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Silver Ready To Breakout - Technicals And Fundamentals Suggest $50/oz In Early Autumn

Tyler Durden's picture





 

From GoldCore

Silver Ready to Breakout - Technicals and Fundamentals Suggest $50/oz in Early Autumn

Gold and silver have fallen after yesterday’s gains due to the very poor consumer confidence data and Federal Reserve murmurings of further monetary easing. Gold is trading at USD 1,792.50, EUR 1,245.10 , GBP 1,098.30, CHF 1,471.50 and JPY 137,624 per ounce. While silver is trading at USD 41.21, EUR 28.53 , GBP 25.31, CHF 33.33 and JPY 3,155 per ounce.

Gold’s London AM fix this morning was USD 1,826.00, EUR 1,264.19, GBP 1,121.14 per ounce. Gold fix was higher than yesterday’s AM Fix which was USD 1,791.00, EUR 1243.49, GBP 1097.56 per ounce.

Gold remains less than 5% from its record nominal high of $1,913.50 per ounce while silver remains nearly 20% below its record nominal high just below $50/oz.

Gold has stolen the limelight from silver in recent weeks with gold reaching a series of new record nominal highs.

But silver has been quietly consolidating after the sharp falls seen at the end of April and in early May when many claimed the silver ‘bubble’ had burst.

Media coverage of silver remains nearly nonexistent which is bullish from a contrarian perspective.

Technically silver is looking better by the day and is now trading not far above its 50 and 100 day moving averages (see chart above).

Today the 50 day moving average is trading at $38.70/oz and the 100 day moving average is trading at $38.74/oz. The 50 DMA is rising after recent price gains and looks set to cross the 100 DMA in the coming days. This will be a bullish technical signal.

Silver’s sell off was very sharp but volatility and a correction was expected and warned of once silver reached the nominal inflation adjusted high of $50 per ounce.

Value buyers continue to accumulate silver bullion. Jim Rogers, one of the most prescient investors of recent times and who arguably has a better track record than Soros in recent years, remains bullish on gold and particularly silver.

A tiny minority of retail investors has begun to look at silver, but it remains largely the preserve of the smart money, a very small amount of people in the US and Europe concerns about currency devaluation and store of value buyers in Asia.

There are many factors that strongly suggest that silver remains a prudent buy and diversification today.

But there are three key metrics which strongly suggest that silver remains far from a bubble if not undervalued.

 
The first is silver’s real price today adjusted for the inflation of the last 31 years. Silver’s real high in 1980 was $130 per ounce – more than double the price today (see chart above).

The second is the gold silver ratio which has averaged 15 to 1 throughout history due to geology and the fact that there are 15 parts of silver to every 1 part of gold in the earth’s crust.

Gold Silver Ratio – 40 Year (Quarterly)

Silver, unlike gold, is an industrial metal and a very significant amount of all the silver that has even been mined has been consumed, like oil, since the dawn of the industrial revolution in the 19th century.

Most analysts with a long term view believe that the ratio is likely to revert to the mean of 15 to 1 in the coming years.

The third metric is comparing silver’s current bull market to that of the 1970’s.

Silver has risen by a factor of 10 in the last 9 years – from near $4 in 2001 to over $41 today.

In its bull market from 1971 to 1980, silver rose by over 3,199% or by a factor of more than 32 in just 9 years culminating in the blow off top in 1979.

 
Today, the physical supply of silver bullion is much less than in the 1970’s. Also there is the ‘Asian factor’ and 3 billion people with growing incomes, many of whom see silver as a store of value against currency depreciation.

Demand for silver in Asia has been increasing and in China alone silver demand is increasing from a near zero base. The demand was not present in the 1970’s.

Were silver to replicate the performance of the 1970’s it would have to rise 32 times or to $130/oz (32 X $4.05).

Interestingly, $130/oz is also silver’s real high from 1980.

Our long held belief that silver could reach the real high, inflation adjusted, of $130/oz remains. However price forecasts should always be taken with a pinch of salt and silver’s value is as financial insurance and a store of wealth that cannot be debased.

For the latest news and commentary on financial markets and gold please follow us on Twitter

NEWS
(Gallup) -- Americans Choose Gold as the Best Long-Term Investment
http://www.gallup.com/poll/149195/americans-choose-gold-best-long-term-investment.aspx

(Reuters) -- Gold edges down; eyes on Fed cues on stimulus
http://www.reuters.com/article/2011/08/31/us-markets-precious-idUSTRE7781Q420110831

(Bloomberg) -- Gold May Drop as Rally on Federal Reserve Minutes Prompts Investor Selling
http://www.bloomberg.com/news/2011-08-30/gold-may-climb-as-fed-minutes-weak-consumer-confidence-boost-haven-demand.html

(CNBC) -- Italian Town Mints Own Money to Fight Austerity
http://www.cnbc.com/id/44322945/

COMMENTARY
(Forbes) -- U.S. Elites Begin To Confront The Paper Dollar
http://www.forbes.com/sites/ralphbenko/2011/08/29/u-s-elites-begin-to-confront-the-paper-dollar/

(Money Morning) -- Why Gold Will Replace U.S. Treasuries as the World's Last Risk-Free Investment
http://moneymorning.com/2011/08/30/why-gold-will-replace-u-s-treasuries-as-worlds-last-risk-free-investment/

(GoldSeek) -- Can we Trust Government Statistics on the Economy?
http://news.goldseek.com/GoldSeek/1314734058.php

(King World News) -- Stephen Leeb - Gold Skying Because of Bernanke Desperation
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/8/30_Stephen_Leeb_-_Gold_Skying_Because_of_Bernanke_Desperation.html

(Speculative-Investor) -- Steve Saville - Gold: The Big Picture
http://www.gold-eagle.com/editorials_08/saville032409.html

China punters sway gold market
http://www.thestandard.com.hk/news_detail.asp?pp_cat=30&art_id=114736&sid=33564191&con_type=1

Gold’s Just Going to Run on Ahead and Price in QE3 for You
http://blogs.wsj.com/marketbeat/2011/08/30/golds-just-going-to-run-on-ahead-and-price-in-qe3-for-you/

 


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Wed, 08/31/2011 - 07:20 | Link to Comment DefiantSurf
DefiantSurf's picture

I enjoy fondling my silver & gold whilst reading ZH articles like this

 

Wed, 08/31/2011 - 18:10 | Link to Comment bankruptcylawyer
bankruptcylawyer's picture

thats not all you enjoy fondling. 

Wed, 08/31/2011 - 07:20 | Link to Comment papaswamp
papaswamp's picture

shhhh bitchez!...I'm still buying. Don't spoil it.

Wed, 08/31/2011 - 07:26 | Link to Comment Sudden Debt
Sudden Debt's picture

I feel your pain....

