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Eric Sprott Discusses Silver's Prospects And Last Week's Raid With Max Keiser

Tyler Durden's picture




 

Eric Sprott, who according to some catalyzed the initial move lower in silver following his sale of PSLV units, to be followed by a bullish clarification that he transferred all proceeds into other silver holdings, was on Max Keiser late last week in an interview that anyone interested in the silver market should listen to. Among the key summary highlights: "I will be a buyer of silver today. I will be a buyer of silver tomorrow. We have not lost any faith in what has happened to silver." As for what happened with that instantaneous $6 dollar drop in silver on May 1: "In my mind it was just one of those raids that we experience from time to time. There was no particular reason for it. And then we end up with 5 margin rate increases. It just reeks of someone manipulating the price of silver down. I have no fear of silver here. Yes it will be parabolic, but it's going to be way more parabolic than what we have today... I believe that gold today is the de facto reserve currency. It's outperformed everything for 11 years. Silver has always been a currency, people are now treating it as a currency, and it's a very, very small market. There is no way that with roughly $50 billion of silver inventory around that we can make it a currency, so I see the price going much higher." And on the ridiculous recent trading volume in silver: "One of the things we should look at is the trading of silver in the paper markets, I mean the Comex and the SLV. Last week it averaged 1.2 billion ounces per day. There is only 700 million ounces mined in a year. There is only 33 million ounces of physical silver that is available for delivery by the commercial shorters. If something like 3% of the people that were trading silver in one day demanded physical delivery, there would be no silver on the Comex.... The key market is the physical market. I don't think this raid is going to work." Much more on Sprott's views of the silver raid and the silver market in general in the full interview.

 

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Mon, 05/16/2011 - 18:39 | 1280931 lieutenantjohnchard
lieutenantjohnchard's picture

well thank you dad. i love being the object of your attention as i triple my money holding silver and gold.

 

Mon, 05/16/2011 - 19:30 | 1281043 Muir
Muir's picture

You are welcome son.

Don't beat yourself up too much, it takes time.

 

p.s. As I said, I bought by mistake @$240-250 /ounce 5 tubes worth and kept it.

Mon, 05/16/2011 - 17:57 | 1280838 Muir
Muir's picture

____

What the fuck people!

Do I have to spell it out for you?

BTFDs!!!!!

____

(and the next dip, and the next and next....)

Mon, 05/16/2011 - 21:14 | 1281351 penisouraus erecti
penisouraus erecti's picture

I believe you avatar is an excellent reminder to buy the dip, and the next, and next, and..........wait, what were we talking about?

Mon, 05/16/2011 - 18:02 | 1280848 silberblick
silberblick's picture

Click below to read why silver market manipulation will not end soon:

http://thesilvergoldhedge.blogspot.com/2011/05/market-manipulation-not-t...

If you haven't seen it yet, click on the next link to watch a hilarious animation telling you why you should buy physical silver:

http://thesilvergoldhedge.blogspot.com/2011/05/join-sla-to-get-even-and-...

Mon, 05/16/2011 - 18:33 | 1280920 Nnthnt1
Nnthnt1's picture

I love silver but I don't need Keiser's pessimistic comments from his outcast voice

Mon, 05/16/2011 - 18:33 | 1280921 Saxxon
Saxxon's picture

If trading paper, I like gold here better than silver.  I have silver bullion but possess no impetus to add to my collection with the spot price north of say $30 and maybe even the low $20s.

I may just load DGP and turn away; take a walk in the Garden of the Mind this summer, spade and kief pipe in hand.

Mon, 05/16/2011 - 19:06 | 1280983 scatterbrains
scatterbrains's picture

pretty much since they took out the world trade center you have copper up 600%+,  gold up 500%+ and silver as much as 1150% so it can come back to $30 and be right inline with copper and gold before continuing the long march higher.

Mon, 05/16/2011 - 19:35 | 1281055 CB
CB's picture

I really dislike Max Keiser.

Mon, 05/16/2011 - 19:36 | 1281063 CB
CB's picture

His stance on socialized healthcare and climate science  is regrettable

Mon, 05/16/2011 - 22:16 | 1281585 OrestesPenthilu...
OrestesPenthilusQuintard's picture

Not just that but he stuck with his buddy Ellen Brown (false flagger if there ever was one) when she said QE was the right thing to do.

