The Gold and Silver Thread

[editec]

The other thing I'd point out is that even though silver has gone nuts, silver stocks have not. The purest silver company is Silver Wheaton, which is a royalty company and has no operational exposure. It's stock has languished. The silver miners ETF, ticker SIN, is still below it's highs.

Could that be because investors are buying actual silver instead of paper silver???? If there no demand for silver stocks then the price will lag the physical silver price. Right???

I suspect that that is a big part of it, LB.

AGain, your theory supports my theory that silver is higher than most commodities because the LITTLE GUYS like myself are buying SILVER to hold against and END OF THE DOLLAR hyperinflative event.

I realize that there are very good reason for silver to rise with other commodities, but that extra push in silver is coming from the panic that is rising in the population which NEVER buys silver or gold as an investment play, but ONLY as a last ditch, hold the fort effort for an end of the economic world event.

The last thing in the world I really want is for my tiny silver cache to make me a high return on investment.

And the fact that my investment of about four years or so ago has quadrupled in value is most alarming as it indicates that the dollars in my savings accounts are losing as roughly the same alarming rate.

And I cannot simply convert those dollars into coin because...well it's all about timing and cost of same.

There is no smooth and cost effective way for small holders of silver to buy and sell the stuff.

The premiums one pays for small silver purchases and the liquidity of same make entry and exit from silver coins less than ideal for NON investors.

Per usual, the small guy, even if he sees the tsuami headed toward the beach, can't really do much to prepare for it.

 

[Toro]

The Sprott Physical Silver Trust ETF is trading at a 22% premium to NAV. That's nuts, but it demonstrates the mania for physical silver.

 

[LordBrownTrout]

The other thing I'd point out is that even though silver has gone nuts, silver stocks have not. The purest silver company is Silver Wheaton, which is a royalty company and has no operational exposure. It's stock has languished. The silver miners ETF, ticker SIN, is still below it's highs.

Could that be because investors are buying actual silver instead of paper silver???? If there no demand for silver stocks then the price will lag the physical silver price. Right???

I suspect that that is a big part of it, LB.

AGain, your theory supports my theory that silver is higher than most commodities because the LITTLE GUYS like myself are buying SILVER to hold against and END OF THE DOLLAR hyperinflative event.

I realize that there are very good reason for silver to rise with other commodities, but that extra push in silver is coming from the panic that is rising in the population which NEVER buys silver or gold as an investment play, but ONLY as a last ditch, hold the fort effort for an end of the economic world event.

The last thing in the world I really want is for my tiny silver cache to make me a high return on investment.

And the fact that my investment of about four years or so ago has quadrupled in value is most alarming as it indicates that the dollars in my savings accounts are losing as roughly the same alarming rate. And I cannot simply convert those dollars into coin because...well it's all about timing and cost of same.

There is no smooth and cost effective way for small holders of silver to buy and sell the stuff.

The premiums one pays for small silver purchases and the liquidity of same make entry and exit from silver coins less than ideal for NON investors.

Per usual, the small guy, even if he sees the tsuami headed toward the beach, can't really do much to prepare for it.

The statement that I boldened is one of my fears. My silver holdings have rought quintupled in the last three years. I plan on holding until about 120-160 an ounce and then selling approx 80 percent of holdings. The problem with that, as you pointed out, will be the dollar. If that scenario comes to fruition then I'll be buying tangibles ie land. I disagree somewhat with your assessment of silver becoming mainstream as of yet though. I'm thinking more in the 70 to 80 price range. I want out of it when it's full mainstream.

 

[Toro]

I would point out that silver rising fourfold is NOT because the dollar has declined by that amount. It has not. There is nothing that the dollar has fallen by 75% against, other than silver.

Instead, it is the perception that the dollar will fall in the future by a large amount which has driven gold and silver higher.

 

[KissMy]

I would point out that silver rising fourfold is NOT because the dollar has declined by that amount. It has not. There is nothing that the dollar has fallen by 75% against, other than silver.

Instead, it is the perception that the dollar will fall in the future by a large amount which has driven gold and silver higher.

That is not correct. Farm Land, Corn, Oil, Cotton, Silver, Gold & Copper all have had a near 4 fold increase. The illusion that the dollar has not fallen by 75% is because the CPI excludes these items & other foreign currencies are falling at similar rates. Plus housing has also been sliding because of the bubble.

Smoke & mirrors my friend Smoke & mirrors. I figured the average rate of commodity inflation is around 9%. In order to stop this bull run in commodities & dollar collapse the Fed must take interest rates to 9%. That will cost the US Government $1.35 Trillion a year in interest. With the onset of the Baby Boomer's retiring I figure the US Dollar has passed the point of no return. The only question is how much can they control the slide.

