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Guest Post: Why I'm Buying Silver At $30

Tyler Durden's picture





 

Submitted by Jeff Clark of Casey Research

Why I'm Buying Silver at $30

The silver price has bounced 27% since January 28, a huge advance for a measly 16 trading days. It's already soared past its 2010 high and was selling for less than $16 this time last year, a double in 12 months. So, is it pricy? Or should we ignore the run-up and keep buying?

I've read a few articles that say we should expect silver to drop to the $25 level, and one pinpointed $22. Others, of course, see bullish tea leaves for the near term and believe it's headed higher. Of those that assert silver will decline, most believe it will be temporary, though one writer claims the bull market in precious metals is over (I think he's a holdout from the gold-is-a-bubble camp).

These authors could be right about a near-term decline, but I'm less concerned with what the price does this month or even the next few months, and more focused on where it's likely headed over the next few years. Caution: the chart ahead may cause excitement.
 
While there are lots of reasons to be bullish on silver, what everyone really wants to know is how high the price can go. Here's one hint, based strictly on historical price performance.


Silver rose an incredible 3,646% from the November 1971 low of $1.32 to its January 21, 1980 high of $49.45 (London PM fix prices). Our current advance, through February 4, is 596%. At $30, silver would have to climb over five times to match the last great bull market. If it did, the price would hit $160.89 per ounce (from its bottom of $4.295 on March 30, 2001).
 
You'll also notice silver has a record of outperforming gold in these two bull markets. In spite of the price dropping 26.9% in 2008 (while gold gained 5%), the metal has outrun its yellow cousin by 38.6% since their respective lows in 2001.

Gold advanced 2,333% in the 1970s; it's currently up 430%. If it matched the last run, the price would hit $6,227.26 per ounce, a return of four-and-a-half times the gold you buy today.

From solely a historical price perspective, the chart certainly suggests we've got a long way to go with both metals. The question is if the fundamentals support such price advances (show me a healthy dollar and no threat of inflation, and we'll talk), but my point for the moment is that there is an established precedence for the price of these metals to climb much higher. And just as important, to keep one's eye on the big picture.
 
So, yes, I'm buying silver at $30, in part because I think the potential for enormous gains is high.
 
However, I'll add that I'm not draining my cash account to do so. I think it's important for the precious metals investor to always be in the game, but given silver's volatility and the precarious nature of most markets right now, prudence suggests we keep some powder dry as well.
 
Let's say one of the soothsayers noted above is correct and silver temporarily falls to $25. If you snag it at that level, your endgame return would be 543%, vs. the 436% gain from $30 (excluding premiums and storage costs). That's more than another 100% gain on your original investment.
 
But how does one buy silver not knowing if the price will plummet or soar? For example, silver could take off from these levels, never to see $30 again, leaving those of you waiting for a sell-off out of the market. Or it could sink to $25, making investors who went all in now regret they didn't wait for a better price. Or it could trade sideways until, say, next fall, leaving both parties uncertain and on the sidelines.

In my opinion, there's a one-word answer to the question. It solves all dilemmas – it keeps you in the market, while simultaneously letting you buy at lower prices if that occurs. It lets you build your position bigger and bigger without the worry of whether you're getting a good price.

That one-word verb is, accumulate. Or in the vernacular made popular in the '80s by the financial planning community, dollar cost average. In other words, buy a little now, buy a little next month, etc., until you have a position sufficient in size to fight off inflation and any other economic woe we're likely to encounter over the next few years.
 
So my advice is, buy, hold, repeat. Because if our silver market ends up looking anything like that left bar in the chart, you may regret not having bought at $30, too.
 
[By the way, we updated the numbers on the market cap for Pan American Silver from our article last week… check out how tiny one of the largest silver producers is compared to other popular stocks here.]

 


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Tue, 02/22/2011 - 18:15 | Link to Comment Whizbang
Whizbang's picture

You're buying PMs for the same reason everyone else is, short term ultra-leveraged investment for short term gain. Good luck

Tue, 02/22/2011 - 18:18 | Link to Comment tmosley
tmosley's picture

10 years is short term?

Are you an immortal?  THERE CAN BE ONLY ONE!

Tue, 02/22/2011 - 18:38 | Link to Comment malikai
malikai's picture

My timeframe is 18-20 years. Perhaps by then these silly 2010 eagles will be valued not on the metal, but as collectors items of a lost empire.

Tue, 02/22/2011 - 19:16 | Link to Comment Moe Howard
Moe Howard's picture

+2011 ASE

Tue, 02/22/2011 - 20:57 | Link to Comment RockyRacoon
RockyRacoon's picture

Is it possible to build a blog-bot that snags the top spot for its trolling?

Sure looks like it, eh?

Tue, 02/22/2011 - 21:37 | Link to Comment Imminent Crucible
Imminent Crucible's picture

There's no point in talking about a dollar price for silver, or gold either--unless you're just in it for a short scalp.

I've been in the silver trade since it was $4 per oz., and I'm not about to trade it for paper dollars that are debasing at the fastest rate of my lifetime.

If silver went to $5000 per oz., would you trade an ounce of silver for 5,000 worthless federal reserve wipes that wouldn't buy you a gallon of gas?

Tue, 02/22/2011 - 22:12 | Link to Comment Troll Magnet
Troll Magnet's picture

if silver goes to $5000 in a few days, i'm selling all mine to buy the yankees.  then, i'll be paying my staff and players in fiat money. 

Wed, 02/23/2011 - 05:33 | Link to Comment Sudden Debt
Sudden Debt's picture

If it goes to 5000$, I'll buy myself a island (somewhere in Greece )

Take on 6 extra wives and retire :)

Wed, 02/23/2011 - 05:48 | Link to Comment malikai
malikai's picture

Dude 6 wives are expensive, even if they're former dictator's nurses. But I'm with you, $5000 silver and I'm buying an island somewhere. It's GTFO time then.

