest cadmium and other metals.  That's tons of silver bitchez.  Go for it.

Mon, 04/04/2011 - 23:49 | Link to Comment Scritchy
Scritchy's picture

Count me in. Ann Coulter says radiation is good for us, so I'll not only be rich but I'll live almost forever.

Tue, 04/05/2011 - 00:16 | Link to Comment JLee2027
JLee2027's picture

Funny, but Coulter was poking fun at things. You guys should actually read the article she wrote ALL THE WAY THROUGH and not make these headline assumptions.

Tue, 04/05/2011 - 00:35 | Link to Comment Scritchy
Scritchy's picture

Ok, no excuses, I like Ann and should have added a disclaimer that it was an attempt, albeit not entirely successful, at humor. I mean, I can actually see her making a joke along similar lines, just better than I did because I did the Tonight Show version.

Tue, 04/05/2011 - 01:56 | Link to Comment rich_wicks
rich_wicks's picture

Why would anybody read Coulter, or Limbaugh, or Al Franken, or any of these stupid blowhards?  You don't learn shit from them, why would you waste any time listening to them?

The only salient difference between the 2 parities today is their rhetoric, they do the same goddamned thing so why are you listening to a cheerleader for any one of them?

Tue, 04/05/2011 - 07:01 | Link to Comment BigJim
BigJim's picture

She was? I read the article, and my usually sensitive irony antennae didn't even twitch.

Maybe her particular brand of irony doesn't cross the pond very well.

Tue, 04/05/2011 - 00:19 | Link to Comment OldPhart
OldPhart's picture

Radiation DOES preserve dead meat.  Microbes can't live in it.

Tue, 04/05/2011 - 00:27 | Link to Comment akak
akak's picture

So does formaldehyde, but I'd rather not consume any of that either.

Tue, 04/05/2011 - 00:38 | Link to Comment dark pools of soros
dark pools of soros's picture

she's a nuclear vampire

Mon, 04/04/2011 - 23:55 | Link to Comment Selah
Selah's picture

 

Are you sure?

A quick Google has Ag in PWR's. Boron is in BWR's like Fuku.

But you've got a good idea! How many tons if you are right?

 

 

Mon, 04/04/2011 - 23:47 | Link to Comment samsara
samsara's picture

You saying it might be different this time?

Mon, 04/04/2011 - 23:50 | Link to Comment SparkyvonBellagio
SparkyvonBellagio's picture

LOL Silver is what silver always was.........NOTHING.

You can't eat it, drink it, or phuuuck it.

It's a worthless entity.

 

 

Mon, 04/04/2011 - 23:52 | Link to Comment Bill DeBurgh
Bill DeBurgh's picture

I beg to differ. Nobel Peace Prize winners love to lob silver-laden cruise missles at tin-pot dictators.

Tue, 04/05/2011 - 01:23 | Link to Comment CitizenPete
CitizenPete's picture

Didn't you hear?  They (Obomba and his new freind Kristol) are avenging the deaths of the Lockerbie victims (according to the "Ed Show").  

Tue, 04/05/2011 - 00:04 | Link to Comment Selah
Selah's picture

 

SAE's are worth over $40 to APMEX:

APMEX Buy Price - $40.57


Tue, 04/05/2011 - 00:09 | Link to Comment Ahmeexnal
Ahmeexnal's picture

Why would they have a buy price higher than spot? Because it's going to $50 in a matter of days!!

Tue, 04/05/2011 - 09:25 | Link to Comment Imminent Crucible
Imminent Crucible's picture

"You can't eat it, drink it, or phuuuck it."

So Sparky, which metals do you eat, drink and fornicate with?

Anencephalic.

Tue, 04/05/2011 - 00:07 | Link to Comment akak
akak's picture

Sparky, it was demeaning to have to even privately acknowledge your worthless post long enough to junk it.

But I will be happy to take as much "worthless" silver off your hands as you might have.

Hmmm, "Sparky" --- I seem to recall reading that that was Jon Nadler's nickname in grade school.

Tue, 04/05/2011 - 01:18 | Link to Comment Al Gorerhythm
Al Gorerhythm's picture

Sparky, you're funny.

Tue, 04/05/2011 - 01:58 | Link to Comment rich_wicks
rich_wicks's picture

LOL Silver is what silver always was.........NOTHING.