The real question now is how many people have been borrowing to buy these commodities. So far I feel most are just trading out of cash to commodities which will not be a bubble. You need massive leverage to cause a bubble.

 

[Toro]

KM

None of those things are up 300%-400% in 3-4 years, except silver. Copper was 3.50, corn was 3.60, oil was 65, gold was 700, and farmland is up about 30% in four years.

Now I get it. Commodities are what housing was a decade ago and tech stocks 15 years ago. But the reason why precious metals have been going nuts is because of 0% interest rates, a tripling of the Fed's balance sheet and debt worries. These all portend future inflation (maybe) whereas we are currently experiencing asset inflation as the excess liquidity in the world rolls from one asset class to another.

 

[LordBrownTrout]

KM

None of those things are up 300%-400% in 3-4 years, except silver. Copper was 3.50, corn was 3.60, oil was 65, gold was 700, and farmland is up about 30% in four years.

Now I get it. Commodities are what housing was a decade ago and tech stocks 15 years ago. But the reason why precious metals have been going nuts is because of 0% interest rates, a tripling of the Fed's balance sheet and debt worries. These all portend future inflation (maybe) whereas we are currently experiencing asset inflation as the excess liquidity in the world rolls from one asset class to another.

I'm a regular produce grazer at the supermarket. I've watched fresh produce rise anywhere from 100 to 300 percent in the last two years.

 

[Toro]

Sure. Many commodities have risen by a lot. I expect them to continue rising. But it is not indicative of broad inflation, at least not yet. That's my point.

RSI for silver closed at a smidgen under 90. Only once before in the last few decades has it been that high.

 

[KissMy]

In July 2010 Missouri farm land average price was $2318 per acre. 23 days ago Missouri farm land sold for a record high of $10,700/acre. That is a 461% increase in less than 10 months. The farm was bought with cash not credit.

 

[Toro]

Thanks for posting that. Its fascinating. But I don't know if it is indicative of the broad market. Google The Economist farmland article since I can't post it right now. It has a graph of broad farm prices. I've also been tracking farmland in Canada since I have inlaws who farm in Saskatchewan and prices have been rising low to dingle double digits.

That is BTW quite high. Robert Shiller has identified farmland as the next possible bubble.

 

[Toro]

Here is the article.

American farmland: Sowing bubbles | The Economist

 

[william the wie]

Here is the article.

American farmland: Sowing bubbles | The Economist

Sorry Toro China and the Gulf states have been buying farmland worldwide for decades. This is not a domestic bubble but the asset inflation is ignored when it happens in Madagascar, Mali, Argentina and Brazil.

 

[liebuster]

Sure. Many commodities have risen by a lot. I expect them to continue rising. But it is not indicative of broad inflation, at least not yet. That's my point.

RSI for silver closed at a smidgen under 90. Only once before in the last few decades has it been that high.

Forgive my ignorance but what is RSI? I'm not an investor so I don't look at all those "internal" numbers and stats. I just go on my gut and try to pay attention to the "writing on the wall"

Is it better to have a higher RSI number or a lower one??

 

[Jos]

The Relative Strength Index (RSI) is a technical indicator used in the technical analysis of financial markets. It is intended to chart the current and historical strength or weakness of a stock or market based on the closing prices of a recent trading period.

Relative Strength Index - Wikipedia, the free encyclopedia

 

[Toro]

Generally, an RSI above 70 is considered overbought and 30 oversold. At 90, RSI is at an extreme level. That doesn't necessarily mean it will fall but it can mean that there is extreme over-optimism, leaving silver vulnerable to a sharp correction. The last time RSI got to 90 in April 2006, it was up 19% a month later but was down 9% three months later and 13% six months later. When it peaked a month later, silver fell 38% a month after that. This doesn't mean silver will do the same thing as in 2006 but you have to be careful.

 

[LordBrownTrout]

Considering buying 3 to 400 oz of .999 tomorrow. Not sure yet but I don't think we're anywhere near the ceiling yet.

 

[Jos]

Take a look at Ebay, silver is selling at spot +50%

 

[LordBrownTrout]

Take a look at Ebay, silver is selling at spot +50%

That is a very good point. It's doing the same at APMEX. I talked to an agent over there Friday and they can't keep enough junk silver in stock. When I bought junk at 9, I paid 11 an oz. That was about two years ago.

 

[Toro]

Silver has opened at $47.75 in Asia.

 

[Mr Liberty]

Silver has opened at $47.75 in Asia.

I saw that now trading at 47.83. China is pushing hard to stop using the dollar as a reserve. I found this
Gold And Silver Making New Huge Moves, As China Makes Fresh Noises About Dumping The Buck
If the dollar loses status as reserve currency, silver will advance even faster.
I don't believe in crystal balls, but I'm hearing outrages predictions, like $1500 per oz. Of course along with that is some very bad news for everything else.