Wed, 02/23/2011 - 06:57 | Link to Comment tonyw
tonyw's picture

If silver goes to $5000 per oz. it means that everything tangible and necessary will also comparably increase in price, so what most people miss is that they will have protected that amount of wealth rather than made a profit. Remember 2,000 years ago one oz of gold would buy a good suit, today it will still buy a good suit not 150 good suits.

Disclaimer, very long PMs especially silver and believe it is undervalued.

Wed, 02/23/2011 - 07:42 | Link to Comment unky
unky's picture

one oz of gold will indeed by you 50 taylored suits in china. if you think one oz of gold will buy u a nice suit give me all your gold, i will give you twice the amount of suits, a good business for you ?

Wed, 02/23/2011 - 07:27 | Link to Comment Treeplanter
Treeplanter's picture

One oz.  Sure, to pay the month's rent on my studio apt. with a few hundred bucks left over to buy a bag of onions.

Wed, 02/23/2011 - 20:09 | Link to Comment h3m1ngw4y
h3m1ngw4y's picture

if id get one ounce of silver for everyone who is in this bull market since 4$ there would be no silver left for all the others ;-)

Wed, 02/23/2011 - 07:37 | Link to Comment unky
unky's picture

i will make some nice copies by then ^^, so dont worry, it will still be just the metal value which is of course much higher.

Tue, 02/22/2011 - 18:39 | Link to Comment impending doom
impending doom's picture

This article highlights why the old guard of financial reporting is dying: some guy said this, some guy said that, anonymous officials reported that... Cite your souces, please. I've probably already read them, but how do I know it's not the nearest homeless schizophrenic?

Tue, 02/22/2011 - 18:43 | Link to Comment nope-1004
nope-1004's picture

I agree.  10 years ago did anyone say silver would "correct" to $25?  Did anyone say it last year?

So why now?  Just plain stupidity.

Here's my forecast, does anyone care?  I believe that when the truth comes out that the banksters and ETF's have ZERO silver in possession, the thing will skyrocket above $2,200 / oz.

But that's just my opinion, like the idiot that thinks it will go to $22.

Who's right?  Guess we'll see.

 

Tue, 02/22/2011 - 19:08 | Link to Comment johnQpublic
johnQpublic's picture

 buy, hold, repeat

i could see a short term drop to mid twentys, akin to the drop in pm's in '08 when folks needed to raise cash

but it wont stay there, nosiree

it'll rise again,just like its been doing last couple years

and i'll buy the fucking dips.hold.repeat.

until such time that we establish a currency that one can have faith in again

chuckle.

Tue, 02/22/2011 - 19:12 | Link to Comment DosZap
DosZap's picture

Casey is a gentleman, and the folks with differing views are not going to be WIPED all over this site, if he respects them.

I have one trader in mind who has told me flat out to not buy, as it is going to these levels.I have been anyway,he's made great calls dead on before, so if I piss my pants, its on me.

I will just DCA.

The reason I an ignoring the sage advice of this guy, is because their are way too many Back Swans circling, and no one can CALL those.

Also, And the second reason for continuing to buy, is China, Asia, India, they are eating Silver UP.

Also Gold.There will come a point soon when world mines absolutely cannot keep up the amounts of either needed.

If the LONGS stand for physical delivery, Comex is screwed.

Tue, 02/22/2011 - 19:18 | Link to Comment Ahmeexnal
Ahmeexnal's picture

Do not underestimate the long reach of the banksters. They are getting a much needed oxygen tank from the spoils of Tunisia and Egypt. Soon the Libyan gold&silver will be theirs too.

And then Chavez's gold&silver will be next to be transfered to the JPMorgue vaults.

It's no coincidence all this is happening before the March deliveries.

Maybe....Wynter Benton is going home in a body bag! doo dah doo dah

Oh well, he did try. Just like "Another" (of foa/fofoa/fofofoa/fofofofoa/fo...foa fame) tried years ago. In the end, "Another" was caught holding a bagful of "worthless fiat paper" in a rat hole outside of Tikrit. And his precious...yep, taken away.

We all need to buy more silver to crack the piggybank.

Tue, 02/22/2011 - 23:46 | Link to Comment living on the edge
living on the edge's picture

Oh well, he did try. Just like "Another" (of foa/fofoa/fofofoa/fofofofoa/fo...foa fame) tried years ago. In the end, "Another" was caught holding a bagful of "worthless fiat paper" in a rat hole outside of Tikrit. And his precious...yep, taken away.

Can you expound on your above comment concerning "Another"? Thanks

Wed, 02/23/2011 - 05:08 | Link to Comment Lord Koos
Lord Koos's picture

Any chart that starts with the Hunt brothers' high (which lasted about 2 seconds) is pretty bogus.  I like silver, but be real...

Tue, 02/22/2011 - 19:01 | Link to Comment High Plains Drifter
High Plains Drifter's picture

But, but, but , Bob Prechter said gold was going to 600..........

Tue, 02/22/2011 - 22:16 | Link to Comment Troll Magnet
Troll Magnet's picture

shit...i wish gold would go to $600.  time to load up!

Tue, 02/22/2011 - 23:36 | Link to Comment akak
akak's picture

Bob Prechter has given up trying to make any sort of market calls, and has instead joined Karl Denninger and other deflationists on a voyage to find the edge of the flat earth, which rumor has it lies just beyond the Isles of Fiat Bliss and the Sea of Eternal Paper. 

I just hope their charts don't lead them onto the Golden Shoals, or even worse, into the Maelstrom of Silver.  "Beyond here there be dragons ..."

Tue, 02/22/2011 - 19:21 | Link to Comment bankrupt JPM bu...
bankrupt JPM buy silver's picture

isnt taking 1980 prices, and assuming we are going back to them kinda like driving while looking in the rear view mirror?

Dont get me wrong, I love silver but the 1980 silver price, and why it went there, has nothing to do with where its going today and why its going there.

 

www.silvergoldsilver.blogspot.com

Tue, 02/22/2011 - 19:52 | Link to Comment chumbawamba
chumbawamba's picture

Fractals, my friend.  Everything is a fractal of something.

I am Chumbawamba.