I spy, with my little eye, somebody that knows nothing about material science.  You might be able to argue it's over-valued (possibly) at this point, but useless metal?  That's just stupid.

Tue, 04/05/2011 - 09:20 | Link to Comment Long-John-Silver
Long-John-Silver's picture

The computer you are using would not operate without the Silver it contains.

 

Tue, 04/05/2011 - 22:14 | Link to Comment latcho
latcho's picture

at least I can pay somebody smart with it to punch you bigtime in the face

Mon, 04/04/2011 - 23:52 | Link to Comment SparkyvonBellagio
SparkyvonBellagio's picture

You idiots can all say whatever, I owned it, held it, it's a worthless metal.

 

You fools think it's the next Grail. Keep chasing it.

Mon, 04/04/2011 - 23:56 | Link to Comment Vint Slugs
Vint Slugs's picture

And no doubt sold it at a loss, eh Troll?

Tue, 04/05/2011 - 00:19 | Link to Comment Quinvarius
Quinvarius's picture

It trades on FOREX.  It is money.

Tue, 04/05/2011 - 00:45 | Link to Comment KTV Escort
KTV Escort's picture

here's some Sparky is a moron info for any silver noobs lurking this evening...

Silver is, in fact, the superman of metals

Silver has the highest electrical and thermal conductivity of all metals. Every computer, server, monitor, cell phone and switch must have silver. Lasers, satellites, solar panels, high-tech weaponry (tomahawk cruise missiles contain 500 oz) and robotics, all require silver. Digital technology and telecommunications need silver. There's silver in every TV, washing machine, wall switch and refrigerator. Conductors, switches, contacts and fuses use silver because it does not corrode or cause overheating and fires. Silver is used heavily in photography and in prints. Batteries are now manufactured with silver alloys. Lead-free silver solder is used heavily for joining materials and producing leak-tight joints. Silver is also widely used in silk-screened circuit paths, membrane switches, electrically heated automobile windows, and adhesives.

Silver achieves the most brilliant polish of any metal and has the highest reflectivity of light of all the metals, allowing it to be used in mirrors and in coatings for glass, cellophane or metals. Double layers of silver on glass reflects away 95% of the hot rays of the sun. Silver has a variety of uses in pharmaceuticals as silver kills bacteria. Hospitals use silver coated devices in surgery to eliminate contamination and infection. Skin care products now use colloidal silver as it has been found to be a healing agent and disinfectant. Silver sulfadiazine is the most powerful compound for burn treatment. Catheters impregnated with silver eliminate bacteria. Silver is increasingly being tapped for water purification, silver ions used in pools and spas. To prevent growth of germs and fungus on surfaces silver ions are used in paints and coatings.

In the face of all these industrial uses there will be less silver available, plus, the unique properties of silver restrict its substitution in most applications. More silver will be used than can be produced.

 SUPPLY SHORTAGE + STRONG DEMAND = RISING PRICE

Tue, 04/05/2011 - 00:58 | Link to Comment Selah
Selah's picture

 

Is there anything Silver can't do?

Oh yeah, it can't be created out of thin air!

 

Tue, 04/05/2011 - 09:09 | Link to Comment riphowardkatz
riphowardkatz's picture

I am starting to wonder. I use it for deodorant and it is awesome.

Tue, 04/05/2011 - 00:50 | Link to Comment werealldoomed
werealldoomed's picture

Yea, man, you're right. "Totally useless":

  • Jewelery
  • Dentistry
  • Medical
  • Photography
  • Solar panels
  • Coinage
  • Mirrors
  • Water filtration
  • Optics
  • Printed Circuits
  • RFID
  • Silver-oxide batteries
  • Control rods for reactors
  • Catalyst for oxidation reactions
  • Solder
  • Anti-bactieral applications

 

Please, stop embarrassing yourself and go to bed.

Tue, 04/05/2011 - 01:21 | Link to Comment CitizenPete
CitizenPete's picture

Is that it?

 

As Bugs Bunny says: "What a marooon". 

Tue, 04/05/2011 - 08:13 | Link to Comment Chuck Walla
Chuck Walla's picture

Ruprecht! Is that you?

