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A 14 Handle on Silver. Again. 8 Nov, 2015

Monetary Metals's picture




 

What’s the difference between the Supply and Demand Report 1 November and the Supply and Demand Report 8 November? Just a minor punctuation change. Last week, we asked (rhetorically) if silver would have a 14 handle again.

This week, the market answered. Why yes, yes we can!

Silver closed the week, trading at $14.78. This is down $0.76 from last Friday and almost 20 cents under our fundamental price from that date. The price of gold also dropped, $52. This is quite a discount to what we calculate as its fundamental price.

So what happened? It’s always a challenge to explain a market price move in terms of a concurrent or preceding event, and financial reporters get it wrong all the time. In this case we feel pretty confident that the driver was the nonfarm payroll report, as the price of gold plunged about $15 within a minute of the release of the data on Friday.

Why? What has the payroll data got to do with the price of tea in China or the price of gold in New York? Traders (likely not hoarders, but speculators) are trying to figure out if the Fed will: (A) cut interest rates, (B) hold them steady, or (C) hike them. If they are to hike, then everyone wants to know when. Since the Fed has said it wants to see full employment as one measure of a recovery before risking a rate increase, the market looks to the Bureau of Labor Statistics for hints.

Such is life in a centrally planned world, where the most important price of all—the price of money—is administered.

There’s only one flaw in this approach. The price of gold does not correlate to the money supply or to the interest rate. In the 1970’s, we had a rapidly rising price of gold and skyrocketing interest rates. In January of 1970, one could have bought gold (if one was not an American—in America, it was illegal) gold for $36.56. By December 1979, the price was up to $593.84 which is a 16-fold increase. More than half of this gain occurred from 1977-1979, which saw the price rise from about $132 to $594.

During that same period 1977-1979, the interest rate on the 1-year Treasury went from under 5% to almost 12%, well over a double.

As to more recent years, let’s look at a graph of 2001 through present, overlaying the gold price with the interest rate.

              The Price of Gold and Fed Funds Rate
Gold and Fed Funds Rate

Here’s a trick question. If we told you the next interest rate trend, how would you bet on the price of gold?

You can’t.

We can tell you that our theory calls for a continuation of the 34-year trend: interest rates are falling worldwide. Although we can’t predict what the Fed will say at their next meeting, we don’t expect any major hikes, because the Fed cannot do it. We would have thought a 25bps increase was possible, but it seems even that meager rise would cause too much difficulty.

As to predicting the price of gold, we have a different methodology. Read on for our picture of supply and demand fundamentals…

First, here is the graph of the metals’ prices.

              The Prices of Gold and Silver
Prices

We are interested in the changing equilibrium created when some market participants are accumulating hoards and others are dishoarding. Of course, what makes it exciting is that speculators can (temporarily) exaggerate or fight against the trend. The speculators are often acting on rumors, technical analysis, or partial data about flows into or out of one corner of the market. That kind of information can’t tell them whether the globe, on net, is hoarding or dishoarding.

One could point out that gold does not, on net, go into or out of anything. Yes, that is true. But it can come out of hoards and into carry trades. That is what we study. The gold basis tells us about this dynamic.

Conventional techniques for analyzing supply and demand are inapplicable to gold and silver, because the monetary metals have such high inventories. In normal commodities, inventories divided by annual production (stocks to flows) can be measured in months. The world just does not keep much inventory in wheat or oil.

With gold and silver, stocks to flows is measured in decades. Every ounce of those massive stockpiles is potential supply. Everyone on the planet is potential demand. At the right price, and under the right conditions. Looking at incremental changes in mine output or electronic manufacturing is not helpful to predict the future prices of the metals. For an introduction and guide to our concepts and theory, click here.

Next, this is a graph of the gold price measured in silver, otherwise known as the gold to silver ratio. The ratio barely moved this week, upwards. 

The Ratio of the Gold Price to the Silver Price
Ratio

For each metal, we will look at a graph of the basis and cobasis overlaid with the price of the dollar in terms of the respective metal. It will make it easier to provide brief commentary. The dollar will be represented in green, the basis in blue and cobasis in red.

Here is the gold graph.

              The Gold Basis and Cobasis and the Dollar Price
Gold

We’re still in the same mode. As the price of the dollar rises (i.e. people sell gold, i.e. the price of gold as measured in dollars falls) the scarcity of gold rises (i.e. the cobasis). The red and green lines continue together. Unlike the Fed Funds Rate and the price of gold, there is no an uncanny correlation between the cobasis and the dollar price.