Gary North tore Keiser, who was too proud to admit that he'd been hoodwinked by Brown, a new one.

Been ignoring Keiser ever since.

Mon, 05/16/2011 - 22:52 | 1281688 akak
akak's picture

Not just that but he stuck with his buddy Ellen Brown (false flagger if there ever was one) when she said QE was the right thing to do.

I did not know that, and appreciate you sharing that bit of info.

Yes, defenders of free and honest money must continually beware of the Duplicitous Duo, Bill Still the Fiat Shill and Ellen Brown the Money Clown.  Both are raging statists who adamantly defend the government monopoly on issuing money, continually spread malicious misinformation, disinformation and outright lies about gold and the gold standard, and are in short monetary wolves in sheep's clothing if ever I have seen any.

Tue, 05/17/2011 - 17:53 | 1284876 CB
CB's picture

Max Keiser and his sidekick Stacey are networking through the financial media very persistently and cleverly.  He's showing up all over the blogosphere (HuffPo, Infowars, Paul Craig Roberts, Karl Denninger, ZH and many more) pumping the JP Morgan-silver meme (note the word "pump" - yet another reason to dislike him).  I see he's with Reggie Middleton in the contributing section today (again, disappointing).
I appreciate his stance on bankster/fed corruption, copyright, and his support for a metals standard but he's no fan of laissez-faire, classical liberal thought.  He supports central planning of the banking sector and from what I can tell, he’s somewhat of a neo-marxist. I publicly called him & Stacey out on his blog to state his opinions on things like publicly funded health care and was pointedly ignored.  I have read enough over the years to know he's in support of many things authoritarian and socialist, but he wants to build a large readership so I suspect he attempts to avoid alienating certain audiences he feels he shares something in common with. 
Imagine a Max Keiser and ZH Venn Diagram with a minute sliver of shared space and I think this is one hell of an unholy alliance with ZH.  I've followed Max & Stacey for several years but I let go last fall.  I hope I don't have to remove ZH from my feeder too.  It is so disappointing to see him here.

Mon, 05/16/2011 - 23:25 | 1281790 Double down
Double down's picture

It is the voice. 

Mon, 05/16/2011 - 21:08 | 1281313 Downtoolong
Downtoolong's picture

There is only 33 million ounces of physical silver that is available for delivery by the commercial shorters. If something like 3% of the people that were trading silver in one day demanded physical delivery, there would be no silver on the Comex....

This is the problem with paper commodity markets today. Most players in these markets don’t have either the contractual right or practical ability to take physical delivery. Therefore, the paper markets never truly converge to physical. Silver, Gold, oil, corn, it doesn’t matter what the underlying commodity is. The paper markets are so dislocated from the physical commodity that they might as well be a market in hub caps, grass seed, or baby carriages. . It’s just becomes a zero sum, high volatility trading game on an index dominated by banks managing their huge positions (mostly hedging opaque OTC derivatives) and speculators guessing how that’s going to unfold. It all comes at the expense of those who want to be in the futures market for true investment or physical hedging purposes, which can never really happen without them being exposed to excessive volatility (risk) under the current market structure. It’s a complete bastardization of what futures are supposed to be to a commodity market, and it’s wrong. It doesn’t need to be this way, but it is, only because the big banks want it so, and they know the exchange operators and regulators will never really do anything to stop them. True investors, suppliers, and end users of physical silver deserve better than this.

 

Mon, 05/16/2011 - 21:10 | 1281338 PulauHantu29
PulauHantu29's picture

PMs are a long term wealth preservation investment since we know the dollar MUST fall as Larry Summers said it must to stimulate exports with a weaker dollar.

There is no mystery why the winners are GLD, SLV and USO.

Good luck!

Mon, 05/16/2011 - 21:11 | 1281341 PaddyFields
PaddyFields's picture

He that can have Patience with the cruel metal, can have what he will

Mon, 05/16/2011 - 21:34 | 1281423 HastyP
HastyP's picture

All of this talk is very interesting and very valid points.  What do you think the minimum ozs of silver and gold would a person need to have to make any difference when currencys collapse?  I am trying to learn more and more from the ZH group.

Thanks

Mon, 05/16/2011 - 21:39 | 1281454 tmosley
tmosley's picture

For currency collapse, you should have gold first (my opinion).  You should have enough to get you and your family across two borders (including two exorbitant bribes), and to pay for your way anywhere in the world by ship or plane, and enough to start a new life wherever you end up.  This works out to at least 3 oz of gold per family member.  Get small denominations, no larger than a half ounce, and have at least five 1/10th ounce coins.