Mon, 04/04/2011 - 23:54 | Link to Comment Vint Slugs
Vint Slugs's picture

Fundamental factors are always an important input in traditional commodities market price analyses.  Under less extreme circumstances than we are now facing, investors should pay attention to silver's supply/demand dynamics.  However, anyone with a shred of commonsense can see that silver is behaving more like its monetary senior, gold.  Both gold and silver markets are reverting to their true monetary basis and their price behavior is reflecting that reality.  For that reason, silver is heading toward its long-term 15 - 17 ratio with gold.  Industrial silver supply is going to be virtually non-existent before the current cycle is over, thus relegating its traditional supply/demand conditions to the scrap heap.

Mon, 04/04/2011 - 23:53 | Link to Comment Top_Kill
Top_Kill's picture

Confidence takes a long time to earn and a minute to lose. Confidence in fiat is lost and will take a generation to regain. Allocate accordingly. When the common man figures out what has happened, the price potential will be exponential. It will take everyone by surprise. Everyone.

My first physical purchase was at $15.75. Afterwards I was freaked out that I just paid so much for bars of metal. Two years later, no one I know has bought any physical and the price is up 150%. Most think it is crazy to buy physical metal. When it catches the general publics attention, it is going to be unbelievable.

Paying $900/oz for a gold eagle felt strange, but I did it because I thought the fed's actions left me no choice. Price will not matter to new buyer's when it becomes mainstream that confidence is completely lost. I'm not counting on it, but is it really that strange to think that someday, maybe soon, people could pay $900 an oz for silver?

Tue, 04/05/2011 - 00:02 | Link to Comment Ahmeexnal
Ahmeexnal's picture

Very soon people will be paying $900 for a McMeal.

Tue, 04/05/2011 - 00:04 | Link to Comment Selah
Selah's picture

 

Only then will they understand hyperinflation...

 

Tue, 04/05/2011 - 00:13 | Link to Comment Scritchy
Scritchy's picture

The trolls have me so scared, I'm going to sell all my gold and silver and put it into a Bank of America savings account where it will be safe.

Tue, 04/05/2011 - 00:20 | Link to Comment akak
akak's picture

NO!  Much better: US Treasury bonds.

"Backed by the full faith and credit of the US federal government."

 

It would be funny if it weren't so seriously delusional.

Tue, 04/05/2011 - 01:18 | Link to Comment CitizenPete
CitizenPete's picture

I have some GMAC Bonds you might be interested in? 

Tue, 04/05/2011 - 00:24 | Link to Comment Flakmeister
Flakmeister's picture

Hyperinflation will occur with the collapse of the US dollar. The dollar will not collapse until the US military does. Along the way, there could be a whole bunch of other things happening as well.... 

Tue, 04/05/2011 - 00:40 | Link to Comment Selah
Selah's picture

 

How can the US military prevent a complete loss of faith in a currency?

Sure, they can prevent "recourse" in the event of a default, but not the flip-side: hyperinflation.

Hyperinflation and then a new currency is the more practical and less (relatively) painful route. It's happened countless times throughout history for the same reasons and it will happen many times in the future. It's not going to be the end of the world, no matter what the Mad-Max crowd wishes.

Just prepare.

 

 

Tue, 04/05/2011 - 00:54 | Link to Comment Flakmeister
Flakmeister's picture

The pricing of oil in US dollars. That is backed by the military...

BTW, I am long Au, Ag and PGM

SLW, SLX.TO, IPT.TO, EXK, FVI.TO, CEF, PAAS, HL, HLPRB, KS.TO, AVR.TO, NWWM.TO AMC.TO, ORV.TO, FRG, SWC  etc..... 

not to mention a mittful of Jan 12 25 SLV calls and Jun 36 SLW calls...

Tue, 04/05/2011 - 00:58 | Link to Comment Selah
Selah's picture

 

The availabity of oil is backed, but not the value of the dollars that price oil.

 

Tue, 04/05/2011 - 01:00 | Link to Comment Flakmeister
Flakmeister's picture

Yes, to a point as long as the producer accepts dollars....When they stop, well, you can guess what happens next....

Tue, 04/05/2011 - 02:18 | Link to Comment Selah
Selah's picture

 

Then the producers will accept other currencies.

If I guess correctly, you believe it will result in an escalation of the Endless War. Then you must be prepared to pay much more for oil products, resulting in much more printing to finance the imports.

Tankers must be filled. They must be insured. They must be able to move and make a profit on the diesel they burn. They must safely depart and return in your vision of total war.