This means that sometimes, speculators are selling futures (typically purchased with leverage) and sometimes they are buying. They have no effect on the price at which supply and demand would clear.

Which, as the price of gold dropped by $52, we calculate moved by only $2. Up. Does this mean gold will trade at almost $200 higher by tomorrow morning? Probably not. So what does it mean? It means gold is on sale, offered at a discount thanks to speculators that are going to lose a large number of dollars one of these days.

Now let’s look at silver.

The Silver Basis and Cobasis and the Dollar Price
Silver

The silver price did fall relatively quickly, less than a month since we noted the market price was above the fundamental.

This week, the market price fell hard. The graph shows that the scarcity of silver rose even hard (though bear in mind that silver has much more of a cobasis distortion field than gold, as the near contract tends to tip into temporary backwardation before gold does, and deeper).

The fundamental silver price fell about a dime this week, thus putting the market price under the fundamental. While that’s a better place to be, if one is a silver bettor, we wouldn’t bet either way on silver right now. The action is going to depend on whether momentum continues to carry the price lower, or whether there’s a sharp rebound as speculators jump to the other side. Maybe those with razor-sharp technical models can make a buck here. That’s not for us.

 

Do you support the gold standard? Please come and be counted. Show the legislature and governor in Arizona that honest money is popular! Please come to the Monetary

Innovation Conference in Phoenix on Nov 17 (Keith Weiner is a speaker). At the conference, speakers will discuss gold and how innovators are using it to solve real problems for real people. Please click here to register. After the conference, we may put on a Monetary Metals seminar if there is sufficient interest. Please click here if interested (different link).

 

© 2015 Monetary Metals

 

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Mon, 11/09/2015 - 15:59 | 6768963 vincent
vincent's picture

"Saving is not investing. The two are not equal. Investing is not saving."

I'm no fan of paper assetes, however, what is a 401 or an IRA? They are investment vehicles intended to be a savings plan.

Yes, you run the risk of losing a portion of your investment, but historically the losses have been 40%, and, up until now have recouped those losses (minus fees of course).

So, am I saving or investing in silver?

I would argue both. No different than a 401 or IRA. I just don't pay the fees. Risk of loss is real, but so is the realization of a gain, and nobody wins when I realize a loss (fees)

Metal will never go to zero, and should I cease to breathe my kid is not going to care whether I paid 18 or 80 bucks for her newly inherited windfall. No hassles, no paper bullshit, no probate, no attorneys, no taxes and fees.

Sure, she's likely to get the house with the pool. That's where she'll get raked over the coals.

I consider this the responsible path to generational wealth.

Mon, 11/09/2015 - 14:04 | 6768358 Jkweb007
Jkweb007's picture

There are two forms of PM the real and the paper options. Its impossible to say the inventory is high when the option amount is 100% of global yearly production. If this idea of PM is a bad idea then why is the east buying it up in tons?  The COMEX is just about out of metal and theLBMA is the only real shipper. Now there are 2 Chinese banks setting the price of gold and silver I can only wonder what their interest is in this worthless item. Now add the BRICS, AIIIB and CIPS what does all this mean, it means who owns the gold will rule the world. It must be awsome to sit on a board and set a price you want to acquire gold and then when you have it all you then set a new price. Any one not buying at this sale as the dollar fades away is an utter fool.

Mon, 11/09/2015 - 13:41 | 6768245 vincent
vincent's picture

Although the last five years have been disappointing to the silver saver/investor, it is still a very short time frame in relation to the horizon many (me and perhaps others) envisioned when deciding to enter the game.

Once I was in and realized the price was going to continue its upward movement I adjusted strategy and chose points to sell some off to pay in full for my holdings. It was part luck and part planning. I even had to part with more at 25 which aggravated me a good deal, but in hindsight it was not as painful given the last few years of price disappointment.

The last couple of years I've adjusted strategy again and began to pick up more collectible pieces at these low prices. It alleviates some of the frustration of depressed prices, and also provides opportunity to buy a bit, appreciate the metal, and accumulate a form which is likely to increase premium wise at an elevated rate over future spot. In short, a bit of a gift, as most of us would have never anticipated this sort of an opportunity... and it is an opportunity.