Wed, 02/23/2011 - 02:42 | Link to Comment Red Neck Repugnicant
Red Neck Repugnicant's picture

I wrote a paper at Williams entitled, Is Fractal Geometry a Hoax?

Not only did I receive an "F", the professor commented, "This paper is a devastating failure by every metric imaginable. Is this paper a hoax?"

I have it framed in my office.

 

 

 

Wed, 02/23/2011 - 02:58 | Link to Comment akak
akak's picture

What kind of grade is an "F"?

You mean one can do worse than an "E"?

 

In any case, it clearly takes somebody of your obvious intellectual caliber, RNR, to discover whole new sub-levels of failing grades.

Wed, 02/23/2011 - 11:39 | Link to Comment tmosley
tmosley's picture

The American grading scale goes A, B, C, D, F.

No idea why.

http://en.wikipedia.org/wiki/Education_in_the_United_States#Grading_scale

Also, lol at RNR for being proud of his ignorance of math.

Wed, 02/23/2011 - 19:01 | Link to Comment akak
akak's picture

The American grading scale goes A, B, C, D, F.

WTF?  Since when?  When I went to school, it was simply A, B, C, D, E, with no Fs or Gs or Hs in sight (and believe me, I know --- I received EVERY one of those letters in my first year of college, LOL).  What universe is this reference talking about?

Wed, 02/23/2011 - 01:19 | Link to Comment nontaxpayer
nontaxpayer's picture

Now I totally agree with you.

Wed, 02/23/2011 - 06:57 | Link to Comment Zero Govt
Zero Govt's picture

Akak's right Rob Prechter has given up trying to predict the PM's, but his Elliott Wave clown side-kick Steven Hochberg hasn't despite throwing his charts in the bin literally every week because his predictions never work. I'm surprised Hochberg hasn't topped himself yet but no luck, he just ignores unapoligetically his fuking incompetence to subscribers and plows on with his latest wonderous pile of shit as if his last 50 pieces of shit never happened!!

Having said that i think Prechters deflationary meltdown is spot on. To my mind inflation is now peeking (hence the inflation hysteria in oil, food and PM's which accompanies any peek). We're going to suffer a 1929 and Japan 1989-2011 deflationary meltdown (credit card implosion) simply because that's what always follows historic levels of credit (debt).

In fact deflation, rather than inflation, is absolute common sense but it's hard to put that across to groups of euphoric near-hysteric inflationists!

Debt is the problem. Full stop. And when debt implodes it results in deflation, not inflation (of anything). It's not a popular view, in fact it's a positively extreme minority view, but the consensus usually calls it wrong  

Wed, 02/23/2011 - 07:02 | Link to Comment tonyw
tonyw's picture

I expected deflation by now but have been shocked surprised by the lying, cheating and stealing that the govts have done to kick the can down the road and prevent/postpone deflation. Now i think there is nothing they wouldn't do to continue this and keep themselves in office for one more round.

Wed, 02/23/2011 - 08:43 | Link to Comment Zero Govt
Zero Govt's picture

Kick the can, the easiest expedient decision, what a wonderous bunch (all) politicians are! ...they're undoubtedly making the deflationary meltdown even bigger when it (Credit Crunch II) comes

Wed, 02/23/2011 - 09:08 | Link to Comment ATM
ATM's picture

Debt WAS the problem.

That problem has now been drowned in a moutain of fiat. The problem NOW is that debt is now worthless fiat which has spread that debt problem from the borrowers and lenders to everyone and the only course of action for central banks is to keep printing as fast as they can and to keep getting faster.

Lenders are being made whole by way of free cash which they  swap for real assets as fast as they can and before that free cash loses more purchasing power. That cycle of debasing the purchasing power of fiat starts slowly as the blind masses (homage to obama) cling to their religion of the almighty dollar.

Once the cracks in the fiat myth begin to show, the onrush of price inflation will commence in real time.

Now we may see some short term deflation but The Bernenck and all the other central banksters will never allow that to hold. They will print, print, print and flood the world with worthless crap and pray the sheeple are too stupid to see what's happening until it's too late - which is exactly what will happen. Then Kaboom. 

Wed, 02/23/2011 - 09:13 | Link to Comment ATM
ATM's picture

dp

Tue, 02/22/2011 - 20:49 | Link to Comment Math Man
Math Man's picture

"You're buying PMs for the same reason everyone else is, short term ultra-leveraged investment for short term gain. "

I am still shorting silver for the same reason - it's going to blow up in everyone's face.

This is the hiccup before the puke.

Waved in some more puts today. 

$5 bucks to dig it out of the ground, but it's selling for 30+

Not to mention SLV has over 10,000 tons.  Hard to have a shortage with 10,000 tons still sitting in a vault.  If you really needed silver to settle a delivery, you could just buy SLV and convert it.

And JPMorgan had a trading profit every day last year while the price of silver went up 80+%.  They also shut their prop desk over the summer to comply with the Volker rule, making the odds of a massive short position, well, ZERO.

Silver will be below $20 soon enough - it was trading there a few months ago.

 

Tue, 02/22/2011 - 21:03 | Link to Comment RockyRacoon
RockyRacoon's picture

...SLV has over 10,000 tons.

Your credibility just flew out the window -- the tiny sparrow that it was.

Tue, 02/22/2011 - 21:20 | Link to Comment Math Man
Math Man's picture

Prove to me it doesn't.

There is a list of all of the ALLOCATED Silver bars held by SLV on the SLV website.

Tue, 02/22/2011 - 21:22 | Link to Comment tmosley
tmosley's picture

Jeff Nielson has done a huge amount of legwork on this.  

http://bullionbullscanada.com/index.php?option=com_content&view=article&...

He has numerous links in his stories to other commentaries and original research pieces that he has done.

Tue, 02/22/2011 - 22:09 | Link to Comment Math Man
Math Man's picture

The is NOTHING in that link that proves SLV does not have the silver.

Only speculation and conjecture.

Mr Nielson's primary argument seems to be that JP Morgan is the custodian.