After that, get guns (and learn to use them), ammo, food, and water supplies for your family.  Once you have those in place, then you can start accumulating wealth for translation into any new currency regime.  Silver is for speculation, gold is for wealth preservation.  Buy them accordingly.  I think the currency crisis is some ways off--a couple of years, but that the COMEX will default long before that happens, so I have mostly silver, and only about 5% gold.

Mon, 05/16/2011 - 22:36 | 1281653 sellstop
sellstop's picture

I wonder what Sprotts bias is?

Manipulation. I don't suppose any of the silver bull sold?

It must have been those nasty Treasury manipulators trying to manipulate again.

It is just a buying opportunity.

LOL

gh

Mon, 05/16/2011 - 23:10 | 1281754 tmosley
tmosley's picture

You need to learn how to read before you spout drivel.

Mon, 05/16/2011 - 22:46 | 1281679 Seacap81
Seacap81's picture

Meanwhile...single Silver Eagles from reputable sellers are once again being bid up to $50 on ebay this evening.  

The theory that the physical price would separate itself from the paper price is indeed beginning to exert itself.

 

Mon, 05/16/2011 - 22:53 | 1281703 floydian slip
floydian slip's picture

People that say, "look at eBay" are dishonest or ignorant.

Dishonest if they know about the fees

ignorant if they do not know about the fees (no offence)

 

to sell on eBay...

you are charged exorbitant fees

 

eBay takes 12% of the first $50 = $6

Paypal fee = 3%                        = $1.50  

then there are the shipping fees  = $1.50

 

So take the $50 and subtract the fees and you have

$41

the seller gets $41

 

Mon, 05/16/2011 - 23:17 | 1281770 tmosley
tmosley's picture

Well that's nice, but what is the buyer willing to pay?

You speak of dishonesty and ignorance, but you show the same when you proclaim that only the final total received by the seller matters, and that the costs of doing business, and the fact that buyers are willing to absorb them, means nothing.

This ignores fundamental economics.  Even a Keynes 101 student would know this.

"Everything is worth what its purchaser will pay for it."

-Syrus, Publilius

Mon, 05/16/2011 - 23:38 | 1281833 floydian slip
floydian slip's picture

Ever hear of eBay bucks? Fat wallet / reward programs? One can whittle down the prices on ebay another 5-10% with such programs.

Do you eBay?

Do you know about these programs?

 



 

Tue, 05/17/2011 - 00:25 | 1281933 Tito Gobbilicious C
Tito Gobbilicious C's picture

You should also register at Mr. Rebates (ok, well the name is a little weird), because you get another 3% rebate on all Ebay buys - which, after the Ebay Bucks, adds up after a bit.

Tue, 05/17/2011 - 00:37 | 1281968 floydian slip
floydian slip's picture

Nice

Big Crumbs (dot) com as well ;)

 

Wed, 05/18/2011 - 00:49 | 1286077 Tito Gobbilicious C
Tito Gobbilicious C's picture

Thanks for that!

Mon, 05/16/2011 - 23:32 | 1281812 plata pura
plata pura's picture

So what ever the commons pay on the commons market be what they pay; for them people selling on ebay aka the peoples market that be what they get. Do's thee like apples?

Mon, 05/16/2011 - 23:42 | 1281844 floydian slip
floydian slip's picture

Do's thee like apples?

 

I like the Brilliant uncirculated ones :) But I willl not pay anything over an orange for it. !

Mon, 05/16/2011 - 23:43 | 1281839 rumblefish
rumblefish's picture

your fee structure is dated.  12% of the first $50?

Tue, 05/17/2011 - 00:19 | 1281922 Tito Gobbilicious C
Tito Gobbilicious C's picture

Better read the regs again - they get 9% of the final sale. If you list at .99 with no reserve, the listing is usually 25 cents. 1% cheaper than the average local auction house, and a much larger buying audience. Paypal charges 2% to redeem your cash. Ebay's best use, IMHO is as a guide to what's hot and what's not, and as to what is selling and what isn't.

Tue, 05/17/2011 - 00:36 | 1281959 floydian slip
floydian slip's picture

https://www.paypal.com/cgi-bin/webscr?cmd=_display-receiving-fees-outsid...