I've done a minimal amount of stacking in recent times, but have occasionally picked up some here and there at 17 and 18 without any hesitation. I'm expecting further decay in the paper price, but as many here are aware, securing metal at 12, 10, or 8 is going to be a tricky proposition for the little guy. Choosing the right time to go all in will cause many of the Big Spenders to lose sleep.

As much as I hope to benefit personally somewhere down the line from the years of research and effort, the real satisfaction comes from knowing that I'm likely leaving my child with a form of real wealth.

It's been 60 months of disappointment. Could be 60 more.

Keep the faith and keep stacking. GLTA

 

 

Mon, 11/09/2015 - 14:34 | 6768559 SuperVinci
SuperVinci's picture

Saving is not investing. The two are not equal. Investing is not saving.

Saving is not investing.

Mon, 11/09/2015 - 14:25 | 6768502 Jkweb007
Jkweb007's picture

There was a time i thought like you but with the recent changes I think you will see it sooner. We didnt have 117 nations on board with the BRICS. The Chinese were not on the LBMA AND an alternate to the SWIFT system did not exist. I think change will happen exponentially now. Hopefully that change will not be from mushrroom clouds as these elite try to save their dollar. A country 20 trillion in debt , 110% of gdp can not expect to last much longer. The Chinese have additionally created swap facilities at major global trading points taking away the dollar clout, no I think you will reap a huge reward sooner than you think.

Mon, 11/09/2015 - 13:36 | 6768215 Rex THT
Rex THT's picture

120 more 5 oz. Rays of Sunshine coming my way!

It sure beats money in the bank

Mon, 11/09/2015 - 13:04 | 6767995 nofluer
nofluer's picture

Ummm... As a commoner I sometimes get confused at the way y'all use certain terminology. For example - in this piece you talk about inventories rising and falling. WHOSE inventories?

I have an inventory of chicken eggs. As I sell the eggs, MY inventory falls, and the inventory of the people I sell to rises. Until the eggs are used/consumed, or more eggs produced, the total global inventory of eggs will be the same, while the buyer's inventory rises and mine falls.

As elements silver & gold are generally not destroyed by being "used". They are applied to various functions and can be "recovered" when that function no longer "uses" them. (ie when they are restored to the "inventory" of available PMs to the global inventory of PMs held by various owners/users.)

But PMs are not eggs. If I buy an ounce of silver, then MY inventory of silver rises by one ounce, and the seller's inventory falls, but with the exception of adding to the global inventory of PMs via mining, the total amount of silver in the world stays the same! As silver is mined, the "total inventory" of silver should rise since more is being produced (mined) and added to the total quantity of silver in the world.

So please explain how you are using the term "inventory", and when you say "inventories are rising" - who's inventories?

Mon, 11/09/2015 - 16:42 | 6769161 herkomilchen
herkomilchen's picture

A thoughtful question.  A lot of the silver used for industrial purposes is converted to forms infeasible to cost effectively recover, i.e. trace amounts in myriad consumer products, and thus is "consumed."  But otherwise yes, gold and silver bought and sold for monetary purposes are not consumed, just shifted from one inventory to another.

In these discussions "inventories" usually refers selectively to just the inventories of manipulators.  Their inventories are extremely important as they must dishoard large volumes to continue keeping prices lower than they would otherwise be if all paper trades had to be securely backed by unencumbered physical metal.

To do this, they foist confidence schemes like GLD and SLV employing shenanigans like rehypothecation enabling them to acquire possession of physical gold in exchange for paper gold claims settleable in cash either overtly or de facto through their default and the resulting legal settlement in cash.

They then turn around and dishoard that physical through COMEX to settle calls for delivery as necessary to maintain the paper-physical link, even at artificially low prices requiring more dishoarding to meet demand than there would otherwise be in the marketplace.  Gauging their inventories and ability to sustain dishoarding is thus instrumental for understanding how long they can keep successfully depressing prices.

Mon, 11/09/2015 - 13:26 | 6768160 Rex THT
Rex THT's picture

As elements silver & gold are generally not destroyed by being "used".

 

 

Ummmmmm you may just want to stop right there, as 80-90% of all silver ever mined has been used up. It is in fact destroyed to an unrecoverable state.

Mon, 11/09/2015 - 14:26 | 6768506 ali-ali-al-qomfri
ali-ali-al-qomfri's picture

unrecoverable, yes

destroyed, no

nature is in balance, man not so much.