He neglets to mention that there is a list of all the ALLOCATED bars and that the holdings of SLV are independently audited.

Do you really think they just create an imaginary list of bars every day (there is a new list every day) and pay off their auditors?

Tue, 02/22/2011 - 22:22 | Link to Comment RockyRacoon
RockyRacoon's picture

You're way late to the party on this subject.  Sorry.

That keg's been tapped so many times that the brew is flat.

Tue, 02/22/2011 - 23:02 | Link to Comment akak
akak's picture

Do you really think they just create an imaginary list of bars every day (there is a new list every day) and pay off their auditors? 

Why the Hell not?  How hard could it be?  Their buddies in crime over at the Fed create FAR more imaginary wealth every day to try and pay off their creditors.

Are you Math Man, or Rain Man?

Wed, 02/23/2011 - 06:00 | Link to Comment malikai
malikai's picture

Don't insult Rain Man like that. He was excellent at mathmatics. I believe Rain Man would also be able to look at the bar list and immediately see the dupes and recognize the questionable nature of said list. I did, and I'm an idiot.

Wed, 02/23/2011 - 00:18 | Link to Comment quasimodo
quasimodo's picture

Yes, too true, could not agree more-know if you will please continue to dispense with the magic ferry dust and all will be well. Just click your heels together.....

Wed, 02/23/2011 - 07:38 | Link to Comment malikai
malikai's picture

JPM and Monsanto teamed up to invent a silver-shitting unicorn. The price of silver will now drop to $0.20. Also, when the unicorn leaves the Monsanto farm, the terminator gene makes it self destruct. So forget about getting one of them for yourself.

Wed, 02/23/2011 - 11:41 | Link to Comment tmosley
tmosley's picture

Try reading again.  Not just the first paragraph.

Schmuck.

Wed, 02/23/2011 - 02:47 | Link to Comment IEVI
IEVI's picture

@Math Man

 

Dude, you've been a member for 5 weeks and the only articles you've commented on are articles about silver or gold. I couldn't waste my time looking through all of them..but the few I looked through all were all promoting JP Morgan's trading profits and trying to claim JP Morgan isn't short silver. Do you realize who you are dealing with on this blog..your not going to fool anyone here. In fact, I don't think you are even to engage anyone in a stupid argument with you. Did you think no one would track your posts??? Seriously..try the yahoo boards.

Wed, 02/23/2011 - 03:02 | Link to Comment akak
akak's picture

Government-paid trolls and disinformation agents are not going to bother messing with the knuckle-draggers on the Yahoo boards, who are, ironically, mostly all Yahoos, and who in any event are not inclined to discuss elite corruption, oligarchic control of our political, monetary, financial and media systems, nor most of all the Achille's heel of our floundering fiat monetary system, the unraveling gold and silver price suppression schemes.

Wed, 02/23/2011 - 04:40 | Link to Comment purplefrog
purplefrog's picture

Many thanks!  BTW we are now at the point where there are very few alternatives to PM.

Wed, 02/23/2011 - 05:11 | Link to Comment Lord Koos
Lord Koos's picture

I have a million bars of silver on MY website.  But you can't come and look at it.

Tue, 02/22/2011 - 21:36 | Link to Comment Midnight Rambler
Midnight Rambler's picture

As a consumer, I don't particularly know or care how much it costs a producer to make something. Instead, my main concern is always what is the value of this thing to me, and could I make it for less money myself. I assume my competitors, other consumers, view it pretty much the same way.

 

In the case of silver, there's no question of making it myself. And what it's been doing for me - increasing my net worth so I can buy things of even greater value - has been abundantly clear the past few years.

 

The argument that because it supposedly cost $5 to produce, that it can't be worth $30 is nonsense.

 

Wed, 02/23/2011 - 09:46 | Link to Comment bigkahuna
bigkahuna's picture

I bought a nice Kenmore sewing machine last weekend for a Silver Eagle that I used fiat to buy in 2009. I am not sure how much it cost back then, but that was my very first real trade in silver - "capital" for "means of production". It felt good.

Tue, 02/22/2011 - 22:37 | Link to Comment TradingTroll
TradingTroll's picture

And the Saudis lifting cost for oil is a few bucks a barrel

Which is I suppose a matter of principle for you, so you walk instead of burning fossil fuels for transport and you burn wood to heat your house

Wed, 02/23/2011 - 00:06 | Link to Comment DeadFred
DeadFred's picture

Why is it the troll comments are always first out of the gate?  JPM must pay a hefty fee for these guys to wait around just to move discussion's direction with a first-in-line comment.

Tue, 02/22/2011 - 18:17 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

I have them all (Au, Ag, Pt, Pd), but the bulk $ value in gold.

The Bearing sleeps well, all things considered.

Tue, 02/22/2011 - 19:04 | Link to Comment Richard Head
Richard Head's picture

What did you think about Pt and Pd getting slapped down today?

Tue, 02/22/2011 - 19:48 | Link to Comment Upswaller
Upswaller's picture

What a blithering question.  They're industrial metals, and just a few days ago they were at the same level they returned to today.  Go troll elsewhere, we see right through it.

Tue, 02/22/2011 - 20:57 | Link to Comment Richard Head
Richard Head's picture

Fuck off, "Swallower",  it was a genuine question, and I didn't ask you.  Silver's an industrial metal too, you dumb shit.  Pt and Pd got slammed today while Ag and Au have mostly been up.

Tue, 02/22/2011 - 20:58 | Link to Comment Richard Head
Richard Head's picture

Also, "blithering"?  Go suck a dick.

Tue, 02/22/2011 - 22:49 | Link to Comment razorthin
razorthin's picture

Not a bad question.  If you're a dickhead, then I'm schmucky the clown.

Today was about the safe haven - of money.  Ag and Au are money, not Pt and Pd.  Anything that wasn't money was Pb today.

Tue, 02/22/2011 - 22:57 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

@ Mr. Dick Head!

Since I am a buy and hold the physical guy, I really don't care about daily price movements.  Until recently, the Bearing just bought Au, Ag, Pt, and Pd at his pleasure regardless of price.