Purchase payments received (monthly) Fee per transaction

$0.00 USD - $3,000.00 USD 2.9% + $0.30 USD

$3,000.01 USD - $10,000.00 USD 2.5% + $0.30 USD

$10,000.01 USD - $100,000.00 USD 2.2% + $0.30 USD

> $100,000.00 USD 1.9% + $0.30 USD

Like I said 3% unless you are doing over 3,000.00 worth of transactions ------------------------------------------------

now on to ebay

http://pages.ebay.com/help/sell/fees.html

Final value fees for auction-style format listings = 9%

Final value fees for fixed price format listings = 12.0% of the initial $50.00, plus 6.0% of the next $50.01 - $1,000.00, plus 2.0% of the remaining final sale price balance ($1,000.01 - final sale price)

Mon, 05/16/2011 - 23:25 | 1281798 plata pura
plata pura's picture

Damn math questions from jpl and shit. Had two mulligans; nail'd the third. Anyway the precious has $5.77usd more downside coming.

Tue, 05/17/2011 - 00:14 | 1281909 Tito Gobbilicious C
Tito Gobbilicious C's picture

First I would like to say how fucking happy I am that I have recovered my password. I'm happy about it because I can now form some replies to the likes of wunderwhathis shaft is stuck in and all the other clones he /she has made of itself. I'm a linguist, and an occasional cunning linguist (s'bt) which means that I can spot people who talk to themselves. Those that do it online? They need a shrink and a padded room with happy music, not silver.

Why do you give a flying fuck at a rolling dognut why Td or ayone else buys precious metals? Does it threaten your reality? Your wallet? Are you a troll because you're paid to be so? If that's the case, then go pander your bullshit somewhere where nobody knows you. Or maybe you're dressed in leather and chains, enjoy pain and masturbate while you read the dressing-downs you receive in reply to your utterly tasteless, unreasoned and idiotic fear-mongering.

If you are so bothered by the idea that others see through the web of lies and deliberate impoverishment openly and adroitly visited upon the population by our loving government, then stfu and go hide in Russia. I'm sure the dons will have some entertainment you can provide for them.

You Troll motherfuckers are going down. And I mean down, brother. Fuck you and all your kind. You don't have the purse strings anymore - and your last weapons are fear and propaganda. Guess what? This is the internet age, and we're all onto your stupid Bilderberg Bullshit. We aren't two brothers trying to corner the market - we're millions strong, and your days are as numbered as the eggs in a carton. I suggest you get on your camel and ride into some far wilderness before we find you in person - because when we do, you're going to live in the shithole where you belong.

Tue, 05/17/2011 - 00:37 | 1281970 jomama
jomama's picture

DAMMNNNN TITO!!!

Tue, 05/17/2011 - 00:44 | 1281984 Tito Gobbilicious C
Tito Gobbilicious C's picture

Well, you know...somebody has to say it like it is. Ain't gilding the lily no more...always polite the first two times out, but after that, brotherfucker, yo' ass belongs to me.

Tue, 05/17/2011 - 00:31 | 1281948 Bansters-in-my-...
Bansters-in-my- feces's picture

 More like Diddler_on_the_roof.

Tue, 05/17/2011 - 00:51 | 1281995 Tito Gobbilicious C
Tito Gobbilicious C's picture

That's the girl with the fiddle, right? "Matchmaker matchmaker...."

Tue, 05/17/2011 - 01:38 | 1282076 Tito Gobbilicious C
Tito Gobbilicious C's picture

I would like to tender an idea for discussion. I read a good many posts that bash "price-chasing chumps" and the like. And yet I wonder - if we are fighting off the fiat fools and their wicked wise men, why do we not welcome newbies into the fold? Part of the key to winning this war is enlarging the numbers of people who buy and hold pm's. If someone who has been sold the mutual-fund song and dance, the 401-k metamorphosis to a 101k, the Wall Street shuffle, then why is it not a good thing if they lose their blinders and pile their fiat into gold, silver and company?

Change is a fickle thing - it can be good or bad. The sheep always think that the leadership, the government, the pundit is going to show them the way. They get shown the way alright - straight to the slaughterhouse. Vast criminal conspiracy after vast criminal conspiracy has been visited upon us in recent years by governments, corporations and media mouths. The sheep have stood and watched in helpless horror as their life savings are stolen, while the thieves run about crowning themselves Masters of the Universe.