 

Wed, 08/31/2011 - 07:23 | Link to Comment spiral_eyes
spiral_eyes's picture

Not sure about this. In this liquidity trap/ debasement environment the only assets I see really flying up are gold (going to $2500) and treasuries (going to 0). Silver's image as an industrial metal won't help it in the way gold's role as money will. I see silver to $50 by the end of the year. Doubt it will test any higher though, especially not if Europe blows up.

Wed, 08/31/2011 - 07:28 | Link to Comment cossack55
cossack55's picture

Don't buy any.

Wed, 08/31/2011 - 07:36 | Link to Comment spiral_eyes
spiral_eyes's picture

I already bought mine at <$10 and <$20. Silver is going to blow up eventually, but only when the hyperinflation hits. You don't get that just from printing. You need an oil/oil infrastructure/geopolitical shock to trigger that. 

http://azizonomics.com/2011/08/15/why-qe-didnt-cause-hyperinflation-2/ 

Wed, 08/31/2011 - 08:21 | Link to Comment Gordon Freeman
Gordon Freeman's picture

I am no silver bug, but there is absolutely no technical or fundamental reason that "silver is going to blow up"--ever.  That's like saying food is going to blow up

Wed, 08/31/2011 - 09:00 | Link to Comment tmosley
tmosley's picture

You're right, you aren't a silver bug.

You are also wholly ignorant of the supply/demand fundamentals of the silver market which dictate a major rise in price, which can either be orderly if the markets are allowed to operate properly, or highly disorderly in the form of a blow off top if price suppression efforts continue until they can't.  Those are the only two options, short of construction of a space mining fleet to flood the market with silver from the asteroid belt.

Wed, 08/31/2011 - 10:39 | Link to Comment mrgneiss
mrgneiss's picture

Anyone who understands economic supply/demand fundamentals, dynamics, would never compare the economic good "silver" to the economic good "food".  It is like comparing the economic fundamentals of oil and coke (the drinkable one).  For example, on the supply side, it takes on average seven years from geophysical prospecting to mine production for a silver deposit, and the timeline is increasing due to environmental regulations.  Whereas in many countries that produce rice, the farmer can harvest three crops a year.

Wed, 08/31/2011 - 11:12 | Link to Comment Crisismode
Crisismode's picture

BTW, the asteroid belt mining thing . . .

 

that's in the works.

Wed, 08/31/2011 - 11:33 | Link to Comment Libertarians fo...
Libertarians for Prosperity's picture

 

 

Cliff

Can you please tell me when "the supply/demand fundamentals of the silver market" began to "dictate a major rise in the price?"  When did this occur and why?  You might want to be careful in your answer, because I, too, am not a silver bug and that works to my advantage.   

Warm regards...  

Wed, 08/31/2011 - 19:33 | Link to Comment Libertarians fo...
Libertarians for Prosperity's picture

 

 

....and crickets, as usual.   

Just more hollow rhetoric full of drama and devoid of substance from the leader of the silver lemmings.  Only the empty headed silver goons who make comments like "silver will default" (see comment below) believe your melodramatic garbage, cliff. 

Wed, 08/31/2011 - 09:59 | Link to Comment fiftybagger
fiftybagger's picture

I know nothing about the subject at hand, but I will still speak in absolutes regarding the technicals and fundamentals.  I am a moron.

Wed, 08/31/2011 - 10:49 | Link to Comment tekhneek
tekhneek's picture

+$130.

He probably thinks gold's more rare than silver, too.

Wed, 08/31/2011 - 11:13 | Link to Comment Crisismode
Crisismode's picture

And diamonds . . .

 

the rarest of them all. /sarc

Wed, 08/31/2011 - 11:41 | Link to Comment Hook Line and S...
Hook Line and Sphincter's picture

and, don't forget loose chicks

Wed, 08/31/2011 - 08:26 | Link to Comment cossack55
cossack55's picture

So......you do not see all that coming?

Wed, 08/31/2011 - 09:49 | Link to Comment passwordis
passwordis's picture

   Say what? Silver's image won't help it?   $4 to $50 in 9 years....  What more do you want? Why would silver's "image" suddenly hurt it now?

 Look at it this way, You can go to the wayback machine and pull up 10 year old arguments against the rise in the silver price. The bears said the same thing back then as they do today.   That silver is going nowhere or if it does, it's a bubble..

 You can also read what people like Bob Chapman, Jim Sinclair and James Turk said 10 years ago.  Based on hindsight you can decide who was correct..  Then listen to what these same people are saying today.

 I have no reason not to continue to trust those same people who told me to buy PMs ten years ago.  They said it was goign to rise, It has by a factor of 10..  Today, they say it's going to rise much higher because the fundamentals haven't changed.

  10 years after I bought my first gold coin, I no longer need to be guided by the experts. I have a good understanding of PM fundamentals.  My litmus test is as follows,  If you think the Government is goign to do the right thing... don't buy PMs.  If you think the government is going to continue to do the opposite of the right thing.. buy Silver and gold.

 

 That's what it really comes down to.

 

Wed, 08/31/2011 - 14:57 | Link to Comment spiral_eyes
spiral_eyes's picture

The difference is that the rise from $4 to $50 took place within the context of a manufacturing and weapons boom. Most of the silver used during this period has been in manufacturing. A full-on depression may change that. Now I'm not saying silver will drop, because it is exceedingly scarce, and it is (debatably) part of the true monetary base. But a depression does remove a lot of upward pressure, which is what leads me to my thesis that we're looking in the next six months at mild to moderate upside. Look at what happened to oil after Lehman: all the peak oilers said it could only continue to climb, and they were wrong. 

Thu, 09/08/2011 - 11:23 | Link to Comment passwordis
passwordis's picture

  Industry consumes only about 30% of the silver supply although, that percentage is rapidly growing with new applications and technologies. I attribute the rise in price over the past ten years to small investment/hedge demand. My local PM dealer tells me each year he sells more silver than the last. 

 At any rate, the trend is securely in place..  What happens over the next 6 months does'nt much matter to me. If you want to trade back and fourth, more power to you. I"m not a trader.

  Hindsight is 20/20 and in 5 years we will see where silver is and have a debate over what brought it there.

Wed, 08/31/2011 - 07:24 | Link to Comment achmachat
achmachat's picture

I honestly also want to hear the reason why it could be a good idea to short silver right now.

I am sure there's a bunch of you reading this, and it would be quite educational to hear both sides.

Wed, 08/31/2011 - 07:25 | Link to Comment Sudden Debt
Sudden Debt's picture

Merkel just agreed to fund the european emergency fund.

If her party isn't canned next month, the euro will lose about 15% in the short run.

And America.... do I really need to explain that one?

 

Wed, 08/31/2011 - 07:46 | Link to Comment DosZap
DosZap's picture

SD, Told Ya.................knew she would CAVE,her butts gone.

Wed, 08/31/2011 - 08:00 | Link to Comment Sudden Debt
Sudden Debt's picture

You where right. I didn't think she'd do it. It's German suicide.

But there's still a chance that next month when her party meets that they'll kick the plan again. And that has already happend 2 times this year.