I have taken a break from buying more PMs, mostly to infuriate fellow PM fan tmosley!  

(j/k, tmosley!  u da man)

Wed, 02/23/2011 - 11:48 | Link to Comment tmosley
tmosley's picture

I don't mind people choosing not to buy PMs.  It just means more for me.

You can be as rich or as poor as you like.  I, personally, am aiming for super rich.  It's risky, to be certain, but the potential reward far outweighs the risk and "suffering" from not spending money on worthless junk today.

Tue, 02/22/2011 - 19:29 | Link to Comment Dapper Dan
Dapper Dan's picture

I am not into gossip but I heard DoChen has been over at the FOFOA site., Like I said, I deplore gossip,  but tell me what you saw over there and don't leave anything out.

Tue, 02/22/2011 - 22:50 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

Dapper, it is true that I am a FOFOA fan, I have said so here at ZH many times.  I would not have as much gold as I do now were it not for FOFOA.

If you read FOFOA carefully, you will note no ads at his blog, no conspiracy theories, etc. there.  He believes that GOLD is the best wealth preserver in town (my words).

The Bearing sleeps well, knowing that THAT base is covered if the SHTF...

Tue, 02/22/2011 - 18:19 | Link to Comment terryg999
terryg999's picture

"Tea Leafs" 

 

/just saying

Tue, 02/22/2011 - 18:35 | Link to Comment chet
chet's picture

Yeah, this is some top-notch "analysis" alright.

 

Tue, 02/22/2011 - 18:41 | Link to Comment andy55
andy55's picture

Yeah, I chuckle to myself whenever I see analysis more than a couple years back thart compares to the past to the present.  Common sense tells me that since there's at *least* 101 major facts that have changed in the last 2-3 years, let alone 20+, it's pretty silly to see a comparison of then vs now as if it's apples to apples. To name a few: QE/QE2, EM growth, Euro crisis, Fall 2008 events, and Egypt.

Tue, 02/22/2011 - 18:19 | Link to Comment dalkrin
dalkrin's picture

Buy the physical with all you can muster, each ounce taken out of circulation adds more and more pressure for the price to break out to the upside.  While those questionable authorities throw around numbers in the 20's, ultimately it is we the market participants who determine the price.  If the last few days are any indication, we may finally be approaching a true price discovery range.  Crash JPM and put Blythe behind bars or make her get an honest job selling used cars.

Tue, 02/22/2011 - 18:21 | Link to Comment silvertrain
silvertrain's picture

 Im a buyer @50 without a doubt...

Tue, 02/22/2011 - 18:59 | Link to Comment malikai
malikai's picture

I'll sell you some at 50 now. :)

Tue, 02/22/2011 - 19:05 | Link to Comment Loco Vida
Loco Vida's picture

Loco more likely to buy back in at 50 than 30

 

out of the metal for the moment

 

LV...........junk away bitch------ezzzzzzzzzzzzzz

Tue, 02/22/2011 - 18:21 | Link to Comment asdasmos
asdasmos's picture

Anyone have the link to US mint sales?

Tue, 02/22/2011 - 18:22 | Link to Comment silvertrain
silvertrain's picture

 I dont have the link handy but they have sold 6.4 million so far this year..

Tue, 02/22/2011 - 19:52 | Link to Comment DosZap
DosZap's picture

asdas,

What is that?

Appears to be a game link.

Tue, 02/22/2011 - 20:20 | Link to Comment asdasmos
asdasmos's picture

They are download links to the film Inside Job. It is about the financial crisis and the players involved.
Info: http://www.imdb.com/title/tt1645089/ http://www.sonyclassics.com/insidejob/

Wait 45 secs then download it. I provided a couple in case it gets taken down.

Tue, 02/22/2011 - 21:09 | Link to Comment DosZap
DosZap's picture

Thank you sir!

Tue, 02/22/2011 - 18:53 | Link to Comment asdasmos
asdasmos's picture

Thank you, 9,021,500 sales now for 2011.

 

Eric Sprott: The Government Lied... There is No More Silver!

http://www.youtube.com/watch?v=T2w7wGwUZ9Y

Tue, 02/22/2011 - 20:23 | Link to Comment lieutenantjohnchard
lieutenantjohnchard's picture

thanks for the video link. enjoyed it.

Tue, 02/22/2011 - 18:21 | Link to Comment gall batter
gall batter's picture

I'm going to sit back, drink, and see what happens.  

Tue, 02/22/2011 - 18:34 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

That's not a bad strategy...  

Really.  Just do nothing if you are diversified.  And watch the show.

Got popcorn with your drink(s)?

Tue, 02/22/2011 - 19:06 | Link to Comment I Am The Unknow...
I Am The Unknown Comic's picture

Agreed.  For the paper part of the play, I'm long AGQ...put a hedge in today with ZSL, and hope tomorrow goes like this:  from open to 1:30 PM close, Blythe and the flying monkeys go apeshit and beat the price back to 31.50 where I sell the ZSL....then after 1:30 close when everybody realizes there are 50,000 + contracts to deliver on with not enough inventory, the price skyrockets and I ride the AGQ over the 34 mark.  Of course, all the markets may freaking collapse if this happens, as they realize JPM is fucked, so I'll have my fat finger on the keyboard.

As for the popcorn, I find the bagged stuff goes well with cold beer, and Smartfood popcorn goes best with colder beer!  Enjoy the ride and good luck.  Should be one hell of a day tomorrow (gold/silver expiration day). 

Tue, 02/22/2011 - 19:46 | Link to Comment DaBernank
DaBernank's picture

Silver, Gold, Wine, Whiskey - I'm long all of 'em.

Tue, 02/22/2011 - 20:19 | Link to Comment Hugh G Rection
Hugh G Rection's picture

looks like my portfolio, sans ammo and KY

Tue, 02/22/2011 - 18:30 | Link to Comment Dr_Dazed
Dr_Dazed's picture

As far as "analysis" goes this is pretty content free.  "Lookie - this happened once in my cherry picked time frame and if changes of a similar magnitude happen again the price would be blah".  Don't get too excited by BS graphs folks.