It is clear to me that the Masters of the Universe cannot see past the end of their noses. The broad views from their penthouse office suites do nothing for their state of mind. They don't see how far they have to fall, or that they will fall on the bodies of the people they crushed to get where they are. "The Law of the Jungle," I was told when I worked on the Street. I called bullshit on it then, and I still do now. The jungle doesn't know greed, or tolerate it.

Change, when it comes, comes from the street. It happens to us all, and then it happens to bureaucrats. Sometimes that mechanism protects us from the wiles of evil men. Sometimes it doesn't, like today-when the Supreme Court ruled that the cops can break your doors down without a warrant, "...if they suspect someone inside is destroying evidence, or if they hear a toilet flushing..." This vote passed 8-1. This, combined with making corporations equal to individuals in sight of the law, is the death-knell for human rights. And you'd better believe that we the people had better get it together and nip this shit in the bud. The weapons we have right now are the vote and our wallets. One of the battles we can win is to buy every stinking ounce of precious metal we can buy and lock it up. If the price goes down, buy more. If you can talk your neighbor into buying a ten ounce bar, just do it. We must crash these bastards before they enslave us all again. Politicians are fickle - we crash their pimps, they'll deal with a new mandate. We let them roll us over again, and maybe, baby, the game is up. Because that cop without a warrant is going to come for your gold-and you're going to have all the legal protection you'd have in Zimbabwe when he does.

Tue, 05/17/2011 - 07:57 | 1282334 shithouserat865
shithouserat865's picture

100% accurate

Tue, 05/17/2011 - 08:05 | 1282349 shithouserat865
shithouserat865's picture

100% accurate

Tue, 05/17/2011 - 02:23 | 1282139 Kairos1
Kairos1's picture

Guys I ve been trading silver for 3 years now. I sold everything at 46,8$. Here's my opinion on Silver: Sprott sold huge amounts almost on Top (like many other traders I know) and then comes out saying no no silver will go up for sure... Hmm everyone knew 50 will be a psychological barrier. I ve read a 100 page doc. on april 11th saying silver will crash within months. Even though inflation adjusted 1980 top would be 120$ today, and silver is becoming the new money the physical supply demand is completely deformed by the paper speculation. I think Internet was possibly used to take money away from people who are politicaly aware and psychologicaly inclined to buy silver but dont check the numbers just "trust" other "revolutionaries" like keiser, schiff, celente and bunch of real amateurs with a youtube channel.

Tue, 05/17/2011 - 04:04 | 1282196 TrueStrengthTur...
TrueStrengthTurnsTheCheek's picture

GOOD TAKE MY FIAT PAPER AND GIVE ME SILVER IDC HOW MUCH PAPER YA WANT?? now I realize what your saying but everyones individual circumstances are different and allow for different investment strategies. anyone who trusts keiser schiff celente is going to be a infinitely better off then those who ignore them/never heard of them.

Tue, 05/17/2011 - 11:08 | 1283026 Fiat2Zero
Fiat2Zero's picture

You've read a 100 page doc. Well you should get a gold star. REPLICANT. Just regurgitating the KWN, Ben Davies silver criticality paper.

Replicant Bitchez:

http://bladerunnerkalssixmemoriez.ytmnd.com/

Did you realize Ben is now buying physical silver like it's going out of style.

You and your "trader friends," are now free to leave.

Your Rothschild Masters do appreciate your improved efforts (subtle FUD, an advanced PsyOp technique), but you need to try a little harder if you want that next check.

Tue, 05/17/2011 - 07:54 | 1282325 shithouserat865
shithouserat865's picture

Im new to this deal..but gonna chime in anyway. Seems like all the silver haters use one or 2 people's investment decisions to blanket an entire subject. SO the fuck what Turd got out...he made a shit load o $$$ and bought back in. SO the fuck what? If you honestly try to say a drop from 45-49$ to 34ish$ is a crash...old dumbass me says time to load boat.Very very few silver investors mortgaged a home doucher. AND..are u seriously trying to say that mortgaging a declining $$ home to buy some physical silver isn't/wasn't a very good calculated risk in the fucking bullshit investment game played by 100's of millions world wide?? Surely you're not that stupid. I got physical that I would swim in like Scrooge McDuck if the laws of physics allowed. After I finish my BA in organic/sustainable production next year, I'll be buying a farm with this worthless silver...and m-f'er when the food $ skyrockets from the aforementioned Fukushima and the 1000 years f-ed practices of idiots, corporation, and religion...I'll be right there to stack cheddar son.