 

Wed, 08/31/2011 - 08:57 | Link to Comment NotApplicable
NotApplicable's picture

It was a foregone conclusion the instant she received her award from Obummer.

Wed, 08/31/2011 - 09:57 | Link to Comment Snidley Whipsnae
Snidley Whipsnae's picture

Sept 7th the German high court to decide if German participation in bail outs is constitutional...

Probably a rubber stamp, but not a done deal.

Wed, 08/31/2011 - 08:52 | Link to Comment gwar5
gwar5's picture

I was surprised to see Germany do that, but I suppose they have their orders from the cartel.  The EU members will be calling the Germans Nazis again when the new conditions are pushed and the Italians and Greeks continue to skirt them.

 

 

 

 

 

Wed, 08/31/2011 - 09:52 | Link to Comment passwordis
passwordis's picture

The only reason I could come up with is that the people shorting gold and silver understand the manipulation and are trying to take advantage of the periodic smack-downs.  Heck the short positions are probably held (by proxy) by the same people smacking the price down.

Wed, 08/31/2011 - 17:59 | Link to Comment GoatETF
GoatETF's picture

Heck the short positions are probably held (by proxy) by the same people smacking the price down.

Spent some time on GATA and you can derive a more informed opinion on that one.

Wed, 08/31/2011 - 13:40 | Link to Comment IQ 145
IQ 145's picture

There honestly isn't any good idea involved in shorting silver "right now". Although market performance is always only a probability; the odds are not in your favor.

Wed, 08/31/2011 - 07:24 | Link to Comment Sudden Debt
Sudden Debt's picture

NOOOOO!!! JUST A FEW MORE MONTHS BELOW 44$!!!!

AFTER NEWYEAR!!!!

 

Wed, 08/31/2011 - 07:32 | Link to Comment achmachat
achmachat's picture

you know very well that with what is happening around the world, the currencies won't be able to stay stable that long.

ever thought of borrowing now the amount of money you'll be getting at the end of the year to buy that silver now?  

Wed, 08/31/2011 - 08:55 | Link to Comment Clay Hill
Clay Hill's picture

Already done. But only as much as I can afford to lose.

Or, stated differently, I curtailed my regularly scheduled gambling in exchange for physical now. My monthly expenditures actually went DOWN, and the shiny is already in my hand.

Wed, 08/31/2011 - 10:17 | Link to Comment Sudden Debt
Sudden Debt's picture

borrowing for silver isn't what I really want. 

Buy when I have it. I hate takeing a loan.

 

Wed, 08/31/2011 - 10:55 | Link to Comment tekhneek
tekhneek's picture

But your loan will be in paper, not silver. You won't owe "anything" after a certain amount of time passes.

Think of it as leverage.

Borrow 10K and make $100/month payments @ whatever interest they charge you, even if it's 30%, you'll beat that with the gains from silver in the long run.

Wed, 08/31/2011 - 11:13 | Link to Comment ozziindaus
ozziindaus's picture

That is so 2005 home flipping talk

Wed, 08/31/2011 - 14:54 | Link to Comment RockyRacoon
RockyRacoon's picture

If you're saying there is a parallel between real estate and precious metals, you should stay out of both markets.

Wed, 08/31/2011 - 13:45 | Link to Comment IQ 145
IQ 145's picture

The way this is actually done is called "margin"; but it's not for people who are on un-evolved that believe a coin collection is a retirement account; if you recover from the internet brainswashing enough to realize that there are several honest and reliable agencies that sell custodial receipts for silver, then you'll be able to finance silver on something closer to 4.5%/year. If you can't outgrow the blog wisdom, then you're just stuck with whatever you can buy and hide, I suppose.

Wed, 08/31/2011 - 07:28 | Link to Comment BorisSDT
BorisSDT's picture

We agree that silver is about to breakout and have developed a theory on what's going on with silver.  It may be a little tin foil hattish but it makes more sense than any ohter theories we've heard... at least that's what we think.  http://www.singledudetravel.com/2011/08/silver-and-the-single-dude/

Wed, 08/31/2011 - 07:28 | Link to Comment HITMAN56
HITMAN56's picture

Well its almost FB season...so early Autumn is upon us. Hi Ho Silver!

Wed, 08/31/2011 - 13:02 | Link to Comment Hugh G Rection
Hugh G Rection's picture

Hey Hitman, how's the weather in Langley today?

Wed, 08/31/2011 - 07:29 | Link to Comment Thunder_Downunder
Thunder_Downunder's picture

mmmm recycled. Can I have my 2 minutes back, I thought this was an analysis piece.

 

Nothing new here, please move along. 

Wed, 08/31/2011 - 07:51 | Link to Comment thunderchief
thunderchief's picture

Silver in the 30's and 40's will be similar to when it was in the teens.  Long gone and not coming back. 

The big ticket issue going up to 50 are JPM and HSBC, which have massive un backed silver short positions, and will throw loads of cash to pummel the price.  This in collusion with the cftc, (5 margin hikes along with a major take down during afterhours trading in Late April) makes Silver out of kilter with any fundamentals. 

Everytime the banks pull their paper bids on off peak hours, and knock the spot price down, it creates physical buying, and a further shortage of Available silver.  Just look at Comex available silver.  One hedge fund could clean them out in a day.  This will lead to a default at some point.  The paper game works as long as cash settlements occur and no default.  This is a game of chicken the big banks are playing everytime the go after the spot price. 

So keep buying the physical and back it up with some good silver mining stocks. 

Wed, 08/31/2011 - 11:00 | Link to Comment tekhneek
tekhneek's picture

Agree with you entirely.

I read an article by a hedge fund manager basically explaining that, right now, the Fed is playing an extremely dangerous game. He's basically saying they're to blame for the coming collapse (duh) but for different reasons than we'd use. He's coming from the angle that there's only so much physical silver left, a few billion dollars maybe? He could allocate 5% of his fund into physical silver to diversify against inflation and immediatey bring down the COMEX which would cause a run on the banks, etc.

He blamed monetary policy for crashes/collapses and he explained it equally. If you force the large chunks of money to move so they can stay net positive over inflation and other factors then you're to be blamed.

Bernanke's putting the funds in a corner and pretty soon they'll know there's no longer a safe haven outside of gold and silver. Some of these guys are dumb, but they're not all dumb and all it takes is 1 or 2 to get their position first and that will begin the collapse. I think this time around it's going to be fueled by hedge funds first, then all the other falderall later.

Wed, 08/31/2011 - 18:09 | Link to Comment GoatETF
GoatETF's picture

Was that read here on ZH? If not link plz.

Wed, 08/31/2011 - 07:38 | Link to Comment sudzee
sudzee's picture

33% think gold is the best investment?

Yesterdays poll.

23 people entered the shop.

23 people sold gold and silver to me.

Bullion leaving the shop-0

9 phone enquires:

8 - how much do you pay.

1- do you have any silver for 5 bucks.

Who did Gallup poll?

Chinese and Indians?