Look at how well limited war has done for oil prices.

A currency reform and return to fiscal sanity is a better approach. However, I can't rule out your scenario. The result of default has a certain appeal to the HDTV masses that hyperinflation can't compete with.

 

 

 

Tue, 04/05/2011 - 09:36 | Link to Comment Flakmeister
Flakmeister's picture

If producers do not accept dollars, there will be war.. That is all I am willing to venture...

You are aware that the putative gold reserves of the US covers 1 year of imports?

Tue, 04/05/2011 - 07:29 | Link to Comment Head for the Hills
Head for the Hills's picture

How can the US military prevent a complete loss of faith in a currency?

Very simple.  Lincoln paid the union army in greenbacks.  If you were a shop keeper, and 20 hungry, thirsty, heavily armed men came in to buy food and water, would you tell them their money is no good?

 

Tue, 04/05/2011 - 07:29 | Link to Comment Al Gorerhythm
Al Gorerhythm's picture

$900 for a McMeal? You can't eat McMeals!

Tue, 04/05/2011 - 22:15 | Link to Comment latcho
latcho's picture

Sparky would say: but you CAN phuuuck it

Tue, 04/05/2011 - 00:18 | Link to Comment Shock and Aweful
Shock and Aweful's picture

O.K...I am just going to say it....

 

When the term "we are in a new paradigm for silver" hits my ears...my brain cannot help but think bubble...

 

That is the CLASSIC phrase used whenever something is overbought.

 

This statement is not based on any data...just what we always seem to hear, for any investment trend right before it peaks and bottoms.  (look back...same exact phrase used over and over for housing, stocks, tech startups, etc...)

 

I am personally LONG as I can be in PM's...and especially silver...so when I hear the term...."Paradigm shift" or "new paradigm" that has any attachment to what I am invested in...I start to worry.

Do any of you get that feeling that TOO many people are catching wind of PM's....

I mean shit...there are even some of the dumbasses where I work that are now talking about buying silver and gold...and these are the types of morons that actually belive what they hear on the mainstream news and even listen to that momo pumpinf douche-bag Jim Cramer! 

I am just saying...anytime we start to hear these kinds of sayings...start to pay CLOSE attention...we could be entering the "mania" phase of any classic bubble pattern...

 

Tue, 04/05/2011 - 00:31 | Link to Comment akak
akak's picture

I am just saying...anytime we start to hear these kinds of sayings...start to pay CLOSE attention...we could be entering the "mania" phase of any classic bubble pattern...

Your thoughts indeed bear consideration, but I cannot see how we can or will enter any "mania phase" for gold and silver, suggesting a follow-on collapse in price, while governments around the world are still spending us exponentially deeper into debt.

In other words, this is NOT going to be a repeat of 1980, nor even a repeat of 1929 --- more like a repeat of France in 1720, or at best Argentina in 2002.  And yes, it CAN happen here --- and it surely will.  But it will leave a bitter taste in anyone's mouth to be saying "I told you so!" afterward, as justified as it would be.

Tue, 04/05/2011 - 07:21 | Link to Comment BigJim
BigJim's picture

I am just saying...anytime we start to hear these kinds of sayings...start to pay CLOSE attention...we could be entering the "mania" phase of any classic bubble pattern...

'This time is different' is the classic explanation for prices getting out of line with reality, that reality itself has changed, that price rises can continue... and then reality re-asserts itself and anyone believing 'this time is different' are proven wrong, once again. A number of MSM pundits have said this about PM investors, that we're falling for 'this time is different' when gold and silver prices are rising precipitously.

But if our macro-economic analysis is correct, they're the ones who are falling for the 'this time is different' fallacy - for thinking fiat will somehow survive an onslaught of creation. PM prices are just reflecting the collapse of their paper, as it always has throughout history... this time is no different.

But maybe they're right... maybe the ponzi can continue for another round. As long as I have enough fiat to buy necessities, it makes no odds, because I am certain that in the long run I am right. Yes, in the long run we are all dead, but I suspect Keynes was referring to his own generation not living long enough to have to face the consequences of their profligacy. What a nasty piece of work the man was.