Tue, 05/17/2011 - 10:21 | 1282817 Weimar-eddie
Weimar-eddie's picture

OMG, the Fed is running out of paper money! Trade in your silver and gold before it's too late!! Oh, wait, no, just trade in your silver because it's not currency anymore, even though it WAS currency all the through 1964 and is being treated so by most of the rest of the world as we speak. But no, only gold is currency now, but it's way overvalued at the moment because somebody said that that must be what Soros thinks, and well, gee, he's just an honest humanitarian, looking out for everyone's best interest, and diamonds, I mean silver, only costs $5 an ounce to dig out of the ground.

LMFAO. Seriously. Most of the honest posters on this site can cup up with better contrarian arguments than this excrement.

Tue, 05/17/2011 - 10:24 | 1282819 Weimar-eddie
Weimar-eddie's picture

OMG, the Fed is running out of paper money! Trade in your silver and gold before it's too late!! Oh, wait, no, just trade in your silver because it's not currency anymore, even though it WAS currency all the through 1964 and is being treated so by most of the rest of the world as we speak. But no, only gold is currency now, but it's way overvalued at the moment because somebody said that that must be what Soros thinks, and well, gee, he's just an honest humanitarian, looking out for everyone's best interest, and diamonds, I mean silver, only costs $5 an ounce to dig out of the ground.

LMFAO. Seriously. Most of the honest posters on this site can cup up with better contrarian arguments than this excrement.

Tue, 05/17/2011 - 10:23 | 1282833 Weimar-eddie
Weimar-eddie's picture

OMG, the Fed is running out of paper money! Trade in your silver and gold before it's too late!! Oh, wait, no, just trade in your silver because it's not currency anymore, even though it WAS currency all the through 1964 and is being treated so by most of the rest of the world as we speak. But no, only gold is currency now, but it's way overvalued at the moment because somebody said that that must be what Soros thinks, and well, gee, he's just an honest humanitarian, looking out for everyone's best interest, and diamonds, I mean silver, only costs $5 an ounce to dig out of the ground.

LMFAO. Seriously. Most of the honest posters on this site can cup up with better contrarian arguments than this excrement.

Tue, 05/17/2011 - 12:02 | 1283276 Kairos1
Kairos1's picture

Guys dont take me wrong I love celente and I am reading jim Rogers books right now. But the Pblm with Keiser, Sprott and many many other Youtube silver bulls (who are also selling silver) is that when the chart went 10 $ up in april no one said "hey wait a minute this chart looks like a bubble". So yea some people baught at 48$/ounce and those people are crying right now.

Tue, 05/17/2011 - 21:43 | 1285664 Weimar-eddie
Weimar-eddie's picture

In a bull market the strategy is to accumulate as you can without worrying too much about the current price, because market-timing is always tricky and if you wait too long you can miss an opportunity for good. Of course, nothing goes up in a straight line either, so everyone expected a correction, but there was really no way to know whether it was going to go from $48 to $58 and then pull back to $42, or what was going to happen once we hit $48 (market manipulator insiders excluded, of course). I think it was a fairly educated guess that some people made that the massively short banks would pull out every stop imaginable to keep a breach of $50 from taking place. But let's not forget, there was so much momentum going that even the first margin hikes didn't put a dent in the run up.

Bottom line, if you bought at $48 because you thought there was a buying frenzy and you wanted to get in on it, then you haven't done your homework and you bought for the wrong reason, and when you buy for the wrong reason you usually get burned. If you did your homework and you understand that the fundamentals then you really can't kick yourself for more than getting a late start. There will be plenty of more rises and drops on this roller coaster ride, so maybe you will get the opportunity to acquire more at lower prices and get a lower cost average.

Just remember, the Bernanke, the EU, Japan, etc., cannot print any actual gold or silver. They can only print paper, and the damage they have already done by the printing that has already taken place has not even been fully assimilated into the world economy. And they have no other option than to print more. If your great-grandfather had an ounce of gold 100 years ago and passed it on to you, he would have been able to buy basically the same stuff you can buy with it now, and that is why you are accumulating now, because you will be able to buy the same stuff with it in the future. If your great-grandfather had a $4,000 100 years ago and decided to pass it on to you thinking "gee, my great-grandson will be able to get so many things with all these dollars--even a house if he likes,"--how did the value of that $400 hold up over time? If the dollar depreciated that much during fairly stable economic times, how well should we expect it to hold up under today's current kleptocratic insanity?