Wed, 08/31/2011 - 07:44 | Link to Comment MonkeySmoke
MonkeySmoke's picture

The 32 people that you spoke with yesterday will regret that decision in very short order.

Wed, 08/31/2011 - 07:57 | Link to Comment DosZap
DosZap's picture

sudzee,

That was the Bernanke Bubble Poll.

Wed, 08/31/2011 - 08:36 | Link to Comment Long-John-Silver
Long-John-Silver's picture

do you have any silver for 5 bucks.

I would have told him he could dig it up himself in his backyard and sell him a $20 shovel.

Wed, 08/31/2011 - 10:41 | Link to Comment Sudden Debt
Sudden Debt's picture

your shovel might help him BUT I'M SELLING 1000$ SILVER DETECTORS!

It are Y shaped magic plied iron bars that start to glow when you find silver with only 1% room of error.

And if you buy the 500$ dept meter YOU CAN ALSO BUY MY BOOK "HOW TO DIG FOR SILVER IN YOUR NEIGHBOURS YARD FOR HALF PRICE WICH NORMALLY COSTS 999$!!

PACKAGE DEAL : 1999$

 

You can pay with western union.

 

Wed, 08/31/2011 - 12:00 | Link to Comment KrugmansChauffeur
KrugmansChauffeur's picture

You got one that detects orcs too?

Wed, 08/31/2011 - 08:46 | Link to Comment Nate H
Nate H's picture

@Sudzee

My cousin owns a coin shop and said the exact same thing. He had 80 customers this week and all 80 were sellers not one single person bought silver or gold. To me this says not so much about gold and silver but more about fact that a large demographic is so strapped they are selling anything they can to make due.  Goes in line with my theory that when gold and silver really pop one day (especially in post-trade world) that <1% of people will have all the gold and silver - not the best situation for social stability...

 

Alternative hypothesis: all these people are really smart and have determined silver and gold are topping and will be back and my cousins store when gold is back to $800 and silver $22. (I doubt it)

Wed, 08/31/2011 - 09:35 | Link to Comment thunderchief
thunderchief's picture

The Cash for gold and silver schemes will go on until the general public sells most if not all of their 12, 14 18k gold and silver jewelry.  This silver and gold will make its way into bars, which will go into the hands of the top 5 percent, who know where the price should be. 

I believe the cash for gold/silver deals are another way of taking any wealth away from the former middle class. 

Take your job. Take your House.  Take your gold and silver.  Take your civil liberties.  Throw you in Jail.

SuperSized with a SuperMax.

Wed, 08/31/2011 - 12:17 | Link to Comment Hook Line and S...
Hook Line and Sphincter's picture

"Take your job. Take your House.  Take your gold and silver.  Take your civil liberties.  Throw you in Jail."

And this is what you'll hear...

"My job sucked anyway. I bought my house with no down so who cares (and the property is worth less now). I'm married with kids - so what civil liberties I had were taken away long ago. Jail has great meals and pleasant comradery. What's gold? Is silver anything like aluminum?"

SuperSized penetration removing all traces of mind, spirit, and dignity... indeed! Hook Line and Sphincter

Wed, 08/31/2011 - 10:04 | Link to Comment Snidley Whipsnae
Snidley Whipsnae's picture

Nate H... "that <1% of people will have all the gold and silver - not the best situation for social stability..."

Weak hand in West are selling PMs, stronger hands in East are buying... How many times must this be repeated before Americans understand what is going on in physical mkts?

If there were no physical sales of PMs happening anywhere in the world, would the PM prices be at the levels seen today?

Wed, 08/31/2011 - 13:59 | Link to Comment IQ 145
IQ 145's picture

"Quite a few times, actually, Mr. Whipsnae, quite a few times. Hopefully repeating a few simple facts may sink in.

Wed, 08/31/2011 - 15:08 | Link to Comment hydenunderwood
hydenunderwood's picture

Im relatively new to this PM thing. I have been glancing at ZH for about 8 months but am now getting into reading on a daily basis. I'm only a few years removed from college so most of my concern has been debt paydown. I have on occasion been able to turn what you guys call FRNs into some physical here and there. Ive been purchasing canadian maples and 10oz Amark bars. All my purchases have been through EuroPac (peter schiff company as I'm sure you know) I really enjoy the comments you, tmose, TD, and suddendebt(I'm sure im forgetting others) post on the articles on ZH. I like the humor you guys seem to be able to bring to serious subjects and you guys make the most sense to me from a common sense point of view. I respect that. To the point though. I'm late to the game from what I can tell and I'm looking for advice from some of the guys who have been here awhile and know the rules. I want to know the pros/cons of bullion vs coins? Pros/cons of differing coins? Pros/Cons brands of bullion(ex Amark vs Englehard as Amark doesnt have the markup like Englehard)? Is EuroPac pretty reputable? Are there better places to get it closer to spot. I will continue to do research on my own, but I would appreciate any knowledge you or any of the other veterans would like to pass on to a newby so I can make sure I'm on the right path. Thanks

Wed, 08/31/2011 - 21:48 | Link to Comment janus
janus's picture

tag along behind tmosley.

he speaks truth.,

Wed, 08/31/2011 - 11:56 | Link to Comment Hook Line and S...
Hook Line and Sphincter's picture

this tells me that there is a brewing bubble in Ag/Au for coin shop owners

"all my coin shop owner buddies are buying, it's got to dump soon"

/sarc

Wed, 08/31/2011 - 13:18 | Link to Comment rosiescenario
rosiescenario's picture

Its a wonder just how much silver is sitting around above ground in the form of eating utensils, etc. I remember when we had the last huge run up courtesy of Bungle Hunt it drew a lot of silver out of attics and into the pot.

Wed, 08/31/2011 - 15:05 | Link to Comment RockyRacoon
RockyRacoon's picture

People don't use silver table ware, tea/coffee sets, and such.   Melting all that was not a difficult thing to do.   The silver coinage, however, was generally NOT recast.   It remains in many $1,000 face bags as it was accumulated back in the 1960s and other high silver spot eras.   That comes back out, is sold hand to hand, and returns to deep storage when the market cools.   Don't ever fall for the "rare coin" spiel when it comes to common-date silver coinage.   You can price your own coins here:  

http://www.ngccoin.com/poplookup/World-Coin-Price-Guide.aspx

and here:

http://mintnewsblog.com/2011/04/silver-melt-values-for-proof-sets-and/

and here:

http://www.ngccoin.com/poplookup/NGCCoinPriceGuide.asp

and here:

http://www.coinflation.com/silver_coin_values.html

Wed, 08/31/2011 - 09:05 | Link to Comment chubbar
chubbar's picture

My small town newspaper ( circa 10K pop.) had a front page piece on gold last Wed. The thrust of the article was to make sure you get multiple bids on selling your gold because there are a lot of shops ripping people off. Not one mention of the monetary aspects of gold or any other analysis, just talked about selling (2 pager to boot). We are a LOOOOONG way from some sort of general population investment bubble.