 

Yes I hold physical, add to it when I see value.  Don't buy on the pitch though.

Tue, 02/22/2011 - 20:10 | Link to Comment cackling capers
cackling capers's picture

Yeah, this is completely devoid of anything except for the misleading comparison of silver during the Hunt brothers with silver now. Shame, good insights on silver prices would have been more than welcome at this point.

Ah well, maybe next time gadget.

Tue, 02/22/2011 - 21:10 | Link to Comment RockyRacoon
RockyRacoon's picture

Hey, you two.   This is the tip of the Doug Casey iceberg.  You should subscribe to his free email newletter(s) and stay up on the daily readings.   You just got a teeeeeeny taste of the good stuff.   Saying there is no meat here is proof that you two don't read the readily available information that is out there.   For many of us this is a ho-hum read because we know the background of every point made.  Stop showing your ignorance.

Wed, 02/23/2011 - 11:31 | Link to Comment Dr_Dazed
Dr_Dazed's picture

Why would I be interested in looking at more if this was a waste of time?  If you're going to tease me, tease me good or I'm walking.

Wed, 02/23/2011 - 14:53 | Link to Comment RockyRacoon
RockyRacoon's picture

So, walk already, Goober.

Tue, 02/22/2011 - 18:32 | Link to Comment Feyd Rautha
Feyd Rautha's picture

Sprott knows best: Silver @50 this Spring.

Tue, 02/22/2011 - 18:33 | Link to Comment Feyd Rautha
Feyd Rautha's picture

Sprott knows best: Silver @50 this Spring.

Tue, 02/22/2011 - 18:38 | Link to Comment tmosley
tmosley's picture

So true, it's worth saying twice.

BTW, today, I bought the tiny dip.  Missed the lows of the morning, but I got the second one.  By God, I got the second one.

Tue, 02/22/2011 - 18:52 | Link to Comment asdasmos
asdasmos's picture

Video of Eric Sprott giving a presentation.....(at the Fall 2010 Casey Research Gold and Resource Summit)

http://www.youtube.com/watch?v=T2w7wGwUZ9Y

 

"Speaking at the Fall 2010 Casey Research Gold and Resource Summit, Eric Sprott told investors that there is no more silver left to go around, "There's $22 billion of silver available in the world, of which the ETFs already own half, and between you guys and us we probably own the other half... Which means there's nothing left."

Tue, 02/22/2011 - 20:06 | Link to Comment DosZap
DosZap's picture

asdas,

Personally I question most of the ETF's.

I am not from Missouri, but I want to SEE IT at the ETF's.

Turks, and Sprotts are the onyl two I personally would trust.

Tue, 02/22/2011 - 20:39 | Link to Comment asdasmos
asdasmos's picture

Fair, maybe the billionaire, with lots of resources and who is the poster boy of the metals, is trolling. Who knows.....

Or.....

In his limited time, he did not want to delve into the topic and call them out on that in fear of technically proof-less accusations.

Regardless, still well positioned and on track.

Tue, 02/22/2011 - 20:12 | Link to Comment papaswamp
papaswamp's picture

the funny part is ETFs may 'own it'...but they don't physically have it...its promised. There be the huge difference. They say they have it..but 'it' is held by the supplier...who is selling physical as fast as possible. The big end game is when people go to 'cash out' to physical and find their delivery is delayed for months (because it is still in the ground). Heck delivery of outright buy now is 2-3 weeks. Something no one is talking about....

Tue, 02/22/2011 - 21:13 | Link to Comment RockyRacoon
RockyRacoon's picture

Das rite!  I own the Brooklyn Bridge, too.  I have a deed to prove it.  Got it from a guy with 4 teeth down in The Bowery.

Tue, 02/22/2011 - 18:51 | Link to Comment impending doom
impending doom's picture

Is that a parrot fish?

Tue, 02/22/2011 - 18:34 | Link to Comment gwar5
gwar5's picture

Good advice. I'm not letting go. The USD is wobbly

PM's aren't going higher, the USD is going lower.

Tue, 02/22/2011 - 19:35 | Link to Comment JW n FL
JW n FL's picture

Yes... spot fucking on!

Tue, 02/22/2011 - 22:44 | Link to Comment JonNadler
JonNadler's picture

you're back to your old avatar?

Tue, 02/22/2011 - 23:03 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

JonNadler should talk about old, recycled avatars...

Au to $0.02, bitchez!

Wed, 02/23/2011 - 01:04 | Link to Comment Oh regional Indian
Oh regional Indian's picture

Hey DCRB, back after a High-at-us? Peruvian highlands treating you well?

Do you happen to knwo of someone who makes excellent Freewheel Pulleys?

Do you?

What you say might have some bearing on a project I am doing. Thanks, and cheers.

ORI

Wed, 02/23/2011 - 01:37 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

Freewheel pulleys?  Alas, no, I don't even know what those are ORI!  I doubt VERY MUCH they make them in Peru...  And my Asian contacts are pretty much only rolling bearing related.

Actually it was the Costa Rican LOWLANDS (Pacific side) where we went fishing, too bad, no luck for me!  My brother-in-law Cesar (from our Peruvian company did catch a Dorado = dolphin (NOT a porpoise!) = mahi-mahi, depending on where you are..!).  Big enough to feed 7 hungry crude Americans!

Cheers to you as well!  Stay in touch amigo!

Tue, 02/22/2011 - 18:45 | Link to Comment Flatchestynerdette
Flatchestynerdette's picture

I like the more realistic idea, read elsewhere but agree, that Blythe Masters is the idiot who developed the concept of credit default swaps and she's been the head of JPM's commodity trading since 2006, was responsible for heavy losses in the firm's portfolio last year, and that JPM does not specify its own market position but is rumored to be short not only this planet's silver estimated reserves but the moon's as well, thus making JPM's positions out of this world and unrecoverable.

Expect higher prices for silver due to this young lady's on the job training.