Mon, 11/09/2015 - 12:38 | 6767850 TheRideNeverEnds
TheRideNeverEnds's picture

If you like silver @14 you will LOVE IT @4! 

Mon, 11/09/2015 - 12:47 | 6767905 SuperVinci
SuperVinci's picture

Coming in 2016! A four handle! Right before 3.

Mon, 11/09/2015 - 12:31 | 6767807 nofluer
nofluer's picture

Personally I love all the pretty colors in the charts! Today we have gold and light blue and red and green... Ooooo.... PRETTY!!!

Mon, 11/09/2015 - 12:28 | 6767788 bshirley1968
bshirley1968's picture

Most of the comments I read here are from the upside down world perspective of things.

You guys that call youself "gold bugs" and are only buying gold to see if it will go up so you can get more fiat, are just part of the upside down world and product of a dumbed down education.

The value of gold has not and will not ever change.  Gold is measured in WEIGHT!......not DOLLARS!  What a bunch of dumbasses!  You should be rejoicing that you can take your paper to the window and get more gold.  When did the measurement of wealth become how much PAPER one has?  There was a time when you handed a man some paper money that he looked at it and measured it by how much gold he could go get with it.......at the bank.

You people amaze me!  You bitch and complain about the fiat system we are in, tell everyone to buy gold and silver, and then bitch and complain because you can't trade in your gold and silver for more fiat.  Sounds like to me that you have already surrendered to the system of fiat and and are obediently waiting for the paperless fiat to come.  You should be happy that the dollar is "stonger" and you can get more gold with the worthless crap we call dollars.

Some of you imagine that gold and silver are your "golden" ticket and it will somehow propel you to a level of wealth that will insulate you from the turmoil and chaos that we all know is coming.  News Flash!  Ain't going to happen.  We are all going to get muddy in this fight, and I don't care how much gold you have, or freedom you think you have, if you are not willing to die or kill to keep it......you might as well give it to them now and join their party while there is still time to have some fun.  Most of your struggle can be summed up in this statement...."You have become a prisoner to life."  That's right, LIFE "has become so dear" that you would rather be a slave than die for freedom.  That is as a result of believing that this life is all there is. Another News Flash!  If this life is all there is, then you have never been nor ever will be free.

No one ever long kept their wealth or freedom by living for it but rather it was won and kept by those willing to die for it.  Some of you need to quit counting your physical inventory and take some time to count you character inventory.  If you, my brothers, are not willing to die.....when the price of freedom calls......then all is lost already.  Quit wasting your time fighting a system that will require death to defeat when you are not willing to die to destroy it.

Mon, 11/09/2015 - 17:32 | 6769415 herkomilchen
herkomilchen's picture

Gold's value as money lies in its convertibility to goods and services valuable to human life.  Currently, that must happen via fiat, in that whether we like it or not, 99.999% of all goods and service providers we want to trade with still only accept fiat.  Thus the continued obsession with the gold/fiat exchange rate.  Nothing to do with fear of cutting the cord to fiat, lack of confidence in gold, or any reluctance to denominate prices in grams and ounces.

Mon, 11/09/2015 - 12:57 | 6767946 Wow72
Wow72's picture

I dont think of it as a golden ticket, I see a manipulated market that drives me fucking crazy? Its not right and your dam right Im buying with a long-term out look because Im not fucking stupid.  When you see manipulation in the metals in a market it is a clear sign of an unhealthy, distorted market? Agree golds price never changes and I would not give up the gold and silver I have for fiat right now.   I know that if prices did go up, I would be able to buy less... But all that doesnt make what the Fed is doing right, it distorts in ways we wont know about till they fucking happen? Its not all about the money.  I dont buy it cause I thinks its going to sky-rocket even though I know it should? I buy it because I know its valuable. Period.  Its about the B.S. bias policies towards it.  Industry buys it cheap and reaps all the reward?

Mon, 11/09/2015 - 13:27 | 6768168 SuperVinci
SuperVinci's picture

Well, unless paper gold and silver get's some major interest...i.e. desire to own it- that until or unless that happens, the paper supply of each of these "commodities" is in far HUGER supply (recall 100:1 or...GASP! 294:1 paper ounces to real ounces) will do nothing but bring the price down.

 

Many of you may want to read that last sentence a couple times till it registers. it's so simple.