Wed, 08/31/2011 - 09:52 | Link to Comment BoNeSxxx
BoNeSxxx's picture

Were the sellers coming in with 99.99% pure minted rounds, bars, Pandas, Maple Leaf, and Liberty Dollars?

Or, were they selling you their 'junk'?  Grandmother's silver gravy boat, jewelry, silverware, old coins, stolen merchandise to feed their crack habit?

The sheeple are net sellers of PMs for various reasons -- necessity and ignorance ranking in the top 2.

I am buying their silver but only once it goes from you to the mint and gets a pretty facelift.

Wed, 08/31/2011 - 09:56 | Link to Comment KinorSensase
KinorSensase's picture

Fucking hysterical right?  Last 2 times I went to the coin shop there was a line nearly to the door...of people selling.  What a bunch of fruits.

Best part is that the dealer always lets me and my buddy cut the whole line.  "Sorry folks, paying customers come first," he says every time.  As they scrounge the family jewellry to pay bills with inflating fiat, I feel like I'm pouring salt on their open wounds and I must say I've come to take a bit of sadistic pleasure in it by now.

At the desk, another customer gazes at a couple roughed up ounces that I'm buying and "oooo's" and "aaaahhh's" while asking me about what I do with them, why I have them.  It's not until she asks where I got them that I realize she thinks I'm selling.

And of course, my favorite is when I have conversations with the few friends who are onto the silver bug and mutual friends that overhear the conversation snicker and smirk.  That's when I rest assured that the run is still well into the stealth phase, and inside, I'm snickering and laughing much harder than they are.

Thank god for ZH and the blogosphere...a rare dose of reality amid a sea of bullshit.

Wed, 08/31/2011 - 12:07 | Link to Comment Hook Line and S...
Hook Line and Sphincter's picture

K.SensaseSchadenfreude de Sade

Good work on speaking my mind!

Wed, 08/31/2011 - 09:58 | Link to Comment KinorSensase
KinorSensase's picture

By the way...the guy who asked if you have silver for $5...sounds like you may have met Mathman in the real world.

Wed, 08/31/2011 - 12:23 | Link to Comment FeralSerf
FeralSerf's picture

I have silver for sale at $5.  Which one do you want -- the Mercury or the Roosevelt?

Wed, 08/31/2011 - 14:55 | Link to Comment Dimeboy
Dimeboy's picture

Never mind the Feral one - I'll sell you the same sized pretty one with the young Queen on one side and nice sailboat on the other for only $4.00 !

Wed, 08/31/2011 - 18:35 | Link to Comment FeralSerf
FeralSerf's picture

Those are cheap imported items (possibly non-union sweat shop).  The ones I have are genuine Made in USA!  

Somebody grab a hockey stick and whack that bloody interloper.

Wed, 08/31/2011 - 19:01 | Link to Comment IAmNotMark
IAmNotMark's picture

"Do you have any silver for 5 bucks?"

Yes.  Two 1945 nickels.  Or a 1964 dime and some change.

Wed, 08/31/2011 - 19:02 | Link to Comment IAmNotMark
IAmNotMark's picture

"Do you have any silver for 5 bucks?"

Yes.  Two 1945 nickels.  Or a 1964 dime and some change.

Wed, 08/31/2011 - 07:38 | Link to Comment Lazane
Lazane's picture

Kind of hard to recall the 4.00 silver of old now stacked deep within the inner sanctum of the hoard, all that glitters isn't golden. remember quite a few who asked for a little advise, yes buy some silver, it's going much higher, some took good advise and some didn't, those who did are singing praises of Pat's marvelous investment savvy, those that didn't are now calling to see if their is still time to get the shinny white gold, and Pat says hell! ya, get some jingle in your pocket quick! before the elite steal what remains.

Wed, 08/31/2011 - 07:40 | Link to Comment trampstamp
trampstamp's picture

I think we will be suprised soon enough. Until then I wait to buy at a lower price.

Wed, 08/31/2011 - 09:02 | Link to Comment SilverDOG
SilverDOG's picture

@trampstamp

Lower paper price does not guarantee lower bullion price OR availability.

1/3 now, 1/3 later, 1/3 for lower price gambling. 

Waiting, is the hook laden media delivered bait. 

China is not waiting, neither are the short contract addicts. 

 

Wed, 08/31/2011 - 12:10 | Link to Comment Hook Line and S...
Hook Line and Sphincter's picture

TrampStampWillLiveInAHomelessCamp

(I'll toss you some cheetos)

Wed, 08/31/2011 - 07:42 | Link to Comment gmak
gmak's picture

Only once, and then by decision - not geology, was the price of Gold ever at 15 times that of silver.  Looking at the author's chart shows that the ratio has not been at 15 times since the 1960's when the gold standard was strangled. The chart itself shows the average as being 50 times. To base a trade on the faint hope that someday this mythical 15 to 1 ratio will somehow come into force is a low probability pay-off.

 

Wed, 08/31/2011 - 08:04 | Link to Comment caerus
Wed, 08/31/2011 - 08:26 | Link to Comment krispkritter
krispkritter's picture

Couldn't get to that link. Found this: http://bit.ly/nm9WTy

Wed, 08/31/2011 - 08:46 | Link to Comment caerus
caerus's picture

that's the one...if link above is broken you can find chart here but have to dig a bit... historical charts

 

it's listed as "650 year silver price"

Wed, 08/31/2011 - 10:05 | Link to Comment gmak
gmak's picture

Without knowing the source of early data /prices, I hesitate to comment. Yet, it seems a stretch to think that suddenly a ratio that hasn't been seen since 1700 would suddenly be in force.  It's an even bigger stretch to think that I would put money at risk against a premise that this un-substantiated data from a thousand years ago is correct and will, only now, come back into force.

Wed, 08/31/2011 - 12:00 | Link to Comment mcguire
mcguire's picture

you didnt hesitate to comment above, so why now?  but to argue a different point, i would say the historical gold:silver ratio should not and can not be a guide for what the future ratio might be.. why?  demographics.  if gold or silver are to be "money" in the case of a breakdown (hyperinflation), silver is the most likely candidate for 'money' just based on supply reasons.  money must serve as a medium of exchange, and today vs. 600 years ago, it must be a medium of exchange for BILLIONS of people..  the game has changed. 

Wed, 08/31/2011 - 12:59 | Link to Comment FeralSerf
FeralSerf's picture

Silver cannot be useful money in the future because of supply reasons.  Why is that so hard to understand?  There simply isn't an adequate above ground supply for it to function as money in addition to its industrial uses.  Gold has a much larger, and even more importantly, a much more consistent above ground supply than silver.   A store of value needs a consistent supply to serve as such.

Silver may be good as an investment, or even as barter material -- that's the way I'm betting at least -- but thanks to 20th century innovations in its usefulness, it is not suitable as money.