Tue, 04/05/2011 - 00:29 | Link to Comment web bot
web bot's picture

yes and no.... (and I"m long in silver)

In the immediate term, we are overbought. IMO, we're going to see a massive market correction shortly and PMs are going to take a bath. I'm expecting sub $20 for silver.... BUT... once QE3 is announced late summer/early fall, we'll see PMs go stratospheric. We should see silver above $200 range, barring the arrival of the apocalypse. That's my view.

Tue, 04/05/2011 - 01:20 | Link to Comment tickhound
tickhound's picture

For you to consider...

In '08 we had an @ 50% market & metal correction, as you suggest could happen to silver again.  Given that the Fed has no other assets to pump to lay claim to "recovery", should we believe that a similar correction would be allowed to repeat?  A severe metals fall would mean a corresponding market fall... I just can't see the pump plug being pulled.  Liquidity drain would know no bounds... can't see it being allowed to happen.  WD40 the printing press and flip the governor... That thing would be running full speed the first sign of "crash".  Too many inflation hedgers now I believe... in both the markets and especially the metals to buy any real significant "dip". 

Lastly, one assumes that the dollar / metal correlation still holds... seems the metals are trading irrespective to the dollar as of late.  Worldwide currency debasement... European and Chinese rate hikes haven't dented the moves.   

I hear you... But I just can't see it.  IMO

Tue, 04/05/2011 - 08:59 | Link to Comment Chicken_Little
Chicken_Little's picture

There's still alot of money in all commodity markets that really shouldn't be there (big money casinos). If liquidity is needed, the good stuff will be sold like in '08. I got killed in gold and silver stocks. But then I sold at lows and bought physical and I have it all back plus more. '08 was different because at year end, the only 2 assets in the black were treasuries and gold. If there's another '08 or worse, I learned my lesson. Fool me once but not twice or I'm a fool.

Bottom line...as long as the fiat money printing continues, go long physical. (www.goldmoney.com). When the smoke clears, gold and silver will rule. An offshore acct with GM will survive.

 

Tue, 04/05/2011 - 09:04 | Link to Comment Chicken_Little
Chicken_Little's picture

There's still alot of money in all commodity markets that really shouldn't be there (big money casinos). If liquidity is needed, the good stuff will be sold like in '08. I got killed in gold and silver stocks. But then I sold at lows and bought physical and I have it all back plus more. '08 was different because at year end, the only 2 assets in the black were treasuries and gold. If there's another '08 or worse, I learned my lesson. Fool me once but not twice or I'm a fool.

Bottom line...as long as the fiat money printing continues, go long physical. (www.goldmoney.com). When the smoke clears, gold and silver will rule. An offshore acct with GM will survive.

 

Tue, 04/05/2011 - 08:20 | Link to Comment Chuck Walla
Chuck Walla's picture

A crash without an immediate recovery will kill the incumbents chance at re-election. This will NOT happen. Not to a President that can so easily manipulate BLSBS data and supports Ben, the pet monkey. Yes We CAN!

Tue, 04/05/2011 - 00:52 | Link to Comment dark pools of soros
dark pools of soros's picture

then sell 25% and enjoy yourself..  when you come back you can see if you gained back that 25% or time to BTFD again

 

you have to ask yourself HOW does the dollar regain any solid footing??  widespread death for 60year olds getting rid of future entitlements?  Derivative market calms down??   too much to name, it's a brush fire headed towards an oil field...

Tue, 04/05/2011 - 08:32 | Link to Comment Chuck Walla
Chuck Walla's picture

Funny you should say "widespread death for 60year olds"

as Doug Elmendorf came out and said that very thing, not so succinctly. The CBO director said we need to cap Medicare  treatments to what is available today. Anything new, you can pay for out of your pocket, Medicare won't. The unspoken part is: If you can't afford that, you DIE!  The Death Panels are back. 

Just consider it a very, very late term abortion. 

Tue, 04/05/2011 - 01:33 | Link to Comment Catullus
Catullus's picture

I think what the author of this BMO report is saying is that their modeling of 50:1 silver is and has been woefully incorrect and they're readjusting their models.  No one wants to read an investment thesis that talks about the 3000 year history of the metal being about a 15:1 ratio.  To BMO, there has to be some sort of paradigm shift to justify a reversion to the historical and physical supply relative scarcity of silver to gold.  The benchmarking ratio approach is really a flawed method, but they need something to value these mining companies. In the end, money will flow from overvalued to undervalued assets. PMs are not overvalued at this point.