As real strong hands attach their claim to unallocated metal, the need for all this hedging and paper form of these metals reduces even further and so when one has no need for paper silver or paper gold anymore, what do do? 

How about you dump it!

But, but then that looks like "manipulation"!! so what? Correlation does NOT imply causation.

Mon, 11/09/2015 - 13:32 | 6768180 Wow72
Wow72's picture

There should be no paper in the first fucking place, duh... do you eat through a straw? What is "paper gold"? Its fucking nothing, why is it there? You fucking got me? Its the problem, Im not disagreeing that prices will go down? I dont like that they are being controlled.  I prefer freedom to having "control freaks" rule.

Mon, 11/09/2015 - 14:39 | 6768240 Wow72
Wow72's picture

They think gold and silver are like stocks you just add shares? You Cant? Its gold and silver??? Very unique metals.

 

Why more people dont realize the opportunity in silver that will someday be realized, Ill never know.  I was never a "gold bug" or a "silver bug" this market transformed me into one.  All this being said I wonder what happens when industry really realizes that there isnt much left? Im surprised more aren't currently hoarding at these prices and given demand some maybe.  After all it is finite, whether anyone likes it or not there is only so much left and if your an industry that depends on it? It doesn’t take a genius?  Im not convinced the FED / Bankers can keep prices considerably lower than this for long periods of time, I think keeping silver down for a decade is a "pipe dream"  you can only lie for so long about things that are finite.  Industry will be planning if they arent already.

Mon, 11/09/2015 - 13:39 | 6768235 SuperVinci
SuperVinci's picture

And thanks for actually engaging and not being a doucher like the guy above a couple posts I asked for clarification from.

Mon, 11/09/2015 - 13:36 | 6768217 SuperVinci
SuperVinci's picture

well, see, I don't see it as manipulation. The heavy weight (pardon the play on words) of all that paper product naturaly- as in, by the laws of nature- weigh down prices.

Honestly, the bull run and rising paper price is the manipulation. That is/was a gravity defying run that only added more paper to the fire.

 

Mon, 11/09/2015 - 13:33 | 6768201 SuperVinci
SuperVinci's picture

Well, that may or may not be true. I don't care however..or rather, I don't spend any time on it because , fact is, it exists.

 

Have to deal with reality as it is, not as it should be.

Mon, 11/09/2015 - 13:43 | 6768247 Wow72
Wow72's picture

We should want things to be better than this?  Not accept good enough.  I understand where you are coming from, I just see it different.  Im not saying gold/silver is a giant money maker right at the moment.  Its a great time to accumulate.

Mon, 11/09/2015 - 14:24 | 6768499 SuperVinci
SuperVinci's picture

We should indeed and I do. What I'm beating around the bush about is the doom and gloom mindset of typical goldbugs, metal guys, i.e. most on here and at all the silver sites.

They can't seem to conjur an idea that maybe, just maybe, these Central Bankers are not so dumb. Not so stupid. (i know, furious down voting occurrs now because I dare not blame a banker)

I see things through a different lens I carry with me. This is a long range view- a very top down view from way up high and my view shows me that we humans have been trying to perfect our monetary systems for thousands of years and we are almost there. My view shows clearly that what is coming is indeed known by the bankers and prepared for by the bankers (cough Euro Project cough) for going on 40 years.

Global finance is no small thing. You don't turn it on a dime- it turns on it's own time as it operates on the thoughts of all humans anyway. It turns at glacial speeds (think the titanic trying to turn sharp)

The Euro was put in place for this time period because a huge transition is progress.

The roles of money- SOV, MOE, UA are about to be split up with a 4th role in there for gold (phyz only of course) only as a wealth reserve asset. (incidently-err actually they planned for this;)) just like how the euro is setup- gold on it's asset side of the balance sheet)

To get there, paper gold and paper assetts need to burn first. This is where we are today.

google this:

fofoa global stagnation

sit back enjoy a long read and hopefully you learn something too. water/horse and all that as they say.

Mon, 11/09/2015 - 14:58 | 6768655 Wow72
Wow72's picture

Your Quote: "They can't seem to conjur an idea that maybe, just maybe, these Central Bankers are not so dumb. Not so stupid. (i know, furious down voting occurrs now because I dare not blame a banker)"

I agree and I dont because if your a central banker income is not a problem, rising costs NP, etc.,.....  look the problem is they are being decieving and not doing things in a convential way, on top of that they try to "force" their ideas w/o transparency, which is not pleasant and gets an unpleasant reaction? Its hard to trust these days and if anyone should understand it should be our government? If they could come out and be way more open, they should be more open source and not so closed, being closed gives others an advantage to manipulate them or gives the sense of such behavior.