Wed, 08/31/2011 - 13:48 | Link to Comment Don Smith
Don Smith's picture

Silver and gold are stores of value.  Dollars are currency and are "real money" when they are able to be exchanged for the store of value.  It is silver and gold's scarcity and durability that make them stores of value, as opposed to, say, wheat. 

The 'money' will still be a paper currency.  

 

YOu may want to read this epic blog post about Freegold. http://forafistfulofdollars.blogspot.com/p/freegold.html

Fascinating.

Wed, 08/31/2011 - 15:18 | Link to Comment RockyRacoon
RockyRacoon's picture

Who says you can't mint coinage with a 50% pure silver content?  Other countries have done it, including Canada.   The "not enough" argument is a weak one.   As long as the content is known and the coin has a face value, there is plenty to go around.   Coins with gold "plugs" have been made as well.   The coin may be 90% silver with a center plug of a certain gold purity.   Where's your imagination?  (And don't give me the Roman Empire analogy crap.)

Wed, 08/31/2011 - 18:18 | Link to Comment FeralSerf
FeralSerf's picture

The Americans minted a bunch of them with 40% silver content.  That's a piss poor use of scarce industrial silver.

You won't get any Roman Empire silver money crap from me, although the Romans did show us how to debase silver money.  The Romans had no other use for silver but money and maybe a few belt buckles and dishes.  That's not the case now.  Silver is too scarce to use as money.

Wed, 08/31/2011 - 19:15 | Link to Comment IAmNotMark
IAmNotMark's picture

Silver has been used as money for 2500 years.  Why is that so hard to understand?

Just because it is also used for industrial purposes doesn't erase that silver is ideally suited along with gold to provide a stable means of valuation.  If people truly lose their trust in banks and fiat currency, and if the governments don't make it illegal, I believe you will see silver used once again as money.  It may not be how you buy a Big Mac but that doesn't mean it isn't money either.

Interesting that you think/know that there is less above ground silver than gold.  So, silver is more rare than gold?

Wed, 08/31/2011 - 09:05 | Link to Comment tmosley
tmosley's picture

That was in an environment of gigantic government stockpiles of silver.  There are no such stockpiles remaining, and we use up the silver faster than we mine it.  Price is going to have to rise significantly to bring new production online and to increase recycling efforts.  Since most silver used in industry is in very small quantities relative to the total cost of the product, the demand is quite inelastic.  Thus, most of the supply/demand dynamic change must come from the supply side, which makes it harder.

Wed, 08/31/2011 - 12:16 | Link to Comment Hook Line and S...
Hook Line and Sphincter's picture


Don't you think that expecting a ratio to attend to historical precedents when technological use is not factored in is like thinking you can go out and pick up a quickie in a bar when your 70 years old?

Wed, 08/31/2011 - 15:25 | Link to Comment RockyRacoon
RockyRacoon's picture

Not at the bars where T-Mo hangs out.

Wed, 08/31/2011 - 09:44 | Link to Comment JPM Hater001
JPM Hater001's picture

Looks pretty much like 15 to 1 to my but what do I know?  Looking at the last 50 years and ignoring the other 5000 seems pretty stupid.  If anything the last 50 look pretty manipulated.

Wed, 08/31/2011 - 15:27 | Link to Comment RockyRacoon
RockyRacoon's picture

We are in a situation where most, yes, MOST of the silver being used cannot be recovered.   Medical and electronics eats up the industrial supply and the silver goes in land fills.   When it was used in photography a major part of the silver was recovered.   Saying that silver usage would decrease due to digital photography was a false prediction.

Wed, 08/31/2011 - 14:06 | Link to Comment IQ 145
IQ 145's picture

It's varied all over the place; but hardly ever enywhere near where it is now. In Roman times it was 8 to one, to one, 12 to one; like that. In other monetary systems when it was active money, it was 15 to one, 16, 18, 22.  forty and fifty seem to be wacky ratios from the new fever world. A reversion to the mean would be hugely profitable.

Wed, 08/31/2011 - 07:49 | Link to Comment PaperBear
PaperBear's picture

My reply to the Forbes article:

It is the big banks that wrote the non-Federal non-Reserve Act of 1913 which ushered in this era of the non-PM dollar.

Liquidate the bad debt, institutions that did stupid things should go bankrupt as has been the case for centuries. To say that an institution is “too big to fail” is the stupidest thing I have ever heard and I have heard some stupid things. I would say that such an institution is “too big to be”.

If the politicians do not want to return to sound money from fake money then the people can simply exchange their savings in fiat paper currency for gold and silver at the market price.

Wed, 08/31/2011 - 09:11 | Link to Comment chubbar
chubbar's picture

Here is mandatory reading for those who are unfamiliar with the genesis of the Federal Reserve Act of 1913.

http://www.apfn.org/apfn/reserve.htm

Scroll down past the videos presented and read the article with the title "Secrets of the Federal Reserve". Fascinating

Wed, 08/31/2011 - 07:52 | Link to Comment Lazane
Lazane's picture

its been said countless times before over the past 11 years that silver's run is done, then it goes higher. basic material bull markets have a lifespan that typically operates for 20 to 25 years, this bull is only half way to the finishline, we got a long way to go if you can stand the heat in the kitchen.

Wed, 08/31/2011 - 14:08 | Link to Comment IQ 145
IQ 145's picture

We're waiting for peace and prosperity to break out. Might have to wait awhile.

Wed, 08/31/2011 - 07:55 | Link to Comment PaperBear
PaperBear's picture

The precious metal buying season. - 8 months of hell for the sellers of paper silver is about to begin.

WOOHOO, WOOHOO, WOOHOO.

Wed, 08/31/2011 - 07:55 | Link to Comment Doomed from the UK
Doomed from the UK's picture

I am always suspicious of any analysis of silver's previous high which omits the Hunt brothers' attempt to corner the market. I don't know what silver is going to do short term - but it is up 100% from last year. Another period of consolidation i.e. falls could be in hand.

For those wishing to look at a contrarian view point on this how about:

http://theautomaticearth.blogspot.com/2011/08/august-27-2011-et-tu-commo...

I maintain a core position in silver in sterling but am hedging this at the moment with US Dollar shorts.

 

 

Wed, 08/31/2011 - 08:05 | Link to Comment janus
janus's picture

i just rang the most beautiful silver bell these eyes have ere beheld.

she sings the sweetest song these ears have ever heard.

Wed, 08/31/2011 - 08:06 | Link to Comment Lazane
Lazane's picture

years ago when offering my tax exempt municipals to my wealthy clients, I would encourage them to always redeploy their cash when ever it was available in the mm. forget about waiting for better prices, higher interest and get the cash working tax free. to many times waiting for something better was a missed opportunity for a great issue. today the only issue of concern should be to all who hold FRN is what is my paper currency going to be able to buy tomorrow? JACK! knows but he ain't telling you today. 

Wed, 08/31/2011 - 08:37 | Link to Comment gwar5
gwar5's picture

You are wise. Of course, most people just don't know Jack.

 

Wed, 08/31/2011 - 08:37 | Link to Comment gwar5
gwar5's picture

You are wise. Of course, most people just don't know Jack.