Tue, 05/17/2011 - 22:04 | 1285725 Weimar-eddie
Weimar-eddie's picture

btw, a bubble cannot be determined by a price chart. A bubble exists mainly when demand is artificially high for an extended period of time due to a broad-based "get-rich-quick" mentality amongst a mass of people who want to replicate what they saw was achieved by people who got in early. (granted, a bubble can also exist among only big-time players such as in the sovereign debt bubble). So until your neighbor, aunt, kid's schoolteacher, etc., start talking about how they liquidated their 401k and put everything into gold and silver, you won't be hearing the word "bubble" used by most precious metal analysts. Short-term "overbought" condition, sure. Short term "oversold"--we're in one of those periods right now. So we're really far from any precious metals bubble--unless you want to call the massively oversold short position out there a "bubble of shorts."

Tue, 05/17/2011 - 12:24 | 1283371 Kairos1
Kairos1's picture

Also Does anyone here believe that silver is going to 500$/oz like keiser says ??? I realy want to know. And within wich timeframe ? % years? 10 years ? 15 years?

Wed, 05/18/2011 - 01:32 | 1286138 Kairos1
Kairos1's picture

Bubbles emerge for many different reasons. But often main one beeing an emotional misinformed group of buyers with a hypnotised belief that they do understand what is going on. 34$ to 50$ within 4 months was a 2000%/year rise that was run by speculators. Normal people pointed out that going long after a parabolic move with no volume support at a 30 year high was maybe a "dangerous game". Merril Lynch said it clearly "silver is going down to low $30' and then will climb to $80' but there again what if then the Central Banks might printing money in 6 months.  believe it or not it might happen. Finaly... sadly.... there is always someone making money. In this case the silver revolutionnary che guevaras are the one who allowed people who  baught silver at 5$ to get out at 45$. Big guys are bloody happy right now they just cashed in millions while the youtubers are shakking cause they still believe the price will go up and their saving wont evaporate within next 2-3 months. If u ask me I alwasy follow the trend AND THE SILVER TREND NOW IS GOING DOWN ASK THE 200-DAY-MOVING AV. GET SHORT . ;-)

Wed, 05/18/2011 - 07:52 | 1286439 Weimar-eddie
Weimar-eddie's picture

I certainly agree that the price appeared to show all the hallmark characteristics of a bubble, but keep in mind that many analysts have expected such an occurrence for a long time. The question we must ask ourselves is whether the price spike was the result of a "hypnotized belief" or the actual first stages of the unwinding of a massive ongoing price suppression. Much evidence has been provided to the latter. Let's look at the following: 1) sudden unprecedented cash settlements with premium by JPM because they cannot obtain physical metal to cover delivery demands; 2) unprecedented low inventories at the COMEX; 3) unprecedented massive reclassifications by the depositories (i.e. massive dents to the known supply of metals with an expectation that more may be coming; 4) increasing awareness of the severity of the short squeeze on the part of big money players. How is this a recipe for anything other than dramatic price spikes? Absent the 15 minute Sunday night raid and series of seemingly never-ending margin hikes, odds seem to indicatae $50 would have easily been breached in early May leaving no technical barrier above it. We could easily be at $65 right now, and the $48'ers would be smiling. Again, pullback corrections are going to be natural. We could have gone from say $65 back to $50 or $40. But the main question everyone must ask themselves is are we witnessing a race to true price discovery or are we merely witnessing a long term uptrend. If the former, then look for more parabolic moves in the future to $65, then $100, then beyond. If the latter, then at least stick to the basic analysis of the ratio of dollars to metals. How many dollars did we add to the supply in the last few years? How many hundreds of years prior to that did it take to produce the same amount? How many dollars are going to be shoved back in our faces as China and other central banks unwind their dollar reserve currencies (in favor of precious metals).

It's always true that no one really knows the answers, especially over the short term. But we can certainly make educated guesses about the long term based on the above.

Wed, 05/18/2011 - 01:38 | 1286147 Kairos1
Kairos1's picture

Correction line 6: what if then the Central Banks STOP printing money in 6 months.

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