Its very easy to make an argument that if someone or something is decieving you its because they dont want you to know, then they are not confident in you knowing....  meaning they have motives they dont want you to know.?

Mon, 11/09/2015 - 14:31 | 6768544 SuperVinci
SuperVinci's picture

oh, and all that planning and time and delaying (i think they delayed the change in 08) was implicitly to avoid the world entering Barter Town. Barter Town is a fucking disaster and no one desires that. Their goal was simply to help usher in this change as relattively peacefully as it can be done. The world has never had a reserve currency before and certainly no debt the size we have in the world today. You don't just let that all crash on it's own without some sort of plan.

Mon, 11/09/2015 - 12:43 | 6767879 SuperVinci
SuperVinci's picture

Burrrp!

 

Shirley you don't mean me?!

Mon, 11/09/2015 - 12:38 | 6767847 bshirley1968
bshirley1968's picture

Don't be a chickenshit and just down vote me.  Be man enough to give a rebuttal.

Mon, 11/09/2015 - 12:48 | 6767902 Wow72
Wow72's picture

I was wrong.

Mon, 11/09/2015 - 12:44 | 6767886 Conax
Conax's picture

You assume we are 'investing' in gold and silver, when many of us are actually using them as savings accounts.  When the transmission goes out and you need $1200 for repairs, it is normal to access your savings to pay the bill.  This is tough to do when your account has been debilitated by the continuous naked shorting of scumbags with unlimited funds, just to fuck you up.

We are slaves to the paper price when emergency redemption of the metal is required, and are therefore quite pissed.

Mon, 11/09/2015 - 12:51 | 6767929 SuperVinci
SuperVinci's picture

If your account had been debilitated...are you implying the monetary system has collapsed? 

Either way, what exactly are you buying with your "metal" and how are you deciding the exchange rate?

Mon, 11/09/2015 - 17:43 | 6769460 herkomilchen
herkomilchen's picture

We don't decide the exchange rate between gold and transmission repair, the market for transmission repair charging in fiat coupled with the market for fiat charging in gold does.  We are price takers in both those markets.

We may value 1 ounce of gold at 20 transmission repairs.  But if transmission repair costs $1200 in fiat, and $1200 in fiat costs 1 ounce of gold, and we have to drive to work to feed ourselves, we will be paying 1 ounce for 1 transmission repair whether we like that price or not.

Mon, 11/09/2015 - 13:14 | 6768032 Wow72
Wow72's picture

".are you implying the monetary system has collapsed? "

 

No I believe he is implying that leaving  or storing money in the dollar  is a losing proposition. Over the past few decades the value of the dollar has collapsed?

Ihttp://pricedingold.com/us-dollar/

Now based on the chart above which is a better store of value gold or the dollar.  Because I want to hear this one Einstein.

Mon, 11/09/2015 - 13:14 | 6768070 SuperVinci
SuperVinci's picture

So then if the money is so bad, why buy it with your metal?

Mon, 11/09/2015 - 13:22 | 6768135 Wow72
Wow72's picture

Because for a short time longer you to can still buy things with money that is "fake".   Get three bars of gold for the price of one, just like mens warehouse No?  this could go on for a while, I have no doubt, but at some point fantasy has to become reality.

Mon, 11/09/2015 - 13:20 | 6768119 SuperVinci
SuperVinci's picture

SO all you "metal" guys then think doomsday scenario will happen and we all meet at barter town huh??

Pretty conspiratardish, no?

Mon, 11/09/2015 - 13:26 | 6768142 Wow72
Wow72's picture

No.. Anyting could happen,  I think the metals will run out first.  Although world war could be coming in which case most of this dosent matter, other than the metals will hold value the best of any asset, they may not skyrocket though.

Mon, 11/09/2015 - 13:31 | 6768187 SuperVinci
SuperVinci's picture

ok, I can agree with that one fo sho. I view my metal as savings for a rainy day as well. Not a trade at all. I'm not a trader afterall. I save.

Mon, 11/09/2015 - 12:56 | 6767952 Conax
Conax's picture

That's just it. We decide the prices when we buy (or not) but selling can be forced by circumstances.