 

Wed, 08/31/2011 - 08:09 | Link to Comment Minoan
Minoan's picture

Chaper 2:WAGING WAR

1. Sun Tzu said: In the operations of war, where there are in the field a thousand swift chariots,
as many heavy chariots, and a hundred thousand mail-clad soldiers, with provisions enough to
carry them a thousand li, the expenditure at home and at the front, including entertainment of guests,
small items such as glue and paint, and sums spent on chariots and armor, will reach the total of a
thousand ounces of silver per day. Such is the cost of raising an army of 100,000 men.

Wed, 08/31/2011 - 08:22 | Link to Comment snowball777
snowball777's picture

Troops in Iraq and Af-Pak: ~150k...cost $170B/yr or $465M/day or 11M toz of silver per day

So 7.5M toz Ag per day for 100k men

Sun Tzu was cheap.

Wed, 08/31/2011 - 08:51 | Link to Comment Flakmeister
Flakmeister's picture

Yeah but Sun Tzu didn't worry about a 20 billion dollar air conditioning bill...

Wed, 08/31/2011 - 09:23 | Link to Comment krispkritter
krispkritter's picture

Good, he's hired. Fire the pencil pushers in DC...and at the end of one year withdraw all the troops, put them on our borders and slash that cost by half.

Wed, 08/31/2011 - 12:45 | Link to Comment Oxytan
Oxytan's picture

Sun Tzu was cheap, or silver is incredibly undervalued today.

Wed, 08/31/2011 - 14:11 | Link to Comment IQ 145
IQ 145's picture

Or both.

Wed, 08/31/2011 - 19:26 | Link to Comment IAmNotMark
IAmNotMark's picture

An ounce of silver a day per 100 soldiers.  Sun Tzu wasn't cheap, the soldiers were!

Wed, 08/31/2011 - 13:21 | Link to Comment moonstears
moonstears's picture

So Sun Tzu implied $7500.00 per OZT Ag, Bitchez??

Wed, 08/31/2011 - 08:16 | Link to Comment Hooter Shaker
Hooter Shaker's picture

WTF!?  Nobody is going to say it?  Okay, I will.....Silver Bitchez!

Wed, 08/31/2011 - 08:24 | Link to Comment antidisestablis...
antidisestablishmentarianismishness's picture

I guess the Nasdaq is probably a great buy here too when you compare it to the inflation-adjusted peak of Nasdaq 5000.  Just grab your ruler and draw a line and bingo!

Wed, 08/31/2011 - 08:28 | Link to Comment The Deleuzian
The Deleuzian's picture

MONSTER BOXES! MONSTER BOXES! MONSTER BOXES!

 

Wed, 08/31/2011 - 11:37 | Link to Comment Flakmeister
Flakmeister's picture

Had to laugh.... A 39 lb box arrived yesterday and the UPS guy said, "What you got in there? Gold bars?"

Wed, 08/31/2011 - 08:35 | Link to Comment gdnchg
gdnchg's picture

WTF, silver is only going to $130?

I thought silver was going to $400 to $500.

Wed, 08/31/2011 - 08:40 | Link to Comment Long-John-Silver
Long-John-Silver's picture

It will when QE to infinity and beyond restarts.

Wed, 08/31/2011 - 08:59 | Link to Comment Smiddywesson
Smiddywesson's picture

It will when QE to infinity pushes us off a cliff and ends this charade.

In answer to our friend above, no, silver will not top out at $130.  There wasn't any global trade system in the 70s to collapse.  The Western nations were not on the brink of ruin in the 70s.  The central banks of the world were not stacking gold like crazy in the 70s in anticipation of this collapse. 

You are going to see the paltry power of the Hunt brothers to manipulate price dwarfed by western nations and  by the central banks of the world.  When the greatest manipulators of price in the history of the world are ready, they will need their gold to be worth substantially more than $1830, and silver is going along for the ride.

Wed, 08/31/2011 - 10:03 | Link to Comment KinorSensase
KinorSensase's picture

When silver is done with its run, its value is more likely to be measured in chickens than FRNs.  cluck cluck.

Wed, 08/31/2011 - 19:35 | Link to Comment IAmNotMark
IAmNotMark's picture

Right now 1-2 silver dimes are worth a chicken.  Roughly $6.

I think that in 5 years a silver dime will be worth 1-2 chickens.  Roughly $20.

10 years?  A silver dime will be worth 5-10 chickens.  Dollars?  Old dollars not accepted.  New dollars? A buck a chicken. 

 

Wed, 08/31/2011 - 08:50 | Link to Comment James T. Kirk
James T. Kirk's picture

Okay, let me see here. Money is necessary for the division of labor, or we face a mass extinction event of the human race, especially in all large cities. Politicians throughout the world are printing money as fast as they can. and creating all sorts of "innovative" financial instruments, and both practices will eventually destroy faith in paper or digital fiat money. Money will have to have intrinisic value in the future, or people will reject it. Besides silver, what indestructible, easily transportable, sufficiently rare, yet easily divisible substance on earth has the value density appropriate for every day trade? In other words, in the near future, no silver = no money = destruction of civilization as we know it. But, I don't suppose that this in any way will place any DEMAND on silver, will it? Probably not. You can now continue playing Monopoly until the end of the world unexpectedly sweeps you away.

Wed, 08/31/2011 - 09:15 | Link to Comment SilverDOG
SilverDOG's picture

Capt. Kirk, slightly fatalistic you are. Does Spock agree?

Wed, 08/31/2011 - 16:28 | Link to Comment Temporalist
Temporalist's picture

Damnit Jim, I'm a surgeon not a miner!

Wed, 08/31/2011 - 08:52 | Link to Comment Smiddywesson
Smiddywesson's picture

Yes, the real dollar value high from the 1970s was $130 an ounce, but the Boyz manipulating it, the Hunt brothers, were pushing UP the price, not down.  Silver is an absolutely great commodity to trade, and to stack for the eventual take off in prices, but the Boyz today are holding the price DOWN, and they can continue to do so until the wheels come off the economy.

Silver pack rats won't get their cheese until the central bank game of kicking the can and slowly buying gold comes to an end.  Then, those who believed in silver will have a lifetime of saying "I told you so" ahead of them.

:-)

Wed, 08/31/2011 - 16:30 | Link to Comment Temporalist
Temporalist's picture

While the Hunts may have been driving the price up the people that stopped them were all too unhappy about it and punished them for it.  That just goes to show that the price should be higher because TBTB don't want to lose control of the precious(es).

Wed, 08/31/2011 - 08:53 | Link to Comment silver is money
silver is money's picture

Hello Hello Hello if Silver is going to be treated like Gold (I mean if central banks around the world settles in Silver like Gold) then Silver should go much much higher!!! I heard someone said something like this...it is not my thought but this make alot of sense!!!

