Commodity bubble ???

Anyone who believes that silver and gold futures are affected by similar conditions that affect consumption commodities is setting themselves up for disappointment. Unlike everything else mentioned, gold and silver are shorted onto the futures market by the bullion banks by using enormous amounts (allegedly) of unbacked paper. It's only when customers start standing for delivery (as they are now) of this paper when things get volatile and not a place for people to play around in who don't understand this. The fact that JPM and HBSC are now facing lawsuits, by a government that has been basically bought out by the banks, underlines how bad it is.

 

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Ben Bernanke's investing in the Canadian dollar says a lot about where the U.S Dollar is going and even says more about himself.

 

I think Ben just sees the obvious. You cannot spend yourself out of debt, as the U.S. seems to be trying to do. The same goes for printing money as you need it, which they've been doing for far longer than most of us realize. Could you send Neil Peart here and straighten this whole mess out?;-)

 

Neil Peart is unavailable but your welcome to Nickleback.

The only 2 people in the U.S. capable of preventing a financial meltdown are Ron and Rand Paul.Everything they say makes total sense but it appears most Americans are to preoccupied with other things like Sarah Palin and Snooki.

 

Please refrain from political posts or the thread will be closed by the moderators.

 

I didn't see anything political about that statement. I think rush2112 was simply stating our media's inability to inform us actual news anymore. It's all about ratings, and of course, money.

 

The US mint kicked off the ASE bullion program 25 years ago in 1986. Total mintage for the 25 year period is in the neighborhood of 250 million. 2009 and 2010 combined mintage pushes close to 25% of the series' entire production. During this 2 year period demand for the product was so great the US mint resorted to rationing sales.

Is the ASE program a reliable indicator for the silver market as a whole?
Does the above give indication of frenzy?

 

I would say it gives a general indication of the silver market. You have the loyal ASE buyers that are going to purchase their usual amount in a bull or bear market, $16 silver or $35 silver. Then there are speculators and "investors" which have been the majority of the sales spike in the last two years. And yes, I would consider that somewhat of a frenzy. Get unemployment under 7% and the Dow Jones over 13,000 and the sales will start to decline.

 

Yes it is. It is a good indicator of public participation in the bullion market. It might also be an indicator that we are within a year or two of the top of the market for this cycle. I'm a bit surprised that ASE sales are this strong this early in the bull market. I wouldn't have expected this to happen until silver got closer to $50.

 

Two years will not put our debt behind us.
People of the depression era carried it the rest of their lives. Some would save rather then live a good life, and save a bit less. A mental burn in like that ,and all that has surrounded these events, will be hard to put behind .

 

I don't buy the idea that debt CAUSES higher gold and silver prices. Other forces are at work. It is a coincidental indicator at best.

 

If the mint is thinking, they might well start decreasing the level of bullion production yearly. Since they have to contract for PM blanks before starting the striking, they don't want to be caught between confirming/paying for an order of PM blanks and getting same profit from the authorized wholesalers. If they received 25 million blanks at $28 oz, and by the time they have them struck silver is at $23 oz. what do they do? Satisfy demand at a $5 loss per coin? I think not. Up the vig for each coin so the collector eats it? Possible if their regulations allow. Interesting.

Jim

 

This is yet another classic example of 2 very different schools of thought (of PM investors) regarding the driver of PM prices going forward. It is repeated over and over throughout many of these threads. Some believe government fiscal issues will have a negative impact on our currency and drive metals upward and the others believe PM's will appreciate from present levels for other reasons. For me, fiscal issues are easier to analyze, articulate and measure, I still struggle with understanding non-fiscal drivers when metals are at there current near-record levels (in nominal terms).

 

To be honest, I was surprised about the PM uptick today until I noted that the USD index /DX was at a 78.0 level rather than the much higher ratio last week. It is now @ 77.87, so it it stays there or lower, I would expect PM gains tomorrow, unless other factors come into play, such as huge jump in the stock market, say to 12,050, or another black swan event. Yes, there are many factors in play in the PM market, and unfortunately , their importance and direction are usually only recognized after the fact.

 

To be fair, people were literally starving for days and/or queueing up for miles for soup during the depression, I'm not sure that is going to happen here, most of the unfortunate ones may just be having to forego more luxuries than normal. At worst people will go bankrupt and lose their house and move into less salubrious rented accomodation.
Well, that is probably how it will be in Britain anyway, I don't know about the US....

 

From what I have read the 2010 official mintage of American Silver Eagle Bullion is going to be around 35 million pieces. Excluding 2008 @ 20 million and 2009 @ 30 million - this is approx. 3 1/2 times greater than any other previous year. More than 9 times greater than 1996 - the lowest mintage year.

Anyway - it has been my experience with physical commodity holdings and dealing with the cash market - you usually pay a nice premium over spot when buying on the way up and get hit with a big discount under spot when selling on the way down.

 

My thoughts are that it is not a direct cause. A soaring debt causes unrest and insecurity among a large portion of the population. People start looking for a hedge against inflation: precious metals. People start buying large amount of silver (like 85 million ounces in ASEs alone in the past three years). And if you believe in supply and demand, the price starts climbing. I know there are other factors, and other countries with high demands for silver, but I think this can definately have an impact on PM prices.

 

You mean, like a few years ago when the official unemployment rate was 7% and the Dow was 14000, and precious metals were on the skids? No, wait a minute, Dow 14000 was occurring during the middle of the present precious metals bull market.

It is not just Americans who are moving this PM market-- it is a world market, and buyers in other countries don't really care if the Dow Jones is above 13,000 or stuck at 11000. The stock market today is a big farce-- companies are trying everything they can to increase profits just to please their big-time investors, but to do that they are increasingly resorting to outsourcing jobs overseas, or firing older workers and hiring younger, less experienced and less expensive ones, or making their American employees work longer for less pay. In all instances, this does not bode well for improving the unemployment rate, certainly not in the short term. And the jobs that are becoming available, especially for older displaced workers, often involve memorizing lines like "Would you like fries with that?" or "Would you like a shopping cart while you're in the store?"

 

Rice or Silver/ in demand by the growing economies in Asia. I am buying Yauns for insurance.

 

So fiscal issues are a cause but not a "direct cause"?