Fuck off.

Mon, 11/09/2015 - 13:19 | 6768105 SuperVinci
SuperVinci's picture

so a billion people running around trying to determine, on the spot, how much goods to either give up for metal or to buy with metal...doesnt sound very thought out. No price regression to go off of. How does any consistency be born? i.e. how do you know you got the same amount of goods for an ounce of "metal" (i suppose you are a silvertard and so when you say metal, you only mean silver) in kansas as one does a county away (let alone states or countries aaway) Sounds like uber chaos.

Mon, 11/09/2015 - 12:44 | 6767885 SuperVinci
SuperVinci's picture

Durp!

 

Shirley, you jest!

Mon, 11/09/2015 - 12:45 | 6767891 SuperVinci
SuperVinci's picture

Just pulease bShir...ley when you answer :)

Mon, 11/09/2015 - 12:48 | 6767912 SuperVinci
SuperVinci's picture

TL;DNR

durrrrrr SHirley surely sherlee

Mon, 11/09/2015 - 11:20 | 6767414 kuro_neko
kuro_neko's picture

buy more silver, a lot of people want to sell it !! why don't you guys buy more ???? you ain't got enough fiat money to buy it ??? poor you !!!!!!!!!!!

Mon, 11/09/2015 - 10:43 | 6767203 NubianSundance
NubianSundance's picture

Not only a 14 handle but could approach a 13 before recovering. I get my take on gold and silver from Illuminati Silver (youtube) who seem to know what they are talking about.

eg https://www.youtube.com/watch?v=DMbsYSVohqQ

Mon, 11/09/2015 - 10:33 | 6767170 _SILENCER
_SILENCER's picture

Silver appears to be at Everything Must Go prices.

Pick up some weight, toss it in the safe.

Make ready for what's to come.

Mon, 11/09/2015 - 12:25 | 6767770 MrBoompi
MrBoompi's picture

Doesn't strong demand in the physical market bring on more naked short attacks?  I think it's wise to own a little physical metal for "emergency purposes" but I wouldn't expect a decent ROI in the foreseeable future.  Most of us are still counting on some ROI for our money so we go elsewhere.

Mon, 11/09/2015 - 10:30 | 6767161 MrBoompi
MrBoompi's picture

Even a young child wouldn't have to ask "what happened?" to gold and silver prices if he had been paying attention to this market the past 5 years.  There is no free market here.  Supply and demand have little to nothing to do with pricing, which is controlled by "equilibrium" in the paper market.  So I must assume this author is playing dumb and purposefully spreading propaganda.  There is no penalty for manipulation because our owners are the ones doing it.  It's not fucking rocket science.  

Mon, 11/09/2015 - 10:30 | 6767160 FreeNewEnergy
FreeNewEnergy's picture

Well, in 2013, I said I'd buy silver if it hit $17. It was in the mid 20s at the time. Octoebr, 2014, $17 was hit, and breached, to the downside, and I said I'd buy if silver hit a $14 handle. People said I was nuts.

I bought early in 2015. A bit early, but I had cash available and didn't want to believe myself.

Now, I could have held and waited, and here we are, but I said about 6-8 months ago that I'd be buying more at $12, so I wonder if that's coming?

I'll wait to see a bottom this time. August 27 of this year, the London fix hit a new low, at 14.27. Funny how that low was met at the same time stocks were mini-crashing. I'm thinking that later this month might see a $13 handle. In any case, I'm buying sometime between now and December 15. I don't really care that much about the price. $15-14-13. It's pretty much all the same to me: ON SALE.

The most I've ever paid was $34.00 an ounce, but I didn't buy much. I think my overall basis is around $18. If I have any fiat at all once the train leaves the station (price actually rises), I'll be buying until mid-20s. Then, I wait. I'll likely sell SOME, not even half, when it's above $60, which is still low, though, of course, it's all relative. Depends on the value of the currency and prices for other things of value (especially land and foodstocks).

Good luck, but, buy silver.

Mon, 11/09/2015 - 10:14 | 6767100 yipcarl
yipcarl's picture

I got in dozens of arugments with the gold and silver bugs on ZH more than 5 years ago.  I kept saying these metals were manipulated like everything else and boy did I get ear full, like I was talking bad about their mom.  I'd like to hear what they have to say today.. It's been so long I can't remember a single user name...

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