Wed, 08/31/2011 - 08:57 | Link to Comment rambler6421
rambler6421's picture

Indians and Chinese are the New Hunt Brothers.  But this time......the COMEX is going bankrupt.  But the Cartel will manipulate it for a while..........eventually, it'll crack 50.  But I can't seeing this happen this fall.........cuz JPM would probably go bust then.  So expect more margin hikes. 

Wed, 08/31/2011 - 12:19 | Link to Comment Hook Line and S...
Hook Line and Sphincter's picture

And what a mess that'll be. JPM issues those food stamps. Negroes eating Mexicans, Mexicans eating rich whites with low fences. oh my!

Wed, 08/31/2011 - 09:03 | Link to Comment myne
myne's picture

If anyone says you cant eat silver, tell them you can't sterilise water with paper.

Wed, 08/31/2011 - 09:16 | Link to Comment Comay Mierda
Comay Mierda's picture

i never understood why silver skeptics say that it wont appreciate because it has industrial uses.  doesnt that mean there are more drivers for demand in silver (industrial + store of value) than gold (only a store of value)?  more demand will equal a higher price

Wed, 08/31/2011 - 12:53 | Link to Comment FeralSerf
FeralSerf's picture

Who says that?  Do they also say that iron, copper, platinum, lithium and all other industrial metals won't appreciate in fiats too?  I wonder what their logic is.

Why isn't iron a store of value if silver is?  It's rumoured to be pretty useful.

Wed, 08/31/2011 - 09:20 | Link to Comment Muddy1
Muddy1's picture

The author is full of **it.  First sentence: gold and silver prices DOWN on murmurings of QE/  BS, that's what helped the increase as people sought a place to store their wealth.  Secondly, silver consolodating after sharp falls in late April and early May when the bubble supposidly burst?  BS again, the sharp falls were caused by the fricking margin increases.  Had the margin increases not happened there's no telling where the price of silver would be today.  "a correction was expected", no, dumb ass, it was not a correction caused by normall market forces and profit taking, it was caused by the margin increases.  SHEEEEEEsh

Wed, 08/31/2011 - 09:39 | Link to Comment thunderchief
thunderchief's picture

True, but I don't think this article wanted to go into the whole manipulation criminal activity by the JPM and the CFTC. 

If you invest in Silver and do not know this story, then I have a stock for you to buy.  It's called SLV, and I suggest you hold that stock until silver defaults.

Wed, 08/31/2011 - 10:38 | Link to Comment puck
puck's picture

Can you aspound on SLV a bit more please

Wed, 08/31/2011 - 12:02 | Link to Comment thunderchief
thunderchief's picture

My advice when in comes to SLV is read the fine print.  You own a paper claim ticket in a market where there are about 150 paper claim tickets assigned to each above ground ounce of silver.  SLV could never turn a fraction of their shares into the physical product and they know it.

SLV is great for rich dudes like Warren Buffet though.  If he has enough shares he can cash them in for real silver.  Like the kind of silver held at the Bank of NY Mellon, where I think he is on the board of directors? 

So when silver really does go into default, and Warren, that good old boy from who cares, wants physical silver from the SLV trust, he just cashes in his shares of around $15 million, or whatever the prospectus says is the minimum astronomical amount required to take delivery, calls his pals at the bank of NY Mellon and says "This is Warren and I'm first in line for the real stuff in the vaults." 

Maybe that's being a little rough on Warren, and maybe not 100% accurate, but one way or another, in some similar sleazy way, that is how the SLV ponzi scheme will come to an end.

And everyone else?  Well they get a paper claim ticket, and get to join a class action lawsuit that drags on for years. 

Wed, 08/31/2011 - 12:21 | Link to Comment Libertarians fo...
Libertarians for Prosperity's picture

 

 

.......and maybe not 100% accurate....

That was the only part of your post that made sense. 


Wed, 08/31/2011 - 15:33 | Link to Comment RockyRacoon
RockyRacoon's picture

That was a decent aspoundment.

Wed, 08/31/2011 - 16:33 | Link to Comment Temporalist
Temporalist's picture

It's not an "aspoundment" it's an "aspounding."

Wed, 08/31/2011 - 11:40 | Link to Comment Libertarians fo...
Libertarians for Prosperity's picture

 

 

.....until silver defaults?

WTF does that mean?  Wait...  are you a silver bug?  

 

Wed, 08/31/2011 - 09:21 | Link to Comment razorthin
razorthin's picture

Yup, monthly stochastics forming a bullish hook for another parabolic move higher

Wed, 08/31/2011 - 09:25 | Link to Comment monopoly
monopoly's picture

Silver will take its place along with gold and have physical and add when I can along with gold. But right now, am watching my stash of miners. Today, looking again at GDX to break out over 64.30. If that happens the next day or two then miners could move smartly higher. We shall see. Nothing has changed. Just close to a 3 day weekend, so lets party.

Wed, 08/31/2011 - 10:24 | Link to Comment New Survivalist
New Survivalist's picture

Silvertards rock.

Wed, 08/31/2011 - 10:26 | Link to Comment Volaille de Bresse
Volaille de Bresse's picture

"I enjoy fondling my silver & gold whilst reading ZH articles like this"

 

Me I enjoy I enjoy fondling mySELF whilst reading ZH articles like this :-)

Wed, 08/31/2011 - 10:57 | Link to Comment William113
William113's picture

The JP Morg and Goldman sucks will finger fuck the price as always.

Wed, 08/31/2011 - 11:10 | Link to Comment ozziindaus
ozziindaus's picture

The best part of physical silver is the premium buffer. Most often works in favour of the seller.

Wed, 08/31/2011 - 11:32 | Link to Comment Phillips Capital
Phillips Capital's picture

Brothas, 

This is indeed a great time to buy technically speaking. If you wish to view my little thoughts on the technicals, click : Chart 

[Please pardon me for using SLV for the chart. this is no recommendation to use SLV. Just a reference.] 

Wed, 08/31/2011 - 11:35 | Link to Comment Phillips Capital
Phillips Capital's picture

the perfect time to buy was 9/25. but it still looks very good technically. the worst that could happen at this point is the current pattern turns into a head and shoulders, (or an unknown macro event happens, which is always a risk). 

Wed, 08/31/2011 - 12:00 | Link to Comment Texas Ginslinger
Texas Ginslinger's picture

(this popped up in my calendar...tis late summer...let's see if this guy's prediction is true)

 

"...04/25/2011 post by Math Man; All you morons on ZH complain that QE2 is causing an oil/wheat/corn bubble, but keep chiming that silver is a different.  It's in a bubble just like the rest of the commodity markets - only WORSE - can you say 75% since the end of January and more than a double since September?  Have fun when it is back below $20 later this summer. 

And by the way... only 487mm of industrial demand last year, with over 1,000mm ounces of supply.  All the price action is being driven by speculative idiots who think the dollar is devaluing --- when in fact the DXY is right where it was 3 years ago while silver has gone up 5x..."

 

Math Man, you still lurking around here...??????

Do NOT follow this link or you will be banned from the site!