Tue, 02/22/2011 - 18:45 | Link to Comment pirea
pirea's picture

Judging PM in terms of fiat currency does not make sense to me at all.

PM is the natural standard unit for measurement of value,

not US$ or any other fiat currency.

So all the analysis of PM based on US$ are maybe useful for short periods (speculations),

but in the long run they are misguiding.

Tue, 02/22/2011 - 20:17 | Link to Comment cackling capers
cackling capers's picture

Analysis in terms of fiat makes perfect sense as long as labour, goods and oil are bought using fiat. By all means talk about gas as being 1/6.1th of an ounce of silver now and 1/5.8 later if you please, but when you hire people, pay income tax or any such thing the standard measure will still be fiat. Unless and until a pm becomes official currency, of course.

(i did not junk btw)

 

Tue, 02/22/2011 - 22:31 | Link to Comment Troll Magnet
Troll Magnet's picture

yeah but you can't buy PMs with anything other than fiat money at least for the time being.

well, that and some plastic cards issued to me by them big banks.

(thinking...)

holy shit!  i can buy gold and silver with paper and plastic!!!!!

Tue, 02/22/2011 - 23:05 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

It's magic!

Tue, 02/22/2011 - 18:46 | Link to Comment jmcadg
jmcadg's picture

Throw your charts out of the window. Ben has taken us to a place not visited before. The oncoming endgame requires you to accumulate regardless of price. Blythe can play her paper games as much as she wants, but physical will win out. Where it goes is anyone's guess. But if Harvey Organ has suggested $424/oz silver right now, unmanipulated, I have more faith in his assumption than the current redundant farce. Just hold, wait and warm your hands on the heat of the LBMA and the Comex fires.

Tue, 02/22/2011 - 20:59 | Link to Comment pacu44
pacu44's picture

Would one say that the "manipulation" has given folks, late to the party, a real oppurtunity to play catch up?

I know I have since 2008

Tue, 02/22/2011 - 21:17 | Link to Comment RockyRacoon
RockyRacoon's picture

Doncha know it.   I was repackaging some stuff for "deep storage" the other day and had to stop to gaze longingly at a roll of Silver Eagles that I bought back in 1995 -- at $7.65 each.   I felt like I was over paying at the time (and I was).  Ah, the good ole days.

Tue, 02/22/2011 - 23:11 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

YOU know I've said it before Rocky, but I'll say it again for the benefit of visitors to this thread.

I almost always bought at or near the "highs", only to see gold & silver march on up from there.

I especially remember a few years ago when I had a disgruntled "Buyer's Remorse" after paying $900 for a Platinum Eagle.  Had I known...

FYI Rocky, I had a rough and rocky day.  I have helped smooth that over with a slug of rye whiskey just now...  You know, since I have mentioned my drinking habits before...

:)

Wed, 02/23/2011 - 14:56 | Link to Comment RockyRacoon
RockyRacoon's picture

Good for you DCRB.  If I could drink responsibly I would.

I gave up the brew in all forms 20 years ago as of this next April 1st.

All the better for it.

Tue, 02/22/2011 - 18:52 | Link to Comment Kaiser Sousa
Kaiser Sousa's picture

Ok, i like the researchers over at Casey but did i miss something???

Silver aint 30 per oz at the moment and i doubt very seriously that it will retreat anytime n the near future back to that resistance level that was hard fought to overcome (and that's an understatment).  so how is he gonna buy it at $30.00???

i bought yesterday because my strategy is that every time debt coupon dollars enter my hand they must immediately be converted n 2 real money if all other every day obligations r covered.   it cost me 37.00 at a spot of 34. and change plus the dealer premium. no sales tax though as i have bought regularly from this dealer.  Until Silver breaches 40.00 per oz i will continue to accumulate no matter the phony paper price...

 

Tue, 02/22/2011 - 20:21 | Link to Comment DosZap
DosZap's picture

at the Fall 2010 Casey Research Gold and Resource Summit)

Tue, 02/22/2011 - 18:53 | Link to Comment disabledvet
disabledvet's picture

again "it wasn't Nevada that declared force majeure but Libya."  Buy all the silver you want--are you buying it with gold because relatively speaking you feel the price of gold is overpriced?  or do you buy it with gold because you think silver has "more to run"?

Tue, 02/22/2011 - 20:33 | Link to Comment Al Gorerhythm
Al Gorerhythm's picture

again, did you take a head shot?

Tue, 02/22/2011 - 18:55 | Link to Comment walküre
walküre's picture

Just keep buying silver. Physical is preferred but if you have cash positions, convert the cash to a silver paper product. Paper will not go away, it will just dilute.

SLV shares for example will be worth more in SDRs than the USD bill. Holders of paper USD will take a haircut during a currency reform or "reset". During this conversion from 'old' money to 'new' money the holders of 'old' currency will get a fraction of the new kind, the more they hold the worse their exchange.

SLV shares and others denominated in USD but reflective of the performance of silver will likely get exchanged based on the value of physical silver in the new currency. They can do that because in the end, the shares are limited vs. an unlimited supply of cash and cash equivalents.

Tue, 02/22/2011 - 19:45 | Link to Comment silvertrain
silvertrain's picture

Exactly my friend.. As of today  1 dollar= 0.639687 SDR 

 

Tue, 02/22/2011 - 20:25 | Link to Comment DosZap
DosZap's picture

Don't bet on that for one second bro..........it was bought w/old,and be valued w/old.

It's PAPER.

Tue, 02/22/2011 - 20:52 | Link to Comment walküre
walküre's picture

The ruling elite does not have enough physical in their possession to let that happen.

No way Jose, they will see their holdings erode when 'commoners' with a nice stash of physical can become the new kings and queens.

Buffett is a paper billionaire and he's probably got 5 to 10 percent of his personal wealth in physical precious metals. Not enough to keep him on the Forbes 500 list. LOL

Shares will maintain a higher value than cash. The cash has a 'promise to pay' of some sort from some form of government but the equity reflects a stake in a company that owns real assets like infrastructure, machinery, claims, patents and so on.