As for too many people getting into PMs, I think there's a BIG difference between someone getting interested in buying mining stocks and SLV and someone actually buying bullion or coins. The number of people who actually gold and silver is so small compared to the overally population (also an argument for why gold and silver are not money yet). You'll know you're in a bubble when people are clearing out their 401k and IRAs for this stuff.  We're a long way off from that.

Tue, 04/05/2011 - 04:48 | Link to Comment Lord Koos
Lord Koos's picture

"You'll know you're in a bubble when people are clearing out their 401k and IRAs for this stuff. "

That's exactly what I've been doing this year... I'm in the minority though, no doubt.

Tue, 04/05/2011 - 06:02 | Link to Comment GubbermintWorker
GubbermintWorker's picture

I did.

Tue, 04/05/2011 - 06:50 | Link to Comment Neoisolationist
Neoisolationist's picture

Heh. I just cleared out a small IRA account to buy survival supplies and 'defensives' ('defensives' just sounds so wholesome...). We started preparing in about November and are just about done. That includes as much PM as we can afford whilst still maintaining a balanced portfolio. We're preparing for the worst, and still contributing to 401K and such, just in case the worst-case scenario doesn't materialize... but we're pretty sure it will..

Tue, 04/05/2011 - 09:35 | Link to Comment Long-John-Silver
Long-John-Silver's picture

"You'll know you're in a bubble when people are clearing out their 401k and IRAs for this stuff. "

I did exactly that a few years ago. My family thought I had lost my mind. Now they think I am some sort of evil genius.

Tue, 04/05/2011 - 11:29 | Link to Comment The Fonz
The Fonz's picture

I too have been helping my friends get their 401K's out of the mutual funds and into a self managing investment account where it is promptly moved to a canadian denominated PSLV investment if possible. Though most people think I am still batshit crazy :)

Tue, 04/05/2011 - 07:34 | Link to Comment earnulf
earnulf's picture

It is worth considering at what point you feel the evidence weighs in favor of a price correction.    I have seen and spoken to more and more people about silver and the evidence I'm seeing is that people know more, but are not yet motivated to "sell the farm" and sink it into silver.   Yes there are more and more cheerleaders and predictions, but the overall trend is still to the upside.    People at this stage still seem to be curious that someone is willing to pay $30 for thier old silver dollar and have not yet bought into the idea that silver is actually becoming even more valuable.

When my average co-worker starts raiding their kid's piggy bank to rake up enough money to buy silver, then we are in the bubble phase and headed for an explosion.

Silver is by nature more volatile than Gold, usually by a factor of three or more.    Minor moves in gold are magnified in Silver (at least from what I've observed).

More people are waking up to the Silver potential, but for now, choosing between buying silver and buying the latest ipad or just putting food on the table, silver loses.     When they start realizing that silver is wealth preservation rather than an investment, that's when the demand will really surge

Tue, 04/05/2011 - 10:31 | Link to Comment Trifecta Man
Trifecta Man's picture

Ask a few people you know, and some more you don't know, if they know the FRN price of silver.  Almost nobody knows.  If so, no bubble.

Tue, 04/05/2011 - 00:23 | Link to Comment jkruffin
jkruffin's picture

Old News, but at least the pot calls the kettle black, like he should:

Bernard Madoff, convicted for organizing a Ponzi scheme, criticized the U.S. during a recent telephone interview with New York Magazine. Bloomberg's Betty Liu reports in today's Movers & Shakers.

Even Madoff, and he should know, calls Benny Bubbles out for running the largest ponzi scheme ever.

Tue, 04/05/2011 - 00:33 | Link to Comment jkruffin
jkruffin's picture

U.S. Federal Reserve Chairman Ben Bernanke said late Monday that commodity prices are being driven primarily by global supply and demand. "Those prices are affecting the overall price indexes of the United States," he said.

 

No, it certainly doesn't have to do with the Trillions the bald-headed bastard had been printing for 2 years. Nah, nothing to do with that.  Someone please put a f**king bullet in this idiots head please. Just flat out blatant lying in front of the world. Why is Congress just sitting back and watching this take place?  Why are the TPR's not calling this crap out?

Tue, 04/05/2011 - 00:31 | Link to Comment honestann
honestann's picture

Hi ho silver, away!

Not that this wasn't obvious long ago.

Always good to see more facts and charts, though the vast majority of the real story is Bernanke and the predators-that-be.  The price of silver and gold are simply a consequence of their predatory actions.

Tue, 04/05/2011 - 00:47 | Link to Comment Selah
Selah's picture

 

Silver trivia: It's "Hi Yo, Silver"!

http://www.youtube.com/watch?v=hxIuIxqo2So

 

Tue, 04/05/2011 - 00:32 | Link to Comment faithfulwatchman
faithfulwatchman's picture

I love it when the deniers spew, It just means another buying opportunity looms...

Tue, 04/05/2011 - 01:06 | Link to Comment Scritchy
Scritchy's picture

After reading ZH for many months, in May 2010 I bought some silver for $18 per ounce. Skin in the game. In September 2010, I bought some more at 22 per ounce. It took some fortitude because there were trolls predicting a drop to 5 an ounce. At the time, ZH posters like Turd Ferguson were voices of reason versus the troll's unsubstantiated claptrap. In a nutshell, the entire world is awash in debt, and the Federal Reserve is furiously hitting the ctl-print key like the Wizard of Oz behind the curtain, and soon Toto will reveal the ugly truth.

Tue, 04/05/2011 - 00:49 | Link to Comment Dr. Porkchop
Dr. Porkchop's picture

I didn't read the report. Does it say it only costs $5 to dig it out of the ground?

 

/sarc

Tue, 04/05/2011 - 02:02 | Link to Comment rich_wicks
rich_wicks's picture

I didn't read the report. Does it say it only costs $5 to dig it out of the ground?

Guess what it costs to create a US dollar in a bank account?

Nothing.

Tue, 04/05/2011 - 09:56 | Link to Comment Richard Head
Richard Head's picture

Where's that liar with the Fiero kit car?

Tue, 04/05/2011 - 10:01 | Link to Comment Richard Head
Richard Head's picture

dupe

Tue, 04/05/2011 - 01:03 | Link to Comment Bansters-in-my-...
Bansters-in-my- feces's picture

mmm silver,my favorite food.!

Tue, 04/05/2011 - 01:22 | Link to Comment Scritchy
Scritchy's picture

You can eat a single silver coin many, many times if you are diligent about it. Also, it has antiboitic properties the entire way through, a true colon cleanse.

Tue, 04/05/2011 - 01:10 | Link to Comment baby_BLYTHE
baby_BLYTHE's picture

So when you fall to the ground... and finally get back to reality.

Tell me. How does it feel to be the enemy?

http://www.youtube.com/watch?v=81t8v3bt5TA

 

CRASH JP MORGAN (that is how you End the FED, btw)

Tue, 04/05/2011 - 06:42 | Link to Comment Vlad Tepid
Vlad Tepid's picture

BB - Half the time you sound rational and half the time (tonight?) you sound like you're strung out on Ecstasy.  What's the deal?  I know you're poetic and all, but we're looking for some substance - MEAT.  Not flowery whoo-ha from garage bands.

Tue, 04/05/2011 - 15:19 | Link to Comment baby_BLYTHE
baby_BLYTHE's picture

Hardly a garage band.

Yeah, I like to smoke up and read ZH. Freest country on earth.

No Ecstasy (ice-cream scoops out of the brain)

Tue, 04/05/2011 - 01:26 | Link to Comment savagegoose
savagegoose's picture

about worst i see for precious is a non continuation of QE, prices get hammered and in 3 minths QE3 rolls out and its busieness as usuall.

 

but this would mean an end to QE which i dont think thry can afford, or if threy can not for very long,. so if u think QE ending for a small while sell high buy back low, if you think it aint ending, keep stacking

Tue, 04/05/2011 - 15:51 | Link to Comment RockyRacoon
RockyRacoon's picture

F u cn rd ths, thr is a crer fr u n stngrphy.

Tue, 04/05/2011 - 15:55 | Link to Comment akak
akak's picture

UR2Qt!

Tue, 04/05/2011 - 19:54 | Link to Comment Flakmeister
Flakmeister's picture

Sht,  my hv t gt jb....

Tue, 04/05/2011 - 01:42 | Link to Comment ak_khanna
ak_khanna's picture

The stock, commodity and currency exchanges have been reduced to gambling dens whereby the more powerful traders with deep pockets move the markets to maximize their own profits at the expense of the remaining not so powerful players. The big boys have enormous money power to move the markets in the direction which results in maximum profits for themselves. They effectively use the media to lure the other players in the market to a position where they would incur maximum loss.