Maybe I'm not 100% spot on here.

Tue, 02/22/2011 - 21:16 | Link to Comment DosZap
DosZap's picture

walk,

We're saying basically the same thing.

NO matter what form of payment is used, the wee Lil' folks, holding shares,or old fiat, are going to GET ahead of their system in payback percentages.

The New one.

Tue, 02/22/2011 - 23:18 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

walku"re, DosZap,

Quite right, you two, Rocky and I are all preaching at each other!

If the PMs blast off like we expect, THEY lose, not us.

Wed, 02/23/2011 - 02:27 | Link to Comment nontaxpayer
nontaxpayer's picture

There will ALWAYS be enough physical (silver, gold), at a right price...

Tue, 02/22/2011 - 18:56 | Link to Comment vast-dom
vast-dom's picture

I am considering buying the ETF: SLV

But NOT at current $32+ == maybe at 27?....

What do you gentlemen think?

 

 

Tue, 02/22/2011 - 19:07 | Link to Comment Silver Pullet
Silver Pullet's picture

Yeah, there's some attractive single stock ETF's you might want to pick up too.

Tue, 02/22/2011 - 19:10 | Link to Comment Pladizow
Pladizow's picture

Much has been publisized about the doubts of the SLV having the physical backing.

You may want to consider Eric Sprott's PSLV, which does remove physical from the market.

The more physical removed the higher the price - which I think you would want.

Tue, 02/22/2011 - 19:30 | Link to Comment cfosnock
cfosnock's picture

Wow if you know the markets movements why are you asking us? What makes you think it will go back to $27 why not $25? What is your time frame for this movement? Can you stand volatility? Personally I would use PSLV or the ETF: SLVR rather than SLV but that is just me

Tue, 02/22/2011 - 20:54 | Link to Comment walküre
walküre's picture

buy now @ 32 and buy again @ 27 IF and WHEN that happens.

can't see Silver correcting anywhere below $30 at this level, not anymore. too much attention on this play.

Tue, 02/22/2011 - 22:40 | Link to Comment Troll Magnet
Troll Magnet's picture

hmm...$27 vs $32...unless you were looking to make a big purchase, i don't think the $5 difference is a dealbreaker.  i'd buy at $32 and buy some more if it falls to $27.  that is if you're in this for the long haul and not looking to sell right away.

Wed, 02/23/2011 - 05:22 | Link to Comment Lord Koos
Lord Koos's picture

I bought 100 oz today at $33, and got a great deal on the bar at $3347.  When it was $27 I didn't have the dry powder.  I'll keep buying, maybe taking a little profite if it super spikes in the near term.

Tue, 02/22/2011 - 21:19 | Link to Comment DosZap
DosZap's picture

Nah, if it goes to $27, wait for it to go lower.(I think you have a Long wait).

We will know when the blood rises tommorrow.

Tue, 02/22/2011 - 21:20 | Link to Comment RockyRacoon
RockyRacoon's picture

What do you gentlemen think?

Ooops.  That leaves me out.

Tue, 02/22/2011 - 23:20 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

I fail there too.  Bearings are even dumber than raccoons!

Wed, 02/23/2011 - 14:57 | Link to Comment RockyRacoon
RockyRacoon's picture

Hey!  As Curly would say, I resemble that remark.

Wed, 02/23/2011 - 02:17 | Link to Comment dumpster
dumpster's picture

well china is buying slv ,, and getting enough shares to strip the silver out ,

soon slv will be all potatoes with no meat..

 

and it share price will reflect that fact  ,, silver 50 bucks  slv ten cent,,,

paper tp paper we all fall down

approach slv with a fifty foot stick  and just poke ,

Wed, 02/23/2011 - 12:10 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

dumpster, that is an interesting tidbit about China buying SLV, only to later strip it clean of all the silver.  I'll throw that thought into my mental hopper.

I am in dumpster's and FOFOA's camp re the ETFs...  SLV and GLD will be worth next to nothing while the real physical trades at levels almost hard to imagine...

Unless you are a trader, just buy the real thing.

Tue, 02/22/2011 - 18:56 | Link to Comment sellstop
sellstop's picture

The sure way to be in every big move:

Buy new highs.

Never average down.

Average up. (your average price is below the mkt.)

gh

Tue, 02/22/2011 - 19:01 | Link to Comment RmcAZ
RmcAZ's picture

This article could be shortened to:

"Silver may or may not go up or down, but i'm buying it regardless."

This article offers no real insight on anything.

Tue, 02/22/2011 - 19:25 | Link to Comment High Plains Drifter
High Plains Drifter's picture

After you buy a big load of silver bullion , I promise you, it will immediately go into major correction. That is the way it is...Ha ha ....

Wed, 02/23/2011 - 03:03 | Link to Comment Hook Line and S...
Hook Line and Sphincter's picture

In a similar way, when the garbage disposal in on, my hand seems to be attracted to it.

Tue, 02/22/2011 - 20:29 | Link to Comment DosZap
DosZap's picture

Yes it does,don't buy paper.

Tue, 02/22/2011 - 20:36 | Link to Comment samsara
samsara's picture

You can lead a man to knowledge, but you can't make him think.

Often the weight of receiving wisdom is on the receiver. 

Wed, 02/23/2011 - 01:45 | Link to Comment Oh regional Indian
Oh regional Indian's picture

Wise words indeed.

ORI

Tue, 02/22/2011 - 19:04 | Link to Comment High Plains Drifter
High Plains Drifter's picture

Now I know why Franklin Sanders used to say, buy 75 percent silver and 25 percent gold when you buy PM. He was right. The real money is in silver.

Tue, 02/22/2011 - 19:17 | Link to Comment Oracle of Kypseli
Oracle of Kypseli's picture

Is that on ozs or dollar value?

Tue, 02/22/2011 - 19:23 | Link to Comment High Plains Drifter
High Plains Drifter's picture

He says when you buy a load of PM, just split it up

75 % percent  silver

25 %  percent gold

 

He is also big into ratios.  16:1 silver /gold etc.....

 

 

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