The markets will fall only when the banksters have eliminated all the short positions and only they themselves have positioned themselves to profit when the market falls

OR

When an unexpected world event catches the banksters with their pants down and the softwares they use to rig the markets go berserk beyond their control.


http://www.marketoracle.co.uk/Article24581.html

Tue, 04/05/2011 - 03:00 | Link to Comment oudwestpossie
oudwestpossie's picture

I guess the report produced by the USGS on silver depletion by 2020 is pretty non-existent then, or at least it has been used as a quote in many writings, but I have yet to see that actual report. USGS has a bad interface for searching, or maybe I was simply unable to track in their archives. Anyone out here who did?

 

Back to the BMO report. They believe production will double by 2018, so I can not really foresee any depletion 2 yrs later, right?

"High Case scenario seessilver production doublingto 1,572 Moz per annum by2018E."


 


Tue, 04/05/2011 - 08:31 | Link to Comment hamurobby
hamurobby's picture

Mining output may double, but it may take three or more times the digging to do it. Since silver is a byproduct of copper mining, I wonder if the projection by the bmo of doubling silver production is partly based on a continued expansion of copper mining? I do believe we are seeing a sort of mini mania in silver instead of gold. But I believe at some point in the next year (maybe two) gold will stretch out the ratio once again. However, nothing would please me more than to see the ratio go to 15 to 1 tomorrow...

Tue, 04/05/2011 - 04:29 | Link to Comment Drag Racer
Drag Racer's picture

this is interesting...

Exchange operator Nasdaq OMX Group Inc said on Tuesday it will rebalance its benchmark Nasdaq-100 index, cutting the weighting of Apple Inc.

http://www.reuters.com/article/2011/04/05/us-nasdaq-apple-idUSTRE7341572...

I am curious if this move is in anticipation of a correction in Apple

Tue, 04/05/2011 - 06:07 | Link to Comment props2009
props2009's picture

China raises rates again. Lending rates at 6.31%. 

http://dawnwires.com/investment-news/china-raises-lending-rates-by-25-bps/

Tue, 04/05/2011 - 08:57 | Link to Comment Reptil
Reptil's picture

Thanks for the info.

Obviously they have an inflation problem at hand. One that they'll solve in the longer term by backing a new Yuan with a basket of commodities.

Precious metals historically don't drop on higher interest rates. This can be seen from the bull rally in the seventies. Gold vs. paper has got to do with perception and real money supply. The hundreds of trillions of CDS and other invisible stuff on or off the books can never be monetised. A deflationairy climate is not what the FED wants. Inflation for the common man is not their concern. It's a paradox, from which there's no normal exit possible, the debt will have to be debased. China taps into the "organised retreat" as identified by Eric Sprott, after identifying this paradox. Of course the central bank of China also prints like crazy, but they're working on an alternative system.

IMHO of course.

Tue, 04/05/2011 - 07:05 | Link to Comment tek77blu
tek77blu's picture

everything the fools at the banks continue to do will only raise the floor underneath gold, silver, and PM equity prices.

Silver will surely be something to remember this decade: http://www.youtube.com/watch?v=zk3z-JUKp3k

Tue, 04/05/2011 - 07:58 | Link to Comment tiger7905
tiger7905's picture

Latest highlights from Eric Sprott Interview.

http://goldandsilverlinings.com/?p=487

Tue, 04/05/2011 - 08:18 | Link to Comment zack
zack's picture

He talks about Juniors that are at 5x earnings wrt production 2 years out.

Any ideas on the miners he's talking about?

Tue, 04/05/2011 - 09:29 | Link to Comment Flakmeister
Flakmeister's picture

Look at SLX.TO and ORV.TO

Tue, 04/05/2011 - 10:17 | Link to Comment SilverFiend
SilverFiend's picture

Silver.  Not been a dip for me to buy in too long!

Sat, 04/09/2011 - 21:47 | Link to Comment thames222
thames222's picture

The demand curve is skyrocketing...we had silver to ourselves for a minute, but now it looks like the average Joes are catching on!  JP Morgan, how stupid are you feeling right now?

 

www.forecastfortomorrow.com

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